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Dow Jones Falls Below 10,000; More Analysis of the Stock Market

Aired October 06, 2008 - 13:00   ET

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

KYRA PHILLIPS, HOST: Beyond the bailout, beyond Wall Street, beyond all borders, now beyond a moral compass. Right now, you're watching Congress putting the Lehman Brothers bankruptcy to the test there. One of Wall Street's biggest collapses under its microscope, and grilling its CEO, Richard Fuld. What did he do wrong, if anything?
Now the financial crisis going global. If you look at the Dow, it dipped below 10,000 for the first time in four years. Asian stocks down, European stocks down. And the credit markets frozen amid fears the U.S. bailout plan will not bottom out soon enough.

Now, the Europeans are trying to tackle their own banking melt- down while back here in the U.S., the battle is raging on among our own banks. Wachovia in the middle, Citigroup, Wells Fargo fighting for control, as well. And the question of the day: how did we even get into this mess?

Ali Velshi, if you were listening to those hearings, and I know you've been following all of this and just listening to members of this committee grill the CEO. They're asking him, look, some of them even saying to him, "You're the villain here. It's because of your company and what happened that started all of this."

ALI VELSHI, CNN CORRESPONDENT: Yes, and I suppose you could sort of choose any point in time to see where things started. You could go back to Countrywide, saying that things weren't as bad as they were when we knew more people were defaulting on their mortgages and there were greater foreclosures.

You can go back to those crazy loans that we started with. At this point, there's a fair amount of blame and lots of people to share it, but it isn't having much effect on where we move forward from here.

In fact, I've been, while listening to the testimony, watching markets. And they're just kind of stuck in this rut. And that's a pretty bad rut to be down more than 500 points.

The issue here, Kyra, is that we were so waiting for that bailout, that you and I were on TV when it happened on Friday. It seems now that investors, professional investors, those who invest your money on your behalf, mutual fund portfolio managers and people like that, have turned their attention away from the bailout, which they hope will help the credit situation, and turned it to the fact that we still have an economy where we are losing jobs, where home prices continue to be lower.

In fact I've got -- I don't know if we've got it, Kyra, easily available, but we just got a poll out, CNN/Opinion Research poll, that really shows you the depth of how many Americans think that we're in a tough situation. We have, you know, 20 percent of people who think the economy is OK right now. And the other 80 percent think that we're in trouble.

And fundamentally, you and I have discussed this for years, Kyra, the only thing that matters or the thing that matters the most in the U.S. economy, is that Americans think it's safe, because if they don't, they don't spend money. And when they don't spend money, the whole operation grinds to a halt, because we don't support companies who employ people who then can pay taxes and spend more money. So that's the situation.

Why we have markets where we are now is because, despite Dick Fuld's testimony or the bailout package, nobody really believes this economy is fundamentally sound.

PHILLIPS: You know, and I want to talk about the fact that people are so fearful that the economy is not fundamentally sound.

But just kind of going back to how this all started, you know, you were even hearing Elijah Cummings. You were hearing John Mica grill him about, "Did you think it was right to do this? Do you regret doing this? How could you pay out your -- your employees billions of dollars..."

VELSHI: Right.

PHILLIPS: "... when the economy was suffering and innocent -- well, you know, low-income and middle-income..."

VELSHI: Yes.

PHILLIPS: "... folks were struggling just to -- just to get by." Which leads me -- let me ask you a question. We talked about the economy now and where we are. I found this quote. I want to read this quote to you. And it hits on exactly what we're talking about right now, is this whole issue of moral compass and how Wall Street runs its operation.

VELSHI: Yes.

PHILLIPS: And this goes back to the Great Depression when the treasury secretary at that time said to President Hoover, "You've got to treat this, this depression with a shock treatment." And he said, "This is the best response. Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate, and that will purge the rottenness out of the system."

VELSHI: Right.

PHILLIPS: "High costs of living and high living will come down."

VELSHI: Yes.

PHILLIPS: "People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."

Well, Hoover rejected that advice, and now look at where we are, years and years later. You tend to wonder if that's a way you deal with something like this, with a shock treatment.

VELSHI: Sure. You know, the fact is, you do have to clean out the excesses. There are many people who what we really need is a very deep recession, which would serve all the purposes of that quote that you just mentioned.

The bottom line, though, Kyra, is a deep recession means many millions of people out of work. We already have more than three- quarters of a million new people out of work starting from the beginning of this year, and it takes very long for them to get back into work. When they're out of work, they're not purchasing things. They're not paying taxes. And they're probably receiving government benefits.

So in terms of cleaning up the system, it's a very good academic argument, but it's very hard to do in a society like ours that is so built on credit: from our level to our state government to our federal government to our companies.

The problem is, we do need to change the system, but by changing it very quickly, you will lose a lot of workers. And what do you do with that? I mean, these are people who are really out of work. It's one thing to say people were in homes they can't afford, but being out of a job is devastating. And it can be long-term devastating.

So that is the conundrum we're in. That quote represents what a lot of people think should happen. Let's let everything that needs to fail, fail. Let's clean out the excesses in the system and teach people to learn -- to live within their means. The problem is, that is a very hard lesson that will spread across the economy and slow this economy down for years to come. And we're trying to find a way to solve the problem without creating such devastation in order to do so. And that is a very tough question.

PHILLIPS: And everybody is afraid right now. Are we really heading toward a depression? I'm getting so many e-mails...

VELSHI: Yes.

PHILLIPS: ... and there's so much talk about, "This is really scaring me." That's what people are saying.

VELSHI: Right. And let's put that at ease a little bit.

PHILLIPS: But is it here? I mean, let's do that.

VELSHI: Yes.

PHILLIPS: Because, if you look at the Great Depression, I mean, are we going to see long bread lines again?

VELSHI: No, no.

PHILLIPS: Why was the FDIC created? I mean, what about FDR's New Deal?

VELSHI: Right. There are -- there are...

PHILLIPS: All the things that were put in place to prevent something that bad.

VELSHI: Let's address this, because there are, I think, four good reasons why we're not going to go into a depression.

No. 1, back then, you didn't have access to information. You, the consumer, didn't have access to information and a bunch of people telling you what your options can be.

You can go to the Web. You can hear people telling you things about what you can do with your -- your investments.

No. 2, you are not -- your money in the bank is safe. We know that. We've heard that many, many times. So there's no reason to have a run on the banks, which is what caused so much of the Depression. Fourteen hundred banks failed. We've had 15 banks in total fail right now.

No. 3, it's a business thing, but businesses don't get stuck with stuff they can't sell, because we're in this economy now where businesses have a much shorter lead time for what they order. So they don't get stuck with warehouses of things that are worth nothing, which means they're more nimble. When the -- when the recession starts to come out, they can then start to order more things and hire more people. We can get out of it faster.

Those are just three reasons why we won't get to the point that we were for the Great Depression.

PHILLIPS: Fine.

VELSHI: That doesn't mean we don't have a deep -- a deep recession. The last recession cost us 3 million jobs. We're only -- we're not even at a million lost yet. So you can have a very deep recession that, for a lot of people, feels like a depression. And that's the reality that we're in. We need people to feel like there's some opportunity for them to earn more money, to have their house be worth more, and to have their retirement increase every year. That, we don't have right now.

PHILLIPS: Well, finally something, Ali -- and we're getting it from you, three reasons why we will not see a depression.

VELSHI: Right.

PHILLIPS: We need to focus on that now...

VELSHI: That's right.

PHILLIPS: ... while all these other crazy people are out there saying, "Pull all your money out."

VELSHI: It makes you panic. It makes you panic.

PHILLIPS: Right. And that's going to...

VELSHI: And you make the wrong decisions.

PHILLIPS: It's going to kill us all. Stay with me, Ali.

VELSHI: OK.

PHILLIPS: Susan Lisovicz at the chaotic New York Stock Exchange for a look at what's happening with the numbers right this minute.

Susan, how's it looking?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I mean, you know, one thing that Ali was talking about is all this information. And what's different now and the 1920s, the 1930s, is that yes, we have access to information, which is great. And governments are working in real time.

We've seen any number of governments just acting today to either prop up a financial institution that's under attack or having problems or directly guaranteeing all banking deposits. We have at least four countries in Europe doing that. So you're seeing real action from governments doing that.

But another thing, the flip side of all this information is that we're talking about it all the time. And so much of what's happening is psychology. Yes, fear is always a factor in the stock market, but you don't want panic. Panic is where people just do runs on banks and things like that, where it can become a self-fulfilling prophesy.

And that's why the Federal Reserve has been intervening since the beginning of the year, the Treasury Department. We're living in unprecedented times. A lot of that is a good thing.

In the meantime, though, the bias is very much to the sell. Because we haven't seen -- I mean, this legislation was just signed on Friday. In the meantime, what you're seeing is where are investors putting their money? Well, they're putting their money in gold, for instance. Gold prices are up more than 4.25 percent today.

We're seeing a big rush into treasury. The yields are so low -- and we've seen this for a number of days now, Kyra -- that basically, investors are saying, "I don't care if I make any money on this. I just want my money back. I don't want to lose money."

That's a kind of times we live in. It's an unwinding of excess. And there was a lot of excess at a lot of levels -- Kyra.

PHILLIPS: And I think a lot of that is going to have to stop, as well. Susan Lisovicz, thanks so much.

Straight ahead, a 9-year-old entrepreneur cooks up some food for thought and for Fido. We're going to visit the whiz kid's kitchen and get her perspective on this whole bailout.

(COMMERCIAL BREAK)

PHILLIPS: America's financial crisis not just shrinking your wallet but souring your mood. Look at this new CNN Opinion Research Corporation poll asking Americans if they thought another U.S. depression -- that's right depression -- is likely. 59 percent of respondents say it's very or somewhat likely.

So are they right? Paul La Monica from CNNMoney.com -- well we hope that you'll have some answers for us. I don't know if you just heard Ali Velshi. Ali Velshi gave me three reasons why we're not going to go into a depression -- we were talking about the Great Depression -- all the changes that have been made since then, so we will never have to stand in those bread lines.

PAUL LA MONICA, EDITOR-AT-LARGE, CNNMONEY.COM: Yes, I think that Ali raises some great points there. And one of things that doesn't probably get as much attention is that the current Federal Reserve chairman, Ben Bernanke, is a student of the Great Depression. Hopefully he really knows how to keep us from entering another one. And I think a lot of people do have that hope that he can keep us out of one.

PHILLIPS: All right. You wrote an article today talking about Europe and the effect of banks overseas and that those banks need to get their acts together as well. Is it our bailout that is affecting the global banking system right now? Or were there already issues going on globally? Because if you think back to the Great Depression, that affected France, Germany, Latin America, Australia -- we could keep going.

So is it us, or do they just need to get their act together as well?

LA MONICA: It's probably a little of both.

Obviously a lot of the European banks also had exposure to some of the subprime mortgages in the U.S., and that is one of the reasons they've had problems. But speaking to people in Europe, it's not as if European countries didn't have also a housing market that was, in some cases, a bubble and all the problems that wind up accompanying that. So it's clearly not just the U.S.'s fault for why Europe banks are now struggling. I think there are certain issues in the European real estate markets that also contributed to that.

PHILLIPS: So what we are seeing now and all this panic that's taking place, is it fear driving that is driving this and people need to just have more confidence right now and start to buy and see the bargains out there? Or is this different, Paul?

LA MONICA: I think a lot of it is fear and it's certainly very difficult to be the brave person and go against the crowd when everyone is selling. But all the people that I spoke to this morning seem to think that this isn't really that much different from other big sell offs in the past, and that eventually reason will return to the markets. But it just may take some time. And that is obviously one of the scary things. Nothing's going to change overnight.

PHILLIPS: Paul La Monica, we'll be talking for days to come, no doubt. Thanks.

LA MONICA: Thank you.

PHILLIPS: Well if you didn't know the election was less than a month away, the latest ads and attacks might be a tipoff. Republican VP candidate Sarah Palin hitting Barack Obama over his past associations with a former member of the Weather Underground. That was a band of violent left wing radicals from the 1970s, when Obama was a child. Former Underground member Bill Ayers is now a university professor who worked with the same nonprofit group that Obama did to raise money for school improvements and charity. Palin accuses Obama of -- quote -- "palling around with terrorists."

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Barack Obama says that Ayers was just someone in the neighborhood. But that's less than truthful. His own top adviser said that they were -- quote -- "certainly friendly." In fact, Obama held one of his first meetings of his political career in Bill Ayers' living room. And they've worked together on various projects in Chicago and these are the same guys who think that patriotism is paying higher taxes.

(END VIDEO CLIP)

PHILLIPS: Now for his part, Obama is drudging up John McCain's role in the savings and loan collapse of the 1980s. McCain was one of the so-called Keating Five senators who intervened with regulators on behalf of an S&L owner who went to prison for fraud. Obama dismisses the Underground attacks as guilt by association.

So in a debate earlier this year, Obama described Bill Ayers as a guy who lives in my neighborhood, and with whom he served on a board. CNN investigative correspondent, Drew Griffin, has been looking into the ties between the two men.

What did you find?

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: Surprisingly, everybody fudging the truth.

PHILLIPS: Imagine that.

GRIFFIN: I know that shocks you.

PHILLIPS: Just 29 days before the election and people fudging the truth. GRIFFIN: Yes, I think there's a lot -- I think it says a lot about the Obama campaign (INAUDIBLE) about what's not forthcoming. Because Bill Ayers and Barack Obama worked on actually two foundations -- two boards -- together, both with very good ideas: improve education, send money to charities and groups working with the poor. But they both did involve Bill Ayers and Barack Obama, and that has become somewhat of a political liability.

There is Bill Ayers. Now he is not talking to anybody -- anyone in the media, and hasn't since his name came up in this campaign. But he is the person who is credited, along with a few other people, of bringing this challenge grant (ph) to Chicago and then recruiting -- he was one of the people, I guess, who recruited Barack Obama as the chairman. And Barack Obama served as the chairman of that group for seven years while Bill Ayers was benefiting from the money from this foundation and while Bill Ayers was also advising the council as part of the advisory council to the (INAUDIBLE) board.

Also found out that he also did work on the Woods foundation. The Woods Foundation another charitable group that sent money to -- Bill Ayers wife worked at a national justice center, sent money there, sent money to Trinity Youth Unity Church.

PHILLIPS: So you hear the word terrorist and Obama associating with terrorists. And that of course gets everybody up on -- the nerves up. So is that an unfair -- or untrue, should I say, statement to make?

GRIFFIN: Well Bill Ayers certainly was a domestic terrorist, according to the FBI. It was also when Barack Obama was a child. But his past is well known. And in as latest 2001, in an interview the "New York Times," he fully admits it, he was not repentive about it. And he said he wished he could do more to stop the Vietnam War, which is what the Weather Underground was trying to do. But here's what the Barack Obama campaign said about this, trying to link Barack Obama with Bill Ayers and anything more than a casual relationship. Take a listen.

(BEGIN VIDEO CLIP)

ANITA DUNN, SENIOR OBAMA ADVISER: What they are arguing is that somehow the fact these two people, who severed both educational reformers in Chicago, both of whom did have their paths cross professionally, as well as neighbors occasionally, that somehow this association is a problem for Barack Obama because of Bill Ayers' past and things that happened in the 1960s when Barack Obama was 7 years old. And that's just wrong and frankly it's quite unfair.

(END VIDEO CLIP)

GRIFFIN: That's the spin from the Obama campaign, that what happened in the past is the past and what happened present day has nothing to do with terrorism for Bill Ayers.

PHILLIPS: OK. Point made. But when you look at his past, can Bill Ayers be linked to murder, bombings, death, destruction? GRIFFIN: Bombings for sure. The Weather Underground, of which Bill Ayers was a founding member, bombed many government buildings. Murder? That would be a stretch. He was on the run for 10 years, from 1970 to 1980. He reemerges in 1980, along with his wife. They turned themselves in and lo and behold, the case is thrown out because the FBI screwed up on gathering the intelligence. That is how he got off -- quote, unquote of this -- of the charges against him with that Weather Underground. So definitely.

And the other thing is, Bill Ayers has never hidden the fact that he was part of the Weather Underground, part of this radical group. In some ways it has made him somewhat famous in the South Side, Hyde Park, Chicago neighborhood where he lives.

PHILLIPS: Drew Griffin, appreciate it.

Well the more money you lose, the more questions you may have. Our personal finance editor will be along to answer them. Gerri Willis joins us next hour for some straight talk on America's money crisis.

And look out, Milk-Bone, watch your back Snausages. She might be starting small, but this little entrepreneur hopes to take a bite out of your business.

(COMMERCIAL BREAK)

PHILLIPS: Remember this woman, Ashley Smith? It was just a few years ago we remember hearing her story of how she was held hostage for seven hours by Brian Nichols after he went on a shooting rampage starting at the Atlanta court house in Fulton Country. And then apparently she was able to talk him out of that rage, read him Rick Warren's "Purpose Driven Life," had a type of spiritual moment with him. In addition to actually giving drugs, she was a struggling drug addict, said that she was reforming. She had lost custody of her little girl. It became an international story.

We were wondering if she was going to take the stand. And indeed, she is, right now in the Brian Nichols trial. You remember he's charged for killing four people, a judge, a court reporter, a sheriff's deputy and also a federal agent. We are following this case.

The adrenaline was flowing when members of the U.S. Olympic kayaking team squared off against military veterans over the weekend. They participated in a charity white water rafting race. Those proceeds going to Team River Runner, it's a non-profit group that helps wounded veterans with the healing process. Check it out.

(BEGIN VIDEO CLIP)

MATTHEW TAYLOR, ADVENTURE SPORTS CENTER INTL.: This is the inaugural Olympic Team River Runner challenge.

UNIDENTIFIED MALE: All forward. All forward.

DANA ALEXANDER, TEAM RIVER RUNNER: It's help and healing through white water boating.

LANCE CPL. BRIAN OVERFIELD, U.S. MARINE CORPS: Team River Runner and -- coming to do this event with them -- I couldn't pass up the opportunity to be with many Olympians.

UNIDENTIFIED MALE: It was a little weird kind of telling them what to do. I felt sort of like it should have been the other way around.

Good. All right. And relax.

OVERFIELD: When you're out there, the water is the only thing you're thinking about. And it's nice to kind of let everything else go for a while.

SGT. JUANITA MILLIGAN, U.S. ARMY: It just kind of helps you feel a little more normal than the every day struggles you might have.

UNIDENTIFIED MALE: Here we go.

TAYLOR: The flow of water and flowing on water is therapeutic. It's exciting. It actually can heal your spirits, heal your mind and heal your body.

ALEXANDER: It started at Walter Reed Army Medical Center. We started taking people out on the Potomac River. And different VA hospitals and medical centers across the country called and said we love your program, how do we get programs like yours?

UNIDENTIFIED MALE: Really there's no way to describe the way it feels to have a wave that's kind of bigger than you are sitting down in a boat and ripping through it.

MILLIGAN: They were really determined to go out there. They were giving me suggestions, and they were great suggestions.

UNIDENTIFIED MALE: It gets you out of hospital environment, allows you to be with your fellow service members. And out here, regardless of branch, we all get along and sit down and talk. On a number of different levels it's really good.

(END VIDEO CLIP)

PHILLIPS: Remembering our fallen heroes. The families of three Army Green Berets are in mourning this week after a roadside bomb in Afghanistan killed their loved ones. We're talking about Sergeant First Class Gary Vasquez. He was on his third tour of duty in Iraq. His brother says that Vasquez always wanted to be a soldier, that he had a larger than life personality. Vasquez leaves behind his wife, Sarah.

Captain Richard G. Cliff Jr. also leaves behind a wife and a child. In fact, he had just been home on leave for the birth of his son, Richard, on September 4th. He returned to Afghanistan a week later and was killed there on September 29th. And Sergeant First Class Jamie Nicholas lost his life in that same explosion. He was a native of West Virginia on his second tour in Afghanistan. He leaves behind his wife, Michelle, and two step- children. These are just three of the 525 service members who have lost their lives in Afghanistan.

(COMMERCIAL BREAK)

PHILLIPS: Among small business owners, she is definitely one of the smallest. A Florida girl wanted to make some cash, but at 9 years old, she wasn't getting too many job interviews. Then one day, inspiration walked in and wagged its tail.

The story now from Shani Muhammad of our affiliate WCJB.

(BEGIN VIDEOTAPE)

SHANI MUHAMMAD, WCJB REPORTER: By most accounts, Sammy Senechal is a typical 9-year-old. She likes math and loves to play with her dog.

SAMMY SENECHAL, 9-YEAR-OLD ENTREPRENEUR: My baby. My little baby, Lucky.

MUHAMMAD: But don't let that fool you. She's an entrepreneur who knew that if she wanted something to happen, she would have to do it herself.

SAMMY SENECHAL: I wanted to make money.

MUHMMAD: With the help of her mother, Stephanie S, Sammy started Sammy's Dog Treats in May. It's an all-natural dog treat made from ingredients humans can eat.

SAMMY SENECHAL: -- suggest they eat it. It's for dogs. But you can eat it, it's natural.

MUHAMMAD: In her kitchen, she experiments with a flavor to add to her already three flavor treat line. Today, it's pumpkin.

SAMMY SENECHAL: It's Halloween, so holiday things.

MUHMMAD: Stephanie calls herself an mompreneur (ph) who runs her own pet sitting service. She came up with the idea for Sammy to sell the treats after her daughter tried unsuccessfully to offer a pet walking service.

STEPHANIE SENECHAL, SAMMY'S MOTHER: She said mom, you know, I don't what to do. I want to make my own money, can you help me?

MUHAMMAD: Sammy mixes, rolls, and cuts each batch by hand. But before each treat makes it out the door, it must get the paw's approval from her trusty taster, Lucky. And he has a fool proof way of grading the treat. If he likes them --

SAMMY SENECHAL: He'll go and he'll eat it fast and then he'll come back like, is that all I get? Come on.

MUHAMMAD: And if he doesn't --

SAMMY SENECHAL: -- Hide it somewhere and he will be like, do you got something else?

MUHAMMAD: The business still has plenty of room to grow. But if you ask Lucky, the business is right where it needs to be.

(END VIDEOTAPE)

PHILLIPS: Well, we do value Lucky's opinion, but we'd like to hear from Sammy herself. She and her mom, Stephanie, join us live from Orlando. Of course, Lucky, on her lap, as well.

Great to see you guys. Hi, Sammy.

SAMMY seaborne, 9-YEAR-OLD ENTREPRENEUR: Hi.

PHILLIPS: So, tell me why you came up with this idea. Why did you want to do this and make money?

SENECHAL: I wanted to save up for college early.

PHILLIPS: And so, why did you feel you needed to take that on, at your age?

SENECHAL: If I do it now, I don't have to do it later.

PHILLIPS: So, Mom, when she came to you and told you she wanted to start saving money for college, you were probably thrilled she was thinking about college. But, what was your reaction to this? Did you really think she'd do it?

STEPHANIE SENECHAL, SAMMY'S MOTHER: Yes, I do. She's always been a self-starter. She always knew what she wanted to do and told me what she wanted to do way before it was time. And this is just part of it.

PHILLIPS: All right. So, Sammy, I understand you actually devised a business plan and you made out your list of what you needed to do. Tell me how detailed that was. What was on it?

SAMMY SENECHAL: It was the price and how far I can walk the dog and do stuff.

PHILLIPS: OK. And how much money have you made so far?

SAMMY SENECHAL: About 100.

PHILLIPS: $100?

SAMMY SENECHAL: Yes.

PHILLIPS: And how many stores are selling your treats?

SAMMY SENECHAL: I think about -- one is all I know but there's more that I can't really name because I'm at school.

PHILLIPS: OK. You're at school so you have to kind of let you peeps do all the business for you. I get it. OK.

So, let me ask you this, Sammy. We're going through a tough time right now. We're taking a tough hit in this economy. Is this whole bailout plan helping you or hurting you? I mean, how's it affecting you as a small business owner?

SAMMY SENECHAL: It's not affecting me at all.

PHILLIPS: No?

SAMMY SENECHAL: No.

PHILLIPS: She telling the truth, Stephanie?

STEPHANIE SENECHAL: Well, yes in a way. Because her treats are inexpensive. So, we tried to make sure that it was affordable to everybody. And people do want to make sure that their dogs have everything that they need. Of course, there's some of those people that you know, have to think before they actually go and spend money on their dogs right now because times are hard. But, she did make sure it was affordable for everybody to buy.

PHILLIPS: Sammy, am I making you nervous? Is that why you're having to drink a little water?

SAMMY SENECHAL: A little.

PHILLIPS: Is there something else up in that cup that maybe is helping you relax?

SAMMY SENECHAL: I don't think so.

PHILLIPS: OK, good. All right. Well, let me ask you a final question, Sammy. Have your other friends come up to you and said, you know, wow, this is really amazing what you're doing. I mean, what are they saying to you? Your friends that are your age.

SAMMY SENECHAL: They're saying, you've got a business? What business? Why didn't you tell me? Why are you telling me now?

PHILLIPS: Well, $100. Where are you planning on going to college?

SAMMY SENECHAL: I still have a long time to go and I'm probably going to wait until I get older to decide that.

PHILLIPS: All right. Well, that's a good plan. Well, you keep pushing those doggy treats. We'll follow your business and check in with you in about 10 years, or so.

Stephanie, Sammy, and of course, Lucky, thanks to all three of you.

STEPHANIE SENECHAL: Thank you.

SAMMY SENECHAL: He says, thank you.

PHILLIPS: Oh, fabulous. Thank you.

Well, it's a stormy say to decide a presidential race. Coffee lover nationwide are now weighing in. Will it be the red cup, or the blue one?

(COMMERCIAL BREAK)

PHILLIPS: A race for the White House gets a jolt from caffeine, that is. Coffee lovers nationwide can weigh in on the race at their neighborhood 7-11 now. You can have a 20 ounce McCain in a red cup, or the Obama in a blue cup. 7-11 says coffee sales are perking right along since the promotion started. And right now, Obama has a venti size lead over McCain in the coffee poll -- 58 percent to 48 percent.

And a baker up in Maine has a popular campaign of her own. She's shipping out political care packages, perfect for your favorite sweet tooth. Liberal or conservative. At last report, the Obama batch was outselling McCain McCookies. And he'll be willing to sample both, by the way, in the name of bipartisanship, of course.

Well, the politics of the big screen. Hollywood is out with some new political movies just ahead of election day. But, will they sway any voters?

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Whose job is it to find these damn weapons?

ANDERSON (voice over): With the presidential election just weeks away, Hollywood is releasing a slew of politically themed movies, both from the left and the right.

UNIDENTIFIED MALE: I love America. That's why it needs to be destroyed.

ANDERSON: And "American Carol" takes aim at liberals.

DAVID ZUCKER, DIR. "AMERICAN CAROL": Instead of Scrooge, it's a Michael Moore-like character saying bah-hum-bug to America.

UNIDENTIFIED MALE: The Bush name.

ANDERSON: Bush critic Oliver Stone's "W," an fictionalized unflattering portrayal of the current president.

BILL MAHER, COMEDIAN, POLITICAL SATIRIST: It worries me that people are running my country who believe in a talking sink. ANDERSON: Bill Maher's "Religulous" questions the validity of religion and attacks Bush in the process.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I believe that God wants everybody to be free.

MAHER: I think religion is a tremendously important topic, I'm just against it.

ANDERSON: But will these films actually impact voters' decisions at the polls?

LEAH ROZEN, FILM CRITIC, PEOPLE MAGAZINE: I don't think that much of what people see on a screen affects them when they go into the voting booth. I think these movies preach to the converted. I think people who go to these films tend to already be on whatever political side they espouse.

ANDERSON: Other new offerings take a less partisan approach to government and policies.

UNIDENTIFIED FEMALE: You want to keep the truth gagged? So be it.

ANDERSON: "Battle in Seattle" about the 1999 World Trade Organization protest was shown at both the Republican and Democratic national conventions.

STUART TOWNSEND, DIR. "BATTLE IN SEATTLE": This isn't a left or right film, or a Republican or Democrat film. It's about Americans. It is about patriotic Americans standing up fighting the power.

ANDERSON: "The Lucky Ones" centers on three Iraq veterans who returning home to the U.S. and "Body of Lies" targets terrorists.

UNIDENTIFIED MALE: It's a dangerous, dangerous world out there, you know?

ANDERSON: Proof Hollywood's latest plot line mirrors real-life issues as the nation prepares to cast its vote.

Brooke Anderson, CNN, Hollywood.

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