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American Morning

Washington Working on a Financial Rescue Plan; Revealing Interview with Nancy Pelosi; Wall Street's Crisis Providing Plenty of Ammunition on the Campaign Trail

Aired September 19, 2008 - 08:00   ET

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

JOHN ROBERTS, CNN ANCHOR: 2-1/2 minutes after the hour now and the "Most News in the Morning." Things are moving very quickly today. We're hearing all kinds of news about spending, short trading. Also, the Fed now saying that they're going to guarantee money market funds. Where is this of this going? Our Ali Velshi here now "Minding Your Business."
Good morning, Ali.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Good morning. I want to tell you about these money market mutual funds. This is thought of as a place for people to stash their cash that is very safe. Many of you have money market mutual funds.

Now, the idea about money markets is that you invest in a fund and it holds the bonds of government and companies. That's how companies finance a lot of their expansion. Now, as a result of this, the failures of the Lehman Brothers and the buyout or the loan to AIG, a number of money markets have gone below the $1.00 threshold. When you buy a money market mutual fund, your unit is $1.00. A lot of them have gone below $1.00.

The Treasury has stepped in and said it will now provide $50 billion to ensure retail and institutional money markets for the next year, so that they don't go below that $1.00 threshold. In other words, $50 billion to ensure that your money invested in the money market is safe. And most people thought, by the way, it was safe. It was traditionally thought of as a very conservative investment. But only because of the failure of some of these financial institutions, that have their bonds in those money markets, have we seen the value of the money market that you are invested in dropping. The Treasury is now saying they will back that up.

A second decision coming out of the Securities and Exchange Commission this morning is the suspension of short selling of 799 financial stocks. Now, the idea about short selling is most people buy a stock, betting it will go up. They can sell that stock and make a profit. Well, some people can bet on a stock going down. Basically, you borrow the stock from someone with a promise to pay it back. The stock goes down. You then buy more stock at the lower price and pay back whoever you borrowed the stock from. You've made the difference.

They are now suggesting that in some cases, the shorting of stocks has contributed to rumors and things that send those stock prices down. They're suspending for a short time, shot short selling in financial institutions. So, your money markets are safer this morning. And that is a big deal. This is really helping U.S. market futures right now.

ROBERTS: You know, whether these funds are conservative money market funds or they're volatile funds in small cap, you know, exploratory firms, it's all a form of gambling. So, is the government not underwriting gambling here?

VELSHI: They are accepted. There's really a fundamental misunderstanding amongst Americans that money market are risky. They were always thought to be entirely, entirely safe. We've heard people over the last year say, this is what your money markets are invested in. It's not all that safe. Now, the Treasury is saying, for now, just to stop people from taking their money out of those money markets, they're going to guarantee them.

ROBERTS: All right. Ali, thanks so much for that.

The Wall Street's crisis certainly providing plenty of ammunition out on the campaign trail. John McCain ramping up the rhetoric, saying that he would fire the man in charge of regulating the market. CNN's Ed Henry is live in Chicago.

Ed, he's talking about the SEC Chairman, Chris Cox, and there's still some lingering questions as to whether or not he actually has the authority or would have as president the authority to do that.

ED HENRY, CNN CORRESPONDENT: That's right, John. Legal questions about whether or not John McCain could really fire the SEC chairman. I think the point is, though, that he was trying to separate himself from President Bush on the economy because John McCain is getting very nervous about Republicans getting the blame for this crisis. And that's why he's stepping up his attacks on Barack Obama as well.

(BEGIN VIDEOTAPE)

HENRY (voice-over): A song from the movie "Top Gun" to claim John McCain is a maverick. But "Danger Zone" also describes the threat the sinking economy poses to McCain's campaign. So, he's lashing out at Barack Obama's indecision over the bailout of AIG.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: You don't get to vote present as President of the United States.

HENRY: What McCain left out is he initially opposed the bailout before appearing to offer reluctant support for it. That seems to be a sign of McCain's concern the public may punish Republicans for the crisis, which is why McCain also declared he would sack President Bush's head of the Securities and Exchange Commission.

MCCAIN: The chairman of the SEC serves at the appointment of the president and, in my view, has betrayed the public trust. If I were president today, I would fire him. HENRY: McCain's running mate, Sarah Palin, who helped draw a large crowd in the swing state of Iowa, lashed out at Democrat Joe Biden's claim that it would be patriotic for wealthy Americans to pay more taxes during tough times.

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: To the rest of America, that's not patriotism. Raising taxes is about killing jobs and hurting small businesses and making things worse.

HENRY: The rally was twice interrupted by anti-war protesters, sparking McCain to again talk tough about how Obama should debate him at town hall meetings.

MCCAIN: And the next time one of those people start yelling, tell him to yell at him to come and stand together.

(END VIDEOTAPE)

HENRY: And, John, McCain will continue the push next hour in Wisconsin. He's going to be here in the Midwest. Aides say he'll be laying out details about his economic plan, something Barack Obama has been talking about this week as well. McCain realizes this is issue number one with voters. He's got to lay out a detailed plan.

ROBERTS: Ed, we talked about the closeness of this race and, of course, we saw little bounces on both sides after the convention. Things have somewhat evened out now. We got some new polls out this morning, one of which appears to be some good news for Barack Obama, two others that appear to be bad news for him.

HENRY: Yes, absolutely. And when you look at the numbers we'll run through, Indiana, I'll look at first. Basically, John McCain up 47 to 45 percent. That's good news for Barack Obama, as you said. You remember full well in 2004, John Kerry lost Indiana by a wide margin, something in the neighborhood of 15 to 20 points. So, for Barack Obama, it will only be down two points there in a state that he really is trying to turn from red to blue. That's encouraging for Obama.

You look at Iowa, though, another one, 45-45, dead heat. Interesting there because the latest CNN poll before this one, about two weeks ago, had Barack Obama up 15 points in Iowa. So, if it's a dead heat now, that's obviously good news for John McCain. You'll remember in 2004, President Bush won Iowa only by one point. In 2000, Al Gore won it by one point. So, it's been going back and forth.

And then finally in Pennsylvania, as well, 45-45. Look, that's a state that Democrats have consistently won in the last four or five elections. If, all of the sudden, that were to turn into John McCain's column, that would obviously be really bad news for Barack Obama, John.

ROBERTS: Yes, still 10 percent of voters unsure there in both Iowa and Pennsylvania. So, there's still a lot of people who could change their mind. But, obviously, a tightening race there and that's what makes it so interesting. Ed Henry for us this morning. HENRY: Absolutely.

ROBERTS: Ed, thanks so much.

CHETRY: Now, we'll get a look at the other side. Barack Obama saying that he has fresh ideas for fixing the market meltdown. Obama is going to be meeting with some of his advisers in the next hour, including billionaire investor Warren Buffett.

CNN's Suzanne Malveaux is following the Senator and she joins us live from Coral Gables, Florida.

Good morning, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Kiran. And not only Warren Buffett but many former Treasury Secretaries, including Larry Summers, Robert Rubin, even Paul O'Neill are going to be joining him on this conference call in this meeting here. Obviously a lot to discuss. Barack Obama is really trying to push for it here as the one who can bring about change and deal with this economic crisis. He has said now is not a time for fear or for panic.

Now, what's going to happen later today? He's going to release a statement talking about his own vision. We expect that it's pretty much going to be on the lines of what he has talked about before, saying that if taxpayers involved, then you have to put taxpayers first. You have to create jobs. You have to expand the middle class. That any kind of plan has to be temporary. That there have to be a particular strict oversight, regulation of the industries.

And he's also going to talk about the need for really a global effort here to work with other industrialized countries to bring about and to shore up the markets. We also expect, Kiran, that he is going to take a shot at John McCain as he's been doing very consistently, talking about the sense that he believes John McCain doesn't have a real grasp of what's going on. Take a listen.

(BEGIN VIDEO CLIP)

OBAMA: On Monday, he said the economy was fundamentally sound and he was fundamentally wrong. On Tuesday, he said the government should stand aside and allow one of the nation's largest insurers, AIG, to collapse. I mean, he said this in three different interviews, despite the possibility that it would put millions of Americans at risk. But by Wednesday, he said he had changed his mind. And today, he accused me of not supporting what the Treasury and the Federal Reserve bank did with AIG despite no evidence whatsoever that that's what I had said.

(END VIDEO CLIP)

MALVEAUX: And Kiran, there was a lot of back and forth between the campaigns over what he said, what he didn't say. Whether or not, he supported the $85 billion loan that the government is loaning to AIG. There was a statement that came out late yesterday that said, in fact, he did.

But when you take a look at both of these campaigns, the one thing that they are saying that's quite similar is that they're not going to provide the kinds of details that perhaps voters are looking for. They're being very cautious about this. Barack Obama released a statement early this morning. I want to read it to you.

It says, "I've asked my economic team to refrain from presenting a more detailed blueprint of how an immediate plan might be structured until the Treasury and the Federal Reserve have had an opportunity to present their proposal. It is critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling and that leaders in both parties will work in concert to solve the problem at hand."

So, Kiran, he says it is partisan wrangling that he's trying to avoid. It is clear on both sides these campaigns that it's to their advantage not to be too detailed until they can figure out how all this economic mess is going to work out.

Kiran?

CHETRY: Suzanne Malveaux for us in Coral Gables. Thank you.

ROBERTS: Washington's most powerful women goes one-on-one with AMERICAN MORNING on McCain, Obama and that other woman who has taken the presidential race by storm.

(BEGIN VIDEO CLIP)

NANCY PELOSI, SPEAKER, U.S. HOUSE OF REPRESENTATIVES: It's not about one woman. It's about women in America and how they advance.

(END VIDEO CLIP)

ROBERTS: Our revealing interview with Nancy Pelosi. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the "Most News in the Morning." House Speaker Nancy Pelosi is reaching out to women voters, particularly Hillary Clinton supporters urging them to back Barack Obama. Yesterday on AMERICAN MORNING, we spoke with one prominent Hillary Clinton supporter, Lynn Forester De Rothschild who was defecting to support John McCain and hoping to take many more women along with her.

I spoke with Nancy Pelosi exclusively yesterday asking her what she thought of De Rothschild reason for defection that Barack Obama was an elitist.

(BEGIN VIDEO CLIP)

PELOSI: I think she's a baroness, isn't she? Isn't she a baroness? She's Lady De Rothschild. So Lady Rothschild is saying that Barack Obama is an elitist? I rest my case. I'm not going into responding to one person. What I'm saying is the women of America know that they have the most to gain from the election of Barack Obama and the most to lose by the election of John McCain.

He's against pay equity, equal pay for equal work. He's against the children's health insurance program. He's for the privatization of social security. He's not for expanding health care to America's working families. There are so many issues that you can name, whether it's social security, Medicare, children's health, equal pay for equal work, violence against women which he voted against the funding for. Women know that this is about policy, and that Barack Obama is right on these issues and John McCain is wrong.

ROBERTS: You were a glass ceiling breaker yourself.

PELOSI: Marble ceiling we call it around here.

ROBERTS: Marble ceiling. But there are many women who would like to see Sarah Palin become the first vice president of the United States. Is she a compelling figure?

PELOSI: Certainly she is a compelling. But one woman does not make progress for women make. The fact is that she along with John McCain opposed all of these initiatives for women -- equal pay for equal work, the children's health. It's about the issues. It's not about one woman. It's about women in America and how they advance.

And sure we take pride in the success of women. But that isn't the reason that you vote for somebody. It may be a consideration. But it's a matter of policy. Women have to think what does this mean in my life.

Chuck Hagel, Republican senator from Nebraska said talking about her foreign policy experience saying she has no foreign policy credentials. He said you get a passport for the first time last year. I mean, I don't know what you can say. You can't say anything.

PELOSI: I agree with Chuck Hagel.

ROBERTS: Can you elaborate them?

PELOSI: No. I agree with Chuck Hagel. He said it very well, and he knows of what he speaks, being a leader on foreign policy in our country.

ROBERTS: And is that a big problem for her?

PELOSI: I think it is. But you know what? It's not about her. It's about John McCain. It's about his policies.

ROBERTS: But she could potentially become president.

PELOSI: And I think that's a question of his judgment. And the judgment of John McCain I think is faulty on many scores. The fundamental of our economy are sound, for one.

ROBERTS: Did he show bad judgment in picking her? PELOSI: I think it raises questions about his judgment. I think that selection raises questions about his judgment. Was it a political appointment to rev up the base? If so, it was very successful. There are many people in the Republican Party, men and women alike, who have outstanding credentials to be president or vice president of the United States. It's just interesting that he leapfrogged over all of them. You have to ask why.

ROBERTS: One other issue that's making a lot of news around the halls of Congress is the chairman of your Ways and Means Committee, Charles Rangel. Have you decided what to do on that front, at this point? Because there are many people who are saying, here is the chairman of a very powerful tax writing committee who can't keep track of his own taxes.

PELOSI: I don't know who these many people are, but I will tell you this. Charlie Rangel himself, who's a very esteemed and respected figure in the Congress on both sides of the aisle, has asked the Ethics Committee to investigate all of his finances.

He's turning over 20 years of his records. And then the Committee will make an investigation and make a determination. He has a great deal of confidence that he will come out of this fine. But until that investigation takes place, I don't know that anybody can be judge and jury on something that really they don't have the facts about.

ROBERTS: Do you have any doubt that Congressman Rangel will be able to fully explain what happened here?

PELOSI: I think so. But he's turning over his records. The Ethics committee will investigate it. But I have confidence in his integrity. I have confidence in his leadership. I have confidence in the fact that this is a man, in his public service, has acted for the people. Maybe that's one of the reasons he's a target.

(END VIDEOTAPE)

CHETRY: Well, in the final weeks of the campaign, all eyes are on the battleground states with the economy in a freefall today. We're going to look closer at Nevada. It's a state hit especially hard, in fact, the highest foreclosure rate in the nation. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: 24 minutes after the hour. Time to check in with Rob Marciano who's monitoring all of the extreme weather across the country today.

And the extreme this morning is, Rob, that there is none.

ROB MARCIANO, AMS METEOROLOGIST: Nice change of pace, isn't it?

ROBERTS: Isn't that nice?

(WEATHER REPORT)

ROBERTS: Rob, who's the best pirate ever?

MARCIANO: I don't know. Jolly Rogers?

ROBERTS: I think Bill Nighy as Davy Jones, the best, since we're listening to the "Pirates of the Caribbean" theme.

CHETRY: Young people are liking Johnny Depp, though. They thought he really nailed it.

ROBERTS: He was a little too much for me like a Keith Richards pirate which, of course, who we modeled the character after. And we saw Keith Richards' play his dad though.

(CROSSTALK)

ROBERTS: We can always count on you for the best in trivia every morning. Appreciate it.

MARCIANO: All right guys. See you later.

ROBERTS: Washington working on a financial rescue plan. But how do you put together a bank rescue this big? We're live on Capitol Hill. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Well, we're looking at the key battleground states that will decide this election and today the focus is on Nevada. It's a state that's been hit hard by the economic crisis. There's a new American Research poll giving John McCain now a three-point lead in the state, still within the margin of error. And joining us right now is Molly Ball, political reporter for the "Las Vegas Review Journal." She's in Las Vegas this morning.

Thanks for being with us this morning.

MOLLY BALL, POLITICAL REPORTER, LAS VEGAS REVIEW JOURNAL: Thank you for having me.

CHETRY: So you guys have the dubious honor of what, being the highest number of foreclosures in your state than anywhere else in the U.S. right now. What are you hearing from people around the state about what really will turn their vote in this election?

BALL: Well, like you mentioned, with the highest foreclosure rate and that's something that's been true for, I believe, a year and a half now, the economy has been really top of people's minds for quite some time here in Nevada. We also have seen, with the high gas prices, fewer people are driving here, fewer people are flying here and fewer people are spending their money at our casinos.

So, we've had huge drops in gaming revenue. And that's really the engine of our state's economy. So, we've had all kinds of effects. You know, the construction sector has more or less shut down with what's happened to the housing market. So, the economy has really just devastated people here.

CHETRY: You know, you've had the candidates paying visits. As we said, it's quite close, just a three-point difference between the two candidates. What are each of them saying that is resonating in some way with the voters there?

BALL: Well, not surprisingly, the economy is what they're talking about when they come here. We had Barack Obama here just two days ago on Wednesday. He came to Las Vegas and that's really all his speech was about. He was very much on the attack, criticizing John McCain very harshly for some of his statements on the economy, really sort of ridiculing McCain's approach to the economy. And, you know, Las Vegas here in southern Nevada is the population center of the state and it's also the Democratic stronghold of the state.

So he finds a receptive audience here. But you see John McCain and his running mate, Sarah Palin, was in Carson City a week ago. And those areas of northern Nevada and rural Nevada are places where traditionally Republicans have been strong and where they can turn out a lot of voters and offset some of the democratic gains down here in southern Nevada.

CHETRY: Yes, you're talking about democratic gains. It's also interesting that the democrats have registered 70,000 more new voters in Nevada than Republicans. And you throw into that as well the Hispanic vote. How are those two things, the Hispanic vote and the first-time voters making an impact?

BALL: Right. I mean, I think those are the two factors that are going to determine which way Nevada goes in November. You do see this enormous edge for the Democrats in voter registration. This something that hasn't been seen in this state possibly ever, definitely in a generation and it's up for debate where it's just that the Democrats have worked harder to sign people up or it really is a sea change in the mood of the electorate.

But across the southwest you know, you see these changes in demographics, reshaping the region politically. That's happening here. So there are now 70,000 more Democrats than Republicans on the books. The question is who turns out those voters on election day.

CHETRY: Right. And as you said, the pivotal issue there of course will be the economy. Molly Ball with the "Las Vegas Review Journal." Thanks for being with us.

BALL: Thank you so much.

CHETRY: If you live in a battle ground state, and if you have a question or an issue that you want tackled, e-mail us at CNN.com/am and tell us what's on your mind.

ROBERTS: 31 1/2 minutes now after the hour. Our Congressional and economic leaders closing in on a potential plan to stem the current financial mess. What shape will it take? That's still unclear. But the idea is to create a fund to deal with the bank's bad debt. And with more on the potential plan now, let's go to CNN's Kate Bolduan. She is live on Capitol Hill. What are they talking about here, Kate?

KATE BOLDUAN, CNN CORRESPONDENT: Well, everyone is still wondering really how this plan is going to shape out. What the details are going to be? But we do know that from that late night meeting last night there was a rather showing of unity, of partisanship here on Capitol Hill. It was 15 lawmakers, members from both sides of the aisle, leaders from both chambers meeting with three of the government's top money guys, Treasury Secretary Henry Paulson, Fed chair Ben Bernanke and of course, S.E.C. chair Chris Cox. They all came together to reach what they said, to pledge their commitment to reaching one comprehensive plan, to all agree - something they can all agree on that will really help change the way that the financial markets are going right now and, of course, try to turn around the economy.

And while they're still, working out the details and they're really trying to start the ball rolling last night when they were talking, they also came out to show the public as well as the markets, really prove to them that they're doing something. They're taking action and they're on top of it. Listen to a little bit from Senate Majority Leader Harry Reid.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D), MAJORITY LEADER: We have all committed to work with them on their proposal. We explained to them how things work on Capitol Hill. They work different than downtown. But we understand the crisis. We look forward to working with them. And we're anxious to see their proposal which we hope to receive in a matter of hours, not days.

HENRY PAULSON, TREASURY SECRETARY: We're coming together to work for an expeditious solution which is aimed right at the heart of this problem.

(END VIDEO CLIP)

BOLDUAN: That from Treasury Secretary Henry Paulson. He said heart of the problem, that being the mortgage mess, the failing housing market. While they don't have the details, haven't come out with them quite yet, Secretary Paulson does say it's likely to require legislative action. And that puts the ball squarely in Congress's court as they're going to have to handle this legislation and pass it to really get things moving.

And one thing that we hear that they are taking into consideration, we heard it from the Alabama senator, Senator Richard Shelby just this morning here on AMERICAN MORNING is the cost. All in as we heard from our own Ali Velshi, all in when you think about the government's bail outs, rescues and loans that they have already signed to this whole plan could cost upwards of a trillion dollars. And Shelby said himself this could be the mother of all bail outs. John.

ROBERTS: Certainly a lot of people concerned about the cost. But the markets are liking all this. Up 400 yesterday. Dow futures are up 360 right now. And Paulson is going to be holding a press conference about all this at about 10:00.

BOLDUAN: We do know he's going to be holding a press conference about 10:00 here in D.C.. It says to talk about the comprehensive approach to market developments and what exactly will be included in that, we'll have to wait and see. We hope to hear a little bit more about maybe what direction they're moving and where they stand. We do know that the lawmakers themselves as well as their aides say they're prepared to stay through the weekend and even through when their scheduled departure of leaving Washington to head home for their recess to campaign for re-election, they're prepared to at least, the leaders say, stay here as long as they need to get it done. So, we'll see.

ROBERTS: Kate Bolduan for us in the (rotunda) this morning. Kate, good to see you, thanks.

BOLDUAN: Thanks, John.

CHETRY: Well, sorting fact from fiction is not always an easy thing to do on the campaign trail. Sometimes the statements or the ads by the candidates can be misleading or taken out of context. Other times they're just plain not true. Alina Cho is here with another "A.M. Reality Check" for us.

Hi, Alina.

ALINA CHO, CNN, CORRESPONDENT: Hey there, Kiran. You hear a lot of outrageous things on the campaign trail. So we want to do a reality check. Last hour we did a reality check on a John McCain ad. This hour we're taking a look at Barack Obama and his words. Out on the campaign trail, Obama has been taking on John McCain's contention that McCain will shake up the old boy's network if he wins the White House. Take a listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: This is somebody who has been in Congress for 26 years, who put seven of the most powerful Washington lobbyists in charge of his campaign. And now he tells us that he's the one who is going to take on the old boy's network.

(END VIDEO CLIP)

CHO: The reality check, McCain does have staff members and unpaid advisers who have registered to lobby Congress. The seven Obama is referring to include campaign manager Rick Davis who happens to be a high profile lobbyist whose clients have included telecommunications companies and Randy Scheunemann, a McCain senior foreign policy adviser who recently faced scrutiny over his lobbying on behalf of the republic of Georgia.

Now, as for the Obama claim that those staffers are actually in charge of the campaign, impossible to prove from the outside. But members of the seven have appeared quite frequently public on behalf of the campaign. And that often signals they are part of McCain's inner circle. Now to be fair, the public watch dog group, Public Citizen, has praised McCain's record for trying to curb lobbyists influence in the Senate. And we should point out that Obama's campaign is not without its own members of the lobbyist family. Daniel Shapiro, an Obama foreign policy advisor has registered to lobby for the American Petroleum Institute. And another unpaid adviser, Broderick Johnson has represented clients including Verizon and Shell Oil.

So, bottom line, is Obama's contention true that McCain has some of the most powerful Washington lobbyists working for his campaign? The verdict, true. But Obama's campaign also includes lobbyists. And Kiran, that is not something Barack Obama or his campaign surrogates ever want to publicize.

CHETRY: Politics as usual, isn't Alina? Well thank you for these reality checks. Because I mean they are very interesting and they really do help voters and viewers -

CHO: Yes. My e-mail is filling up with all kinds of suggestions for what to do next week. So stay tuned.

CHETRY: All right. Alina, thanks.

CHO: You bet.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): Resting up and fighting back. We check in with a legendary senator battling a devastating disease. Ted Kennedy talks about his career, his recovery and plans for the future. You're watching the most news in the morning.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROBERTS: 20 minutes now to the top of the hour. Massachusetts Senator Ted Kennedy working from home as he continues to get treatment for brain cancer. He has kept a low profile since the Democratic National Convention. But recently he was back at the polls doing what he does best. CNN's Dan Lothian is live in Boston.

DAN LOTHIAN, CNN CORRESPONDENT: Good morning, John. Well, he's still fighting and he seems upbeat, as you know the senator had surgery in North Carolina followed by chemotherapy and radiation treatments here in his home state. He said at times his treatments do slow him down, but he's staying active and doing as much work as he can from home.

(BEGIN VIDEOTAPE)

LOTHIAN (voice-over): Senator Ted Kennedy looking energetic as he worked the room with his wife Vicky, shaking hands and hugging poll workers after voting in his state's primary elections this week. He's been battling brain cancer since May and fighting hard to maintain a normal life. SEN. TED KENNEDY (D), MASSACHUSETTS: Again, I feel well. Once in a while I get a little tired. But we're doing well. We got a good summer.

LOTHIAN: A good summer spent mostly on the water in his sailboat.

KENNEDY: Every day as I possibly can. The weather has just been out of sight this year. I mean, it's just been extraordinary.

LOTHIAN: And the public's warm embrace has been good medicine.

KENNEDY: Everybody has been very kind, extraordinarily kind and generous in their good wishes and their friendship.

Nothing is going to keep me away -

LOTHIAN: The senior senator from Massachusetts has not made a public appearance since his rousing speech at the Democratic National Convention in Denver last month.

KENNEDY: The hope rises again and the dream lives on.

LOTHIAN: Determined to pump up his party, despite the fact that he wasn't feeling well. While he may not be in Washington, Kennedy is still working, pushing hard his Serve America Act, a bill he co- sponsored that expands opportunities for volunteerism.

KENNEDY: This has been something that I've been very interested in. It was just enormously encouraging to see both Barack Obama and John McCain give their strong support for that program. It's an important one.

LOTHIAN: And he's doing other work, too, from his home in Hyannisport, using video conferencing on Thursday to stay in the action on Capitol Hill as he pushes for national health care legislation.

(END VIDEOTAPE)

LOTHIAN: Kennedy's office tells me that doctors have recommended that he continue to work from home through the fall, and they say he intends to be back on the floor of the Senate next January. John.

ROBERTS: Looks like he may make good on that promise, if he's out and about the way he is. Dan Lothian, thanks for that update so much.

LOTHIAN: That's right.

CHETRY: Well, can your personality really predict how you're going to vote? There's a new study that says how you physically react to images can actually predict whom you'll vote for. And we thought it was the issue. We're "Paging Dr. Gupta" to explain. You're watching "the most news in the morning."

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the most news in the morning. A lot of people say support the troops. But Walt Peters really does it. The Vietnam veteran who is almost blind, is often waiting at airports to see troops off to war and welcome them home when they come back. That's why he's a CNN hero.

(BEGIN VIDEOTAPE)

ANNOUNCER: This is CNN Heroes.

UNIDENTIFIED MALE: All right. God speed. Come home safe. We love you all.

WALT PETERS, VIETNAM VETERAN: If it wasn't for our soldiers and our veterans, we would not have this beautiful country. They are our freedom. It's important that they know how proud this country is of them for their service.

My name is Walt Peters, and I'm often the last person a soldier sees when he boards a plane.

Be safe. We love you. Take care.

And I'm often the first person they see when they return.

Welcome home, young man. We're proud of you.

A friend got me involved with greeting flights through the Red Cross. Now I'm one of the leaders and I train my volunteers.

Three miles out, let's go, before wheels are down.

When the soldiers come through, I walk around and talk with the soldiers.

Guys, it's so good to have you all back home.

I'm a combat veteran. I served a lot of time in Vietnam. They know I can relate to them.

If you stay scared, you stay alive. You know what I'm saying?

UNIDENTIFIED MALE: Yes, sir.

PETERS: Sometimes it breaks your heart because you ask yourself which one of these beautiful people are not coming home?

I see the roots of our country and our future in every one of these soldiers.

ANNOUNCER: Get involved, CNN.com/heroes.

(END VIDEOTAPE)

CHETRY: And many more wonderful stories like that one to come. Well, CNN NEWSROOM is just minutes away. Heidi Collins is at the CNN Center with a look at what's ahead. Good morning, Heidi.

HEIDI COLLINS, CNN ANCHOR: Good morning to you, Kiran. That's right. Here is what we're working on in the NEWSROOM. Buying bank's bad debt. Lawmakers briefed on a new government rescue plan. We're watching for Wall Street's reaction this morning.

And Hurricane Ike aid, what one Texas congressman brought from Capitol Hill to help people who lost so much.

And much more on the House that Ruth built. A fond farewell to Yankee Stadium. We get started at the top of the hour right here on CNN. Kiran.

CHETRY: Heidi, thanks so much. Also, one programming note for our viewers, 10:45 a.m. Eastern time, President Bush is going to be holding a news conference to talk about the economy. That is to begin again at 10:45 a.m. this morning in the Rose Garden. And CNN will, of course, bring it to you live.

Well, you thought you were choosing a candidate on the issues. A new study says it could be something completely out of your control or at least something you're not even aware that you do. We're paging Sanjay Gupta for some answers. You're watching "the most news in the morning."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, WIFE OF SEN. BARACK OBAMA: people shouldn't make a decision this time based on, I like that guy, or, you know, she's cute. You know, this isn't - and I'm talking about me. [ laughter ] but that shouldn't be anyone's reason for making a judgment this time around.

(END VIDEO CLIP)

CHETRY: Well, that was Michelle Obama. She was stumping for her husband in Charlotte. But, you know, she brings up an interesting point. It's how you vote and why you vote, is it based on the issues? Is it based on a candidate's personality? Well, there seems to be one thing in common. This is very, very interesting.

It's a new study that says your psychological trait can predict how you vote. For example, people with lower sensitivities to sudden noises tend to vote Democratic, while those with higher reactions tend to vote Republican more often. So what are some of the other clues about how we cast our ballots? We're "Paging Dr. Gupta." CNN's chief medical correspondent, Dr. Sanjay Gupta joins us now from Washington. So, this is very interesting. So the physical reactions you have to things could sometimes or somehow influence how you vote?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes. They call it being hard-wired in some way, hard-wired toward a political tendency. And this is a small but one of a gathering number of studies that seems to show the same thing. That there's a biological basis for our political tendencies. Just as you said, Kiran, you know, they took people who had self-professed strong political views, either they are more conservative or more liberal. And what they did was they put them in a room and showed them a series of images.

A lot of soothing images, then occasionally a threatening image, like a person who had blood on their face or a spider or something else. And what they found was the people with the more self-professed conservative views tended to have a much stronger reaction. They had a harder blink, more of a startled response, more physical manifestation as did the people with the self-professed liberal views who tended to have sort of a more equal reaction across the board where there was a soothing image, a calming image, or a more threatening image.

That was what the study showed to basically give the people this idea that there is some sort of innate, if you will, trait that dictates our political tendencies.

CHETRY: And I'm always fascinated with how science figures this out. One, if this is genetic, do we pass it on to our kids? But also, is it innate or is it the way that our, I guess our life shaped us make us more sensitive to those images?

GUPTA: Yes. You know, it's a very good question. We asked the authors about that very issue, your second question first. So if you see two images, for example. The authors gave us an example. You see an image of Bin Laden and you see an image of the pope. People with the more self-professed conservative views would immediately have a strong reaction to the Bin Laden image, recognize it as a threat. Where people with the more self-professed liberal views would take a little bit longer to actually recognize that as a threat. So is one more methodical or it is just a little bit slower? You don't know what to make of it.

As far as passing it on to your children, you know, what we are I think more ready to say is that there is a biological basis to our political tendencies. But as you might imagine, it's not the entire picture. You can almost assign a value to it. Now, you can say that almost 30 to 40 percent of the way that you think politically is something that you're born with. But that obviously leaves 60 to 70 percent based on things you grew up with and every experience you've had since you were born.

CHETRY: All right. I wonder what the swing voters think about these various images. That's probably a whole new study.

GUPTA: Well, you can be sure the campaigners are looking at studies like this trying to better figure out how to campaign, who to target and how to target those people.

CHETRY: All right. Sanjay, good to see you as always. Thanks.

GUPTA: Thank you.

ROBERTS: His face said it all when we saw the picture. Wall Street's Mr. Misery. But who is this mystery man? Our Jeanne Moos is on a mission, find him, name him, help him. That's what he needs, a little publicity.

(COMMERCIAL BREAK)

ROBERTS: Well, his face was everywhere. His anguish said it all. But who is this guy. Our Jeanne Moos roams the streets to find the name of the devastated face of Wall Street, as if he isn't embarrassed enough already.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Up 410 one day.

SUSAN LISOVICZ, CNN CORRESPONDENT: Explosive rally.

MOOS: Down 449 the day before. The open, close and in between the headache. The headache felt round the world. We're calling it the uh-oh photo. If the market is all Greek to you, read his face, imagine finding yours next to "Nightmare on Wall Street" or how about "Street of Screams" with the plunging graph superimposed on your mug, it's enough to have you reach for -

UNIDENTIFIED FEMALE: HeadOn, apply directly to the forehead. HeadOn apply directly to the forehead.

MOOS: We headed directly to Wall Street looking for the face in the uh-oh photo.

You know him?

UNIDENTIFIED MALE: No.

MOOS: Do you know who this guy is? I'm looking for this guy. Do you know who this guy?

UNIDENTIFIED MALE: No.

MOOS: Do you know this guy?

UNIDENTIFIED MALE: Yes. That looks like Roger Clemens.

MOOS: We're talking to Dow Jones average, not a pitcher's earned run average though the resemblance is striking. Stock exchange expert CNN's Susan Lisovicz asked around.

LISOVICZ: So I said, who is this guy? Do I know him? And Chris Croty (ph). And they said, yes, he's in the garage.

MOOS: Not that garage.

Chris Croty. Calling Chris Croty.

The garage is the trading floor off the main trading floor of the stock exchange. We finally located floor broker Chris Crotty. But he didn't feel like talking. He apparently had enough ribbing from all his friends.

Well I was thinking, you know, he might just, you know, have an itch or something.

LISOVICZ: Could be an allergy.

MOOS: Reminding us the time Secretary of State Condoleezza Rice was under pressure at a Mid East summit. Several times she touched her face, apparently to move her hair and still photos made it look like she was sweating bullets.

UNIDENTIFIED MALE: Let's see how it went.

MOOS: So beware floor traders, no wiping, no touching your face or running your hands through your hair. If you blow out air, you could become the uh-oh photo. As for the uh-oh comedy sketch, the award goes to "Saturday Night Live" back when the tech bubble burst.

UNIDENTIFIED FEMALE: Does Reliable have a mid cap fund?

UNIDENTIFIED MALE: It would offset the risk to your stocks in your portfolio.

UNIDENTIFIED FEMALE: So I'm great. (inaudible)

UNIDENTIFIED MALE: Reliable is one of the largest online brokerages.

UNIDENTIFIED FEMALE: I think I've learned something.

UNIDENTIFIED MALE: It's a great time to invest.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

ROBERTS: Well, that's going to wrap it up for us. Thanks for joining us on AMERICAN MORNING. We'll see you again on Monday.

CHETRY: I still can't believe she found him. He was in the garage the whole time.

Great week. Well, right now, here's CNN "NEWSROOM" with Heidi Collins.