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AMERICAN MORNING

Spree Killer Arrested in Illinois; John McCain Talks Free Trade in Colombia; Starbucks to Close Underperforming Stores; Cyber Cheating is a New Ground for Divorce; Critics Call New Swim Suit Technological Doping; Oil Prices Up Again This Morning; Faith Bringing Barack Obama and President Bush Together; Polygamist Wives Selling their Prairie Look on the Internet

Aired July 2, 2008 - 06:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
ANNOUNCER: Issue number one.

UNIDENTIFIED MALE: I come from a closed plant in New Jersey.

ANNOUNCER: As car sales sink to a ten-year low, John McCain makes a stop way off the electoral map. Fighting for free trade. Promising to save American jobs.

JOHN MCCAIN, PRESUMPTIVE GOP PRESIDENTIAL NOMIONEE: We must create more jobs for Americans, and for our neighbors to the south.

ANNOUNCER: Plus the super Speedo.

UNIDENTIFIED MALE: Literally, the water bounces right off of it.

ANNOUNCER: The suit that could save precious seconds in Beijing if you have 40 seconds to squeeze into it. On this AMERICAN MORNING.

KIRAN CHETRY, CNN ANCHOR: Forty minutes?

JOHN ROBERTS, CNN ANCHOR: High-tech suit? Yes, 40 minutes to squeeze in. But, you know, people like Michael Phelps just go bare-chested and you're still setting records. So we'll be looking at all that today.

And lots of politics. John McCain in Colombia and Mexico today. Barack Obama going to be talking about national service.

Welcome to the show. It's Wednesday. It's the 2nd of July.

CHETRY: And topping the news this Wednesday morning, the suspect in a two-state killing spree is behind bars this morning. 28-year-old Nicholas Sheley wanted in connection with eight murders in Illinois and Missouri over the past week. He was captured last night in Granite City, Illinois. That's about 10 miles north of St. Louis.

Police say Sheley has a long and violent criminal history. He's scheduled to be arraigned in court later this morning.

CNN's Susan Roesgen has more. (BEGIN VIDEOTAPE)

SUSAN ROESGEN, CNN CORRESPONDENT (voice-over): Whoever killed these people was desperate and had nothing left to lose. That's what investigators say about Nicholas Sheley, arrested on a warrant charging him in one murder and he's suspected of seven more.

Among the most recent killings, detectives believe Sheley used something as a weapon, they won't say what, to attack an Arkansas couple in Festus, Missouri. The husband and wife were in town for a graduation party. Detectives say Sheley beat them to death in their hotel parking lot. The couples' dogs attracted attention.

UNIDENTIFIED MALE: A customer of the hotel came in and found two dogs on the parking lot. Both dogs were covered in blood.

ROESGEN: In just one week, eight people were found murdered in what detectives say was a one-man killing spree, stretching nearly 300 miles. The first killing was in Whiteside County in Sterling, Illinois, toward the north. The Festus, Missouri, murders were near St. Louis to the south.

In Galesburg, Illinois, a man was killed behind this grocery store. A gas station clerk nearby says he spotted a man who looked like Sheley covered in blood. Rock Falls, Illinois, three adults and one child, killed in this small apartment. And in Sterling, Illinois, a 94-year- old man beaten to death, his body stuffed in the trunk of a car.

UNIDENTIFIED MALE: Nice old man. He didn't hurt nobody or nothing.

ROESGEN: The last time anyone saw Sheley was Monday night at Busch Stadium where the Cardinals were playing in St. Louis. He was arrested not far from there in Granite City, Illinois, with a $25,000 bounty on his head.

Susan Roesgen, CNN, Rock Falls, Illinois.

(END VIDEOTAPE)

ROBERTS: Turning now to the "Most Politics in the Morning." John McCain talking free trade in Colombia today. It is the second time in as many weeks that he's pushing that message that free trade is vital to jumpstarting the U.S. economy. And it's a sharp difference from Barack Obama. Here's CNN's Dana Bash.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: John and Kiran, make no mistake about it. John McCain may not be in a battleground state or any U.S. state at all, but his trip abroad is all about his political message back home. That free trade will create new jobs. But that's a tough sell in hard hit industrial states.

(BEGIN VIDEOTAPE)

BASH (voice-over): A tough on crime speech in Indiana, a reliably Republican state that Barack Obama hopes to make competitive. A political no brainer. But you won't find John McCain's next stop on any electoral map. Colombia in South America. It has some political veterans scratching their heads.

DAVID GERGEN, SENIOR POLITICAL ANALYST: He should be spending his time here laying out much more emphatically and clearly his economic plans.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I am strongly in favor of the free trade agreement between the United States and the nation of Colombia.

BASH: McCain says he's going to Colombia to spotlight his support for free trade, which he calls crucial to jump starting the U.S. economy. A sharp difference with Barack Obama.

MCCAIN: He doesn't support the Colombia free trade agreement. I think it would be -- have very serious consequences if we rebuked our closest ally.

BASH: The Colombia Free Trade Agreement is now stuck in Congress, held up by Democrats including Obama.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We have not been very good negotiators in our trade agreements in terms of making sure that the interests of American workers and not just corporate profits are cared for.

(BEGIN VIDEO CLIP, CAMPAIGN AD)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We must encourage more trade agreements to create more jobs on both sides of the border.

(END VIDEO CLIP)

BASH: McCain's new Web ad promising trade equals jobs is proof he hopes his trip abroad will help back home. His problem? There is new evidence most voters don't agree with McCain that free trade will help fix their economic woes.

A new CNN/Opinion Research poll shows 51 percent call free trade a threat to the economy. Forty-one percent call it an economic opportunity. It's especially risky for McCain in hard-hit, must-win states like Ohio where voters confront him.

UNIDENTIFIED MALE: Is there any way that the trade can become more fair instead of just free? I come from a closed plant -- excuse me -- in New Jersey.

(END VIDEOTAPE)

BASH: McCain acknowledges the anxiety expressed by that worker and others like him are very real. But he is adamant despite the political risks that more trade is a net gain for the American worker in the long run. Expect to hear a lot more of that in Colombia and his next stop in Mexico -- John and Kiran. ROBERTS: CNN's Dana Bash for us this morning. A new CNN/Opinion Research Corporation poll shows John McCain trailing Barack Obama. According to the poll, 50 percent of voters interviewed say they would vote for Obama. Forty-five percent chose John McCain.

CHETRY: Private U.S. security contractors working in Iraq will no longer be immune from prosecution there. The immunity issue was a major sticking point in a long-term security agreement between the Iraqi and U.S. government. This morning Iraqi's foreign minister says that negotiations on the issue are almost complete.

That immunity agreement comes nearly a year after security contractors with the Blackwater firm allegedly shot and killed 17 people, including women and children, in Baghdad.

National news now. A legal battle in Georgia after managers at Atlanta's Hartsfield-Jackson Airport declared a gun free zone. Licensed gun owners are now challenging that ban saying that the state's expanded gun law allows them to carry concealed weapons in public transit including airports.

The law's cosponsor served the city with a lawsuit. Representative Tim Bearden said that he did it after he was told he'd be arrested if he carried his handgun to the airport when he picked up his family.

A New York City hospital promising changes this morning after disturbing surveillance video. And we do want to warn you this is upsetting. It shows a woman that just literally fell off of her chair and laid there in the emergency room floor for more than an hour. Staff and security guards at the Brooklyn Psychiatric Ward at the Kings County Hospital appeared to notice her body at least three times but made no visible attempt to see if she needed help.

Police say 49-year-old Esmin Green collapsed after waiting for assistance for nearly 24 hours. Six people at the hospital have been fired.

And the hundreds of wildfires burning right now in northern and central California have caused a spike in air pollution. Doctors in the area say their waiting rooms are packed with people complaining of sore throats, itchy eyes and smoke-related breathing problems. People with congestive heart failure or emphysema and asthma are being warned to stay indoors.

ROBERTS: Seven minutes after the hour. As you can imagine there's not a huge market for pickup trucks, SUVs, those big gas guzzling vehicles with gasoline being as expensive as it is. And car makers are seeing a plunge in sales.

As a result, Ali Velshi here tracking on the sales for us this morning. Good morning, Ali.

ALI VELSHI, SENIOR BUSINESS CORRESPONDENT: Good morning. Well, we saw these numbers coming in late yesterday afternoon. I want to run through them and show you how it went. First of all, let's go down the list of automakers that sell cars in the United States starting at the top with General Motors, which actually didn't do as badly as was expected. The drop in the sales in June compared to last June was about 18 percent.

Ford was down 28 percent. Chrysler down 36 percent. Toyota was down 21 percent, and Nissan down 18 percent. Now, we have discussed the fact that we thought Honda would be the only one with an increase in sales and there it is, a one percent increase in sales for Honda.

Now, how does that break down in terms of the kind of cars that we're buying? Well, it's exactly what you would expect with gas above $4 a gallon. By the way, we're $4.09 again today. Another record high.

Take a look at how it broke down in terms of the types of vehicles that were sold. Cars were down just eight percent. Crossovers, those things that are kind of like cars and kind of like SUVs, were down 17 percent. Light trucks were down 28 percent. Those are pickup trucks. And SUVs sales were down 38 percent.

So, again, the trend that we have been expecting with gas prices increasing, we started to see this first as gas crossed $3.50 a gallon as a national average, and then at $4 a gallon. We really, really are seeing people running very, very far away from trucks and SUVs, trying to get --

And by the way, the reason a lot of these cars weren't selling as well, people couldn't get their hands on the absolutely most fuel efficient cars that they wanted to including hybrids which, in many cases, have a waiting list right now.

ROBERTS: So the auto manufacturers ramping up production on those cars?

VELSHI: Yes. All of the major ones have said they're switching production from SUVs and trucks over to hybrids and more fuel efficient cars. So hopefully, we'll see those numbers start to adjust over the course of the next few months.

ROBERTS: Ali, thanks so much.

VELSHI: OK.

ROBERTS: See you again soon.

A shakeup at Starbucks. The coffee giant says it's going to close 600 underperforming stores. That is up dramatically from its previous plan to close only 100 stores.

CNN's Sandra Endo is live at a Starbucks in Washington in the corner of K Street and 16th, just a couple of blocks away from the White House. Good morning, Sandra.

SANDRA ENDO, CNN CORRESPONDENT: Well, good morning, John. We're seeing some people slowly trickle into the Starbucks coffee behind me. And a lot of people rely on their caffeine fix to start up the day. But a latte cost almost as much as a gallon of gas these days. So it appears some consumers are cutting back.

(BEGIN VIDEOTAPE)

ENDO (voice-over): And fewer tall, vente and grande lattes, so Starbucks is scaling down. The famous coffee chain is closing 600 underperforming stores nationwide, with only 200 new stores set to open next year. In a statement on the company's Web site, the head of Starbucks says, "By far, this is the most angst-ridden decision we have made in my more than 25 years with Starbucks."

Starbucks cut about 600 positions in February. And now, as many as 12,000 employees could lose their jobs. But the Seattle-based company says it will try to find other positions for them within the corporation.

Starbucks stock is down by 40 percent over the past year. A sign the company's financial problems have been brewing for some time.

(END VIDEOTAPE)

ENDO: Now, the company is hoping that downsizing now will help them weather these tough economic times so they can hopefully grow later on in the future -- John.

ROBERTS: Sandra Endo reporting for us from Washington. Sandra, thanks so much.

CHETRY: Following breaking news from Israel this morning after a man in a bulldozer rams into a bus and other cars killing two people. We're going to be live in Jerusalem with the latest on what's unfolding this morning.

Also, Detroit Mayor Kwame Kilpatrick has legal troubles stemming from those steamy text messages, not only threatening to derail his political future but now his mother's. We'll explain.

ROBERTS: It has been said many, many times that clothes make the man. But can a suit make the swimmer? The debate over a revolutionary new skin for the water.

CHETRY: And more focus, less politics. That's the president's prescription for Congress to rescue struggling homeowners. But who's really to blame for failing to pass a housing bill?

You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: We have some breaking news out of Israel this morning, and these are the scenes after a bulldozer plowed through cars and buses in downtown Jerusalem. Two people were killed, dozens of others hurt before police shot and killed the Palestinian driver.

CNN's Ben Wedeman joins us on the phone from Israel with more on the situation. Ben, what's going on? ON THE PHONE: BEN WEDEMAN, CNN CORRESPONDENT: Kiran, now it's relatively calm. The initial pandemonium that I witnessed firsthand just when the incident was taking place has now subsided. But what we do know from the police and what I saw personally was that a bulldozer on Jaffa Road, which is right in front of the CNN office in downtown Jerusalem went on a rampage.

He run, he crushed one car, then hit a bus and then went further down the street, hit another bus and turned it on its side. I saw one woman with a very badly mutilated foot lying on the outside before the emergency services came up. He hit another car, killing the driver there.

And then, very quickly motorcycle -- a motorcycle team from the Israeli police showed up on the scene. One of them climbed on to the cab of the bulldozer and shot at point-blank range the driver. At this point, we don't know the identity of the driver. The police are describing him as a terrorist. But I spoke with a -- with a police spokesman and he said that the reason they believe he's a terrorist was that he also tried to run over the police motorcycle unit as well.

At this point, we don't have very many details on the identity of the driver. We know that at least two people were killed in addition to the driver of the bulldozer, and another 30 were wounded. Two of them seriously, according to the Israeli police. The entire incident couldn't have taken more than six, maximum seven minutes -- Kiran.

CHETRY: And there's -- as you said at least a confirmation of two people killed but that number could possibly climb. And some of the wire copy we're getting is talking about just how stressful it was in the moments after that happened, describing one man screaming, where's the baby, because there was apparently a baby that had blood all over its face at the scene as well. Any word on the conditions of some of the other people that may have been injured or possibly killed?

WEDEMAN: In fact, I saw the baby that you mentioned and it couldn't have been more than just a few months old. And it did have blood on its clothing but it did appear to be alive. Some of the injuries were, as I said, I felt fairly serious.

This one woman as I said had a seriously mangled foot. She was inside the bus that was hit by the bulldozer. And then we saw several people being carried away. I saw another car, a small pickup truck that was essentially -- the entire front half was crushed. And I saw the body of the driver inside of that. The emergency services were having a particularly difficult time wrenching that body out of the wreckage.

So, yes, it was certainly in the initial minutes it was just utter pandemonium. And these situations obviously you don't know what's happening. You only see what's in front of you. What I saw was utter chaos and fear, shock and anger -- Kiran.

CHETRY: All right. Ben Wedeman for us in Jerusalem today, the site of that attack. It's being described by the Israeli police, at least, that a terrorist carried out this attack. Still no further details on who that driver that was subsequently shot and killed by police there is. We'll continue to update you on the story throughout the morning.

ROBERTS: Bizarre scene there. Wow.

Eighteen minutes after the hour. Retired General Wesley Clark's comments about John McCain's wartime experience landed him in political hot water. He tells CNN what he really meant.

Cyber cheating defense being used more and more in divorce court. We'll tell you why. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Well it used to be you knew what cheating was in a marriage, right? Well, now, there's text messaging, chat rooms, online dating. The Internet has made it easy to meet and to cheat without ever leaving your home. It's also giving wronged spouses a new weapon to use in divorce court.

AMERICAN MORNING legal analyst Sunny Hostin is here to explain. It seems the Internet cyberspace has opened up a whole new world for would be cheaters.

SUNNY HOSTIN, AMERICAN MORNING LEGAL ANALYST: It really has. And interesting enough, Kiran, according to at least one survey, one-third of divorce litigation is caused by online affairs now. So it's something that judges are grappling with all the time. It's sort of the 21st century has met divorce law.

And you know, typically you have either no-fault divorce, which is just one spouse wanting to sue the other but not placing blame, irreconcilable differences. But when you have a fault divorce you typically get more money, more alimony, more marital property.

And what are the grounds for a fault divorce when a spouse is trying to place blame? Cruelty, which can be emotional cruelty or adultery. And when is adultery anymore (ph)? I mean, is adultery really going into a hotel room with someone else or consistently going online, sort of this intense Internet relationship?

And I find what's fascinating is we've sort of taken an informal poll. Here in the newsroom, here in the studio, most men think Internet relationships -- that certainly doesn't qualify as adultery.

CHETRY: I would say women feel differently, right?

HOSTIN: Exactly. Seventy-two percent of women by one study, 46 percent of men say absolutely not. That's ridiculous.

CHETRY: How does it shake down in the courtroom, though? How are they defining infidelity?

HOSTIN: Yes, well cyber affairs have been found to be infidelity. And interestingly enough, the evidence piece I think, and most judges think, very, very easy. That's the easiest part of all.

E-mails can be found. Internet browsers, Internet histories. And 79 percent of divorce attorneys say spouses' Internet use is now used in court. Forty-four percent say evidence from spy ware programs are on the rise. And so, certainly cyber affairs can be a ground for divorce. So everyone, watch out.

CHETRY: Even if there's nothing physical that happens, just the back and forth exchange?

HOSTIN: Just the back and forth. An intense Internet relationship has been found legally to be ground for divorce.

CHETRY: Wow, very interesting. Sunny Hostin, great to see you. Thanks.

HOSTIN: You too.

CHETRY: You can e-mail Sunny your legal questions. Drop her a line Sunnyslaw@CNN.com or log on to our Web site CNN.com/am. And she answers some of your e-mails every Friday here on AMERICAN MORNING -- John.

ROBERTS: At the U.S. Olympics swimming trials in Nebraska. A revolutionary new swimsuit is getting as much attention as the athletes wearing it. It's not just its figure hugging curves either. Swimmers say it helps them shave seconds from their time. Critics though call it technological doping.

CNN's Chris Lawrence has got the story.

CHRIS LAWRENCE, CNN CORRESPONDENT: John and Kiran, there's tight, there's skin tight, and then there's this new suit that took some swimmers up to 40 minutes just to slip on.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): He's only in high school, but Max Eliot is ready to trade his suit for the Speedo laser.

VOICE OF: MAX ELIOT, HIGH SCHOOL SWIMMER: The new ones are ultrasonically bonded, so they actually don't have seams.

LAWRENCE: But these suits are submerged in controversy. Swimmers have set more than 40 world records in the Speedo laser, and it just came out in February. The world record holder says it turns "mediocre swimmers into Martians." And foreign swimmers are revolting against their own sponsors to get it in time for the Olympics.

JESSICA HARDY, OLYMPIC SWIMMER: I think if they don't wear it they're at a disadvantage for sure.

LAWRENCE: Olympic swimmer Jessica Hardy broke two records wearing the suit.

HARDY: When I jump in the water, like literally the water bounces right off of it.

LAWRENCE: An Italian coach called the laser "technological doping." But the Olympic committee OKed its super light fabric because the suit doesn't provide buoyancy. And some say it's part of an ongoing evolution, from Mark Spitz winning gold medals with shaggy hair.

JASON SCHWARZ, LA SWIM CLUB: In the '70s, nobody really thought to shave. If you noticed, he swam with a mustache and no goggles.

LAWRENCE: And when Jason Schwartz started training, it was all about the smallest suit possible.

SCHWARZ: At the time we thought that the skin was the fastest thing against the water. We would shave our legs. We would get the dead skin off. We'd get the hair off.

LAWRENCE: Full body suits designed to produce drag first caused a stir in the 1992 Olympic trials. But Speedo says the laser does more. It core stabilizer helps swimmers maintain a streamlined position through the end of a race.

ELIOT: But I'd say it's like 40 percent is the technology and 60 percent is really mental. You know, you get one of these suits on and you're like, yes, I'm going to go fast skin on. I'm going to go fast.

(END VIDEOTAPE)

LAWRENCE: And if you want to feel what the Olympic swimmers do, it will cost you. The laser goes on sale to the public in October but will cost up to $550 -- John, Kiran.

ROBERTS: $550. I mean, that's a pair of shoes, right?

CHETRY: For some people. Knock off one of the bureaus, maybe I'll buy them. But this is pretty cool. Why does it take so long to get in the darn thing?

ROBERTS: Because it's very -- they're very, very tight. It's got muscle compression technology. It's a whole new thing in workouts where you give muscles support. Some of the swimmers say you put it on you feel like a superhero. It's like putting on the superman suit.

CHETRY: Well, they're smashing records right and left. So something's working.

ROBERTS: Yes.

CHETRY: Well, from the polygamist compound to your closet. The prairie style clothing worn by the women and children seized back in April will now -- that type of clothing is being sold on the Internet. So are people buying it? Well, we'll find out.

You're watching the "Most News in the Morning."

(COMMERCIAL BREAK) ROBERTS: A court appearance today for a man suspected of killing eight people in just a few days. 28-year-old Nicholas Sheley was arrested last night near a bar in Granite City, Illinois. Police say his killing spree stretched from Illinois to Missouri. He has a long and violent criminal history.

This morning John McCain is in Colombia for talks on free trade. It's an issue that he insists will help U.S. workers restart the U.S. economy. Later on, he heads to Mexico. The trip is designed to show the sharp differences between himself and Barack Obama.

And John McCain says, quote, "The time has come for the Obama campaign to cut ties with supporter and retired General Wesley Clark." Wesley Clark is not backing down from comments that he made over the weekend where he said getting shot down does not qualify you to be president.

But Clark is still trying to clarify his criticism of John McCain's wartime experience. In yesterday's "SITUATION ROOM," General Clark told me his response to a question on "Face the Nation's" Sunday lacked context.

(BEGIN VIDEO CLIP)

GEN. WELSEY CLARK (RET.), BARACK OBAMA SUPPORTER: I think if you'd seen the whole question and the whole interview and context, I think there's no issue with this. But I think it does show what can happen when an excerpt is taken. And I noticed in some of the major news channels, and I don't want to point any fingers here, but they only showed my answer as though I made that up.

This is like someone says, Is the sun out? You could say yes, the sun is out. Or you could say, yes, or you could say the sky is blue. But I just happened to answer it exactly the way it was asked. And my point is that when we're about to select a president of the United States in a time of war and the national security is going to be a big issue in this campaign, the American people should look at the real qualifications. That includes John McCain's character and courage.

I've never said anything dissing that. I would never diss the service of anyone who served in the United States Armed Forces. I did it for 38 years. I was a captain in Vietnam. I commanded an infantry company, came home on a stretcher in a hospital with four bullet wounds in me. So, you know, I'm very sympathetic to John McCain -- he's one of my heroes.

(END VIDEO CLIP)

ROBERTS: Just to clarify, Clark never did criticize his wartime experience. What he said was as honorable as McCain's service was, it did not rise to level of making war or peace decisions, and therefore does not necessarily qualify to make him commander-in-chief.

Kiran?

KIRAN CHETRY, CNN ANCHOR: Well, President Bush expressing confidence that Congress will pass a housing bill that he can sign. But he's also blaming lawmakers for leaving Washington without giving struggling homeowners the help they desperately need.

Here's CNN's Ed Henry.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John, Kiran, vacationing lawmakers got hit with a blistering editorial in the "New York Times," which noted that between now and Monday when Congress is supposed to get back to work, another 55,000 people are likely to lose their homes.

(BEGIN VIDEOTAPE)

HENRY: (voice-over): This is the sound of silence. Tour buses are rolling up to Capitol Hill to see their government at work. But the Democratic-controlled Congress is not here. Gone for a week-long July 4th vacation, they left before they passed a long awaited bill to rescue homeowners trapped in the mortgage crisis.

GERALD CONNOLLY, FAIRFAX COUNTY, VA BOARD OF SUPERVISORS: As they're deterring at the federal level, thousands of homeowners have lost their homes. It is critical that the government step in and try to stabilize this situation.

HENRY: Just about 20 miles from the Capital in Fairfax, Virginia, grass grows wildly on foreclosed and now abandoned homes. Gerald Connolly, a Democrat and chairman of the County Board of Supervisors says in January a year ago, there were just 74 foreclosures here. A year later this January, there were 1,400.

CONNOLLY: The situation is going to get worse before it gets better. People are hurting. People, you know, get stretched.

HENRY: So what's Washington doing? Not much. After months of delay, Senate Democrats finally got a bill to the Senate floor last week. It would have given struggling homeowners new mortgages backed by the government, if lenders would also make concessions.

Then a Republican, Senator John (INAUDIBLE) stalled the bill by insisting it include unrelated renewable energy tax credits. And then came the siren song of a July 4th vacation back home during an election year, as well as the predictable lashing from President Bush.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I think we can get us a bill. But it's going to require less politics and more focus on keeping our minds on -- on who we need to help. And that's the homeowner.

(END VIDEOTAPE)

HENRY: The president did not mention that a Republican is blocking the housing bill or that he, himself, is vowing to veto the final product unless Congress includes the Federal Housing Administration Reforms that he wants. In other words, a lot of finger pointing so far but not a lot of action.

John?

Kiran?

ROBERTS: Ed Henry this morning. It's 34 minutes after the hour. The HOA is here -- the hairless oracle of the apocalypse. And got some stuff on oil prices.

VELSHI: Yes, oil prices, again, up this morning. We're not at record but we're around $141 a barrel. The Saudis have said they're not likely to increase production again any time soon because the demand isn't there. Can you believe that? The demand for oil isn't there. I'll tell you more about that when we come back from a break. You're watching AMERICAN MORNING, right here on CNN.

(COMMERCIAL BREAK)

VELSHI: (INAUDIBLE).

CHETRY: How about it?

ROBERTS: Yes. There you are.

CHETRY: (INAUDIBLE). It's always sunny in Philadelphia at least today.

ROBERTS: That musical choice brought to you by our producer in the morning, Brian Bell (ph), who we understand is going ballroom dancing later on this morning.

VELSHI: I must say this particular shot looks a little bit like Philadelphia's big sky country.

ROBERTS: Yes. It's kind of like -- yo, tilt down. Where are the buildings?

VELSHI: Beautiful day over in sunny Philly.

ROBERTS: Isn't that nice?

VELSHI: Yes.

ROBERTS: Ali Velshi here now with more on oil prices, oil production and what's going on?

VELSHI: Well, oil prices are -- you know, we've seen a record of almost $144 a barrel. We're down from that. We're about $141 a barrel this morning. The light sweet crude was up. It's a new record high. That $140.97 is a record for where it settles.

Settle is a strange term. Unlike the stock market, which closes everyday and opens up the next day, oil keeps on trading. So we've got concern of a random point in the afternoon when the trading stops at NYMEX in New York as the settle price for oil. But then, it continues to trade. So it's above that right now.

The Saudi oil minister was at -- was at a conference in Madrid where our Charles Hodson from CNN was there. And he was saying -- asking the Saudis, as the price of oil continues to increase, would they be prepared to increase their out put more than they have so far?

The Saudis put out about 9.2 million barrels a day. They agreed to up that to about 9.7 million barrels a day. But there are some sense that there's a capability to put out more than 11 million barrels a day. So Charles put that question to Ali al-Naimi, the Saudi oil minister and here's how that exchange went.

(BEGIN VIDEO CLIP)

CHARLES HODSON, CNN CORRESPONDENT: Can you imagine any circumstances under which Saudi Arabia would increase oil production further? It's said you have a capacity of 11 million barrels a day.

ALI AL-NAIMI, SAUDI OIL MINISTER: Yes. Where is the buyer? Do you have a buyer? We would be very happy to sell it.

(END VIDEO CLIP)

VELSHI: The Saudis have been making over the last several weeks is very interesting. And that is they feel that this rapid increase in the price of oil more than -- about 50 percent now since the beginning of the year is based on speculation that it's not supply and demand.

If it were supply and demand, they say they would increase output to the market and help depress the price oil. But their argument is they keep putting oil on the market and the price keeps on going up. So it's clearly not about supply and demand.

There are really very clearly a few schools of thought on this. Some people say it's entirely supply and demand. Some people say it's entirely speculation. And the Saudis are coming down on the side of this has got to be speculation because we keep putting oil out there and the price doesn't come down.

Now, there is also further speculation that the Saudis may not have as much oil as they would like the world to believe they do. As they pump, they're having to use more water to get the oil out of the ground. The water built pressure.

If you have a lot of oil in the ground, the pressure is already there. Unless, you know, you hit a hole and it gushes out of the ground. And as a result, we're on this energy hunt. And that's why I went up to northern Alberta and we'll be going other places to see where else there is oil. But as it becomes more scarce, we dig deeper or we do more expensive things to get oil out of the ground. And that's -- that's going to be the quest for the next year or so.

ROBERTS: Looking at the price of oil, it's a bargain in comparison.

VELSHI: You know, if it goes up much further, I'm just going to not go on an energy quest. I'm just going to drill right here at this building. You know, deep enough at 200 bucks a barrel I'd probably find oil here.

(CROSSTALK)

CHETRY: If you don't leave the building, you're still on a quest.

VELSHI: That's correct.

ROBERTS: Ali Velshi in the quest for the oily grail.

VELSHI: Exactly.

CHETRY: Our Rob Marciano is in the weather center this morning with more on what we can expect weather wise.

Hey, Rob.

ROB MARCIANO, CNN METEOROLOGIST: Hey, guys. A little quiz on minor league ballparks and lightning strikes. Take a look at this I-report shot over one particular ballpark over the weekend. Dr. Pepper Ballpark. Do you know where it is? Do you know who plays there? Lightning strikes. Weather is coming up when AMERICAN MORNING comes right back.

(COMMERCIAL BREAK)

CHETRY: Rob Marciano joins us now at the weather center in Atlanta. And you teased up a picture of a lightning strike at a ballpark. What's going on there?

MARCIANO: Do you know -- do you like Dr. Pepper?

CHETRY: Yes, love it.

MARCIANO: I mean, who doesn't, right? That's the name of the ballpark. This picture, Kiran, shot by an I-reporter out in Frisco, Texas. That's Dr. Pepper Ballpark, AA, Dr. Pepper for the Frisco Roughriders playing Saturday night.

That's a lightning strike, one of many to surround the ballpark. They did manage to get the game in. Nine innings played there. But I never knew there was a Dr. Pepper ballpark. There is in Frisco, Texas.

(WEATHER REPORT)

CHETRY: That's right. And we look at that map of the U.S. and almost -- it's 80 and above everywhere except San Francisco.

MARCIANO: That's the place to go.

CHETRY: The coolest place in July, right? San Francisco.

MARCIANO: Yes, Mark Twain once said that for sure. See you, guys.

CHETRY: Thanks, Rob.

MARCIANO: All right.

ROBERTS: Faith bringing Barack Obama and President Bush together. The Democratic candidate says he is for the President's faith-based programs and he'll even boost cash for some. How the religious right is reacting today.

CHETRY: Also still waiting for justice. It's a CNN exclusive. The USS Cole's former commander speaks eight years after a bomber killed 17 of his sailors.

ROBERTS: And shocking video from the ER waiting room. A woman ignored until she died. And a hospital staff in big trouble today. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: Twelve minutes now to the top of the hour. And it is the very latest in fundamentalist fashion.

CHETRY: Polygamist wives now selling their distinctive and handmade prairie look on the Internet. It's the "Most News in the Morning."

(BEGIN VIDEO TAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): You know you've seen one too many news story on that polygamist sect when you stop counting wives and start counting prairie dresses.

UNIDENTIFIED FEMALE: We hang our dresses.

MOOS: Pastel prairie dresses generally seen flouncing up the courthouse steps.

TIM GUNN, FASHION GURU: Who's talking about their crimes against fashion?

MOOS: Their latest fashion crime, the FLDSDress Web site, Fundamentalist Latter Day Saints, where you can buy a baby dress with bloomers or a girl's nightgown, all handmade.

UNIDENTIFIED FEMALE: This is our sewing room. We sew all of our clothing.

MOOS: The polygamist women hope selling kids' clothes on their own Web site will bring in some money. They make everything from overalls to underwear, long underwear worn in all seasons for religious reasons.

(on camera): These women are all about modesty. All buttoned up, no flashy colors. On their Web site, they quote Scripture from the book of Mormon.

(voice-over): "And they did not wear costly apparel, yet they were neat and comely." Though comely is in the eye of the beholder. The teen princess dress will set you back about 60 bucks. As one FLDS member told the "Salt Lake Tribune," "This is not about Wal-Mart quality." But on the Internet, the prairie look is the butt of jokes.

UNIDENTIFIED MALE: Even Quaker women think those ladies dresses so 1890s. I think these women are reading the Queen Victoria's secret catalogue. MOOS: Which brings us to comedian Mo Rocca.

MO ROCCA, COMEDIAN: You almost want her to take off the glasses, let her hair down and become Darrell Hannah.

MOSS: Mo got together with fashion guru Tim Gunn from "Project Runway" to critique polygamous style.

GUNN: Silhouette, horrible. Proportion, hideous. Do you think they do their own hair?

MOCCA: I think that there is one hairdresser in the compound and he is fabulous.

GUNN: Is he the one who doesn't have 14 wives?

MOSS: Actually, their hair done up in buns and braids is kept very long because they believed the wives will use that hair to wash Christ's feet or their husband's feet in heaven. It was a feet for Tim Gunn to redefine the prairie look.

GUNN: Take the sleeves off all together. So it would be sleeveless. I'd open up the top four buttons. I'd shorten it by a good 12 inches.

MOSS: But beware of making too much fun.

GUNN: Next year on Mark Jacobs' runway.

MOSS: In this age of overexposure, it's a shock when underexposure comes out of the closet. Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

ROBERTS: Do you buy many clothes online?

CHETRY: No.

ROBERTS: Not that, but --

CHETRY: I don't have that outfit yet. However, they said that they don't have costly clothing or they're not supposed to. That's it's, you know, a sin. $60 for a pair of kid's pajamas seems costly to me.

ROBERTS: It's a little (INAUDIBLE), isn't it?

CHETRY: Yes. How about it? Maybe it's vintage.

ROBERTS: 51 minutes after the hour. We'll be right back.

Church and swing state.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: Faith and values can be a source of strength in our own lives.

(END VIDEO CLIP)

ROBERTS: Barack Obama makes a run at the evangelical vote with a page from the GOP play book.

Plus, flash back.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It seems just so hippy, did this 60s.

(END VIDEO CLIP)

ROBERTS: Magic mushrooms make a comeback.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's a very beautiful feeling. And then the feeling that we were all one.

(END VIDEO CLIP)

ROBERTS: How they can provide modern day comfort for the sick. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the "Most News in the Morning." At six minutes to the top of hour, in your "Political Ticker," this Wednesday. San Francisco's controversial mayor has launched an exploratory bid for governor. Liberal Democrat Gavin Newsom could run in 2010. Newsom challenged California's ban on same-sex marriage back in 2004 and performed California's first legal gay marriage last month.

Developing this morning, word that Barack Obama may have received his own discounted home loan. "The Washington Post" reports that he locked in on a low rate for a super, super jumbo loan to finance his $1.65 million home in Chicago. This was back when he first became a senator. The campaign defended the deal, saying he got a low rate because lenders were competing against each other for his business.

CHETRY: Bab's changing her tune. Barbara Streisand is now endorsing Barack Obama. Streisand posted on her Web site that the Illinois senator, quote, "Has awakened in many of us the notion that we can again be hopeful." She was one of Hillary Clinton's strongest supporters and endorsed her back in November.

Well, Barack Obama's fist bumping days may be over. He reportedly refused to bump fists with a boy as he was touring the east side community ministry in Zanesville, Ohio. Obama simply said no. And then, if I start that, Obama's fist bump with his wife, Michelle, the night he clinched the nomination became one of the most talked about moments on the campaign trail.

And for more up to the minute political news, head to cnn.com/ticker.

John?

ROBERTS: Senator Obama is reaching out to evangelical voters, even going as far as backing President Bush's faith-based initiatives in promising a half a billion dollars to expand the programs.

David Brody is the senior national correspondent for the Christian Broadcasting Network and he joins me now from Washington.

David, this was a controversial program in the Bush administration. But Senator Obama seems prepared to weather that controversy. Let's listen to a little bit of what he said about it yesterday.

(BEGIN VIDEO CLIP)

OBAMA: I know there's some who bristle at the notion that faith has a place in the public square. But the fact is leaders in both parties have recognized the value of a partnership between the white house and faith-based groups.

(END VIDEO CLIP)

ROBERTS: So, David, what's going on here? Is this the intersection between church and swing state?

DAVID BRODY, CHRISTIAN BROADCASTING NETWORK: Well, that could be one way of looking at it, no doubt. But listen, you know, the reaction I think is relatively positive. I mean, you know, more money in essence for faith groups. Better access, at least, according to the Obama campaign. And faith groups taken seriously.

You know, Barack Obama had seemed to be one step ahead when it comes to this faith and politics intersection. And it's gone on, John, here for a few years. I mean, go back to 2006, that call to renewal speech where he talked about his personal commitment to Jesus Christ. And, of course, that meeting with religious leaders all across the ideological spectrum in Chicago a few weeks ago.

You know, where Franklin Graham was at that meeting. John McCain met with Franklin Graham, but it was not until after Barack Obama did. So it seems like Barack Obama and with this situation in Zanesville, Ohio yesterday with the faith-based initiative, so to speak. He seems to be one step ahead when it comes to faith and politics.

ROBERTS: Yes, David. I was covering the White House when President Bush launched his faith-based initiative and I remember, there was controversy and criticism from the Democratic side. I mean, there's one or two liberal groups that are skeptical of what Senator Obama is proposing. But why aren't we hearing more of a human cry from Democratic circles? Is it just because it's a Democratic proposing it?

BRODY: Well, there could be more of that in the days and months and obviously weeks to come. But I think what you're seeing here from Barack Obama's camp is clearly a play not necessarily to the religious rite, but to a guy who takes his faith very seriously.

He has done that from day one. And this is pretty much a heart motivated situation by Barack Obama. Nothing more, nothing less.

ROBERTS: Senator Obama is running on faith like no Democratic that I've ever seen before. And he is getting some help. You reported on a group called The Matthew 25 Network. It's a religious political action committee that's put together an ad that highlights Senator Obama's faith and is paying to have it run on religious radio stations. Let's listen a little bit about what that ad says.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Jesus taught us that we must listen to what a man says because out of the overflow of his heart, his mouth speaks. So here are words from Senator Obama's heart.

OBAMA: Kneeling beneath that cross on the south side, I felt that I heard God's spirit beckoning me. I submitted myself to his will.

(END VIDEO CLIP)

ROBERTS: That is a pretty significant appeal to evangelicals.

BRODY: Yes, it sure is. I felt like, you know, getting in the hammock and taking off my shoes. I mean, you know, with the clouds rolling and the heavens opening -- the whole thing. I mean, sure, the ad is extremely strong. It will be effective, you know. And why is it effective? Because he's going on Christian radio, conservative Christian radio, and basically talking about his personal commitment to Jesus Christ. It resonates with evangelicals.

Now, John, the flip side here is that there are going to be groups that are going to come out now and say -- well, wait a minute, there's another side here. They're going to mention a lot of Obama's progressive positions and then get that on Christian radio as well. That's the new battleground.

ROBERTS: You know, religious voters may appreciate his focus on faith and this message of hope that he puts out there, but, you know, he's also in favor of abortion rights. Would religious voters put aside some of those core issues because they like what he's saying about faith?

BRODY: Well, we're going to find out. And this is the tap dance. You know, we've talked about the John McCain tap dance between independent voters and evangelicals, and how he has to play it.

Barack Obama has a tap dance of his own and that tap dance is pretty simple. He has appeal to evangelicals by talking about his commitment to Christ. So he has an audience. He has a receptive audience.

Now, the question is, what will happen from this day forward? For example, we also reported on CBN News yesterday about these pro-gay rights flyers that the Obama campaign was handing out in St. Louis this past weekend. And you know, he's going to have to -- he's talking to evangelicals, but he's also talking about the homosexual agenda he wants to have as part of a Barack Obama administration. That tap dance would be very interesting to watch the next few weeks.

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