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American Morning
Crisis on Wall Street: Lehman Brothers Files for Bankruptcy; Hurricane Ike's Aftermath; Campaigns Slam Each Other Personally; First-Time Voters Examines Candidates; What Voters in New Hampshire Want
Aired September 15, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR (voice-over): Breaking news. Wall Street on red alert this morning after a giant investment bank files for bankruptcy.
And surviving the storm.
UNIDENTIFIED MALE: House by house, block by block.
ROBERTS: People who ignored evacuation orders get a lifeline.
UNIDENTIFIED FEMALE: We thought we was going to die in the house.
ROBERTS: Inside the biggest rescue operation in Texas State history on this AMERICAN MORNING.
(END VIDEO CLIP)
ROBERTS: And good morning, thanks very much for being with us. It's a Monday morning, the 15th of September. And while you were enjoying your weekend, a lot of people out there certainly weren't.
KIRAN CHETRY, CNN ANCHOR: Yes. And thousands of people -- thousands upon thousands still in the dark this morning and some waiting to be rescued. We're on the storm aftermath, but we also have breaking news and that's the overseas financial markets are down sharply, reacting to the news overnight that Lehman Brothers is filing for bankruptcy.
Now, Lehman is the fourth largest U.S. investment bank crippled by billions of dollars in bad loans and unable to find an investment partner to thrown it a lifeline. And it's not the only news that's rattling financial markets this morning. Gerri Willis breaks it all down for us in just a moment.
Also, rescuers in and around Galveston, Texas, scrambling to find thousands of people who refused to evacuate ahead of Hurricane Ike. At least 15 people are confirmed dead in Texas, Louisiana and Arkansas, and more than 2.5 million still have no power.
In Houston, there is a nighttime curfew in effect all week. Schools and businesses in that city closed. And this morning more than a dozen refineries in the region also shuttered.
The candidates are swimming in cash. Barack Obama's campaign announcing it pulled in a record $66 million last month that shatters his own personal best of $55 million set back in February. It also tops his Republican rival Senator John McCain. But McCain's campaign also says it earned $47 million last month. That's more than double McCain's previous best fund-raising month.
ROBERTS: Let's get into detail on our breaking news this morning. Foreign financial markets taking a big hit overnight following the fall of U.S. investment giant Lehman Brothers. Lehman will file for Chapter 11 bankruptcy protection. The announcement coming after weekend efforts to rescue the 158-year old investment bank fell apart.
On Sunday, a steady stream of company employees were cleaning out their offices at the firm's New York headquarters not knowing what today will bring. Meantime, Bank of America tossed a financial lifeline to Merrill Lynch, the $50 billion deal said to be all but done.
And another huge Wall Street firm is in trouble. AIG, the country's biggest insurer, is seeking a government bailout. So how will the U.S. markets react today and what could it mean to you, the investors?
CNN's Gerri Willis "Minding Your Business" for us this morning. And this is some terrible news in the financial markets.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: This is tough stuff. You know, 158-year-old, really important player on Wall Street will be gone. Lehman Brothers will file Chapter 11. That's what we're looking at this morning.
It was a frantic weekend on Wall Street as regulators, the SEC, Treasury, Fed, came together in southern Manhattan at the New York Fed to talk about what should happen with Lehman Brothers, trying desperately to bring it back from the brink of bankruptcy. There were potential suitors for this firm. The Bank of America, Barclay's, a British bank, possible suitors for that firm, but at the end of the day, when the Treasury Department, when the federal government said, hey, we are not going to contribute to this, those two potential suitors backed out.
You know, it's been seven months since the treasury bailed out Bear Stearns. Paulson making it clear that that was not going to happen again. There was a lot of criticism of that move. Now, Lehman Brothers will essentially go away. And what we found yesterday is that news started to leak throughout southern Manhattan.
Folks went into Lehman Brothers who worked there and started carting out things they owned. As you can see, the stock of Lehman Brothers under pretty dramatic pressure here. Efforts by CEO Dick Fuld to save that firm, unsuccessful.
Coming out of this though, a deal for Merrill Lynch, which has also been under pressure. Bank of America will buy that firm for $50 billion in stock. This deal coming about six to seven months, almost a year since the company bought Countrywide. So Bank of America here an important player in what's unraveling to be a major, major crisis.
Now, as we look ahead to today, futures markets pretty down. The Dow futures market is down almost 300 points. That's what we're looking at. Federal Reserve saying they're going to make loans available to investment banks and a consortium of 10 banks, both domestic and foreign, putting together a multibillion dollar fund for folks to borrow from, for investment banks to borrow from who are in trouble. So lots going on down in Wall Street. Lots of concerns and worries.
ROBERTS: It's going to be a rocky ride today. You're going to have a busy day.
WILLIS: Absolutely, John.
ROBERTS: Gerri, thanks for joining us this morning. Appreciate it.
WILLIS: My pleasure.
Former Fed Chairman Alan Greenspan sounding the alarm about the current financial crisis. Greenspan telling ABC's "This Week" that he has never seen anything like it.
(BEGIN VIDEO CLIP)
ALAN GREENSPAN, FMR. FEDERAL RESERVE CHAIRMAN: This is a once in a half century, probably once in a century type of event.
UNIDENTIFIED MALE: Is it the worst you've ever seen in your career?
GREENSPAN: Oh, by far. There's no question that this is in the process of outstripping anything I've seen, and it still is not resolved and it's still has a way to go. And indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes.
(END VIDEO CLIP)
ROBERTS: Greenspan predicts more major financial institutions will fail as well, and he says the United States has a less than 50 percent chance now of escaping a recession.
CHETRY: Well, this morning in Texas, there is some growing anxiety as thousands who did not evacuate before Hurricane Ike are now desperate to get out. Across the Houston/Galveston area, another day in the dark and there's no power and no telling when it will be turned back on. Roadways are littered with debris stranding trucks and emergency supplies in those trucks, and there's frustration that's running high as hundreds of the newly homeless line up for aid.
Right now, the number of people killed stands at 15 across Texas, Louisiana and Arkansas. And a massive search and rescue effort continues in Galveston, Texas. That's where CNN's Rob Marciano is right now to give us an update on the situation there.
The storm has passed but clearly, there is still a big crisis in that city, Rob?
ROB MARCIANO, AMS METEOROLOGIST: Oh, big time, and obviously, no power. The infrastructure as the town torn apart, and no word really as to when that power may be restored. Estimates anywhere from a week to a month to more than that. So this town continues to reel.
Yesterday, as a matter of fact, people were actually evacuated out of here. Hundreds of them brought from buses that took them out of town, kind of a reverse evacuation after the storm because there's just nothing here for them to survive on. So they got out of dodge.
Behind me, you see a scene that is echoed throughout this island, which is boats that are just littered, brought in by the storm surge, mostly off the bay. We've been talking about a lot about the crashing waves and the surge and the seawall on the southeast side of the island. But really, the big story has been all the other three sides where communities have been flooded and where the surge from the bayside and around that protective seawall have really demolished homes and crushed some homes.
And yesterday, we went out with somebody. We'll talk more about that in the next hour. Also yesterday, folks were lining up to get some badly needed supply, water, ice and some food. We talked with one gentleman who lost everything.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I didn't think it was going to be half as bad because I've been through them all down here. And this was the worst. And I don't think I want to go through another one like this because I've lost everything I own. And right now, we're trying to wait for electricity and water so we can go salvage something. But right now, we're just down to our clothes. This is it.
(END VIDEO CLIP)
MARCIANO: We heard that many times yesterday. And surprisingly, he laughed it off as did many people in that line. So the resiliency of the human spirit here in Galveston remains fairly strong.
The weather, I'll tell you this, Kiran, is a little bit drier. We had some thunderstorm roll through yesterday, which kind of hampered search and rescue efforts. Recovery efforts continue today on a door-to-door basis, and there are still spots on the island that are difficult to get to. We'll talk more about that in the next hour as well -- Kiran.
CHETRY: All right. Rob Marciano for us in Galveston this morning, thanks.
ROBERTS: Heavy rains from the remnants of Hurricane Ike are forcing hundreds of evacuations across the Midwest. At least two deaths are blamed on the flash flooding in Missouri. The storm spawning a tornado in Arkansas and hurricane force winds in Cincinnati that temporarily shut down the city's main airport. And the entire Chicago area has been swamped by more than seven inches of rain.
CNN's Jacqui Jeras live in the weather center with more. An awful lot of woe left behind by Ike. Where is it heading next, Jacqui?
JACQUI JERAS, AMS METEOROLOGIST: Well, believe or not, it's out of here already. A really fast-moving storm and what an incredible storm on so many levels, John.
We want to just kind of take you through time in case you missed things over the weekend and give you an idea of what Ike did. Here's from September 6th, as this thing with a Category three as it made landfall over Cuba. It weakened quite a bit, then it made its way into the Gulf of Mexico. And the real notable thing here is that the size of this thing just grew incredibly, and look at how the cloud cover just encompasses the entire gulf.
So it was about 900-plus miles across with that cloud shield. Landfall happened about 2:00 in the morning local time on Galveston Island. It was a very strong Category two with winds of 110 miles per hour, one mile an hour away from a Category three hurricane. Then it made its way on up towards the Midwest. It moved through the Ohio -- excuse me, it moved through the Ohio Valley and caused problems there.
If you caught the Bengals-Titans game, by the way, the winds were gusting up to hurricane force at times. Now, your satellite picture is showing you, it's up there in Canada. So we'll watch for improving conditions today. But a cold front that Ike hooked up with will still cause some gusty conditions across the northeast.
Travel delays possible, Boston, New York City and maybe Philadelphia. Those of you still dealing without power in the Houston area, at least the weather conditions will be relatively comfortable for not having a/c. High temperatures will be in the lower 80s with dry weather expected -- John.
ROBERTS: Jacqui, thanks so much. We'll keep checking back with you throughout the morning.
Nine minutes now after the hour.
CHETRY: Boycotting Oprah.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We were just upset that she wasn't going to be interviewed.
(END VIDEO CLIP)
CHETRY: Why a woman's group is trying to pull the plug on the queen of day time. You're watching the "Most News in the Morning." (COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING on this Monday. We're following breaking news that has rocked the global financial markets. Word that Lehman Brothers, the 158-year-old Wall Street investment bank, will file for Chapter 11 bankruptcy today. It puts tens of thousands of jobs around the world at risk.
Into last night, employees were heading into Lehman's midtown Manhattan offices and coming out with boxes of their belongings. All eyes on the Dow Jones when it opens later today. Overseas markets down sharply, reacting to the news that Bank of America cut a deal to buy troubled Merrill Lynch. That's the world's largest brokerage firm.
We'll keep you posted on all the financial news this morning -- John.
ROBERTS: Thirteen minutes after the hour. To the "Most Politics in the Morning" now.
Barack Obama's campaign setting a fund-raising record. Obama raised $66 million in August compared to John McCain's $47 million. That's his best haul so far. And with 50 days to go before the election, both candidates accusing each other of hitting below the belt.
CNN's Jim Acosta is live for us in Grand Junction, the battleground state of Colorado, where Senator Obama is going to have an event later on today. Good morning, Jim.
JIM ACOSTA, CNN CORRESPONDENT: Good morning, John. After some bruising campaign ads from John McCain, Barack Obama is now playing for keeps. If this were a football game, somebody would be throwing the flag for unnecessary roughness.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): It was this speech by Barack Obama in New Hampshire that touched off a campaign fire fight.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: They will try to distort my record. And they will try to undermine your trust in what the Democrats intend to do. I mean that's what they -- that's what they do every election.
ACOSTA: Obama unloaded just as Hurricane Ike was lashing the Gulf Coast. Complaining that a national disaster was no time for smash mouth politics, the McCain campaign said in a statement, "Barack Obama showed zero restraint in the ferocity of his attacks despite the wreckage in the gulf."
In response, the Obama campaign hit back hard saying, "We will take no lectures from John McCain who is cynically running the sleaziest and least honorable campaign in modern presidential campaign history." In North Carolina, it was running mate Joe Biden's turn, slamming McCain on the economy.
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: I could walk from here to Greensboro, I wouldn't run into one person who thought we made great economic progress unless I ran into John McCain on the road.
ACOSTA: With so much attention lavished on Alaska Governor Sarah Palin, some Democrats say it's time for Obama to remember who he's really running against.
PAUL BEGALA, CNN CONTRIBUTOR: They seem to just not be able to resist the shiny object of Sarah Palin who is not running against Barack Obama.
ACOSTA: With both campaigns running neck and neck in the polls, McCain tried to rev up the so-called NASCAR dads in New Hampshire, an appearance designed to resonate with the millions of stock car racing fans across the country, including some crucial southern states.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: When I'm in Iraq and Afghanistan, they're watching you. You are their role models. You are their heroes.
ACOSTA: Palin targeted women in Nevada during her first solo campaign swing on the Republican ticket.
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: This November with your help, we're going to shatter one glass ceiling once and for all.
(END VIDEOTAPE)
ACOSTA: As for Joe Biden, he is planning to deliver what the Obama campaign is billing as the Bush 44 speech, making the case that John McCain is just another four more years of George W. Bush.
ROBERTS: The NASCAR race in Lebanon, New Hampshire, a way to appeal to the northeast and the south all at the same time.
Jim, thanks so much for that. Appreciate it.
Sixteen minutes now after the hour.
CHETRY: First-time voters.
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PAT SWELGIN, MCCAIN SUPPORTER: You need a lot of older people in the south that will throw out the "n" word.
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CHETRY: Race and politics. Candid talk from college students about the candidates. (BEGIN VIDEO CLIP)
ISIDORA ILUONAKHAMHE, UNDECIDED FIRST-TIME VOTER: The day before, I'm going to decide who I get to vote for.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: First-time voters could have a major impact on the presidential race. CNN's Rick Sanchez has been following this group in his ongoing series. And this morning he talks to Georgia Tech students who are paying close attention to each of the candidate's strengths and weaknesses.
(BEGIN VIDEOTAPE)
RICK SANCHEZ, CNN CORRESPONDENT: How does Barack Obama get Americans to know him well enough to trust him as much as they like him?
BEN PORTER, OBAMA SUPPORTER: You know, we've heard since he became a major national candidate that he was a community organizer in Chicago. But I haven't seen any of those people. I haven't seen any tangible piece of what that created. You know, what did he organize? What were the effects of that? What did he do for a long time?
SANCHEZ: That's a great point. Yes. That's a great point. I mean, it's out there and we hear it out, but it's still abstract.
PORTER: We know John McCain's background. He's been all these years in the senate. He was in the Navy. He was a POW for all these years. We have those stories. But we hear Barack Obama was a community organizer, but we don't see the effect of that.
SANCHEZ: How about John McCain? How does John McCain break out of what he has?
PAT SWELGIN, MCCAIN SUPPORTER: He needs to just get better at public speaking. Barack Obama is such an eloquent speaker and very powerful. And you see him live, you'll almost like, you want to be his best friend.
SANCHEZ: But you don't think he makes as good an impression as Barack Obama?
UNIDENTIFIED MALE: Yes.
SANCHEZ: Independents over here, do you agree with that? Is that a problem for John McCain?
ISIDORA ILUONAKHAMHE, UNDECIDED FIRST-TIME VOTER: Definitely, yes. SANCHEZ: Barack Obama doesn't look like the guy that central casting would send over if you asked them for someone to play a presidential role. Right? Everybody agree?
PORTER: His portrait is going to look really weird in the national (INAUDIBLE).
UNIDENTIFIED MALE: Right.
ILUONAKHAMHE: White guy, white guy, white guy, hmm?
SWELGIN: And so, you need a lot of older people in the south that will throw out the "n" word all the time...
SANCHEZ: Yes.
SWELGIN: ... or feel that. The young voters I think don't necessarily care.
PORTER: The people that can't accept a black man in the White House aren't the people who will vote for a liberal anyway in general.
AMECHI OKOH, FIRST-TIME VOTER: Barack Obama has earned a lot of the young people's vote. We don't really feel that way as far as McCain.
SANCHEZ: You're excited because of Barack Obama?
OKOH: I'm excited because of Barack Obama, yes.
ILUONAKHAMHE: I have a poster on my bedroom wall and I have the candidates. And I add things like Michelle Obama's speech and I go on. And at the end of it, the day before, I'm going to decide who I get to vote for.
SANCHEZ: Kristie?
KRISTIE CHAMPLIN, FIRST-TIME VOTER: I think this is a really exciting time, especially for first-time voters, because we've only grown up with Bushes and Clintons. So, you know, Obama represents a huge change. McCain represents an authoritative difference. And I think it's going to be really interesting to see how it turns out.
(END VIDEOTAPE)
CHETRY: Check out "The League of First-Time Voters" on our Web site, CNN.com/league.
ROBERTS: Search and rescue.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: House by house, block by block.
(END VIDEO CLIP)
ROBERTS: Ed Lavandera goes along in the largest rescue operation in Texas history. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Twenty-four minutes now after the hour. Welcome back to the "Most Politics in the Morning."
John McCain on the campaign trail in New Hampshire where Barack Obama has opened up a lead in the polls. Our latest CNN/Opinion Research Corporation poll shows him with a six-point advantage there.
Joining me from Nashua, New Hampshire, is radio host and McCain supporter, Jodi Callinan, and from Boston, Massachusetts, radio host and Obama supporter, Margery Eagan.
JODI CALLINAN, CO-HOST, MORNING LIFTOFF WITH GEORGE AND JODI: Good morning.
ROBERTS: Good to see you, folks. Let's do a quick little back and forth between the two of you. If in 2004 the big issue there in New Hampshire was the war, what's the big issue that your listeners are talking about in 2008? Jodie, would you start us off.
CALLINAN: In 2008, what seems to be the most important issue for the people of New Hampshire is our economy, and most specifically the cost -- the health costs and the rising cost of fuel. You know, 97 percent of New Hampshire employer firms are small. So high rising health care cost is really going to be a huge issue for the people in New Hampshire.
ROBERTS: Margery, is that what your listeners are telling you?
MARGERY EAGAN, CO-HOST, JIM & MARGERY SHOW: Absolutely. "It's the economy, stupid." And I'm hoping that when people begin to think about that and vote their wallets, they're going to be voting for the guy whose policies are much more aimed at the middle class. And I'm also hoping that all those Massachusetts voters that have gone over the border will take a huge impact. I mean, we're a big Democratic state here, and New Hampshire is getting more and more blue.
ROBERTS: OK. Well, Jodi, to that point, New Hampshire has been a stronghold for John McCain for a long time. Why is Barack Obama up by six points?
CALLINAN: Well, to be honest with you, I'm surprised about that number. That's not a number that I have heard most recently. And both Barack Obama and McCain have been here in this great state this weekend.
And there seems to be a lot of support for John McCain here. He is authentic. He's genuine. He's unscripted.
And people in New Hampshire, that's what we love. We love people who have experience and who can talk off the cuff and talk to us in a normal tone.
ROBERTS: You know, the Granite State there, Margery, a fiercely independent state. People love to say that they're independent voters. John McCain has been getting some traction recently as he tries to adopt Barack Obama's mantle of being the agent of change on a national level. We start to see some independents breaking his way. Might New Hampshire start to go for John McCain soon?
EAGAN: Well, I'm thinking a lot of this is the Palin effect. Because as Jodi knows, you mentioned the word "lipstick" on talk radio and in nine seconds your phone lines are full, and there's nine million people e-mailing. I've never seen a phenomenon like this.
So for those of us who are for Obama, we're thinking, well, this is probably the height of the Palin palooza and maybe it will slow down. But again, I think this election is about change.
If 80 percent of the country thinks that we're going to the wrong direction, and McCain, there's a lot attractive about McCain. I loved him in 2000. I love him a little less this time around. But he is not the agent of change. And I can't see how most of the country is going to buy that idea. Everything from oil, to health care, to education reform, to the economy.
ROBERTS: Jodi?
CALLINAN: Well, I mean I find that interesting because it seems as though that the media has put John McCain in President Bush's back pocket, and he couldn't be more different than President Bush. The only thing that they have in common is they're both over the age of 60 with white hair. John McCain --
ROBERTS: Well, hang on for a second, Jodi, because his voting record is over 90 percent in 2007 in line with President Bush, and 100 percent in line with President Bush in 2008. So what do you say to that?
(CROSSTALK)
CALLINAN: Well -- you know what? John McCain is happy to cross party lines. He goes for what he knows is right for our country. George Bush, unfortunately, tends to be a party puppet.
ROBERTS: Right.
Margery, let me finish with you and ask you this question.
EAGAN: OK.
ROBERTS: You know how popular Hillary Clinton was there. You're talking about the Palin effect here with John McCain.
EAGAN: Hugely popular. Yes.
ROBERTS: Did Barack Obama make a mistake in not picking her as his running mate?
EAGAN: I don't think so because as difficult as things look right now, I think it would have undercut his whole message of change. And you can't deny, it's hard to be the president with Bill Clinton breathing down your neck every two seconds.
Joe Biden, lots of us didn't watch the debates early on. I'm a junkie, I did. He was great in the debates. As a matter of fact, I thought he was better than all of them in the debate. So I'm hoping that when people see him versus Sarah Palin, he'll become a more attractive candidate.
And don't forget, New Hampshire, there was a lot of sexism against Hillary Clinton right before the New Hampshire vote. I think that played hugely into her huge win in New Hampshire.
ROBERTS: It's only got four electoral votes, but New Hampshire a big prize in 2008.
Margery Eagan, Jodi Callinan, great to see you this morning. Thanks for being with us.
EAGAN: Thank you.
CALLINAN: Thank you.
UNIDENTIFIED FEMALE: Thank you. Have a good day. Take care.
ROBERTS: You too.
CHETRY: Well, we're just about half past the hour now. We get a check on the top stories this morning.
Foreign markets taking a big hit overnight. Investors are reacting to the news that Lehman Brothers is filing for Chapter 11 bankruptcy.
Here's a look at people at the company's headquarters cleaning out their offices Sunday not knowing what today will bring. The firm employs 25,000 people around the world.
Also this morning, search and rescue efforts under way along the Texas Gulf Coast. Nearly 2,000 people pulled the safety effort trying to ride down Ike.
Power outages affecting millions. Residents have no clean drinking water, and a lot of these trucks that were supposed to bring supplies have been unable to get to some of these areas especially around Galveston. At least 15 people confirmed dead in Texas, Louisiana and Arkansas. President Bush is expected to tour the area of damage tomorrow.
And federal investigators are looking at whether text messages played a part in Friday's deadly commuter crash outside of Los Angeles. Two teenagers say they were messaging the engineer just before the head-on collision that killed 25 people, injured more than 130. The train's operator said the engineer failed to heed a red light.
And more now on our breaking news this morning. All eyes will be on Wall Street when it opens this morning after the dramatic news overnight of Lehman Brothers collapsing and Merrill Lynch being swallowed up by Bank of America. So, what will the changes mean to just every day investors?
CNN's Gerri Willis joins us now with more on this.
Just put into context for us about why we should be so concerned about what's happening.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Absolutely. Well, just look at these headlines. Pretty dramatic stuff. Lehman Brothers, the globe's ninth largest investment bank out of business. Merrill Lynch, the nation's largest broker, it's going to be swallowed up by another company. You see these headlines just piled up. AIG in trouble, Washington Mutual struggling as well. It could be taken over.
Here's what you need to know. This is really the end game of what's been going on for months with the real estate market, with credit markets in this country. These companies, these banks, these investment houses essentially turn real estate into an investment that was sold all over to the globe. Those investments went sour. Credit became impossible to get. Money was tight for everybody, even the best credits out there. And now you are seeing this end game so dramatic now.
You may be wondering why does this matter? I mean, Lehman Brothers is just one investment bank after all and the ninth largest, not the biggest, not by a long show. Well, here's the problem. So many of these firms have contracts with Lehman Brothers. They're all interconnected, woven together by a system of different kinds of credit contacts, very highly sophisticated products. If Lehman goes out of business, then what happens to those contracts? Those are the questions that traders or investors are asking today.
Individual investors, you know, you've seen those stocks go down. The financials go down for a year now. This was a group of stocks that used to be the biggest group in the S&P 500. They really drove performance for so many investors, particularly index investors across the country. So now, we're going to have to wait and see how this entirely dramatic series of events is going to affect those stocks and that group over the coming weeks.
CHETRY: You'll explain it better than I will, but bottom line is these banks, what do they do? They underwrote for these home loans that have all gone into foreclosure? I mean, was that the biggest problem.
WILLIS: Well, the big investment of course were these bonds essentially that, you know, essentially took mortgages from all over the country, sliced and diced them into different investments and became totally liquid and totally without value. So now those are on the books of these investment banks. They are on the books of investors who are at these investment banks and now if you can't trade those, they are impossible to get rid of. And we're reaping the results of that right now.
CHETRY: Wow. All right. Gerri Willis, thanks for joining us this morning.
WILLIS: My pleasure.
ROBERTS: Big psychological blow, too. I mean, this is not a mom and pop operation. It's almost 160 years old.
WILLIS: And 25,000 employees. Merrill has 60,000 brokers, possibly. I mean, it's a lot of folks. And you know, you saw the look on those folks' faces as they are taking their, you know, stuff out of their offices. Dramatic stuff.
ROBERTS: A lot of people hurting today. Gerri, thanks.
It's a race against the clock as rescuers search the ruins along the Galveston Coast. So far nearly 2,000 people who ignored evacuation orders had been rescued. At least 15 deaths have been confirmed in Texas, Louisiana and Arkansas. And the very early damage estimate is put at least at $8 billion. CNN's Ed Lavandera is looking at the situation on the ground in Houston.
ED LAVANDERA, CNN CORRESPONDENT: John and Kiran, search and rescue teams will continue scouring southeast Texas looking for victims and survivors in the wake of Hurricane Ike. So far, 2,000 people had been rescued, and the work isn't over yet.
(BEGIN VIDEOTAPE)
LAVANDERA (voice-over): Flying over the destruction and looking for survivors isn't easy especially when one of them like this man is floating on mangled debris only wearing a life vest. An Air Force rescue team pulled him to safety from Crystal Beach, Texas, a small coastal town decimated by Hurricane Ike.
STEVE MCCRAW, TEXAS HOMELAND SECURITY: This is the largest search and rescue effort that Texas has ever taken. Starting east going all the way west. And house by house, block by block, search and rescue.
LAVANDERA: Carrying and moving the elderly is proving to be a challenge once again. An elderly man had to be rescued from his car after driving into high water along Interstate 10, and state officials say they are looking into how and why nearly 300 people were abandon at a nursing home. And at another nursing home in Houston, the elderly had to be moved out because of damage to the building.
MCCRAW: Well, we had part of the roof tear off and water coming into the roof, but the parking lot, we were waist deep and chest deep in water, and there was just the winds were howling.
LAVANDERA: But across the region, there are miles and miles of damaged homes that need to be inspected, an exhaustive search to make sure there aren't more victims trapped in the rubble.
(END VIDEOTAPE)
LAVANDERA: On Sunday, several thousand people had to be evacuated out of the Houston area, moved to shelters in San Antonio and Austin, a sign that it will take weeks, if not months for life to return to normal here.
John and Kiran, back to you.
CHETRY: Hometown reality check. On the ground in Alaska with the women trying hard to make Sarah Palin vice president.
(BEGIN VIDEO CLIP)
CROWD: U.S.A.! U.S.A.!
(END VIDEO CLIP)
CHETRY: And the ones taking a vocal stand against her campaign.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Because I'm a woman, I live in Alaska, and I do not support Sarah Palin.
UNIDENTIFIED FEMALE: Other Christians need to examine their hearts.
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CHETRY: You're watching the "Most News in the Morning."
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AMY POEHLER, ACTRESS: Well, tonight we are crossing party lines to address the now very ugly rule that sexism is playing in the campaign.
TINA FEY, ACTRESS: An issue which I am frankly surprised to hear people suddenly care about.
(END VIDEO CLIP)
CHETRY: There it is. The campaign comedy, Tina Fey and Amy Poehler bringing Sarah Palin and Hillary Clinton together for the season premiere of "Saturday Night Live." It was SNL's most watched episode in six years. Republicans are hoping the real Sarah Palin can attract female voters who once supported Hillary Clinton. But as CNN's Jessica Yellin tells us, even in her home state of Alaska, the would-be vice president has become a polarizing figure.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: John, Kiran, after Sarah Palin's trip to Alaska, it's clear that women here are sharply divided in their views of the governor. In fact, a weekend demonstration against Palin turned out the largest crowd officials here can remember.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALES: Yes, we can! Yes, we can!
YELLIN (voice-over): Anchorage police estimated at least 1,500 protesters turned out for this anti-Palin rally, declaring electing her would turn back the clock.
UNIDENTIFIED FEMALE: The message is that I'm a woman, I live in Alaska and I do not support Sarah Palin.
UNIDENTIFIED FEMALE: She is anti-abortion, you know. Every woman should have the right to choose.
UNIDENTIFIED FEMALE: We have fought so hard to get where we are now, to take a step back and take her view, absolutely, no, no.
YELLIN: It wasn't just Democrats. Among the more emotional, this woman who says she's a Republican and a Born Again Christian.
UNIDENTIFIED FEMALE: I feel very strongly that other Christians needed to examine their heart and ask themselves, is she really walking in a way that they want to follow?
YELLIN: A few miles away, the passion just as high at a farewell rally for Palin.
LEAH HUTCHINS, SUPPORTS PALIN: She represents women with a morality message. She's pushing the morality agenda.
WANDA SUTTERER, SUPPORTS PALIN: There has never been, I don't think even with Hillary Clinton, someone who is as poised and as much of a female role model as Sarah Palin is.
UNIDENTIFIED FEMALE: I don't think she's a feminist. I think she's a woman doing a job.
YELLIN: On the stump, Palin does not shy from her image as a strong woman. She sells herself as a barrier breaker.
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: In Alaska where men are men and women win the Iditarod.
First woman can break the glass ceiling once and for all.
YELLIN: You might think that would appeal to women. But Palin is actually doing better with men. The latest CNN Opinion Research Poll shows 62 percent of men have a favorable view of Palin. That's 9 points higher than women. How Palin's reception by women and her historic candidacy play at the ballot box is still the big unknown.
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YELLIN: Here in Alaska, a local conservative talk show host kicked up some controversy when on the radio he described the organizers of the anti-Palin rally as maggots and gave out their phone numbers. Two of those organizers tell me they got phone calls suggesting they should get out of Alaska.
Well, that talk show host later apologized and he showed up to take part in a counter protest on the same day as that rally. There are clearly strong feelings on both sides.
John?
Kiran?
ROBERTS: Broken schools.
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UNIDENTIFIED FEMALE: We got to reconnect our parents.
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ROBERTS: The school system that's paying parents to get involved in their kids education.
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UNIDENTIFIED FEMALE: I get advice, you know, but at the same time, I get knowledge as well.
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ROBERTS: You're watching the "Most News in the Morning."
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ROBERTS: Coming up now at 15 minutes to the top of the hour. The remnants of Hurricane Ike caused dangerous flooding as it raced across the Midwest. As much as 8 inches of rain fell in parts of Indiana, Illinois and Missouri. Here are some pictures from Chicago where you can see that it caused a few problems there. The storm system also touching off a tornado in Arkansas. CNN's Jacqui Jeras is live in the CNN weather center.
I was trying to watch the motorcycle racing yesterday from Indianapolis and it was getting rained on an awful lot.
JACQUI JERAS, CNN METEOROLOGIST: Oh yes.
ROBERTS: It's all over with, right, because Ike is gone but it left quite a lot of destruction in its wake.
JERAS: Absolutely. You know, we're still going to have a few issues in the northeastern corner yet today. You know, the area of low pressure and the front that's all associated with Ike now. It's still going to bring in some gusty conditions. It's moving way up into Canada now.
We've got some wind advisories in effect for northern parts of upstate New York into Vermont and then also up towards Caribou area, where winds could still be gusting around 50 miles per hour. And I think we could see strong enough winds at, say, at Boston Logan into the New York metros that we may have some minor airport delays. So call ahead.
But yes, Indiana getting hit hard yesterday as well as Kentucky. Look at some of these wind gust reports. Louisville, 75 miles per hour, 74 in Covington, Kentucky. And you know, that's hurricane force winds, there were at one point, more than a million people in Ohio without power. Still hundreds of thousands waking up this morning without power yet. So, those winds really doing a number as this thing blew through the Ohio Valley. Cool air in its wake. So, a little bit of good news there -- 66 at Minneapolis today, 70 degrees in Kansas City -- John.
ROBERTS: Jacqui, thanks very much. We'll see you soon.
CHETRY: Boycotting Oprah.
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UNIDENTIFIED FEMALE: We were just upset that she wasn't going to be interviewed.
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CHETRY: Why a women's group is trying to pull the plug on the "Queen of Daytime." You're watching the "Most News in the Morning."
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CHETRY: Welcome back to the "Most News in the Morning." Oprah Winfrey doesn't want Sarah Palin to come around until after the election. Well now, the "Queen of Daytime" is facing calls for an Oprah boycott as a result.
CNN's Kareen Wynter is following the story for us.
KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: John, Kiran, it's the interview that she's not doing that has Oprah Winfrey under fire.
(BEGIN VIDEOTAPE)
OPRAH WINFREY, TV HOST: Barack Obama.
WYNTER (voice-over): He graced her couch not once, but twice. The Democratic presidential nominee sat down with the "Queen of Daytime Talk" in 2005 and 2006 before he announced his bid for the White House. Now, Oprah Winfrey is taking heat for refusing to interview Republican vice presidential nominee Sarah Palin.
UNIDENTIFIED FEMALE: We were just upset that she wasn't going to be interviewed on "Oprah."
WYNTER: The Florida Federation of Republican Women has launched a national boycott against Winfrey, urging women to tune out her show and cancel subscriptions to her "O" magazine.
UNIDENTIFIED FEMALE: Unfair treatment of the candidate who has really, really excited not just women in this country but everyone. And it just seemed unusual to me that she would be excluded from a talk show that focuses on women.
WYNTER: Winfrey has endorsed Obama, campaigned with him and even attended the Democratic convention. But she says when it comes to her show, she's not playing favorites, saying, quote, "at the beginning of this presidential campaign when I decided that I was going to take my first public stance in support of a candidate, I made the decision not to use my show as a platform for any of the candidates."
A position Winfrey also spelled out in a 2007 radio interview.
WINFREY: It would be really disingenuous of me to be sitting up interviewing other people as though pretending to be objective or even creating the illusion of objectivity.
WYNTER: "O" magazine told CNN the newly launched boycott has not affected sales, and a spokesperson for CBS TV distribution which syndicates "Oprah" show said so far this season the ratings are up. Winfrey has agreed to have Palin on her show after the election. Until then, her critics promise to keep up the fight.
(END VIDEOTAPE)
WYNTER: There have been hundreds of responses on the floor of the Federation of Republican Women's Web site, both supporting and condemning the boycott.
John?
Kiran?
ROBERTS: Breaking news. A major investment bank hits the skids. The Feds take steps to save your savings.
Plus, broken schools.
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UNIDENTIFIED FEMALE: Our goal to interrupt that pipeline from school to prison.
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ROBERTS: Paying children to learn, paying parents to get involved.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I get (INAUDIBLE) at the same time, I get knowledge as well.
(END VIDEO CLIP) ROBERTS: Will it cost their kids down the line?
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ROBERTS: Welcome back to the "Most News in the Morning." And checking the "Political Ticker" for you. John McCain picks up ground in a key battleground state according to a new poll. In Minnesota, the state where McCain accepted the Republican nomination, "The Star Tribune," has the candidates now tied with 45 percent each. That's a big change.
Cindy McCain saying the hosts of "The View," quote, "picked our bones clean," after some rough treatment that her husband got on the day time show. But she said the views of the media don't represent the way the American people feel.
CHETRY: Karl Rove says that the McCain campaign has gone, quote, "one step too far in recent ad attacks against Barack Obama." He said some of the ads don't pass the 100 percent truth test. The former Bush adviser is known for his own aggressive campaign tactics.
And record campaign contributions for both candidates last month. The Obama campaign says it raised $66 million in August. The McCain campaign brought in $47 million. Both campaign said they got a big boost after naming their running mates.
And for more up to the minute political news, just head to CNN.com/ticker.
ROBERTS: Four minutes now to the top of the hour. Our next guest spent the weekend at a Summit for Values Voters in Washington. So, did the nomination of Sarah Palin help bring back those voters to the Republican side? Joining me from Arlington, Virginia is Bill Bennett, CNN political contributor and host to the national radio show "Morning in America."
Bill, it's good to see you. So, she was the star of the show. Has she completely fixed John McCain's problem with the religious voters, value voters, the conservative right?
BILL BENNETT, CNN POLITICAL CONTRIBUTOR: Yes. I mean, the answer is just simply yes, John. It was just a big burst of enthusiasm. Two things. People like Sarah Palin very much. They like her story, they like her history, they like her family. They like her. But it also had the effect of validating John McCain's judgment. They said good for him, you know, in picking her. I heard one woman say -- it was very interesting. She said, good for the man who surrounds himself with strong women -- Cindy, Sarah Palin and mother Roberta, you know.
ROBERTS: So -- but Bill, are conservatives absolutely confident that John McCain will adhere to their values if he wins the White House? I mean, he's running pretty hard to the center right now.
BENNETT: No, I don't think they are. But I think what they feel is that they now have very clear and obvious representation of the things they care about on the ticket. Conservatives at this meeting Values Voters Summit are realistic. They understand that, you know, they're not going to get a ton of attention to the issues they care about.
But what I think they feel, John, is that their issues now won't be neglected. They know that the major tasks here are energy, the economy, foreign policy. But at least they feel as we say the cliche a place at the table.
ROBERTS: I'm sure you heard, Bill, over the weekend, Karl Rove was complaining that both campaigns are going a little too far in their advertising. He had criticism for the Barack Obama campaign. He also had criticism for John McCain. Let's listen to what he said.
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KARL ROVE, FORMER PRESIDENTIAL ADVISER: McCain has gone in some of his ads, similarly gone one step too far and sort of attributing to Obama, things that are, you know, beyond the 100 percent truth test.
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ROBERTS: He said that Senator McCain's campaign has gone beyond the 100 percent truth test. Whatever happened to straight talk?
BENNETT: Yes. Well, don't you find it a little funny, Karl Rove criticizing this kind of thing?
ROBERTS: It is a little ironic, yes, OK.
BENNETT: Just a touch. My God, I'm shocked. Gambling is going on in here, you know.
ROBERTS: Who knew?
BENNETT: People making tough ads. Yes, who knew? Look, this happens in campaigns. I've looked at ads on both sides. And I think, you know, a lot of them fail the 100 percent truth test. But, you know, we have this other thing in American journalism which I think is good, which is the fact checking and the accuracy checking.
What people try to get after in these ads, and this much is fair it seems to me, John, is a tendency or a valance in the campaign. They may not get the exact literal truth but they give you a sense of who the candidate is, what the candidate stands for. But, yes, they go over the line. The interesting thing now is we're back in a very conventional political campaign these last 50 days. There's a lot of salvos both sides. It's not the new politics.
ROBERTS: You know, last week, when he was on "The View," and we mentioned that Cindy McCain thought that he got rough treatment on "The View," he said that Sarah Palin has not requested earmarks as a governor, when the record clearly shows the opposite. He had to walk that back.
And now we find out that Governor Palin doesn't want to eliminate earmarks. She merely wants to reform them, get them out there in the light of day. And that's what Senator Obama has been doing all along. All of his earmark requests had been posted on his Web sites. So, what are they fighting over here?
BENNETT: Well, yes, there was a flap, obviously, about the bridge to nowhere, where she withdrew that when she became governor. The point she makes, and I think it's a fair point, I think Obama makes it, too. There are times the states do need help from the federal government because of the situation right now.
The question is can we lower that threshold or raise that threshold so it's more like a situation with operation -- with Hurricane Ike than the normal business as usual.
Look, the kinds of pressure that John McCain got on "The View" are not inappropriate. You go on that show, maybe, you know, people think it's a soft venue. But when you're running for president, you better be ready for tough questions. She got tough questioning from Charlie Gibson. I think some unfair questioning, but, if you're running for president or vice president, you got to expect it. Now the real game begins, I think. Now, the inquiry really, really gets tough. And I think both hard questions for both side.
ROBERTS: Bill, it's great to see you. Thanks for being with us this morning.
BENNETT: Thank you, John. Appreciate it.
ROBERTS: I'll see you again -- Kiran.
