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Larry King Gets Street Named for Him in Los Angeles; Iranian Missile Tests Send Oil Prices to New Record Highs; Cease Fire in the Niger Delta Region in Nigeria; Freddie Mac and Fannie May in Financial Trouble; New IPhone Released Today as Hundreds Gather Outside Stores

Aired July 11, 2008 - 10:00   ET

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

TONY HARRIS, CNN ANCHOR: You know, he's the king of talk and now he is also the king of the block, king of the hills. CNN's own Larry King gets a street renamed in his honor. The intersection of Sunset and Cahuenga Boulevards in Los Angeles is now Larry King Square. The street was named after King to honor his 50 years in broadcasting. Our main man. It is adjacent to the CNN Los Angeles bureau, where "LARRY KING LIVE" is based. Way to go, Larry.
FREDRICKA WHITFIELD, CNN ANCHOR: Nice address. Good morning, everyone. I'm Fredricka Whitfield, in for Heidi Collins.

HARRIS: And I'm Tony Harris. Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown.

Iranian missile tests send oil prices to new record. That is costing you money on Wall Street right now. It is issue number one.

WHITFIELD: And they're called flying bombs. Homemade explosives, perch top rockets, the newest threat to American troops in Iraq.

HARRIS: Is this our economy taxing your marriage? Our guest can help. Share your situations, send us your e-mails today, Friday, July 11th. You're in the CNN NEWSROOM.

WHITFIELD: Oil prices gushed into record territory. Supply fears driving the market. Iran's missile launches and violence in Nigeria all sending oil past $147 a barrel. And now take a look at the big board. The Dow down 109 points, 110 points. That's an improvement considering it was just about 15 minutes ago when it was more like 159 points down. Our Ali Velshi is watching the market, watching as well the barrels of oils. So what changed in just 15 minutes?

ALI VELSHI, CNN, SENIOR BUSINESS CORRESPONDENT: Well, you know, we'd like to look at trends so I'm happy there has been a change. Maybe it's because we saw quite an aggressive increase in the price of oil this morning overnight and that has slowed down. Here's the - the good news it slowed down. The bad news is oil was above $147 this morning. Yesterday it closed at $141 and change. That was an increase of $5.60. That, by all standards, is a very big increase, it's the second biggest increase on record for oil.

Overnight, until this morning, we saw an increase of almost that same amount. So we've gained more than $10 in 24 hours. So that, of course, is part of what was spooking markets. On the other side, we've now seemed to hit that limit for today. But we don't know. It's only 10:00. We got a long way to go, Fred.

I'll tell you what's going on. You mentioned some of it. Number one Iran testing some missiles, conventional missiles, that indicated that they could reach as far as Israel. Now, Iran has often said if they are attack by Israel or the United States they will shut down the Strait of Hormuz through which 40 percent of the world's oil travels, probably about 15% or 20% of the oil the world uses every day. So, that caused prices to go up. The second thing is Nigeria, is the fourth largest source of U.S. oil, the fourth biggest exporter to the United States.

They have a cease-fire in the Niger delta region of Nigeria where have been attacks on oil facilities. That cease fire comes to an end midnight local time, tonight it's about 7:00 p.m. Eastern time tonight. And the rebels have indicated that they will resume attacks on those oil facilities. So these are real supply concerns that have gotten traders bidding the price of oil up. We're still hanging around the high $146 range for a barrel of oil right now, Fred.

WHITFIELD: Oh, interesting. If I could ask you, Ali, just to kind of make a turn from the talk of oil in the markets to now talk about mortgages and that mess, Freddie Mac, Fannie Mae -

VELSHI: Right.

WHITFIELD: -- having some announcements yesterday and now we understand the Treasury Secretary will have some comments on that today.

VELSHI: Yes. We just got news about that the Treasury Secretary will have something to say shortly. And we'll peruse that when we get it. The issue here is that Freddie Mac and Fannie Mae, which are quasi-governmental agencies continued to be in financial trouble. They have been for some time. The stock of those companies are publicly traded and they have lost most of their value in the last three gays. They continue to trade much lower today. There's a discussion or reports that there are discussions at the administration level about whether the government would formulate a bailout for Freddie and Fanny. And that's what's affecting markets right now as well.

WHITFIELD: All right. You have to wonder the word "afford," you know, where is at that. That has to be prominent in all of this. Can this country afford to help bail them out along with every other mortgage lender out there, too.

VELSHI: That's exactly right.

WHITFIELD: Thanks so much, Ali. Appreciate it. Tony.

HARRIS: Will someone bail me out?

WHITFIELD: No. We all need bailing out, to some degree, right? HARRIS: Oil and the economy are high on the President's agenda today. He meets with his economic team at the Energy Department in about 30 minutes. Brianna Keilar live from the White House now. Brianna, good to see you. What is the President hoping to accomplish this morning?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Tony, a year ago gas was at about $3 a gallon. Today it's just under $4.10 a gallon. So President Bush is trying to show Americans that he is focus on finding solutions to these soaring energy prices. He has asked the Department of Energy - he'll be there hour. He's going to be meeting with his economic team, the vice president as well as several members of his cabinet, secretaries of agriculture, commerce, transportation, energy, getting a briefing from them. And then he's going to be giving a statement on the economy, talking about how energy prices are affecting families, businesses, farmers when it comes to these high transportation costs and these soaring food prices. Tony.

HARRIS: And Brianna, we've heard it from the President recently. I'm wondering if we'll hear it from him today. Do you believe he'll talk a bit about offshore oil drilling?

KEILAR: No. We've heard that he is going to be speaking about that, according to White House spokesman Tony Fratto. He'll be talking more about that announcement he made a few weeks ago, urging Congress to lift that ban on offshore oil drifting on the outer continental shelf or on the U.S. coast. So, he'll be talking about that. Of course, it's a very contentious issue, though. It's not really expected to go anywhere with democrats heading up Congress at this point. But he's going to be talking about that increasing domestic oil output. He's also going to be talking about increasing refinery capacity here in the U.S., Tony.

HARRIS: That's right. OK. Brianna Keilar is at the White House for us. Brianna, thank you.

WHITFIELD: Meantime, big-time worries in the west right now. Out of control wildfires closing in on homes in two states. In California, firefighters are battling to save the town of Paradise, shifting winds forecast for today or similar to those who pushed the fire to destroy dozens of homes this week. And flames on a ridge line lit up suburban Spokane Valley, Washington overnight, winds gusting up to 50 miles an hour stoked the fire. At least eight homes destroyed but no one has been hurt.

HARRIS: With daylight comes a bit of hope and lighter winds. Firefighters in eastern Washington catch a bit of a break with the weather today. They certainly need it. 50-mile-an-hour gusts pushed fires yesterday. Eight homes were destroyed in Spokane Valley. One resident talked with our affiliate KREM as he watched his neighbor's home go up in flames.

(BEGIN VIDEOTAPE)

UNIDENTIFIED REPORTER: Greg Baker, you were living in the area where we're standing right now and you even said you're not yourself right now as you're watching this . What is it like?

VOICE OF GREG BAKER, SPOKANE VALLEY RESIDENT: It's surreal. I've lost my appetite and dinner's off. This is something I'll never forget.

UNIDENTIFIED REPORTER: Did you ever expect because as we've been talk about these homes are surrounded by tense timber, did you ever think that something like this could happen in this area?

BAKER: It has happened before, but I thought people would make the right precautions, you know, keep their trees cleared from their immediate properties. But you know, that's half the appeal of living up here, is the woods. And living amongst the trees. So I don't know what to say. It's just so unfortunate.

UNIDENTIFIED REPORTER: And you mentioned you had seen something like this before. Were you here for firestorm in '91?

BAKER: I was visiting. I had friends over in Ponderosa and my uncle lived over there at the time. And it came very close to burning his house, but, yes, I didn't really think it would - I mean, I'm amazed that it has grown to this magnitude. It's just with the wind. And I don't know what the cause was, but I guess it's immaterial right now. It's just devastating.

(END VIDEOTAPE)

HARRIS: It's not even his house, and he is -

WHITFIELD: So sad.

HARRIS: How about that feeling of total and complete helplessness. What do you say, we check in with Bonnie Schneider. Bonnie, we'd love to report to folks that there was a break in the conditions. Maybe? Maybe not today?

BONNIE SCHNEIDER, CNN METEOROLOGIST: Not quite today, but we're getting there. We're getting some improvements. I'll show you in a moment. I just want to let you know that first off we have a red flag warning until 8:00 Pacific time so not that much longer, but we're still looking for high temperatures, low relative humidity and gusting winds up to 30 miles per hour. And that's for in and around the valleys of Sacramento and Stockton. But take a look at this. The heat advisories we had in place earlier are no longer in effect, which is good news for San Francisco. For example, we have a live picture to show you of San Francisco at this hour.

Let's take a look. You can see haze that's the poor air quality that we've been reporting on here on CNN. And that would persists. We're seeing poor air quality across much of California. I want to take a look now at Google Earth. We've highlighted some of the areas where we have bad air quality. Green is good. Yellow and orange is where the air quality is poor. You have to realize, however, in the past couple of weeks we've seen these colors in pink and purple on the highest scale so it's slowly improving but still a threat, especially for those that have upper respiratory problems. You don't want to be out in conditions like this.

And speaking of some heat that's going to make things a little bit worse, we still have heat advisories in place, meaning temperatures could climb into the upper 90s to triple digits as we go through the afternoon in some parts of California. Now, as we head further to the south and east, we're getting what's known as monsoonal moisture across Arizona, meaning we're getting heavy rain from Phoenix to Tucson and especially in and around areas of southern New Mexico. This is very typical at this time of year to get these thunderstorms.

We have a new flood warning in effect for southern Arizona, a flood watch for southern New Mexico. Monsoonal moisture means the reversal of winds, instead of winds coming from the north, this time of the year they come from the south. Tapping into that moisture coming from the Gulf of Mexico and from the Pacific Ocean and that's why we tend to get some of the heavier rains this times of year, in and around this region.

As we take a look at the map we're also tracking the threat of a severe storm in and around cities this afternoon and tonight, in Minneapolis and possibly towards Chicago. But we're seeing some stronger storms popping up in and around Wisconsin. If you're traveling into Green Bay, some of that rain is heavy. And we've got some frequent lightning strikes. This is just early. So in the afternoon, Fredricka and Tony, we will see some more severe weather.

HARRIS: I hear you say lightning strikes I think of California again because so many of those --

WHITFIELD: I know, like dry lightning.

HARRIS: That's right. That's right. All right, Bonnie, Thank you.

WHITFIELD: I was confirming the worst. The remains of two American soldiers have been found. 14 months after they were kidnapped in Iraq. That confirmation coming from the family of one of the soldiers. Our Frederik Pleitgen is following developments from Baghdad.

FREDERIK PLEITGEN, CNN CORRESPONDENT: Very sad news for the families of Sgt. Alex Jimenez and Private First Class Byron Fouty. The military came and approached their families yesterday afternoon. Alex Jimenez's father told CNN and told them that the remains of their son had been indeed found in Iraq. Here's what Alex Jimenez's father had to say.

(BEGIN VIDEO CLIP)

JIMENEZ (through translator): It's closure that now we know what's happened but I don't know if it alleviates it for me. We now know what it is. If it's one thing or the other. He decided since he was young to join the Army. I'm very proud of my son.

PLEITGEN: So far the military here in Iraq is only willing to confirm that it has found human remains in that area of operations and that those human remains were indeed brought to the U.S. for positive identification. We're looking for a statement from the U.S. military sometime later today, maybe even tomorrow. Now it's been 14 months since these soldiers were abducted here in Iraq and the U.S. military in that area of operations has never stopped looking for these two soldiers, certainly even in the past couple of months when it was looking more and more like these two soldiers were not alive. Even then, the operations continued to try and find them. Fred Pleitgen, CNN, Baghdad.

(END VIDEO CLIP)

WHITFIELD: And the military still has one soldier listed as missing in Iraq. Army specialist Ahmed K. Altaie. He was allegedly kidnapped in October of 2006 while on his way to visit family in Baghdad. The official number of troops killed so far in Iraq in that war now stands at 4,117.

HARRIS: Another female soldier is missing from Ft. Bragg, North Carolina. We have just learned her name. She is Second Lieutenant Holly (inaudible), 24 years old and assigned to Womack Army Hospital at Ft. Bragg. Right now police are going through her burned-out apartment. They say the fire was deliberately set. And the lieutenant's car was found in the parking lot. Police say she is going through a divorce.

Last month the body of Army Specialist Megan Touma was in a Fayetteville motel. The pregnant soldier was also stationed at Ft. Bragg.

WHITFIELD: And now, we have an update on one of the most infamous cases of a school teacher who had sex with a student. Today Debra Lafave, remember her? Well, it's officially released from nearly three years of house arrest. Still, she faces seven more years of probation. As you remember, the Tampa area teacher was arrested more than four years ago and charged with having sex with a 14-year- old boy. Lafave later blamed psychiatric problems and accepted a plea deal that kept her out of prison.

HARRIS: Well, sure, times are tough right now. The economy is tough. But you really need to stop whining. That message from a top McCain advisor. Is he talking to you?

(COMMERCIAL BREAK)

WHITFIELD: Viagra, birth control? A candidate on the spot.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I certainly do not want to discuss that issue.

(END VIDEO CLIP)

WHITFIELD: A very uncomfortable moment on the trail.

(COMMERCIAL BREAK) HARRIS: Expanding his war zone authority, General David Petraeus now chief of U.S. central command, he was easily confirmed by the Senate yesterday as the new man in charge of U.S. forces in the Middle East and Afghanistan. It comes 15 months after he took over as the top U.S. commander in Iraq leading the so-called surge troops that proved vital to a drop in violence. The Senate also voted in favor of Petraeus' second in command moving up in the ranks, Lt. Gen. Raymond Odierno promoted to four-star rank. He will replace his boss as chief military officer in Iraq.

Deadlier devices insurgents in Iraq now using a powerful new weapon. Live now to CNN Pentagon correspondent Barbara Starr. Barbara, good morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning to you, Tony. There's been a lot of talk about how things are getting better in Iraq, but now once again a new weapons threat from the insurgents.

(BEGIN VIDEOTAPE)

STARR (voice-over): A massive explosion here in Baghdad's neighborhood left 18 civilians dead and 29 wounded. But this time it wasn't an improvised explosive device. It was a new potentially more deadly version, improvised rocket-assisted mortars.

MAJ. GEN. MICHAEL OATES, U.S. ARMY: There's an improvised munition locally fabricated, not done by a person without skill, and it's largely confined to the Baghdad area. It does concern us.

STARR: Called IRAMs, they have the potential for killing large numbers of American troops and Iraqis. The U.S. believe insurgents backed by Iran are lining the backs of trucks with launch tubes, then Iranian-made rocket charges propel explosives like mortar and tank shells sometimes over walls more than 20 feet high. The type surrounding U.S. bases.

OATES: It is a homemade multiple launch rocket system and it is very dangerous and we will attempt to eliminate this threat.

STARR: This type of technology has been used before, a similar weapon may have been used by the I.R.A. in a 1991 attack on number 10 Downing Street.

(END VIDEOTAPE)

STARR: You know, Tony, in Iraq, three U.S. troops have been killed by these new weapons. Once again, it is Iraqi civilians largely unprotected on the streets who are suffering the most from these new killers. Tony.

HARRIS: Always seems to be the case. Barbara Starr for us, at the Pentagon. Barbara, thank you.

WHITFIELD: A presidential candidates targeting two battleground states today. John McCain focuses on the economy and women voters during a town hall meeting in Wisconsin. That's expected to begin in less than an hour. And Barack Obama campaigns in Ohio. He'll discuss his plans for what he calls a secure energy future. Obama's town hall meeting also set to start in the next hour. We hope to bring you both candidates live.

John McCain distancing himself from a comment by one of his top economic advisors. McCain says former Senator Phil Gramm wasn't speaking for him when he made the remarks to the "Washington Times."

(BEGIN VIDEO CLIP)

PHIL GRAMM, FORMER U.S. SENATOR: This is a mental recession. We've sort of become a nation of whiners.

MCCAIN: I don't agree with Senator Gramm. I believe that the person here in Michigan that just lost his job isn't suffering from a mental recession. I believe the mother here in Michigan or in America who's trying to get enough money to educate their children isn't whining.

(END VIDEO CLIP)

WHITFIELD: Gramm issued a statement explaining his comments. He says - "the whiners are the leaders. Hell, the American people are victims, but it didn't quite come out that way in the story." That quote from Phil Gramm.

Well caught off guard, the political side effects of Viagra puts John McCain on the defensive. CNN's Joe Johns explains.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: The Straight Talk Express started sputtering a little when a reporter asked John McCain whether it was fair that many insurance companies that don't cover birth control pills for women do cover Viagra for men.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I certainly do not want to discuss that issue. I don't know what I -

UNIDENTIFIED FEMALE: ...you voted against coverage of birth control, forcing insurance companies to cover birth control in the past. Is that still your position?

MCCAIN: Look I'll look at my voting record on it, but I don't recall the vote right now. I'll be glad to look at it.

JOHNS: What triggered that uncomfortable exchange? Comments from McCain's co-chairwoman, Carly Fiorina, the high-profile CEO who is helping McCain win over women voters. Earlier this week, Fiorina blasted insurance companies, saying "there are many health insurance plans that will cover Viagra but won't cover birth control medication. Those women would like a choice." McCain later faced a grilling about Fiorina's charge.

UNIDENTIFIED FEMALE: I guess her statement was that it was unfair that health insurance companies cover Viagra but not birth control. Do you have an opinion on that?

MCCAIN: I don't know enough about it to give you an informed answer because I don't recall the vote. I have pass thousands of votes in the Senate --

JOHNS: For the record, in 2003, McCain voted no on legislation requiring insurance coverage of birth control. His campaign says contraception is a personal matter, best left up to individuals not government. Joe Johns, CNN, Washington.

(END VIDEOTAPE)

HARRIS: Student loans, you know, they make college possible for many, but is paying them back making it impossible to make ends meet? Gerri Willis will have some solutions.

(COMMERCIAL BREAK)

HARRIS: College graduation. Your diploma is in hand, but your debt is hanging overhead. If you're struggling to make payments as you build a career, you do have options. CNN's personal finance editor Gerri Willis has tips.

(BEGIN VIDEOTAPE)

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR (voice-over): The burden of paying back student loans is causing many graduates to make radical changes. People are delaying marriage, buying a home or starting a family. If you're having trouble making your payments, there is relief out there.

WILLIS (on-camera): If you have federal loans, consider consolidating. Bundling them together into one big low with a low rate of interest. To do that go to the Department of Education web site at loanconsolidation.ed.gov.

If you just can't afford your federal loan payments, there are options. Apply for an economic hardship deferment or forbearance. This suspends or reduces your monthly payments, but interest will keep accruing. You can also ask for an alternate payment plan. This can lower your monthly payment, but it also increases the life of your loan. So, you'll pay more interest in the long run. And of course, if you're still in school, you can go to your college financial aid office at the job loss or disabilities to change your financial situation, ask for a professional judgment review. You may get more financial aid so you can at least finish school.

Experts suggest documenting your financial loss using a pink slip or a copy of your unreimbursed medical bills. Send it into the financial aid office by certified mail.

There are severe penalties to defaulting on A student loan, including ruining your credit. There are steps you can take to make sure the worst doesn't happen to you. Gerri Willis, CNN, New York.

(END VIDEOTAPE) WHITFIELD: All right. Welcome back, everyone. I'm Fredricka Whitfield, in for Heidi Collins.

HARRIS: And I'm Tony Harris. Welcome back. Good Friday getaway day in the NEWSROOM.

WHITFIELD: Oh, yeah, get away day, get away from these terrible numbers. They continue to drop. Just about 30 minutes ago we thought maybe they were rebounding. Now the Dow down 165 points. And this compounded by the fact that oil prices a barrel at $147 a barrel and some change, a new record high. We'll be checking in with our Ali Velshi and the rest of our money, our economy "Issue number one" team when we can.

Meantime, the economy, how is it taxing your marriage? Or is it? Share your wedded blues. We're beginning to already see your e-mails. We want more. The address is cnnnewsroom@cnn.com. We'll get them on the air and get some of your questions answered.

HARRIS: We want to update the story because we have some additional information, I believe, a photo to share with you. We now know the name of that female soldier missing from Ft. Bragg, North Carolina. There she is. She is Second Lieutenant Holey Wimunc, 24 years old, just 24 years old. And assigned to the Army Hospital in Ft. Bragg. Right now police are going through her burned out apartment. They say the fire was deliberately set, Fred. And the lieutenant's car was found in the parking lot. Police say she was going through a divorce. Last month, the body of Army Specialist Megan Tuoma in a Fayetteville motel. The pregnant soldier was also stationed at Ft. Bragg.

WHITFIELD: And now to Texas where funerals are being planned this morning for twins who died after they were given an overdose of a blood thinner. Doctors at a Corpus Christi Hospital said there is no direct link between the overdoses and the death of Kevin and Kylan Garcia. The infants' grandparents are scheduled to speak out however this hour. We'll bring you some of their comments as soon as we get them.

And teen pregnancies, up for the first time since 1991. A new report from the National Institutes of Health says the numbers climbed between 2005 and 2006 but, they say there is not enough information to determine exactly what has caused the increase or to determine whether the jump is a trend or an aberration.

HARRIS: Calling all iPhone fans - you, Fred? OK, the new and improved version is on sale. Does it live up to all the hype? We will touch the pros and the cons.

(COMMERCIAL BREAK)

HARRIS: You know, when it comes to oil, it seems what goes down must go up. And after a brief retreat earlier this week, prices surge dramatically yesterday and again today. Boy, we need an energy fix.

As CNNmoney.com's Poppy Harlow has our Energy Fix from New York. Any quick fixes out there, Poppy?

POPPY HARLOW, CNNMONEY.COM: Oh, boy, Tony. No, not much relief in sight. No quick fixes.

What we're seeing today, just a dramatic Friday for the oil market. Oil briefly climbing above $147 a barrel, a new record high. Right now not far from that. And while our own oil consumption in this country plays a role, Tony, a lot of the factors affecting the price we're seeing today are coming from far away. Check out what's going on.

In Nigeria, the fourth biggest exporter of oil to this country, a cease-fire is about to end. That raises supply concerns. Also in Israel, there are reports that the army has conducted military exercises in Iraqi air space. That has a lot of people concerned about increased tension with Iran. And Opec's chief has said, if Iran is attacked the price of oil would be quote, "unlimited." And topping it all off, workers for Brazil's oil company, Petrobras are threatening to strike on Monday. So, combine all of that with the current supply and demand issues that we've got. And this is why we have record oil prices today, Tony. Pretty astounding.

HARRIS: Yes. Boy, we are really trying to track down that story, that second item there, the Israeli military Navy conducting exercises over Iraq. That would be really dramatic.

Poppy, give us something. Maybe some signal that perhaps there is a light at the end of the tunnel here?

HARLOW: You know, I think there is a little glimmer of hope at the end of the tunnel despite these surging prices.

Driving habits in this country are changing so dramatically. Gas consumption in the U.S. is falling more than any analyst could really have imagined a year ago. Most of us are coming to the realization that the days of cheap gas are all but over. Case in point, global warming stickers are starting to appear this month, on a lot of cars in California. They become mandatory in that state, next year.

What these stickers are, you see them right here. They gauge how efficient a car is. Here's the average, right here. So, this car is a little above average. But, if you see one on the back of an SUV, you can bet it is not energy efficient at all. So, combine that reading with smog scores and miles per gallon, the consumers really have the tools now, in California to make smart buying decisions. We're going to see those stickers here in New York in 2010. And even without all the stickers, we know the sales of SUVs and pick-ups have been falling. So, we're seeing falling consumption here. Hopefully we'll see those stickers around the country, some smaller cars. And that will certainly help with the demand side of it, Tony.

But again, record prices for the oil market today.

HARRIS: OK. Poppy Harlow, in New York at our Energy Fix desk.

Poppy, have a great weekend. Thanks.

HARLOW: You too, Tony.

WHITFIELD: All right, Tony. And more on one of those issues impacting the oil prices.

Iran's nuclear ambitions on the table and under the microscope. This week's test-firing of missiles further underlines international concerns. And in the background, diplomatic talks aimed at diffusing them.

Earlier on CNN's "AMERICAN MORNING," we heard from CNN chief international correspondent Christiane Amanpour. She looks at the high stakes and the rising suspicion surrounding Iran's ambitions.

(BEGIN VIDEO CLIP)

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL CORRESPONDENT: They maintain that they sent off a volley on Wednesday and that they did again on Thursday. The United States Military Intelligence and Radar Surveillance has a different view of that. They feel that there weren't that many sent off on Thursday.

But the fact of the matter is that there were some sent off. And it happened at a time when the nuclear negotiations are under way and it's a very tense period in that region. Particularly given that Israel has said in the past that it needs to take out Iran's nuclear facilities if there's no diplomatic resolution. And that there have been those massive Israeli exercises. So what's happening is, a cycle of rhetoric and counter rhetoric with threats coming to Iran's nuclear facilities and Iran saying that it's going to defend itself.

JOHN ROBERTS, CNN ANCHOR: You know, Christiane, we saw this photograph. I don't know if it was an official or what. But it showed four missiles being launched in the desert. And then we have this other photograph on the right here that shows no, it was only three. And that there was one that was left over. There is some contention from the U.S. that that fourth missile that did not go off on Wednesday, was the one that was fired on Thursday.

Do we have any confirmation of that from anywhere else other than U.S. officials?

AMANPOUR: No. Although obviously, others in the region and those with surveillance capability have been looking at it,as well. And frankly as Ben Wedeman reported from Jerusalem the first day of these missiles, or second day perhaps. It has not received a huge amount of attention in the Israeli press. Perhaps because they are aware as well, that there was a discrepancy to Iran's claims.

But also, Iran has for years consistently over exaggerated its military capability in terms of the ballistic missiles targeting and range and accuracy. Even in terms of its nuclear program with its centrifuges. There's been a huge dispute over whether or not it is actually capable of doing what it threatens. But, the fact remains that it is concerned. it is sending out these signals. It is muscle flexing because it feels that it is under belligerent and bellicose rhetoric from the United States and from Israel, as well.

And right now I do have a little bit more news about the nuclear negotiations. That they will take place in Geneva on July 19th between Javier Solana and the Iranian negotiator, Jalili. And these are to negotiate pre-negotiations, if you like. Iran still has not fully given its response to the latest E.U. and U.S. proposal.

(END VIDEO CLIP)

WHITFIELD: Christiane Amanpour, there.

Well, Iran's government has not responded to the widespread reports that those photos were doctored.

(WEATHER REPORT)

WHITFIELD: All right. Well, a story that has everyone talking. They're just so anxious. The new iPhone flying off the store shelves already. We'll talk to a techie who's already making calls, next.

(COMMERCIAL BREAK)

(BUSINESS HEADLINES)

HARRIS: Boy, let's see that live picture out of Chicago. The lines, Fred.

WHITFIELD: Oh, gosh. For the iPhone?

HARRIS: For the iPhone.

WHITFIELD: People, come on.

HARRIS: People, come on.

WHITFIELD: I never get this. I never get it.

HARRIS: It really is not that big of deal anymore. Every computer company, every teleco company is coming up with a device that brings the world to a handset near you. You know what? We're going to push back.

WHITFIELD: The iPhone it's a whole other level. But, still. You're going to be able to get this next week. I don't get why you got to be the first.

HARRIS: Thank you..

Marc Saltzman is going to join us in just a couple of minutes.

WHITFIELD: But I guess I'm old school.

HARRIS: I'm old school right along with you.

We're going to take a break. You're back in the NEWSROOM in just a moment. (COMMERCIAL BREAK)

HARRIS: All right. Let's talk about an IPhone frenzy. The new updated, upgraded, latest and greatest iPhone went on sale this morning on the east coast and the Midwest. The west coast launch is just about a half hour away. Thousands -- look at this. Live picture there. We've split the screen for you.

WHITFIELD: Where's my husband? I know he's in a line somewhere.

HARRIS: You think so?

WHITFIELD: Because he's always got to have the latest, greatest and all that kind of stuff.

HARRIS: Well, look what we've done here. New York on the right. Is that Chicago, Michael, on the left there? Thousands camped out.

WHITFIELD: Oh, my gosh!

HARRIS: Oh, boy, all around the world, I guess. To be one of the first to buy one.

WHITFIELD: You've got to be hip. Hip and happening.

HARRIS: Is that what it is? What's all the fuss going on here?

WHITFIELD: And edgy.

HARRIS: And edgy. Yes, got to be edgy with young people today. And old folks, like us, I suppose.

Joining us now Marc Saltzman, a high-tech expert, author, columnist.

Mark, all right, look. Let's show these pictures again. Come on, let's be real about this. The iPhone really not a big deal anymore, Mark. Given that every computer company...

MARC SALZMAN, TECHNOLOGY COLUMNIST & AUTHOR: Well...

HARRIS: No, no, no. Hold on. And every teleco company is fashioning some kind of device capable of doing everything the iPhone can do, correct?

SALTZMAN: Yes. Well, it may sound geeky to line up for the iPhone. But, when you see what this digital Swiss Army Knife can do, you might be eat your words, yes. But, yes, it's pretty amazing.

HARRIS: All right, well, all right. How long have you had the device?

SALTZMAN: I've had it for about 10 days.

HARRIS: All right. And what can it do? What makes it the latest and greatest? Can you show us a couple of things here? SALTZMAN: Yes, sure. Well, as the name suggests, the iPhone 3G offers 3G wireless connectivity. So, that's high-speed broadband-like speeds without having to find a wi-fi hot spot.

So, what we'll do is I'll show you the web, the Safari browser. And we've got the CNN home page there.

HARRIS: That's what I want.

SALTZMAN: You can see how fast it loads up.

HARRIS: Yes.

SALTZMAN: These are wi-fi networks. I want to show you, I'm not going to use one of these wi-fi networks. I'm going to use 3G instead. So, I'm going to close that down. Cancel. This is 3G. And as you know, it's got that built-in acceleramator so it will automatically change to the perspective. So 3G is the big one.

HARRIS: That is -- I like that. Wait, is there something else you want to show us?

SALTZMAN: Yes, sure. So, GPS now is built right in, unlike the first iphone.

HARRIS: GPS?

SALTZMAN: Yes. So it's a navigation unit. So this is an overhead map of where I am. We're using satellite imagery. And those red push pins are showing me the nearest coffee shops. I typed in coffee and it's going to take me to the nearest location. With turn by turn directions as well as the phone number and address and all that.

WHITFIELD: But, wait Mark. Can I interject? I know I'm like, you know..

HARRIS: Go, go, go, go, go.

WHITFIELD: Wait, because you know what? I was lost one time, in L.A. recently. And I asked this guy for directions and he pulls out his iPhone. I'm like, oh, he's killing me here. And he was able to direct me.

So, if he didn't have GPS before on the regular iPhone and that's what you've got on the new 3G or G3, how is it different? I don't get it.

SALTZMAN: Yes. Well, it's just like a stand alone GPS unit with one exception. It doesn't give you audio turn-by-turn directions like a stand alone one would. But expect that to be a download from the apps store, which is one of the other new hallmark features.

HARRIS: OK. Stop right there, Mark. Let's talk about this apps store. And I'm going to give you an opportunity to pull it up here while I sort of frame a question for you, here. I've heard some suggest that this is the real news here.

Not the sort of upgrades on the device, but the apps store that allows you to do what?

SALTZMAN: Right. So the apps store lets you download thousands of applications to customize the iPhone however you'd like. So, it's -- Apple opened up the platform to third-party developers so that means you know, 3D games, it's business applications and utilities. Everything from a rock band simulator to a medical encyclopedia that you can download. And you get to choose what you want. And you customize the look and feel of the iPhone.

So this is what the apps store looks like. It launched today. And there's a few hundred to start. But expect a few thousand you know, in no time. And it's pretty wild.

HARRIS: All right. I'll take your word for it.

WHITFIELD: I think I'm sold.

HARRIS: I'm not trying to do a commercial. Look, I'm not trying to do...

WHITFIELD: You just did.

HARRIS: He does it.

One more quick question for you, Mark.

SALTZMAN: Yes.

HARRIS: Michael, if we can, let's show everyone Chicago again. You see the big -- oh, Chicago went down? The big AT&T sign? All right. Come on now. Look, the iPhone is joined at the hip with AT&T. I want some choice here.

SALTZMAN: Yes. You're not alone. I think the first step is we're seeing AT&T dropping commitments. You know, the two-year plans. I think that's a great step. The price of the iPhone has dropped, with more memory. So i think that in time it will be opened up. Don't forget, today also marks the first time it's available in dozens of other countries around the world. Give it some time. We'll see if you'll have more choice when it comes to carriers.

HARRIS: How about all my all the whiz-bang features. Is it going to reduce my battery life here?

SALTZMAN: Yes. But it's got some built-in -- it's a great question. But, what's cool about the iPhone is it has some built-in sensors. One's called the proximity sensor. So, when you hold the iPhone up to your ear, like that, it actually knows that you're not using the screen right now. And it turns it off for you. And then when you take it away, it lights up again. So very you know, clever touches like that.

WHITFIELD: It's too smart for me. I'm getting dizzy here. I can't take. You had me and now I'm withdrawing. Too much.

HARRIS: All right, Mark. It's great to see you. Good weekend to you. That's good! Thanks.

SALTZMAN: Thanks you and to you.

WHITFIELD: That is neat.

All right. Let's talk about the president. President huddling with his top advisors now. Issue number on the agenda. They're not talking about the iPhone, not really. The economy as a whole. We'll hear from him, actually.

(COMMERCIAL BREAK)

HARRIS: How about this story? In Columbus, Ohio, a would-be rescuer says a falling toddler was saved by a miracle. The neighbor tried to catch the 20-month-old boy as he plunged from an upstairs window. The neighbor fell short. The toddler's luck did not. The boy just landed on a stack of tires that softened his landing. The youngster did have some head injuries.

(CROSSTALK)

HARRIS: The boy is recovering just fine today.

And good morning again, everyone. You are informed in the CNN NEWSROOM. I'm Tony Harris.

WHITFIELD: And I'm Frericka Whitfield, in for Heidi Collins.

Developments keep coming in to the CNN NEWSROOM this Friday, the 11 of July. Here's what's on the rundown.

Wildfire overruns homes in the Spokane area. We're also watching the ongoing battle to the south, in California.

HARRIS: Presidential politics. Both candidates speak live this hour. John McCain talks economy, Barack Obama, energy.

WHITFIELD: And oil shoots up, stocks take another dive.