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American Morning
Hurricane Dolly Intensifies; Obama Meets with Palestinian Leaders; A Reality Check on Obama's U.S. Troop Withdrawal Plan; Lawsuit Targets Costume Look-Alikes; The Policies That Led to the Mortgage Meltdown
Aired July 23, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Closing in. Hurricane Dolly targets Texas. Land fall expected within hours.
Plus, walking the line.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: In the interests of both the Israeli people and the Palestinians to arrive at a peaceful settlement.
(END VIDEO CLIP)
ROBERTS: Barack Obama in Ramallah, live this hour. And seeing both sides of the Mideast divide on this AMERICAN MORNING.
And good morning. Thanks very much for being with us. Lots of big news to tell you about on this Wednesday, the 23rd of July. I'm John Robertson, Washington, D.C. Good morning, Kiran.
KIRAN CHETRY, CNN ANCHOR: Hey, John. Good to see you. I'm Kiran up here in New York. And, you know, we're beginning with this breaking news of the latest on Hurricane Dolly.
This storm now packing nearly 85-mile-an-hour winds. Still gaining strength. And, again, expected to make land fall within hours along the Texas/Mexico border bringing more than a foot of rain to some parts.
Residents busy boarding up windows and they're being told to stay away from the real grand levees. Meanwhile, roads are packed across the border as Mexican authorities plan to move 23,000 people into shelters there.
CNN is your hurricane headquarters. We have live team coverage of Dolly in just a moment.
Barack Obama is in the West Bank. He's expected to meet with Palestinian President Mahmoud Abbas this hour. Earlier today he met with Israeli leaders including Israel's defense minister and Ehud Barak and President Shimon Peres in Jerusalem. Obama says he will start bringing the two sides together as soon as he's "sworn into office." And Iran's president, Mahmoud Ahmadinejad, praising this past weekend sit-down with the State Department's third highest ranking diplomat, William Burns. He called the discussion a "positive step forward." Secretary of State Condoleezza Rice says Tehran wasn't serious during talks with the U.S. and other nations in Switzerland. Iran now has less than two weeks to accept an incentives package in exchange for ending its nuclear activity.
ROBERTS: Back to the breaking news this morning. Hurricane Dolly gaining strength and approaching the Texas coast at this hour. Dolly is expected to make land fall around midday along the heavily populated Rio Grande Valley.
CNN is watching the storm from every angle this morning. Our Ed Lavandera is live on the border town of Brownsville, Texas. Reynolds Wolf is live on South Padre Island, but we begin with Rob Marciano. He is at the weather center in Atlanta with the latest on the storm's position.
Rob, how strong is it? Where is it headed?
ROB MARCIANO, AMS METEOROLOGIST: Well, it's still Category One, but it has increased in intensity. Good morning, John. And you can see here on the satellite picture a little bit of an eye. It's getting more well defined as it approaches the coastline. And the hurricane hunters that were in there just a couple of hours ago reporting a drop in pressure. So they have upgraded it by five miles an hour. Maybe even be increasing in intensity as we go on to the next couple of hours before land fall.
Sixty-one miles an hour from Brownsville. It's heading pretty much directly that way, northwesterly move about eight miles per hour. It has slowed down in the last 12 hours and that's kind of given it some room to breathe and some areas to intensify here.
The track generally to the northwest. We have hurricane warnings that are posted from Brownsville all the way up through Corpus Christi and tropical storm warnings northward almost all the way towards Houston. So here you go, Category One. There you see the backside of this. This really, the eastern side of this has really developed overnight tonight and that has really given it the structure needed to intensity. And by all accounts it looks like it will probably have just a little bit more room, a little bit more real estate to intensify here in the next couple of hours.
And for the first time since Dolly developed, National Hurricane Center saying there is a chance for this to become a Category Two before this thing makes land fall around midday today. And here you go again.
Not only that, John, we've got inland flooding problems across the Rio Grande. And, of course, when these things make land fall, the spin in the atmosphere creates the potential for tornadoes. Tornado watch posted until 11:00 a.m. That's the latest from here. Back up to you. ROBERTS: Rob Marciano for us this morning. Rob, thanks, and we'll check back with them. You know, I was listening last night to Chad Myers who was saying that the eye wall was having difficulty developing. As Rob was saying it looks like it has, which means that the winds are beginning to wrap up even tighter.
Our Reynolds Wolf standing by now live on South Padre Island, Texas, which appears to be in the bulls eye. Reynolds, are you feeling the effects of these heightened winds yet?
REYNOLDS WOLF, AMS METEOROLOGIST: Oh, we really are right now. I mean, it's just coming in. To our viewers at home, our viewers across America, you could see some of the raindrops across your television screen going from one side to the other. Horizontal action. We expect that to continue through a good part of the day.
Right now, we're near the top half of the storm. The eye should pass farther to our south, but we're getting the real brunt of a lot of the wind and, of course, a lot of the rain still on the backside but we're still going to be dealing with that later on.
Right now, Rob was talking about the hurricane warnings in effect for a good part of the coast. We do have that but not only that, we're also dealing with a tornado watch -- a tornado watch in this area and, of course, a flood watch.
In terms of rainfall, we anticipate anywhere from six to 10 inches of rain but some isolated amounts could get up to 15 inches of rain. That's a tremendous concern for many people here. Sure, the wind is a big fear but you have to remember back in 2005, Hurricane Edley (ph) passed nearly 100 miles south of this exact point and the result was widespread flooding for parts of the Rio Grande Valley. So that's a tremendous fear, tremendous fear for many people as the storm edges over closer. Let's send it back to you.
ROBERTS: All right, Reynolds. You know, we have those border towns farther inland like McAllen, Texas, places like that that have levee systems around them. Any idea how much water those levee systems can hold before they breach?
WOLF: That's a great question. You know, that's an answer that I don't think anyone really knows right now. I mean, those are some older levees. I'm not quite sure of what kind of work has been done on them.
I can tell you though, John, there were some sandbag efforts yesterday in many of those communities. They've been working very hard around the clock just to try to reinforce those structures. And again, the big test is going to come over the next 12 to 24 hours to see how much weight of that water they can bear.
ROBERTS: Reynolds Wolf for us this morning right in the thick of things in South Padre Island. Reynolds, thanks. We'll check back with you as we can because we know that the winds are starting to get higher there. We might lose your signal -- Kiran. CHETRY: Well, turning to the most politics now. Barack Obama shifting his focus to Middle East peace efforts this morning. He's expected to meet with Palestinian President Mahmoud Abbas in Ramallah in just about 30 minutes.
The sit-down comes a little more than two hours after his meeting with Israeli President Shimon Peres. Next for Obama, the southern Israeli town of Sderot. This town near Gaza has been hit with more than 2,000 rockets in the past four years.
And Barack Obama's trip to the West Bank comes as he and John McCain engage in a bitter face off over the troop surge in Iraq. Obama was asked repeatedly on CBS' "The Evening News" whether the surge has worked. He says he was against it from the start and he still hasn't changed his mind. McCain seized on that in a separate interview on the program saying the senator still doesn't get it.
(BEGIN VIDEO CLIP, FROM "CBS EVENING NEWS")
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Senator Obama does not understand the challenges we face. And they did not understand the need for the surge. And the fact that he did not understand that and still denies that it has succeeded, I think the American people will make a judgment.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: There is no doubt that our troops helped to reduce violence. Those additional troops could have gone into Afghanistan. That money also could have been used to shore up a declining economic situation in the United States. That money could have been applied to having a serious energy security plan so that we were reducing our demand on oil which is helping to fund the insurgence in many countries.
(END VIDEO CLIP)
CHETRY: Barack Obama left Iraq as he went into it, convinced that if he's elected he can withdraw troops within 16 months of taking office. But his plan puts him at odds with military brats on the ground.
CNN's Barbara Starr looks at the reality of Obama's plans for Iraq should he become president -- Barbara.
BARBARA STARR, PENTAGON CORRESPONDENT: John, Kiran, when President Bush comes to the Pentagon later today, he will be briefed on the latest developments in Afghanistan and Iraq. All part of the military reality that has confronted Barack Obama on his trip.
(BEGIN VIDEOTAPE)
STARR (voice-over): Barack Obama left Iraq still committed to a timetable for bringing U.S. troops home, opening the debate again about whether the Obama vision can work on the ground.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: My view based on the advice of military experts is that we can redeploy safely in 16 months.
STARR: Obama didn't say who those military experts were, but admitted the commander in charge of Iraq isn't one of them.
OBAMA: There's no doubt that General Petraeus does not want a timetable.
STARR: Either way Iraqi political reality may trump the debate. The Maliki government had said it wants U.S. troops out by 2010. Obama also raised the question of how much he will listen to his commanders.
OBAMA: There are a range of factors that I have to take into account as a commander in chief or a potential commander in chief, that I wouldn't expect General Petraeus or anybody who's just on the ground to have to take into account.
STARR: But their advice could be hard to ignore.
NATHANIEL FICK, FORMER CAPTAIN, U.S. MARINE CORPS: The commanders on the ground tell the president that in their best military judgment, it doesn't take 16 months. It's going to take 18 or 24 or 36 to withdraw troops from Iraq. I just find it almost inconceivable that the president would disregard that military judgment.
STARR: Realistically Obama's proposal to withdraw one to two brigades a month may be tough to accomplish. Military experts have long said it would take longer than a month to withdraw just one brigade of about 3,000 troops -- John, Kiran.
ROBERTS: Barbara Starr with a reality check for us this morning.
Stocks set for more gains this morning as markets rally again Tuesday and oil prices plummet. Our Stephanie Elam breaks it all down for us just ahead.
Also coming up, finding the right entertainer for your kid's party. From Hannah Montana to Mickey Mouse, it's no laughing matter. What you need to know so that you don't break the law.
And we continue to follow the breaking news this morning. Hurricane Dolly now lashing the Texas/Mexican border with wind and rain. We'll tell you what's being done right now to prepare for the big storm.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: We're following breaking news for you right now. Hundreds of thousands of people are bracing for Dolly, a Category One hurricane now with 85 mile an hour winds battering the Texas/Mexico coast. She could become a Category Two by the time its center reaches land. Dolly is slowing down and now there are flooding fears as rains continue for at least 48 hours. Rob Marciano will have the latest for us in just a few minutes -- John.
ROBERTS: Coming up on 12 minutes after the hour, stock prices up, oil prices down. Sounds like the good old days, doesn't it? Well, you haven't woken up in an alternative universe this morning because everything old is new again.
And here's Stephanie Elam with all of that this morning in for Ali Velshi.
Good morning, Steph, what's going on?
STEPHANIE ELAM, BUSINESS CORRESPONDENT: Good morning, John. Yes, it was one of those weird days where -- I should say normal days, actually, where the markets really didn't really figure out where they wanted to go until like the last hour of trading. And then right then the markets shot up.
So let's go ahead and take a look at what happened yesterday. The Dow adding on more than one percent. Same story for Nasdaq. S&P 500 up 1.3 percent just about yesterday. As we saw all of this earnings news come out and it looked like investors were just going through and picking out the good things that they wanted to hear from that. Even if companies were reporting losses they weren't as bad as Wall Street expected and that was enough to give the markets a little bit of a rally.
One stock worth noting, Washington Mutual. That is the one of the largest thrift bank in the country. They actually came out with a $3.3 billion loss and reported that yesterday after the closing bell. That was way worse than what Wall Street was expecting. So that's one stock we'll be watching today.
The other thing we, of course, have to talk about is oil which was down yet again yesterday, losing about $3 to $127.95 a barrel. It is now up more than $17 from the high that it hit on July 14th. And, of course, part of that, we're talking about weather all day long. You were just mentioning it as well. Because it looks like hurricane Dolly is going to miss some of those rigs out there in the Gulf of Mexico, that's one of the reasons why we've seen oil prices continue to fall -- John.
ROBERTS: Really kind of a statement though on where we are these days when bad is good, isn't it?
ELAM: Yes. It's like oh, you're not as bad as we expected. Yes. So that's pretty much what happened yesterday.
ROBERTS: All right, Steph. Well, any good news, we'll take it this morning.
ELAM: We'll take it. We'll take it. Yes.
ROBERTS: All right. Thanks. We'll see you again soon -- Kiran.
CHETRY: Well, Barack Obama following in John McCain's footsteps touring the Middle East but he's breaking with the Republican nominee by meeting with Palestinian President Mahmoud Abbas. We're live in Ramallah with the significance of today's meeting and what it could mean for the Mideast peace process.
We also have Rob Marciano tracking Hurricane Dolly.
And as you talked about the possibility of this hurricane growing to a Category Two today?
MARCIANO: That is a possibility for sure. We'll talk about the chances of that happening, how far it is from the Texas coastline. It is bee lining it towards Brownsville. Complete details on Dolly when AMERICAN MORNING comes right back.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most News in the Morning." We're going to fast forward to show you some stories that will be making news today. We're focusing on issue number one in the Senate. The Joint Economic Committee will be holding a hearing on the impact of the economic slump on American families.
President Bush also heads to the Pentagon today where he'll meet with Defense Secretary Robert Gates and the joint chiefs. They're expected to talk about Iraq and Afghanistan.
And Congress will review the military's "Don't Ask, Don't Tell" policy. This will be the first hearing on it since it was enacted 15 years ago. Former military personnel on both sides of the issue will be speaking -- John.
ROBERTS: Back to our top story this morning. We're watching it very closely. Hurricane Dolly taking aim at the Texas/Mexico border. Our Rob Marciano in the weather center in Atlanta. He's got the very latest on the storm for us now. Hi, Rob.
MARCIANO: Hey, John. This thing really has developed over the last 24 hours. It was moving quite rapidly over some very warm waters. We're very fortunate I think that this thing didn't slow down sooner because the water dried out here toasty in the mid-80s. Waters right next to Brownsville right around 80 degrees.
Nonetheless, it has taken the more classic structure. And even here in the last couple of frames you see that eye just pop right out there. That certainly indicates the best organization we've seen of this storm yet with winds of 85 miles an hour. And then Hurricane Hunter aircraft in there earlier reporting a significant drop in the pressure, which is the first thing to go before those winds starts to wind up.
Sixty-one miles from Brownsville moving northwesterly eight, nine miles an hour. So we have hurricane warnings posted from below the Mexican border all the way up through Corpus Christi where hurricane conditions that are expected within the next 12 to 24 hours. And certainly Reynolds Wolf starting to feel at least some tropical storm force winds there. Here's the forecast track. Generally speaking, a line towards Brownsville give or take about 50 miles or so, and then maybe moving a little bit farther west and slowing down. And there will be a number of threats with this besides the typical wind and storm surge. There will also be inland flooding straits (ph). And when you talk about fatalities with hurricanes, it's much more than just straight line winds.
We have a tornado watch that's out, but also that inland flooding possible, which will be an ongoing news story, John, I think over the next couple of days. The number one cause of death during hurricanes is from inland flooding from all the rainfall that we expect from these storms as they move inland. John, back up to you.
ROBERTS: Looks like a fairly slow mover, Rob, which might mitigate that combined effect of the winds of circulation and the forward motion. But in terms of storm surge, places like South Padre Island, any idea of what we could see?
MARCIANO: Anywhere from four to six foot storm surge. Of course, if this thing gets to a Category Two, then we have to up the ante there. But as far as the imagery (ph), how the Gulf of Mexico is situated here, it's not nearly as devastating a situation as it would be if something that would be heading into the panhandle of Florida.
Nonetheless, four to six foot storm surge is the forecast for the folks who live up and down the Brownsville coastline give or take 40 miles or so.
ROBERTS: All right. Our Rob Marciano keeping a close eye on Hurricane Dolly this morning. Thanks, Rob. We'll check back with you.
Sponge Bob and Dora the Explorer. Today kids want to see their favorite television characters at their birthday parties. The corporations are cracking down on costume look-alikes. Find out why it's not so easy and in fact may be illegal to hire an impersonator.
Plus, turning around the mortgage mess. Treasury Secretary Henry Paulson says he has a plan. But will lawmakers buy into it? The impact Paulson's plan could have on you and your investments. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Well, that's Hannah Montana. Not only a stage hit but also a hit at kids' birthday parties. Also, Dora the Explorer. But trying to book an authentic look-alike for your kid's party is no easy challenge.
Sunny Hostin is here with the legal reason behind why these favorites can be so hard to come by. Good to see you, Sunny.
SUNNY HOSTIN, AMERICAN MORNING LEGAL ANALYST: Good to see you.
CHETRY: Of course, you had to do your own market research here because you tried it for your daughter's party.
HOSTIN: That's right.
CHETRY: We're talking about trademark infringement.
HOSTIN: That's right. I tried to get Dora and I was told I couldn't get a Dora Explorer character to come to my daughter's birthday party. Why? Because brands are trying to protect their trademarks, they're trying to protect their brands.
And they are now really cracking down on costumers. They're cracking down on birthday party companies. They're sending threatening lawsuits. They're sending cease-and-desist letters, Kiran, and they're even suing companies and getting settlements.
And so, they're very serious about this. And why they're saying, we don't want Elmo showing up with a cigarette hanging out of his mouth. We don't want a fake Elmo showing up with a mustache. We don't want that sort of thing.
And I'll tell you, in doing my research for the story, we contacted someone, a costume company, and we found one of their letters. And you'll see right here, Marvel says, this letter was from Marvel. "Marvel cannot permit such confusion or false association to permeate the marketplace, nor can it permit the distinctiveness of its famous marks and characters to be diluted."
CHETRY: But what's confusing --
HOSTIN: And that's why they're doing it.
CHETRY: But what's confusing is you can buy costumes at the store.
HOSTIN: Costume is very different, Kiran, than having a life- size Elmo coming to your party. And so, it is different but they're cracking down.
CHETRY: Wow.
HOSTIN: I don't think parents are going to be sued, but I have to say they are even monitoring parenting blogs. They're monitoring birthday party Web sites. And so, parents need to watch out. It's something that you can't do.
If you want to do it, you've got to contract with the company that actually, actually has a contract with one of these companies. And it costs $1,600 to start with to have Spidey or Iron Man come to your party.
CHETRY: Yes, that is extremely pricey. Maybe we'll just stick with the mask, the party hats.
HOSTIN: That's right. Just get a clown.
CHETRY: Exactly. The good old days, right? But it's very interesting that you say they can't monitor, let's say, if Elmo comes with a cigarette hanging out of his mouth. You know, Disney famous for that. And I mean being very tight about what their characters can do when they're in costume. Interesting.
HOSTIN: Absolutely. And Marvel is not the only company that's sending these letters. Disney sends them as well. Hit Entertainment that has Barney, all the companies are monitoring are doing this. So parents, watch out.
CHETRY: Parents, throw a pool party instead this summer. Sunny, thanks so much.
HOSTIN: Thank you.
ROBERTS: Barack Obama meeting this hour with Palestinian President Mahmoud Abbas. We're live in the West Bank with the significance of today's sit-down and its impact on the presidential race.
And breaking news this morning. Hurricane Dolly gaining strength and battering Texas right now. We are tracking the storm for you. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Coming up on 27 minutes after the hour and breaking news right now. Hurricane Dolly getting closer and stronger. The storm packing 85 mile an hour winds right now, but its center is moving toward land at only eight miles an hour. Six-foot storm surges could put the Rio Grande levees in danger, and residents are being told to move. We'll have the latest update for you just minutes from now.
CHETRY: Thanks, John.
Well, Congress is expected to vote on a $25 billion plan today. It would rescue mortgage giants Fannie Mae and Freddie Mac. The two firms hold the paper on half of the nation's home loans. About $5 trillion.
Secretary Paulson says that it's crucial the two companies have access to the money they need. But the question is, how did we get to this point?
Richard Bitner is managing editor of housingwear.com. It's a leading mortgage industry trade publication. He also wrote the book "Confessions of a Sub prime Lender: An Insider's Tale of Greed, Fraud, and Ignorance." And Richard joins me now. Thanks for being with us.
RICHARD BITNER, AUTHOR, "CONFESSIONS OF A SUBPRIME LENDER": Good to be here.
CHETRY: Well, the title alone maybe sheds some light on exactly how we did get into this mess. But what happened with the sub prime market? BITNER: Well, you know, I think, Kiran, one of the interesting things about this story unlike other business debacles we've had in the history of this country is that, you know, unlike examples of maybe Enron or WorldCom, where you've got a couple of people that are doing things that they shouldn't. We largely had a breakdown of the entire system from brokers who were largely unregulated to investment banks at the other end of the industry food chain who were simply trying to feed the mortgage securitization machine.
We literally had an entire system that sort of failed. Of course, coupled with that was the fact that rates went so low, money became so cheap relatively speaking...
CHETRY: Right.
BITNER: ... that you kind of put this all together and you really had the perfect storm.
CHETRY: And I guess when you sit back and look at it, you wonder how could it go right in the first place? You're basically allowing people who can't pay it back to borrow money. I mean, isn't that the very nature of what you guys are doing?
BITNER: No. You know, I think that's a bit of a misnomer because, you know, I got into this business back in 2000 at a time when the industry actually made sense. You got to remember, the fact that people are being lent money who have less than perfect credit is not new to the world of finance. I mean, we do it for auto loans, we do it for credit cards, we do it for all forms of financial instruments.
Mortgage is certainly no exception. The difference, of course, was that as Wall Street got involved and realized the kind of revenue that could get created, we saw that line between what was acceptable and what was not acceptable from a risk standpoint, continue to get pushed further and further out. That's one of the reasons why I got out of the business in 2005.
CHETRY: Yes. You said that you had a personal revelation, too, after you suffered a fire in your home as well. And just -- there was some other talk about exactly who was getting money. You look at somebody who has maybe a 35,000, $40,000 income and the amount of money that they're being approved to borrow, it seems like it wouldn't make any sense, a recipe for disaster. Because how is that person going to eventually be able to pay that off?
BITNER: Absolutely. And, of course, what you're really referring to is what now has become known as stated income or liar loans. And, you know, there's kind of another example of a product that actually existed for 20 years in the industry. And if you knew how to underwrite the file it actually made sense for a certain type of borrower.
Traditionally self-employed had more money for a down payment, had really much more skin in the game. The problem is we got to a situation where frankly there was no difference between loans relatively speaking for borrowers who were providing income documentation and those who weren't.
CHETRY: Right.
BITNER: And when largely becomes a case of A or B, brokers we clearly found were going with the path of lease resistance and putting into those types of loan.
CHETRY: Let's take a look at some of these numbers there because it really is surprising when you break it down. In 2005, 850,000 foreclosures. In 2006, that jumped over 40 percent to 1.2 million foreclosures. By 2007, you have a 75 percent jump with 2.2 million people filing. How do we make sure this doesn't happen again going into 2008, 2009? Is this housing bill the answer?
BITNER: Well, you know, interesting thing. We almost got to take a step back and look at historically some trends that have happened when we've head down markets. Now, mind you, we really don't have a basis for this sort of the Great Depression relative to the kind of numbers that we're looking at.
But you might even use examples, something like the southern California market back in the early '90s. Folks may forget that was a market that took five years to correct. Five years from sort of peak to trough. And that was at a time when the credit markets were functioning formally.
So, to answer your question, are we looking at a situation where the housing bill is going to help? I certainly think we're going to get a pickup. There's no question. One of the things we have to do, we may not like it as taxpayers and it may not necessarily be the best answer, but we have to make sure that there is at least the illusion that Fannie and Freddie can continue to operate normally because without it, we're going to have a serious problem.
CHETRY: All right. Richard Bitner, author of "Confessions of a Subprime Lender," live from Dallas this morning. Thanks for joining us.
BITNER: Thank you.
ROBERTS: It's 31 minutes after the hour. Barack Obama is in the West Bank today and expected to meet with Palestinian President Mahmoud Abbas this hour. Earlier today, he met with a number of Israeli leaders, including President Shimon Peres in Jerusalem.
The presumptive Democratic nominee has promised to make Middle East peace a top priority if he's elected. This leg of his trip is one of the trickiest because of past statements that have offended both Israelis and Palestinians.
"Vanity Fair" posting a mock cover of John and Cindy McCain on its Web site. It's in response to the "New Yorker's" cover, which came under fire for its caricature of Barack Obama and his wife. "Vanity Fair's" illustration shows the McCain's bumping fists and Cindy holding an armful of prescription drug bottles. "Vanity Fair" says it has no intention of actually putting the cover on its August issue.
More sexual abuse charges against polygamist sect leader Warren Jeffs this morning. A Texas grand jury has indicted Jeffs and four of his followers for sexually assaulting girls under the age of 17. And one of Jeffs' followers was also indicted on a bigamy charge. Jeffs was already convicted in Utah as an accomplice to rape. He is facing charges in Arizona for conducting underage marriages.
Back to our breaking news this morning. Hurricane Dolly pounding the Texas-Mexico coastline. The Category One storm gaining strength now, could reach a Category Two before its center reaches land. CNN has live team coverage of Dolly this morning.
Rob Marciano tracking her position from the Weather Center in Atlanta and Ed Lavandera is in Brownsville, Texas this morning right along the coast.
Let's start with Ed. What are you seeing out there right now? We saw Reynolds Wolf just a little to the east of you on South Padre Island getting pounded by the wind. What's it like there in Brownsville?
ED LAVANDERA, CNN CORRESPONDENT: We know the worst of it hasn't really hit us yet in Brownsville. We're just in the downtown area of Brownsville, Texas, along the Rio Grande, about 20 miles inland.
So, those initial wind gusts and drizzle and the light rain is starting to fall here in the city. And of course, not necessarily so much the winds that are going to be packed by this storm are major concern. But, really, what you hear a lot of people right here talking about is the intense rainfall that is expected. Some people predicting 10, 15, perhaps as much as 20 inches of rain.
So, there's heavy concern here about the possibility of flooding in low-lying areas. In fact, some county officials around here have been urging people to evacuate those low-lying areas in the coming hours to be out of harm's way. So, that's what they'll be looking at very intensely here in the coming hours.
John?
ROBERTS: Ed Lavandera for us in Brownsville, Texas this morning. Ed, thanks very much.
Let's check on the track of Dolly now. Rob Marciano with the latest from the Weather Center in Atlanta.
Hi, Rob.
ROB MARCIANO, AMS METEOROLOGIST: Hi, John. Looking more and more impressive as the minutes and hours progress. The eye just popping up here on the satellite photograph. That certainly indicates organization. The Hurricane Hunter aircraft that were in there showing pressure drops so the winds now beginning to wrap around this thing. And we've got hurricane force winds that extend 15 or 20 miles out on either side, especially the northern side. And tropical storm force winds that go up well over 100 miles out. So, this is a pretty large cycle. Because of that, we've got warnings that are posted almost just south of Houston and just past the Mexican border. Hurricane warnings posted from the Mexican border all the way up towards Port Arthur.
So, what are we looking at as far as the track is concerned? The forecast is for it to come somewhere around Brownsville, probably around midday and its current speed, northwesterly movement about 8 miles an hour. And yes, we have sustained winds at 85 miles an hour. That is a moderate Category One.
And the National Hurricane Center saying there is a chance for it to become a Cat Two. And certainly, as we see things wrap up here, John, very well-defined eye there. Rain bands all around this thing in all quadrants. And winds, classic direction as this thing moves closer to on shore, anywhere from 20 to 30 miles an hour, well away from the eye. But those will begin to increase obviously as the hours progress.
John, back over to you.
ROBERTS: Rob Marciano with the latest for us this morning. Rob, thanks very much. Now, let's send it back up to Kiran in New York.
CHETRY: Well, air traffic controllers not even old enough to drink. Why the FAA is recruiting fresh-faced controllers to help land your next flight. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Some breaking news right now. You're looking at a look right now in Ramallah where Barack Obama is setting out on what could be the trickiest part of his foreign trip. He's trying to please both the Israelis and Palestinians, and he is meeting at this very moment with Palestinian President Mahmoud Abbas, something never done by a presidential candidate.
CNN's Ben Wedeman is just outside of that building where they're meeting in Ramallah and joins us on the phone.
Good morning, Ben.
BEN WEDEMAN, CNN SENIOR CORRESPONDENT (on the phone): Yes, good morning. Senator Obama arrived here about 10 minutes ago, five minutes earlier than scheduled. He was scheduled -- he's scheduled to meet for 45 minutes with Palestinian President Mahmoud Abbas, his Prime Minister Salam Fayyad.
Now, the Palestinians are honored, they say, to meet with Senator Obama. He's the first presumptive presidential candidate to come to Ramallah on this sort of visit. They're somewhat unhappy with the fact that he'll only be meeting with them for 45 minutes during this -- his 36-hour visit to Israel and the Palestinian territories. But he did come on a road that would have allowed him to see some of the realities of life on the West Bank. He'll be able to see the so-called wall or separation barrier that Israel's constructed around many of the Palestinian towns and villages. And the Palestinian officials tell me that they will be giving him a very compact and quick briefing on the situation, stressing their desire to see the United States more engaged in the peace process.
CHETRY: And, Ben, how is Barack Obama's visit to Ramallah playing on the streets there?
WEDEMAN: Well, we've heard a variety of opinions from Palestinians. In fact, those who can vote, American citizens overwhelmingly seem to favor Barack Obama over his rival, Senator John McCain. The feeling among many Palestinians is that for the last 7- 1/2 years the United States hasn't been fully engaged in the peace process. And they're hoping that Senator Obama, if he is elected, will be a much more engaged and active U.S. president in this part of the world.
CHETRY: All right. Ben Wedeman for us. He is outside of the building in Ramallah where the leader there of the Palestinians, Mahmoud Abbas, is meeting with Senator Barack Obama. And as we've said, this is the first time that a presumptive presidential candidate is holding these types of meetings. Just 45 minutes, but significant, much more than that. And we'll continue to follow it throughout the morning.
John?
ROBERTS: The McCain campaign trying to point out an Obama bias. A new ad on the Internet talking about a love fest to Senator Obama tours the Middle East with a huge press contingent along for the ride. We'll ask a former White House press secretary whether the media should dial it back.
Help wanted.
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UNIDENTIFIED MALE: Would you want a kid fresh out of high school put into those situations?
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ROBERTS: The FAA hits YouTube and MySpace trying to find young people to land your plane. You're watching the "Most News in the Morning."
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ROBERTS: 43 minutes after the hour. As you prepare for your next trip, consider this. Your next flight could be landed by someone not even old enough to drink. With the FAA facing a critical shortage of air traffic controllers, our Deb Feyerick tells us this morning they are recruiting kids fresh out of high school. Deb?
DEBORAH FEYERICK, CNN CORRESPONDENT: John, Kiran, if you've been to an airport lately you'll know that the skies are busier than ever. Many air traffic controllers are now retiring. And the FAA is facing a vacuum. They're going to have to hire some 17,000 new air traffic controllers over the next ten years. And while youth may be on their side, the question is, is that a good thing when it comes to landing planes?
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FEYERICK (voice-over): Ever thought of a career landing planes? With the majority of the nation's air traffic controllers reaching mandatory retirement, the FAA is racing to find recruits. Advertising on Web sites like YouTube, MySpace, even Craigslist.
ROBERT STURGELL, FAA ADMINISTRATOR: We are targeting a new generation. And we're trying to connect with them where they are.
FEYERICK: NBC host Jay Leno laughed about it.
JAY LENO, HOST, "THE TONIGHT SHOW JAY LENO": We don't trust them to drive a car. But land a 747, yes, no problem.
FEYERICK: With veteran air traffic controllers like union rep Dean Iacopelli say it's no joke.
DEAN IACOPELLI, AIR TRAFFIC CONTROLLER: Would you want a kid fresh out of high school with no experience whatsoever put into those situations where split second, life and death decisions need to be made? I wouldn't.
FEYERICK: The FAA plans to hire and rigorously train some 3,000 new controllers this year alone. The majority 24 and younger.
STURGELL: 18-year-olds today can go off to war and serve this country. So, we will train the folks we hire and we will make sure they're fully certified to serve in our facilities.
FEYERICK: The union says the real problem is hands-on experience. That by 2011, a whopping 60 percent of all air traffic controllers will have been on the job less than five years.
IACOPELLI: We have 40 people in here now who have absolutely no air traffic experience whatsoever. And somehow they need to get up to speed to the point where they can handle traffic, you know, in the nation's busiest, most complex air space.
FEYERICK: But Ian Lazarus, a senior at Vaughn College of Aeronautics and Technology across from New York's La Guardia airport says he's ready.
IAN LAZARUS, FAA NEW HIRE: Education and experience. They both come together at one point.
FEYERICK: Your confidence level, you're good to land that plane. No question.
LAZARUS: No questions at all.
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FEYERICK: The FAA admits there will be times when airports are tight on staffing. It takes two years for air traffic controllers to become fully certified after their apprenticeship.
John?
Kiran?
ROBERTS: Deb Feyerick for us this morning. Why are so many controllers retiring now? Here's more in an "AM Extra." The FAA hired most of those controllers back in 1981 to replace striking controllers that were fired by President Reagan.
And many of them are choosing to retire now rather than continue under a new pay scale and work rules that include a dress code and restrictions on entering and leaving air traffic control facilities.
They become eligible for retirement benefits if they've been on the job for more than 25 years or are 50 years old with at least 20 years of service. The FAA has a mandatory retirement age currently set at 56.
Kiran?
CHETRY: Well, first it was nuclear versus nuclear. This time around it's the question of pronouncing Pakistan. Or is it Pakistan. Jeannie Moos takes a linguistic look at how the word rolls off the candidates' tongue.
Big stink.
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UNIDENTIFIED MALE: It's embarrassing for the city. You know, we already have a reputation as being full of nuts.
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CHETRY: The controversial plan in San Francisco to plaster President Bush's name all over a sewage treatment plant.
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UNIDENTIFIED MALE: It's representative of the quality of his thinking, his judgment.
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CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK) CHETRY: All about the word play. So, is it Pakistan or Pakistan? The presidential candidates each have their own way of pronouncing the country's name. And who better to take a look than our own Jeanne Moos.
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JEANNE MOOS, CNN CORRESPONDENT (voice-over): Pakistan has gone the way of tomato, tomato.
SEN. BARACK OBAMA (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: Got questions like Pakistan.
For the people of Pakistan.
Pakistan.
MOOS: Senator Obama says it one way. Senator McCain, another.
SEN. JOHN MCCAIN (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: Including the Pakistan situation.
OBAMA: Pakistan as a safe haven.
MOOS: Sure it's subtle.
MCCAIN: Pakistan.
OBAMA: The Pakistan.
MOOS: But Senator Obama puts a more native twist on words most Americans pronounce Pakistan and Taliban.
OBAMA: And to go after the Taliban.
And for vetting the Taliban from using Pakistan.
MOOS: It has bloggers like Kal, an American of Pakistani origin raving. The clincher for me is the fact that Obama is the first American politician I can recall that pronounces Pakistan correctly. He then goes on to give this helpful hint. Pakistan. It's like Tupac, not six pack.
Author and linguist Geoff Nunberg says Pakistan says this about Obama.
VOICE OF GEOFF NUNBERG, LINGUIST, UC BERKELEY: It marks him as an internationalist. On the other hand, some people are going to say well, that's not the way we Americans say the name.
MOOS: On the Web critics mock the pock in Pakistan. The phone held upside down, they accused Obama of sounding affected. Does he pronounce France "Frahnce?" Multi-culti fruitcakes at another. The geographic linguistic pitfalls exist much closer to home the right way.
MCCAIN: It's wonderful to be here in Nevada. Nevada. Nevada. Nevada. Nevada.
MOOS: The wrong way.
MICHELLE OBAMA, BARACK OBAMA'S WIFE: It is so nice to be back in Nevada. We are so happy to be here. Nevada, Nevada, Nevada.
MOOS: As they say in the song.
UNIDENTIFIED FEMALE: You like Havana and I like Havana. You eat banana and I eat banana.
MOOS: Forget bananas. How about this from a guy who went to Harvard.
OBAMA: They've done in Massachusetts.
MOOS: And sometimes the candidate gets accused of making a gaffe.
OBAMA: That's why I stood up for equal pay in Illinois.
MOOS: When it is no gaffe, it's the possessive if you just let him finish his sentence.
OBAMA: Illinois' State Senate.
MOOS (on camera): Just think, if Senator Obama succeeds President Bush, we could find ourselves going from one extreme to the other in terms of presidential pronunciation. And this at least.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: "Nukilar" weapons.
MOOS (voice-over): Would cease to proliferate because neither Obama...
OBAMA: Nuclear weapons.
MOOS: Nor McCain say it.
MCCAIN: Nuclear weapons.
MOOS: Though the kid behind McCain looked like he was about to go nuclear Tuesday until his mom shot him a look that led him to disarm unilaterally. Jeanne moos, CNN, New York.
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ROBERTS: Love fest.
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UNIDENTIFIED FEMALE: Hippy.
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ROBERTS: The McCain campaign says she's not the only one with a crush on Obama.
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UNIDENTIFIED MALE: The media's love affair with Barack Obama.
UNIDENTIFIED MALE: I felt this thrill going up my leg.
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ROBERTS: A new ad that mocks the media.
Plus, T. Boone Pickens.
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T. BOONE PICKENS: Our country is in a deep hole and it's time to stop digging.
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ROBERTS: The man who can influence oil prices with a single word lays out his new energy plan live.
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JAY LENO, HOST, "THE TONIGHT SHOW JAY LENO": You know, I got to feel kind of sorry for McCain. I mean, all day on TV, they show nothing but footage of Barack Obama touring the Middle East, being with the troops in Afghanistan, meeting with troops in Iraq. The only time I saw McCain on TV was when Willard Scott wished him a happy birthday on the "Today" show.
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ROBERTS: And of course, Willard Scott known for wishing people a Happy 100th birthday.
Jay Leno is not the only who has noticed that John McCain is missing in a media coverage in this current trip. McCain camp actually released an ad on the Web called Obama Love, mocking the way that some members of the media are covering the other side.
Joining me now to talk about this from Washington here is former White House press secretary Dee Dee Myers. She is a contributing editor to "Vanity Fair" and an Obama supporter.
Good morning to you.
DEE DEE MYERS, FORMER WHITE HOUSE PRESS SECRETARY: Good morning.
ROBERTS: Let me pull a quote from a recent "Vanity Fair" column that you wrote. You say, quote, "Obama is The One." In the first quarter of the general election, he has simply gotten more and better coverage than McCain. The enormous press entourage that is treating Obama's current trip not like the campaign swing of a presidential candidate, but like the international debut of the new American president."
You know, I was on the international debut trip of President Bush back in 2001 and I don't quite remember it being this big.
MYERS: Right. Where were the network anchors, right?
ROBERTS: Obviously, he took the press core with him. Remember, the anchors didn't come along. Is this over the top?
MYERS: It's really interesting dynamic. I mean, Obama is a fascinating candidate. He's running a historic campaign. You can line up all the reasons why he's gotten so much attention. And yet, we know that when Senator McCain took a trip to the Middle East this spring, he didn't get nearly the amount of coverage. If he took a trip today begrudgingly the network anchors would now have to go. But they wouldn't -- he wouldn't just generate the incredible amount of coverage that Senator Obama has generated.
It's not just my opinion. There are a number of studies out there that's out. A number of them. The Tyndall report, The Project for Excellence in Journalism which looks at 300 stories every week. From the moment that Obama was the presumptive nominee in June until last week, he got significantly more coverage every single week. So, it's a question of not just quality of coverage but quantity of coverage.
ROBERTS: I think people will be watching to see if Senator McCain decides to go back or do a Middle East tour or goes to Iraq or Afghanistan, if the same press entourage will be following.
MYERS: It's a tricky dynamic for McCain in particular because he's always had a great relationship with the press. Reporters like him because he's straightforward. He talks a lot. He's politically incorrect at times. And he's always joked that the press was his base.
And now, you know, in just a few months ago in Washington, there was this conversation about -- gosh, you know, the press loves both of these candidates. When the general election comes if Obama's the nominee, how are they going to choose. It seems to me that Obama is winning this contest so far.
ROBERTS: John McCain said yesterday that he's not really upset with the coverage. Doesn't see anything unfair. Let's listen to what he said
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MCCAIN: I'm a big boy and I'm enjoying every minute of the campaigning and I'm certainly not complaining. In fact, I think it's fun to watch.
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ROBERTS: Is that a little bit of an Alfred E. Neuman "What, me worry?" statement.
MYERS: Yes. It absolutely is because candidates don't ever benefit by wanting about coverage. You know -- but, at the same time, his campaign is complaining about it. Running this video in a contest to pick a song to go with the footage of journalists fawning over Senator Obama.
ROBERTS: And in fact, let's run just a little bit of that here.
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UNIDENTIFIED FEMALE: I want to hold you so much.
JOE SCARBOROUGH: The media's love affair with Barack Obama is all consuming.
CHRIS MATTHEWS: The feeling most people get when they hear Barack Obama's speech. My, I felt this thrill going up my leg. I mean, I don't have that too often.
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ROBERTS: So, they're mocking the media's coverage of Obama, calling it Obama Love. Obviously, they're trying to embarrass the media into dialing back. But the case of this trip, John McCain goaded Obama into going to Iraq, going to Afghanistan. Is this a case of be careful what you wish for?
MYERS: To a certain degree, I think it is. That doesn't totally justify, I think the disparity in coverage. But yes, I think that raised the stakes for Obama and this is a high stakes trip for him. He went over there. Any mistake that he makes with all these reporters and anchors and, you know, really media celebrities on the trail would be amplified very much as his success has.
And he's managed to run a very good campaign. This trip has gone very well. He's handled himself very well. I think another candidate might bump up against some criticism that he's a bit presumptive. He's acting like, at least the Democratic nominee, which he will be. And maybe even a step beyond that.
And so, he needs to be a little bit careful of that. But look, it's been a brilliant trip. It's gone really well so far. He still has a few days left. Something could happen that could change the dynamic of all of this. But so far I think this has been everything and more that the Obama campaign had hope.
ROBERTS: Right. Well, you know, writer Thomas Patterson in a very good book called "Out of Order."
MYERS: Right.
