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Lehman Brothers Suffers Spectacular Downfall; Sarah Palin Continues Solo Campaigning; Obama More Popular Among People Overseas; Ike's Aftermath, Millions Without Power, Thousands Homeless
Aired September 15, 2008 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Well, it's crossing the hour now, 8:00 a.m. here in New York. We'll following breaking news this morning. Lehman Brothers, one of the nation's largest and oldest investment banks, will file for Chapter 11 bankruptcy protection today. It follows a tumultuous weekend in which two potential buyers, Bank of America and British bank Barclays, both pulled out of deal talks. We're going to have more on Lehman's fate in just a minute.
Early hour indications now, the market's headed for a big tumble when the opening bell rings just 90 minutes from now. Overseas markets have also plummeted. The news of Lehman's filing was just one of several developments that has Wall Street on alert. The country's biggest insurer AIG is looking for a loan. Bank of America cutting a deal, essentially a lifeline to buy Merrill Lynch for $50 billion.
And former Federal Reserve Chairman Alan Greenspan says the country has a less than 50 percent chance of avoiding a recession. He spoke on ABC's "THIS WEEK," and Greenspan said that the financial tailspin is a, quote, "once in a century event."
(BEGIN VIDEO CLIP)
ALAN GREESPAN, FORMER FEDERAL RESERVE CHAIRMAN: Few question that this is in the process of outstripping anything I've seen, and it still is not resolved and 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)
CHETRY: Lehman Brothers suffering a spectacular downfall. Its stock at one point this year sold for $67 a share. Right now, it's trading at just $3.65 a share.
CNN's Allan Chernoff joins us now with a closer look at what it means for your money. He's live outside of Lehman Brothers headquarters in New York.
And Allan, that's where we saw those pictures all morning long of people yesterday literally packing up their life's work and carrying it out in a box.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Kiran, this is absolutely stunning. Wall Street has seen very, very few days like this. The mortgage crisis has now taken down two of the biggest names, the most storied names on Wall Street, one of them Lehman Brothers right behind me. The parent company of Lehman Brothers filing for bankruptcy as the subsidiaries basically wind down or Lehman tries to sell them off.
In addition, huge, huge news beyond Lehman Brothers, which is not the biggest shock this morning, by the way. Merrill Lynch selling itself to Bank of America for $50 billion. Really, I just cannot put into words how stunning that is. The biggest brokerage firm in America, Merrill Lynch, being sold off for $50 billion.
Both Merrill and Lehman Brothers had invested so much money, billions, into pools of investments in mortgage securities. As a result, they lost billions, investors lost confidence in them. And you see now what exactly has happened. These two firms under and the Federal Reserve has said it is going to make it easier for investment firms to borrow money -- Kiran.
CHETRY: Allan Chernoff for us down there out front of Lehman Brothers this morning. Thanks for being with us. You know, Allan didn't notice this probably but, of course, our television viewers did (INAUDIBLE). Just obviously trying to make light of a bad situation, pretending to console each other out there. But there were many different reactions.
Christine Romans joins us now with more on this. A lot of people expected this and there were others who were just simply devastated.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And goes some classic Wall Street pranks this morning. But, you know, I will say that this is -- this is really stupendous this has happened. I mean, unfathomable almost that Lehman Brothers is going down as we've been saying over the weekend. You had bankers, central bankers and bankers huddled in Lower Manhattan trying to figure out what to do, trying to see if they can find a buyer for Lehman.
Consider this. The CEO of this company last year got $22 million in a bonus because the company had done so well in 2007. Its profit was up 5 percent. Now, it's going to be unwound. They're trying to find an orderly way to take this company apart. The stock has been hammered. Stockholders have been hammered. You know, the S&P 500 has a big component of financial stocks. So, you could very well have exposure to this company or at least to the financial stocks that are falling in your 401(k).
Another thing that I think is interesting about this is this is a 158-year-old company that has really been kind of a bellwether on Wall Street, right? Its rise and its performance has mirrored the performance of the United States of America becoming a global power and the superpower in the world. If Lehman can go down, people are saying, what does that mean about the health of the American financial system right now?
And I think that sounds so dire. But that's what people are talking about. That's why Merrill is being bought out. That's why AIG is going to try to get a big loan. You know, there were some really smart people who made an awful lot of money who went out and took some big risks. And look what's happening. JOHN ROBERTS, CNN ANCHOR: Right. And so we talk about this idea of turning the tide and when will that happen. Some people are now thinking that since Bank of America stepped in to buy Merrill Lynch, that may begin to turn the tide. This may be the last big loss. But every time we say have we turned the tide, something worst happens.
ROMANS: I heard that at Bear Stearns. Hey, you know, this is a great time to buy financials because Bear Stearns has been bailed out by the federal government. Now, that's over, you know, it can't get worst than this. And then Fannie Mae and Freddie Mac had to be taken over by the United States government, making the three of us and 300 million other people in this country basically the nation's largest mortgage guarantor.
CHETRY: Well, what's the root -- there's a root of all of this. The subprime mortgage is -- I mean, you said they've been around 158 years. Were they always making risky investments?
ROMANS: Things got really risky over the past few years. Mortgages are a big part of that -- the buying and the selling of these mortgages. You know, some of these -- some of these people you talk to at the banks and they're -- especially when a new CEO comes in and tries to figure out what was happening before. There were departments apparently, and I'm not talking about Lehman in particular -- but people doing stuff the CEOs didn't even know was going on, some of this risk.
I mean the bottom line for us is, you know, take a look at your own risk and make sure that you know what you got and what you're doing, and that you're saving money that you know -- that you're investing in your future and that you're not taking these big risks yourself and your own finance.
ROBERTS: I think the big word today, too, is for investors is going to be don't panic because Dow futures are down 366 points.
ROMANS: Yes, it could be ugly today. It could be ugly. Although, I never try to predict Wall Street because you never know when, you know, somebody who, you know, a big smart guy someplace is going to go and start buying stuff up. So, you just not never know.
ROBERTS: Christine, thanks you so much for that.
ROMANS: You're welcome.
ROBERTS: Appreciate it.
CHETRY: You know, a weird postscript to all of this -- oil $95 a barrel today.
CHETRY: With all the talk of price gouging and problems after Ike.
ROBERTS: In the meantime, the price of gasoline going up because of short supplies after Ike. So now we'll see where this all goes today.
To the "Most Politics in the Morning" now. Wonder where that's going to go as well. Barack Obama sets a fundraising record of $66 million in August. It's the most ever for a presidential candidate. John McCain holding $47 million in August, a record for his campaign as well.
Meantime, John McCain's running mate, Governor Sarah Palin continuing her solo campaigning. After a stop in Carson City, she heads to Golden, Colorado this morning. CNN's Dana Bash joins us now live from Golden.
Good morning, Dana. What's she trying to achieve there on this western trip?
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Good morning, John.
Well, what she's doing is she's going to Republican strongholds in these western states like Colorado, like Nevada. Republican strongholds where McCain need really to think that they need to boost their numbers. And also areas like where I am right now, Jefferson County, Colorado, which had been traditionally Republican but has become increasingly Democratic.
So, what she's done at one of her first two rallies -- she's actually only having two altogether, in Carson City, Nevada and then here in Golden, Colorado later today, is really try to play up her western sensibility, her western roots, her connection to these voters out here. Not just Republicans but also, she hopes, Democrats and independents, but also playing up the things that we've heard over the past week and a half or so from her, the fact that she is somebody who is an outsider, who will help John McCain change Washington -- John.
ROBERTS: She is still promoting herself as fiscal conservative on the stump. Let's listen to part of her speech yesterday in Carson City.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: The old oil company monopoly that had really controlled our state, we broke it. And the good old boy network of lobbyists and special interests that used to run things, whatever they're running now, it's not the state of Alaska. And nearly $500 million in wasteful excessive spending, well, that's what vetoes are for.
(END VIDEO CLIP)
ROBERTS: So there you are, a fiscal conservative and a reformer. Sounds familiar.
BASH: It sounds very familiar. These are the lines that we've heard really for the past 10 or 11 days, really since the Republican convention, since Sarah Palin's big debut speech there. She is very much, John, sticking to script, at least so far. And that is really part of the strategy that the McCain campaign has for putting her out there.
It's very controlled. She's speaking to these rallies. She's not doing Q&A with voters so far. She's definitely not doing Q&A with those of us in the press corps traveling with her.
They say that the speech that she's going to give later on this morning, that she will have some new lines about what they say that her focus will be in the campaign, maybe even in the McCain-Palin administration. But definitely what it seems to be right now is that they want her to stay on track and do what she has been doing, which is get the crowds in, get people energized. In fact, I can tell you, in her one rally over the weekend, she signed autographs with the crowd for longer than she actually spoke.
ROBERTS: Let's hope that she signed her name and not Tina Fey's as well. Dana Bash for us this morning in Golden, Colorado. Dana, thanks so much.
BASH: Thank you.
ROBERTS: Coming up now on ten minutes after the hour.
CHETRY: Ike's aftermath, millions without power, thousands homeless. We've got the latest from the extreme weather center.
You're watching the "Most News in the Morning."
CHETRY: We have some breaking news this morning. Ike's effect still being felt this morning. 2,000 people have been rescued. Officials, though, are still making door-to-door searches. More than 3 million people are without power across Texas and surrounding states, and Ike is still causing problems for air travelers as well.
CNN's Jacqui Jeras is live at the weather center in Atlanta tracking all of this for us this morning.
JACQUI JERAS, CNN METEOROLOGIST: Hey, Kiran. Hello, everybody.
We're dealing with wind issues primarily still from the remnants of Ike. And it's way up to the north now pushing through Quebec but we've got this cold front pushing through and the strong gradient from this storm. So, wind advisories remain posted in parts of the northeast where winds may be gusting between 30 and 50 miles per hour throughout much of the day today. And, of course, that's going to cause some problems at the airports.
Boston, New York Metros and Philadelphia all could see relatively minor delays. Hopefully should be around 30 minutes or so. For most of you, Galveston Airport is still closed. Both of Houston's airports are open, Intercontinental and Hobby. Both American and Continental Airlines say they're going to be resuming their operations today, but Southwest is going to be waiting until tomorrow. Forecast behind this system is nice, cool, comfortable air. For people who are still without power, we'll see highs in the 80s across Houston. And the number one question, guys, asked to CNN meteorologists today, is anything else out there? The answer is there's one little disturbance here but way too much wind sheer, that we don't expect any development at least not in the next several days.
Back to you.
CHETRY: That's good news. Thanks a lot, Jacqui.
Well, the community of Port Bolivar at Coastal Town, northeast of Galveston island was nearly wiped off the map.
Here's CNN's Susan Candiotti.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: John, Kiran, we're back in Houston after a five-hour boat trip to and from a coastal community north of Galveston.
CANDIOTTI (voice-over): Port Bolivar used to be a quiet, seaside community, until Ike came along. We approached by boat across Galveston Bay. A dead horse floated by, an ominous sign of the destruction ahead. Nearly every home in the beach town flattened by Ike's powerful storm surge. Stilts outlined where homes washed into the sea. Cracked foundations layered in the sand. Other homes barely standing. Here, a hat hanging in what was a window. The only sound, a house alarm eerily wailing through deserted streets.
(on camera): And then when you look at a house like this where there is nothing left, you remember that National Weather Service bulletin that was issued just before Hurricane Ike hit that said unless you leave these low-lying areas you will, quote, "face certain death." I don't know how anyone could have survived this.
(voice-over): Scattered around, cars submerged in water or stuck in mud. Some flipped over. And what didn't float away, a toilet, a bathtub, a lawnmower, a frightened dog scavenging for food. The aptly named "Hurricane Club." These neighbors barely survived the storm. Humans and pets traumatized and, words of one, trapped because of stupidity.
UNIDENTIFIED MALE: Got up, the house was flooded. We went to the second level and stayed in the second level. And all we had left after that was the attic.
CANDIOTTI: Was there a point when you thought you would die?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED FEMALE: When the water kept coming up.
CANDIOTTI: Jean Reedy (ph) is convinced she lost a friend, whose boyfriend says she was swept away. UNIDENTIFIED FEMALE: The guy she was with, he said they were hanging on to the rafters and a big wave came and took her.
CANDIOTTI: Her friend hasn't been found. The handful who made it rescued by the Coast Guard from a town that may recover but can never be the same.
CANDIOTTI: There is no telling how long it will take to rebuild Port Bolivar -- John, Kiran.
ROBERTS: Head-to-head, the new poll that shows how the candidates match up around the world.
You're watching the "Most News in the Morning."
ROBERTS: 20 minutes after the hour. Welcome back to the "Most News in the Morning."
It has been said that politics is a popularity contest. And according to a new BBC Poll, Barack Obama is more popular among people overseas. CNN's Becky Anderson is looking at the poll results for us this morning. She is live right there by Carnaby Street in London.
Good morning to you, Becky.
BECKY ANDERSON, CNN CORRESPONDENT: Good morning, John.
You're absolutely right. An overwhelming majority of the 22,000 people who are polled across 22 countries around the world favor an Obama presidency. Now, let's be honest. Obama did have an advantage going into this campaign as far as the rest of the world is, was and will be concerned, John. It's anybody but Bush. And by dent of association, therefore, anyone but John McCain.
So, let's take a look at these numbers, shall we. And see what's surprising about them. What isn't surprising is you get something like an 82 percent approval rating for Obama. In Kenya, for example, is where many of his siblings, step siblings, members of his family live. They like, know Obama. They like him, they know him, and know a lot about him, and they want him for presidency.
Perhaps more surprisingly, John, is when you look at the numbers from NATO allies. For example Canada, France, Germany, good approval rating of over 50 percent for Obama. And these are people who dealt with the Bush administration in the past and are looking for international affairs, foreign policy and experience in both of those. So, that's where perhaps the numbers are a bit more surprising.
These polls, John, were also conducted back in 2004 across 33 countries. And a majority of those in 30 of those countries, back in 2004, were looking for a John Kerry presidency. So perhaps not too surprising when we see the rest of the world is still looking for a Democrat at the White House. Very briefly, though, and lastly, in the Philippines, in Poland and in Nigeria back in 2004, they were sticking with Bush. These days, they're with Obama. So, it looks as if most of the world is shifting that way. The GOP not popular around the world -- John.
ROBERTS: So, Becky, overseas, President Bush has got very long coattails that John McCain seems to be attached to. But here in the United States, John McCain is presenting himself as an agent of change now. He's going back to that maverick attitude that he had back in the year 2000, and it's starting to work among some independents. Is there anything he can say to change opinion worldwide?
ANDERSON: It's interesting, isn't it? I wondered whether there might be, a few weeks ago, until he took Sarah Palin on to the ticket. That's been interesting to see people react to Sarah Palin and John McCain as an item, because there's an awful lot of skepticism about Sarah Palin.
When you hear words like creationism, when you hear words like -- or phrases like, I don't support the arguments for global warming, for example, it's arguments like that and it's a Sarah Palin ticket, I think, which is, to a certain extent hurting John McCain.
There really isn't very much, it seems, that he can say or do at this point, even on foreign policy interestingly enough -- John.
ROBERTS: We should point out, though, that only people in the United States, people who are Americans, get the opportunity to vote. But it's interesting to look at that worldwide opinion. Becky Anderson for us this morning. Becky, thanks very much.
CHETRY: And a deadly train crash north of Los Angeles takes a shocking turn this morning. The investigation, that is. Could a text message be behind this accident? We're going to get a live report.
Also, Barack Obama and John McCain both reaching out to a crucial voting bloc, but which candidate is winning women over? There are some new polls out that have many scratching their heads. We're going to talk about it, coming up.
CHETRY: The race for president getting tighter by the day in independent voters, especially women, could be at the center of the fight. Take a look at this. It's a new "Newsweek" poll. It finds an 11-point shift among white women to John McCain since Sarah Palin was named to the ticket. There you see taken back in July, 44 percent to 39 percent, and then taken in August, 53 percent to 37 percent.
Patricia Murphy is editor of citizenjanepolitics.com. She joins us from Washington. And in San Diego, John Avlon, a contributor to Politico and the author of "Independent Nation: How the Vital Center is Changing American Politics." He's in San Diego.
Thanks to both of you for being with us. So, we saw that dramatic shift. An 11-point difference toward McCain among white women.
Patricia, what do you think is behind this?
PATRICIA MURPHY, CITIZENJANEPOLITICS.COM: Well, I think that you have to look to the Sarah Palin factor here. She has an incredibly high approval rating among white women with children at home. She has an 80 percent approval rating with those women.
And if you look at why that is, the first thing she did when she came out and accepted her nomination, she introduced her family. She introduced her husband. And then, she went into her issues. Whether women agree with her or not, they're relating to her. And I think we're going to see the shakeout. We'll see Democrats trying to push maybe where women might be different with her on social issues in particular, but she's really relating to these women and that's something that's got Democrats on their heels.
CHETRY: And, John, I'm curious -- how does this then translate into longevity at the polls, meaning this bump it appears to be because of bringing Sarah Palin to the ticket. Do women vote on who they can relate to, or do they tend to vote on the issues once they get into the booth?
JOHN AVLON, INDEPENDENT POLITICAL ANALYST: Ultimately, I think it will come down to issues. You know, we saw a major bump when Geraldine Ferraro was named as well. But there's no question Sarah Palin has re-energized this race, shaken it up. The Republican Party doesn't look like Dick Cheney's party anymore, and that's a very good thing for John McCain and for many independent voters.
But if you go deeper to the "NEWSWEEK" numbers, I think there are some interesting questions that emerge about whether or not Sarah Palin will ultimately be a polarizing force. For example, 24 percent of the people polled said that they were less likely to vote for McCain because of Sarah Palin. That's unusually high. 57 percent said they didn't know, for example, that she was opposed to abortion even in cases of rape and incest. So, I think there are still policy issues to be worked out. But in the overall, immediate impact, Sarah Palin has been, no question, a net benefit for John McCain.
CHETRY: And Patricia, he brought up Geraldine Ferraro. She said that when she was campaigning on the vice presidential ticket with Walter Mondale, they had huge crowds. Secret service said I haven't seen crowd this big since JFK, yet it didn't translate into vote. How, if you were giving advice to McCain and Palin, would they be able to counter that?
MURPHY: Well, I think, the reason that I don't think that's actually great example is that Sarah Palin is the first woman on a national ticket. Certainly the first woman on the national scene who is not coming out of the feminist movement.
She is appealing to an entirely different group of women. And so, I think if I were the Obama campaign, actually, I would continue to campaign against John McCain. The more that they talk about Sarah Palin, the more they tend to get themselves in trouble. The McCain ticket, I think, if they continue to campaign with Sarah Palin, with her family, they continue to put her out there in front, she's going to continue to do well with women. They're still evaluating her. The swing women are. They're not onboard completely, but they are paying attention in a way they were not before.
CHETRY: You brought up John McCain and Barack Obama's camp in what they should focus on this. And, John, I want to ask you about this, because we've heard from the Barack Obama camp over the past several weeks about John McCain voting 90 percent of the time with President Bush, and linking John McCain to President Bush.
There's an interesting article, though, out in "The Washington Times" today that shows an analysis that they did of both candidates' records since Obama has come to the Senate. And they found that John McCain actually reached across the aisle far more than Barack Obama. They said that Democrats made up 55 percent of McCain's political partners. over the past two Congresses, Republicans only 13 percent of Obama's.
How significant is the bipartisanship for independent voters?
AVLON: Huge. I mean this is one of the reasons John McCain has opened up a 15 point lead among independents since his convention. It's because of his record on bipartisanship. I mean this is a guy who has been a profile in courage when it comes to reaching across the aisle over a long period of time. It's one of the reasons he's been one of the most popular for independents over the past decade.
The big millstone around McCain's neck is the Bush administration and how deeply unpopular they are among independents but he's been able to by naming Sarah Palin - he's been able to highlight his record as a reformer, as a centrist. And that's exactly the kind of thing that translates to votes for independents. That's why he's gotten this far.
CHETRY: We're going to have to leave it there. Sorry, I'll leave you the last work, next time Patricia. Always great to have you both on. Patricia Murphy, John Avlon, thanks.
AVLON: Thank you.
ROBERTS: 31 minutes now after the hour. We're following breaking news right now as the biggest rescue effort in Texas history continues. Already 2,000 who refused to evacuate ahead of Hurricane Ike have been saved. Earlier I spoke with Texas Governor Rick Perry and he had a message for those staying in shelters, hotels or with friends and family.
(BEGIN VIDEO CLIP)
GOV. RICK PERRY (R), TEXAS: The message to Houstonians who may have evacuated appropriately is wait until you hear from your local officials. Wait until you hear a clear signal to come back into town. The last thing they need to do is to leave the comfort or the relative comfort of where they are and go back into the city of Houston.
(END VIDEO CLIP)
ROBERTS: Investment banking power house Lehman Brothers is filing for bankruptcy today. The move comes after a weekend marathon talks failed to rescue the 158-year-old firm. Lehman brothers became crippled by billions of dollars in bad loans.
The Lehman Brothers collapse expected to send shock waves through Wall Street. Right now Dow futures down by more than 300 points.
For more on the turmoil on Wall Street, what it means for you money, we turn again to Christine Romans. A lot of people are going to be keeping an eye on the stock market today. And we may see the Dow dip below 11,000.
ROMANS: That's right. I mean, we're looking at Dow futures showing some 300 points on the downside. I always say it's so hard to predict what Wall Street is going to do. There could be someone who decides to go in there and starts buying up cheap stocks. Who knows?
But it looks like right now it's going to be pretty rough stuff on Wall Street today. And that means your 401(k), this is where Lehman comes into your 401(k), Lehman and Merrill Lynch, another stock would have been - has been hammered over the past few months and is also in the news this weekend. These are two stocks that are high quality, blue chip stocks that could very well be in your portfolio. Financial stocks make up a big chunk of the S&P 500. So these are things that could affect your portfolio. Now the credit crunch is where the consumer impact of Lehman and all these headlines from the weekend really come in.
The Fed has taken extraordinary measures over the past few months really to make sure that the oxygen is flowing to the financial system. That is, loans, cheap loans are flowing to the financial system. And the hope is that means the banks will be able to keep the cheap loans flowing to you and so that the credit crisis, the credit crunch and credit card debt in homes and student loans and cars, and everything we use to borrow things can sort of dampen down a little bit. That's the hope at least.
ROBERTS: You know, when you talk about stocks, who's going to get into financial stocks these days?
ROMANS: I know somebody who really has a strong stomach and somebody who really thinks the worst is behind us, I guess. But we thought that Bear Stearns was the last of it, and then Fannie and Freddie might be the last of it and now there's Lehman and Merrill Lynch is going to be bought, and we know that AIG is out looking for capital.
We know a lot of people have been saying this morning you know, the real saviors over the past year in all of this credit crisis for the American banks has been these foreign governments who have these investment arms that have been coming in and buying - where are they? Even the foreign governments have decided it's a little too risky for them. Gosh, John, I can't tell you. It's just fascinating stuff that's happening. ROBERTS: And now taxpayers have taken over Freddie Mac and Fannie Mae.
ROMANS: Oh, yes.
ROBERTS: And we're going to be backing investment grade securities. We're going to be on the hook for a lot.
ROMANS: That's absolutely right.
ROBERTS: Christine Romans, thanks for that. Kiran.
CHETRY: John, thanks. There are some disturbing new reports surfacing this morning about the train crash that killed 25 people north of Los Angeles. Investigators were looking into whether the engineer was text messaging at the time of the crash. The train apparently went through a red signal, collided head-on with a freight train with now we know deadly results.
Chris Lawrence joins me now live from Chatsworth, California, with more on this situation -- Chris.
CHRIS LAWRENCE, CNN CORRESPONDENT: Yes, good morning, Kiran.
This crash has killed 25 people and injured well over 100. And one of the big questions is morning is did the engineer miss that signal to stop or was it functioning properly? In any case, you can take a look behind me. You can see that - this is one of the first trains to leave this morning.
Just any minute now, it will be pulling out of the station. You can see hundreds of commuters starting to file in, some of them taking the first ride this morning. And a lot of them will be getting on this train and trains like it across the area with no real guarantee that this crash won't happen again. But what we'll be looking at today and the NTSB will be on the scene here at about 6:00 in the morning, they'll be looking at several questions as to what happened when that train crashed and what can be done to prevent it from happening again.
LAWRENCE (voice-over): Passengers saw the freight train bearing down, then felt an explosive collision.
AUSTIN WALBRIDGE, TRAIN CRASH SURVIVOR: It was like running into a brick wall at 60 miles an hour. I don't remember much. I just woke up and there was people laying all over the ground. It's just a disaster.
LAWRENCE: But was it a preventable one? Officials say the engineer ran through a red signal and switch. That tripped an alarm in the control center. But by the time the dispatcher warned the conductor, the trains had already collided. Now one question is, was the engineer text messaging with others while operating that commuter train? KITTY HIGGINS, NTSB: We're going to be obtaining records from their cell phones and from the cell phones of the deceased engineer to begin to determine exactly what might have happened.
LAWRENCE: Either way, civil engineer Najm Meshkati says too much is left to chance.
You don't want to put the lives of hundreds of people on a red light?
DR. NAJM MESHKATI, USC DEPT. OF CIVIL ENGINEERING: On the light bulb of a red light.
LAWRENCE: Meshkati says railroad officials need to outfit more trains with a collision avoidance system. Positive train control uses a combination of digital communication and GPS. And if engineers miss a signal, these electronic devices automatically apply the brakes.
HIGGINS: It could have prevented this accident. If this engineer had run a red light, run this signal, the train would have stopped. It would have stopped. You could not have moved forward.
LAWRENCE: Right now, that system only covers a small section of tracks, including Amtrak's Boston-to-New York route. For years the NTSB has been pushing to make it mandatory but right now the legislation is stalled in Congress with an estimated price tag of over $2 billion.
VOICE OF KITTY HIGGINS: I guess I ask myself, what's it going to take? How many more accidents are we going to have to see like this that could have been prevented if this technology were in place?
LAWRENCE: Now, railroad industry executives say they've already poured hundreds of millions of dollars into researching this technology and there's still some reliability issues. They say that the cost, the sheer cost of the system outweighs any potential safety benefits -- Kiran.
CHETRY: They're certainly going to have to explore the possibilities, though, after you look at that type of devastation.
Chris Lawrence for us in Chatsworth this morning. Thanks.
ROBERTS: Riding out the storm.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We thought we were dying.
(END VIDEO CLIP)
ROBERTS: People who stayed behind tell how they survived Hurricane Ike.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We climbed up here and they would hand me the animals and we would put the animals up here.
(END VIDEO CLIP)
ROBERTS: You're watching the "Most News in the Morning."
ROBERTS: Welcome back to the "Most News in the Morning."
Hurricane Ike having an impact on your wallet. Gas prices rising almost five cents overnight on worries that supplies will be disrupted. The new national average $3.84 a gallon according to AAA. But look at this, oil prices are falling sharply in early trading today, down nearly $6, well below $100 a barrel. They're going for $95 a barrel right now.
All across Texas, Hurricane Ike left thousands of people stranded. Many of whom had to be rescued. In Bridge City teams used boats and dump trucks to save those who ignored the warnings.
That's where CNN's Rusty Dornin is today.
RUSTY DORNIN, CNN CORRESPONDENT: John and Kiran, Lake Sabine is about a mile behind me. And when Hurricane Ike came roaring in, it brought the Gulf of Mexico with it, pouring into the town of Bridge City.
Katherine Duncan hasn't left her house since Hurricane Ike hit. She and her husband watched the floodwaters rush into her Bridge City home.
KATHERINE DUNCAN, STORM VICTIM: It was coming so rapidly through the walls and everything. Within ten minutes we had three foot of water in my house.
DORNIN: Did you think - were you nervous at that point whether you were going to make it out alive?
DUNCAN: We thought we're dying. We thought we was going to die in the house.
DORNIN: So they tried to escape.
DUNCAN: We panicked so bad we got this. We climbed up here, and they would hand me the animals and we'd put the animals up there. And my husband put a running board up there so we could sleep on. We slept on boards that we're no wider than this. When we got down at daylight, when we stepped down, the water was too our waist. The house is ruined. The house is ruined.
UNIDENTIFIED MALE: All the litter from the lake is all up here now.
DORNIN: Nearby we joined Philip Everett. He evacuated but came back to see two feet of water had ran through his house.
PHILIP EVERETT, STORM VICTIM: You see the water marks on the appliances. This is how far it came up.
DORNIN: And to check on his exotic birds.
EVERETT: Yes. You see her cage was in here and wind or something knocked her cage down.
DORNIN: More than 400 people were rescued over the weekend. Teams used everything from boats to dump trucks to pick up the stranded. But why didn't people leave when ordered to? Many said they didn't believe it would be that bad. Others, like Katherine Duncan, say they'd already left once for Hurricane Gustav.
DUNCAN: We used all the money for medicines, food and hotel rooms. So when the second hurricane came, I didn't have no money to leave.
DORNIN: But those words angered some emergency officials, who say people were offered busses to leave and shelters. But made their own choice to stay.
Nearly every person we talked to that rode out the storm here says if another surge is predicted like Ike, they won't stay this time. John and Kiran.
CHETRY: Hidden dangers. Staying safe in the aftermath of Hurricane Ike. Elizabeth Cohen looks at the health risks lurking beneath the surface.
You're watching the "Most News in the Morning."
CHETRY: Hurricane Ike is so far and now have been blamed for at least 15 deaths as the region recovers and thousands get rescued. Hospitals are feeling the pressure. CNN medical correspondent Elizabeth Cohen joins us now with more on the relief efforts and what the biggest medical priorities are right now.
Hi there, Elizabeth.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Hi, Kiran.
What hospitals need right now is they need certain products that they are short of. So let's take a look at what hospitals need right now in this area. What they're lacking is power, water, fuel and ice. And emergency workers are trying to get those to hospitals as we speak. Also, hospitals are being flooded with nonurgent cases because just don't know where to go. That becomes a problem as they try to treat the truly urgent cases.
Also, there's a big issue with elderly people abandoned in group homes. At CNN, we heard one where elderly people were just left with just a security guard and so oftentimes those elderly people end up at the hospital, again, nonurgent cases that are keeping hospitals from doing what they need to be doing -- Kiran.
CHETRY: Also carbon monoxide a big concern right now?
COHEN: Yes, carbon monoxide is a big concern. There's been at least one death because people are using generators in their houses because they lack power but they also were lacking circulation. That's the problem. And at least 33 people sick.
CHETRY: All right. Elizabeth Cohen for us, thank you.
ROBERTS: 47 and a half minutes after the hour. CNN NEWSROOM just minutes away. Heidi Collins at the CNN Center with a look at what's ahead.
Good morning, Heidi.
HEIDI COLLINS, CNN ANCHOR: Hey, good morning to you, John.
Wow, what a morning. Here's what we're working on in the "NEWSROOM."
Bankruptcy earthquake, and major aftershocks in the financial sector. We are watching the fallout from the Lehman Brothers collapse and the takeover of Merrill Lynch.
Also, they defied the evacuation order. Now they're begging to be brought out. Hurricane Ike victims still getting picked up by rescuers.
And hundreds of Chinese babies hospitalized due to tainted formula. A toxic chemical being blamed. We get started at the top of the hour here on CNN. John. Back to you.
ROBERTS: Looking forward to it, Heidi. Thanks very much.
Judging the Juice. Can one of the most infamous men in America get a fair trial? Sunny Hostin looks at O.J.'s surprising new jury.
You're watching the "Most News in the Morning."
(BEGIN VIDEO CLIP)
KEITH SANONJ, PROFESSIONAL WATER SKIER: My name is Keith Sanonj. My occupation is a professional water skier. I'm on the road for over 100 days a year. I also run a water ski school and travel around the world performing water ski clinics. My typical day on the boat starts about 7:30 in the morning. This is my office that I'm sitting in. I instruct all day and try to get people learn things as fast as possible. I always try to carry some B-12 with me or some kind of supplement just to give me a little extra energy when I need it.
One little quirky thing that I do when I travel is I try to get to a health food store. So busy and active, I need energy, the biggest challenge when I'm traveling is having consistency with my own skiing, my own repertoire. So I have to stay in shape and work on specific tricks. Some things that I do to stay fit besides water skiing, I have kind of like a little kickboxing routine that I go through, something to try to get my cardio up. You guys get enough yet?
(END VIDEO CLIP)
ROBERTS: O.J. Simpson's kidnapping and robbery trial begins today in Las Vegas with opening statements. Simpson could get life in prison if convicted on all charges related to a confrontation with sports memorabilia dealers in a Vegas hotel room last year. The jury was seated last week with no African-Americans on the main panel. Could that hurt or help Simpson?
Legal analyst, Sunny Hostin joins us now. So what do you think? Help or hurt?
SUNNY HOSTIN, CNN LEGAL ANALYST: You know, I think it could help him. The bottom line is the prosecution has now given O.J. an excellent thing on appeal. Because if he get's convicted, which is possible, he now has an appeal. Let's face it, it is possible. If he now has an appeal, he can say that blacks were systematically removed from the jury. And I think he could get a get of jail free card.
ROBERTS: Jury selection took place over four days -
ROBERTS: Which compared to his first trial, more than a decade ago, it was short. They fought hard to include two African-Americans on the main jury pool. There are a couple in the alternates.
HOSTIN: There are. There are two in the alternates but they did fight very, very hard because, again, you're supposed to get a jury of your peers. In this case they're saying that they didn't. But I have to say they gave very, the prosecution very race neutral reasons for excluding the last two black jurors. They said that these women were very, very religious and they were likely to forgive O.J. and they couldn't put someone in jail. What better reason for a prosecutor than to do something like that.
I have picked many, many jurors, John, as you know, and that was always something of a concern, can someone really pass judgment on someone else, put them in jail. And these women said they couldn't. The judge said that's a race-neutral basis, not a problem. But O.J. is now facing not one black juror on a jury of his peers.
ROBERTS: He's facing 12 counts, including felony kidnapping, armed robbery, conspiracy. Remind us again of what the maximum sentence and how long do you think this trial will take to unfold?
HOSTIN: The trial is going to take five weeks I think. But O.J. is facing life in prison with the possibility of parole. But life in prison if he gets convicted on the armed robbery, mandatory prison sentence. This is the high stakes for O.J., certainly a case that many people are talking about because they think that he got away with murder and they think that this is sort of a vendetta case. And that's what the whole thing comes down to.
ROBERTS: During the initial trial, we saw all of this blood evidence. We saw the skull cap with the hairs in it and all of the forensic evidence surrounding that. We saw the gloves that he put on that didn't fit. Are we going to see anything like that?
HOSTIN: I think we are, John. I think what we're going to see is the tape. We're going to listen to the tape. I've heard the tape. It is full of expletives. It is vulgar. It is crass. And it is scary and you hear O.J. on this tape. It's his voice.
ROBERTS: Yes, but none of this DNA evidence and arguing back?
HOSTIN: I don't think so. But I think what's different is this case is that you actually have O.J. at the scene of the crime, alleged crime, and his voice is there. And that's going to be the bombshell of this case, no question about it.
ROBERTS: Interesting, looking forward to it.
ROBERTS: Sunny Hostin, thanks so much.
ROBERTS: 54 minutes after the hour.
CHETRY: Boycotting Oprah.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We were just upset that she wasn't going to be interviewed.
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CHETRY: Why a woman's group is trying to pull the plug on the queen of daytime.
You're watching the "Most News in the Morning."
CHETRY: Republican women's groups trying to pressure Oprah Winfrey to interview Sarah Palin. But the queen of daytime isn't budging. And now she's facing an Oprah boycott.
CNN's Kareen Wynter is following the story.
KAREEN WYNTER, CNN CORRESPONDENT: John, Kiran, it's the interview that she's not doing that has Oprah Winfrey under fire.
OPRAH WINFREY, TALK SHOW HOST: Barack Obama.
WYNTER: 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.
LINDA IVELL, PRES., FLORIDA FED. OF REPUBLICAN WOMEN: 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.
IVELL: Unfair treatment of a 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, "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's show says 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.
WYNTER: There have been hundreds of responses on the Florida federation of Republican Women's Web site both supporting and condemning the boycott -- John, Kiran.
ROBERTS: Kareen Wynter's for us this morning. That's going to do it for us from New York. Thanks so much for joining us on AMERICAN MORNING. See you back here tomorrow.
CHETRY: That's right. And let's turn it over now to Heidi Collins, CNN NEWSROOM, next.