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Investors Still Shaken by Credit Crisis; Gearing Up for Debate Round Two; John McCain-Barack Obama Face to Face Tonight; U.S. Plane Forced to Land in Tehran; Lawmakers Will Grill AIG's Executive; Police Officers Being Hailed as Heroes
Aired October 07, 2008 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: All right, thanks, guys. We are talking about your vote and your money, following two major stories today. The election being one of them.
Can John McCain make tonight's debate a game changer? Got some new poll numbers that show he might have a pretty tough fight on his hands here.
Also, looking for relief after Wall Street's wild ride yesterday. Investors still a bit shaken by the credit crisis.
It is Tuesday, the 7th day of October. Heidi is off today. I am sitting in for her. I'm T.J. Holmes, and you are in the CNN NEWSROOM.
We got big stories and big stakes this morning. And we are at the intersection of Wall Street and Pennsylvania Avenue today. This hour the Dow faces its lowest open in four years.
Where are your investments headed today? We will look overseas. Maybe give us a few indications of what's going to happen here in about 30 minutes.
Also, presidential politics, a key debate, now just about 12 hours away. We'll look ahead to the Obama/McCain face-off and the shifting numbers of our latest polls.
CNN's Ed Henry will be taking note of every word and maybe every wink, Ed, that comes out over the presidential candidates tonight. Also, our senior political analyst Bill Schneider is here to tell us about new poll numbers that show who is gaining ground and where, also who is digging a pretty big deep hole right now.
We'll check in with those guys in just a second. But Wall Street, a gut wrenching ride yesterday, a roller coaster ride that seems to just be going one way yesterday, and that was down.
Now we wait. We are minutes away from the markets opening. Can they bounce back? The CNN money team breaking it all down for us again this morning.
CNN's Christine Romans is going to start us off.
So we are 30 minutes away. Do know what we can possibly expect? CHRISTINE ROMANS, CNN CORRESPONDENT: Can they bounce back? That is the -- that's the big question. And right now Dow futures are down just slightly. So it looks like a flat -- a flat opening. But we have 28 minutes to go and -- I'm telling you, the ground is shifting below us by the minute here.
Let's take a look at where the market has gone so far this year. Yesterday's wild ride aside, this is your market check. When you open up your 401(k) statement in the mail for the third quarter year to date, you're going to see the Dow down 25 percent, the NASDAQ down 30 percent, the S&P down 28 percent.
It's nauseating that that much value has been lost. Yesterday half a trillion dollars of stock market values disappeared. And it was a wild ride. By 10:44, if you look at the chart, you can see the Dow is down some 500 points. Then by the -- by about 2:45 in the afternoon, down 800 points.
We have never seen the Dow Jones Industrial Average have what we call an 800 print down, 800 points. And then one of the best rallies of the year. And then suddenly it cut those losses in half. So if you look at just one day of the stock market performance, you'd be forgiven for being very, very concerned.
Now what could happen today? Well, there are a few things that we're watching. Australian Central Bank cut interest rates. That is a lot of talk about maybe hopes that other central banks will cut interest rates. That would inspire some confidence.
So we're watching what interest -- what interest rates happen, what will happen with the central banks interest rates. And also the Fed, T.J., has used every tool at its disposal and it created some new tools to try to stabilize the market and -- calm the economy.
One thing we're watching are published reports this morning that the Fed and the treasury together are going to have some kind of a plan to buy commercial paper, that short-term financing that companies used to fund their daily operations.
How does it affect you? Well, they use those for payrolls, to buy raw materials, so that could stabilize things. And that's a pretty radical plan.
They bought out financial firms, they've guaranteed bank buyouts, they've injected hundreds of billion of dollars of funds in the system. They've already lowered interest rates and then all kinds of things to trim borrowing costs.
So the Fed has already done an awful lot along with the treasury and we'll see how much more they could try to do. But this is a confidence game and a contagion game. They are trying to boost confidence and contain -- contagion. And we'll see how it goes today -- T.J.?
HOLMES: We'll see how it goes. And as you were just talking about, and mentioning the Federal Reserve, and it's possible that reports of the new program did just cross the wire of the Associated Press.
ROMANS: OK.
HOLMES: And in fact, in a bold move, the Federal moves to create a new program to buy company short-term debt, a commercial paper, we're talking about. We'll certainly be getting into that a little more. But, in fact...
ROMANS: We've been chasing that all morning. And that's a big confidence builder. That would be a massive -- a massive plan. So we -- we saw a lot of different published reports this morning that they were preparing something. So we'll get into all the details and bring those back to you.
HOLMES: Absolutely.
Christine, we appreciate you. We will be talking to you again soon. And again, we are 25 minutes away from that opening bell and we will go there when it does happen.
CNN's Susan Lisovicz is down there for us at the New York Stock Exchange. She'll look ahead at the day ahead.
Well, overseas, and certainly under distress as well. Quick look at how the world markets fare overnight. Another bad trading day in Asia. Japan's Nikkei index closed down more than 3 percent. Stocks in Europe, mostly climbed out of the red. They are hovering around that break even point which they'll certainly take right now.
The brightest spot overnight, maybe Australia. We heard Christine talking about this. Stocks surge after Australia's central bank announced its biggest interest rate cut in 16 years. It was a full percentage point.
We're also watching the capital this morning. There it is. Lovely shot, but turmoil. Lawmakers are trying to unravel the financial crisis there. Under the microscope next hour, the world's largest insurer and the taxpayer bailout that rescued it, it will be top American International Group or AIG executives likely to face a pretty good grilling.
CNN's Kate Bolduan is there for us. She'll set the stage a little later this hour.
Will the tough times mean tough questions? And we want your tough questions. Send your money questions to Newsroomam@CNN.com. Again that's Newsroomam@CNN.com and our financial experts will answer them coming up next hour.
A huge night for John McCain and Barack Obama. 12 hours away now. The two presidential candidates will be face to face with an auditorium full of largely undecided voters.
McCain arrived -- as you can see there -- in Nashville, Tennessee, yesterday. Obama will be in the Music City in just a few hours. Both, of course, busy working on how to best get their messages across and change some minds, and, of course, those messages will have a lot to do about the economy.
We are four weeks to go. Can you believe it?
Ed Henry, seems like you, us, everybody has been covering this campaign for the last four years. But still been a lot of campaigning, we're just a month away. You are there for us in Nashville.
We are going to get some questions from the audience. It's hard to imagine given what's going on with the economy that any question would be about anything but the economy. But what are we expecting to hear tonight?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: You're absolutely right. I mean, this is what it's all about. The second of three presidential debates. It's really crunch time for both these candidates, especially a lot of pressure on John McCain.
As you know, because of the financial crisis in the last couple of weeks, we've really seen Barack Obama at least inching, edging ahead in a lot of the key battleground states. So it's time for John McCain to try and change the narrative of this race, try to shake it up.
The good news for John McCain is, despite that pressure, this is the format that really plays to his strengths, if you will. As you noted, it will be moderated by Tom Brokaw of NBC News.
The two candidates will be in those chairs behind me, sitting down with undecided voters from the Nashville area here asking them questions directly as well as questions from Tom Brokaw, and Mr. Brokaw also has the ability to throw in some Internet questions that have already come in from voters around the country.
As you noted, the economy, issue #1 for voters, likely to be the dominant topic here. And with that heavy focus on the economy, though, that could play to Barack Obama's strength even though the format plays more to McCain's strength.
As you know, Obama has been gaining from the economic problems. And the bottom line is that, I think, John McCain, he's -- I have been covering his campaign and his aides say, you know, they were confident going into this because John McCain is essentially been prepping for this for months, because he's done so many town hall meetings across the country, out on the stump.
But they also privately admit that if he has some sort of a gaffe, if he has a poor performance. Because of the high expectations for John McCain in this format, it's only going to be magnified if there is something bad that happens.
And so they do have some private concerns that if something goes wrong, that's really going to sort of lock in a narrative in these final days that John McCain is really on the rope. So they're looking for a big, big night for him tonight -- T.J. HOLMES: And you -- you talked about some of the concerns there. Are there any concerns, as well, about the audience? Because usually, when McCain is doing his town hall those are full of people who support him. These are undecided voters and many undecided and others out there, they're not so comfortable with a lot of the personal attacks.
Certainly to some we've been seeing in the past several days. So we don't expect these candidates to -- they may go off to each other on policy. But we don't -- expect some of these nastiness we've been seeing the past couple of day, do we?
HENRY: You're right. You raised two good points. First of all, both candidates are not really used to getting random questions from undecided voters. Both sides tend to get their own people out whether it's a town hall meeting or whether it's some sort of a speech that Barack Obama is delivering from a teleprompter.
This takes them off their game a little bit, each of them. It's going to be a little bit different for that reason. But I think you also make a good point about the personal attacks over the last three days, in particular, we've seen Sarah Palin, the Republican, running mate, really step it up and go after Barack Obama personally.
You're right that that is kind of thing, while it may score points with your base on the campaign trail, it's the kind of thing that could turn off independent voters. And, in fact, latest CNN Opinion Research Corporation Poll is showing that Sarah Palin's unfavorable numbers among the American people is starting to grow a bit.
And so you've got to be careful about a backlash there. And so it's highly, highly unlikely that either candidate will be engaging in very many attacks here with undecided voters. They'll do that when they leave here but not tonight.
HOLMES: They'll do it as soon as they step foot out the door. They'll go back to doing that.
HENRY: Not in this house.
HOLMES: Not in that house. Ed Henry for us there in Nashville. We appreciate you, Ed.
And you can catch all the debate action right here on CNN. The best political team on television, Ed Henry included, covering it all for you all afternoon and evening. You can watch the debate with us right here 9:00 Eastern Time.
And new numbers out for you this morning that suggest Senator Obama gaining some ground and, in fact, in some of those key battleground states.
Senior political analyst Bill Schneider is at the base central as well there in Nashville. There he is. Bill, good morning to you and do these numbers show that McCain maybe had more work to do tonight than he anticipated he might have to at this time.
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That is exactly what these numbers show. Let's take a look at four states which have become battlegrounds. One of them is Indiana. That was supposed to be a safe McCain state.
Indiana's voted Republican since 1964. Bush carried it four years ago by 21 points. Now our latest poll in Indiana shows McCain is ahead but only by five points. So that's in our leaning McCain category. It's by no means safe.
New Hampshire -- New Hampshire voted for John Kerry last time but only by one point. New Hampshire is a strong -- supposed to be a strong McCain state. He won the primaries there in 2000 and in 2008, but right now Obama is leading in New Hampshire by eight points. That is a state leaning to Obama.
North Carolina, whoever imagined this would be a competitive state? Bush carried it by 12 points last time. Right now, North Carolina is in utter dead heat. Obama, 49, McCain, 49 percent. That is a tossup state.
And finally, Wisconsin, that was a very close state. Kerry carried it last time but by less than 1 percent. Now Obama is leading by five points. Wisconsin, we are putting in the leaning Obama category, so generally, even if Obama isn't carrying all these states, the news in these latest polls is pretty good for him.
HOLMES: All right, so how does this change that all-important electoral map? We can talk about some of those -- now that we're leaning and most things are leaning now than ever. What does it do for the map?
SCHNEIDER: It does do -- we do have some shifts. We have shifted the state of Wisconsin from a tossup to a leaning Obama state. That's 10 electoral votes. New Hampshire, the same thing, tossup to lean Obama, four electoral votes.
North Carolina was leaning to McCain. Now it's a tossup state. That's 15 electoral votes away from McCain. And Michigan went from leaning to safe Obama -- that's where McCain pulled his campaign out, so that stays in the Obama category.
Overall, bottom line, we have, in our electoral map, Barack Obama with 264 electoral votes. How many do you need to win? 270. He's just six shy of an electoral vote majority. McCain is at 174 with 100 electoral votes in the tossup category.
HOLMES: All right. We'll see how much of that -- that changes. It only has another four weeks to change, though.
Bill Schneider for us there in Nashville. We'll see you again soon. Thank you, sir. And we have other new poll numbers from another battleground state -- Ohio. Young voters could make a difference there. We are on the campus of Ohio State University. Stay here.
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HOLMES: All right, look at this here. A car hit a tanker truck. A driver is trapped inside and the flames start to spread. We'll tell you how the woman's life was saved.
(END VIDEO CLIP)
HOLMES: Well, how about this? Registering to vote and casting your ballots at the same time, right away. New voters in Ohio were given that option for only a week, though.
The so-called golden week ended yesterday. And elected officials say turnout was bit lighter than expected. More than 5,000 newly registered voters in Ohio's fourth largest counties took the state up on its offer.
Ohio, of course, a key battleground state, always is. But no Republican has ever won the White House without carrying the state of Ohio.
So how is John McCain doing there? Let's bring in CNN's Mary Snow who's in Columbus. What are the numbers telling us? Used to be a time all you had to say was go Buckeyes and you pick up a few votes there in Ohio.
MARY SNOW, CNN CORRESPONDENT: Hi there, T.J. Well, let's take a look at the latest numbers. And you'll see that Ohio remains a tossup state. Barack Obama, 50 percent to John McCain's 47 percent.
And you know, this is not a big difference from the last time that we had a poll in September. Obama had been leading by two points. Now he is up by three. 20 electoral votes at stake here and this show you how high the stakes are. Both candidates will be heading to Ohio after tonight's debate.
And as you mentioned, I mean, this is such a crucial swing state. This is a state that George Bush won by a slim margin in 2004 that helped put him over the top in that election. And for Senator John McCain, the stakes are incredibly high, because history has shown us that no Republican president has gone to the White House without first winning Ohio.
Barack Obama has his own challenges. He lost the primary here to Hillary Clinton. And one of the key groups that he is vying for are blue-collar workers that he has to win over.
HOLMES: Well, blue-collar workers, an important group as well, but also, young voters. We saw him do so well in so many of those college communities throughout the primaries in so many different states. You are on campus there, Ohio State University. Are young voters certainly -- is that their mind set right now and seeing like that's where they're going and they're leaning towards this younger, fresher candidate, if you will?
SNOW: Yes. But you know, some are undecided and the registration efforts have been massive, as you mentioned. There was that window where people could register and vote on the same day, that window ended last night.
And to show you how much these voters are being courted, Barack Obama campaign office is right across the street from Ohio State and was -- and they were helping these young voters go to register and encouraging them to vote.
And, you know, the economy, though, T.J., is really crucial for them. When you talk to them, you know, you forget when you're a college student, you're relying on loans. Some are very scared about whether bank lending will freeze up and that put their loans at stake and just living day to day.
They go to school. A lot of them working part time. And you hear them talking about just essentials in terms of buying milk and bread. They're very worried about the economy and what the future holds for them, because they go to school to get better jobs.
Ohio itself has a 7.4 unemployment rate. That's a 16-year high for Ohio and it's above the national average.
HOLMES: Yes, kids, young folks worried about if there are going to be a job for them when they do graduate.
Mary Snow there for us in Ohio, a very important state. Mary, good to see you as always.
And you can catch all the debate action right here on CNN. The best political team on television covering it for you all day long. Watch the debate with us tonight at 9:00 Eastern Time.
All right. We turn to some weather now. We turn to that man, Rob Marciano.
Rob, do we have a storm with a name we should be talking about?
(WEATHER REPORT)
HOLMES: All right. Rob, appreciate it. You don't hear that too often. It's impressive because it's so small. We don't hear that often.
ROB MARCIANO, CNN METEOROLOGIST: No, we don't. Do we?
HOLMES: No, we don't. Rob, thank you, sir.
MARCIANO: See you, T.J.
HOLMES: We'll tell what you to watch for in tonight's presidential debate as well.
Our political director is your guide. Stay here with us.
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HOLMES: And we are about five minutes now away from the markets opening here in the U.S. All eyes will be on the Dow, the NASDAQ, of course, those markets which have been hurt severely the past week or so.
Certainly saw another down day yesterday. An extraordinary day. Below 10,000 for the first time, the Dow was, yesterday in four years. Well, the Fed keeps trying to help.
Let's bring in Christine Romans here. Another move that the Fed is trying to make this morning to try to -- to try to -- you know, boost confidence is what they're trying to do.
ROMANS: That's right. It's a bold move, a dramatic move. And they're just unveiling it in the past few moments. And let me try to explain to you what this is, the commercial paper market.
Companies borrow very short term for their -- to buy raw materials, to meet their payroll, for their very, very short-term bills. And investors have shied away. They're not lending money in this environment and that is -- is catching a lot of companies who are otherwise very profitable, very solid, who have never had problems borrowing money and have built that borrowing into their business plan. It's catching them off guard.
Now the Fed is essentially stepping in and saying it's going to be a backstop for those loans to try to unfreeze this market. This is what the Fed said in announcing it, which is pretty interesting.
What they said about why they're doing it -- they said that the treasury is stepping in here to the commercial paper market. They believe that this facility is necessary to prevent substantial disruptions in the financial markets and economy.
Again, sort of painting what kind of -- what kind of a world we're in here right now when you're talking about substantial disruptions in the financial markets and in the economy. It's basically the closest they can get to actually lending money directly to companies to keep them in business, back stopping these loans.
So this is a very big confidence move.
Let's talk a little bit about some of the things the Fed has already done because we know that they have used every tool in the toolbox and they are reaching out and they're pulling out the tools I've never seen before.
Buying up short-term debt, these commercial papers that we're talking about right now. They've bailed out financial firms. They have guaranteed bank buyouts. They have injected hundreds of billions of dollars into the system -- the Treasury and the Federal Reserve -- and they've trimmed borrowing costs by cutting interest rates up to -- here you have interest rates at about 2 percent now and also doing some other things like paying the interest on commercial bank reserves.
That was an announcement yesterday. And we're hearing a lot in the markets about maybe some kind of an international coordinated rate cut. There's a hope for that, a rumor of that. That's one of the reasons why things are looking a little bit better here this morning.
Australia, that central bank, cut interest rates. So there's a lot of technical things happening right now where government are trying very, very hard to restore confidence into the system. T.J.?
HOLMES: Well, a lot of people are saying that the global move needs to be made because this is now a global crisis.
ROMANS: Certainly it's a global crisis.
HOLMES: And that's certainly something to hear. You said -- you have been covering this a long time. They're pulling out tool you haven't even seen before.
ROMANS: I know. We're learning something new every day around here.
HOLMES: We'll all know if anything else is left in that tool bag but we will see Christine Romans. Thank you. We'll be talking to you again shortly.
ROMANS: OK.
HOLMES: Thank you so much.
And I know you've got some tough questions out there, folks, because it's tough times right now. We want to help you out. Send your money questions to Newsroomam@CNN.com. Again that's CNNnewsroomam@CNN.com. Our financial experts will answer the questions for you next hour.
And of course, the European markets recovering after yesterday's global slide. But what about Wall Street? The opening bell moments away.
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HOLMES: All right. Hold your breath. The bell. Opening bell on Wall Street right about now. This is the time for it to happen and yesterday, of course, as we saw, as soon as the bell rings, we were already down almost 300 points before then dropping some 500 points by 10:45 in the morning.
Then we lost -- went down to 800 points by early afternoon before recovering a bit and closing down 300 points yesterday. But again the opening bell right now. We will check that board in a second.
Our Susan Lisovicz is there at the New York Stock Exchange for us. Had been keeping an eye on things.
Susan, are you holding your breath?
SUSAN LISOVICZ, CNN CORRESPONDENT: I am. I'm getting blue. I've been holding my breath for so long lately. And it looks like we were going to have more selling at the open, T.J. That is until about 30 minutes ago, when the Federal Reserve announced its latest emergency move to free up the credit markets.
As Christine was just explaining, policymakers rolled out a radical plan to buy massive amounts of commercial paper. We've been hearing a lot about that lately. Not from banks and brokerage firms, but from individual companies, commercial paper, short-term financing that many companies rely on from day-to-day operations. The markets bore that crucial financing has virtually dried pup. Futures improved with that announcement.
Also today, both Fed Chief Ben Bernanke and European Central Bank President Jean-Claude Trichet scheduled to speak. The Fed is due to release minutes from its last meeting. So we're looking for more activities or insight from the Fed.
In the meantime, Australia's central bank cut interest rates a full percentage point. A big move. In fact, the largest amount there in 16 years. We're also watching Bank of America, B of A shares right now down more than 8 percent. And recently announced it's buying Merrill Lynch. Announced its profits two weeks early. The company reporting a nearly 70 percent in drop in quarterly profits.
It's also slashing its dividend in a half and plans to raise $10 billion by issuing new stocks. So, B of A is down 30 stock, but the Dow itself is up 76 points or three quarters of a percent. The Nasdaq is up one percent. We've got it bounce. Two minutes into trading, T.J.
HOLMES: We will take it. Let's just capture this moment. Let's just take it in for a second, Susan. But you know what, it is something about that -- we were talking about yesterday. The $10,000, the point mark, is just some psychological security blanket, if you will. Just makes you feel better to see $10,000 back up there on the board. We will see where we go from here. Susan, we'll talk to --
LISOVICZ: 10,039.
HOLMES: We will take it. Susan, we will talk to you again soon. Thank you so much. If there is a silver lining to the world's economic troubles, it may be as close as the pump. AAA reports gas prices have slid nearly 2.5 cents a gallon. Today's price now $3.48 a gallon. That's the 20th consecutive day of decline. Oil prices have plunged below $90 a barrel. Yesterday's close, it's less than $88 with the lowest price in eight months.
Now, we want to hear from you. We want to see if we can help you out a bit. Send us your questions to cnnnewsroom@cnn.com. OK, that's cnnnewsroom@cnn.com. Our financial experts will answer those questions for you coming up next hour. And here we are. Of course, exactly four weeks to Election Day. And all eyes are on John McCain and Barack Obama. They come face to face just hours from now. A live look at Belmont University, Nashville, Tennessee. At this debate, it will be ordinary citizens asking the questions, and our political editor, Mark Preston. He can't wait to hear what they have to say tonight.
Mark, kind sir, always, always good to see you. Tell us, first of all, is this almost do or die time for John McCain? He is running out of opportunities to really change the game. And this is certainly one of them.
MARK PRESTON, CNN POLITICAL EDITOR: Yes, absolutely, T.J. Look, 28 days before Election Day right now. And what we're seeing nationally and certainly in the polls in the battle ground states, things are right now trending towards Barack Obama. He does need a game changer. He would certainly welcome a game changer at this point.
I'll tell you a very disturbing number that I saw in the last 24 hours, T.J., was a new poll from CNN. One of the numbers out of that poll showed that 80 percent of Americans think that things are going very badly right now in this country. So, yes, you know, we could see a game changer tonight. Certainly that would be welcomed by John McCain.
HOLMES: Also, with more at stake in this one because of, you know, that last debate, even though a lot of people were anticipating and wanted to watch it, it was still on a Friday night. A lot of people out and about. Not necessarily at home and focused on presidential politics. And the numbers for that one were weren't as much at the V.P. debate. So, we expect a bigger audience tonight?
PRESTON: Yes, absolutely. Look, Friday nights aren't great nights for television. You and I both know that very well. There will be more eyeballs on this debate tonight. Look, again, we're 28 days out. People are really starting to focus in. This has been a marathon election up to this point. But you know, most of America has to go about their daily lives, but now they are focusing in debts. What we're hearing, you know, out in this battleground states, and that's really, when these candidates are talking tonight to the small audience behind, really who they're talking to are voters in Ohio, and Pennsylvania, Indiana and North Carolina. That's who they need to reach out to.
HOLMES: Will that crowd be a factor? This format, certainly different. Town hall format, which many say favored McCain. He's been having a ton of town halls around the country. But will that audience make a factor? Do they have the play to the audience because, you know, they can say something that gets rousing applause which certainly will play with the viewing audience. Or they might say something that gets boos or hisses or something from this audience which also would play to the television audience.
PRESTON: Yes, and what the organizers are going to try to do is really try to minimize that. They're going to try to have no booing, no applause, really make this very, very, very straightforward question from the audience and then answer by the candidate, follow up by the opponent.
But I'll tell you what, what they have to do tonight, whether it's John McCain or Barack Obama, two things. They have to show they have command of the issues at this point, especially because of this economic crisis. And of course what's going on with our foreign policy. And at the same time, they have to show compassion. And I think that's what you're talking about, T.J. They have to show compassion because people are hurting out there. No question about that. And I think that both candidates are going to try very hard to do so.
HOLMES: OK, issues, compassion, reaching out, do they also need to stay away from a lot of this mess we've been seeing the past several days and over the weekend, bringing out these attacks and associations, you know, talking about the Keating Five and also the Bill Ayers mess. Will they go out of their way to stay away from that? Or do they want to take advantage of this huge audience they are going to have and bring that stuff up, and try to make a point about it?
PRESTON: Well, I'll tell you what, that is a great question that we don't have an answer to. But maybe this is an indication that could happen tonight. Both campaigns this morning, T.J., have released television ads accusing the other of smears and telling lies. So, what you could see tonight is you could see one of the candidates turn to the other and say, he's distorting my record, he's telling, he's telling smears. I don't necessarily think that Barack Obama wants to bring up Ayers, too, for himself, personally. Or for John McCain to talk about the Keating Five scandal, personally, but it could come up. And I'll tell you, if it does come up, can you imagine the fireworks we will see out of that?
HOLMES: All right. Mark Preston, always good to see you. Come back and see us some time on CNN Saturday and Sunday morning. We miss you.
PRESTON: I will.
HOLMES: All right. Thanks, Mark. And remember, you can catch all the debate action right here on CNN. The Best Political Team on Television, of which Mark Preston is a member. Covering it all afternoon, all evening for you. And watch the debate with us. Where else would you watch it? 9:00 Eastern right here.
We're also watching Capitol Hill this morning. And not just outside the building. A lot going on inside. Lawmakers trying to unravel the financial crisis. We are live from D.C. with our Kate Bolduan, next.
(COMMERCIAL BREAK)
HOLMES: We have a -- something just in to us here. We are certainly trying to get reports or more confirmation or more clarity on. The reports are from Al Arabiya, that a U.S. plane was forced to land in Tehran. Now, again, these are reports we're getting from Al Arabiya, and also from the Associate Press, that a plane was forced to land, again, not shot down, not having mechanical issues that would make an emergency landing, but was forced to land after entering Iranian Aerospace. Reports from Al Arabiya that this was in fact a U.S. jet, but we have not confirmed that. We are working on the story.
Our Barbara Starr, though, at the Pentagon for us now.
Barbara, are we getting anything from the U.S. military about this possibly being true?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, T.J., just a few moments ago, two top U.S. military officials told CNN they have no report, no report, that any U.S. military aircraft has been forced down in Iran. A lot of deep breaths here at the Pentagon a few moments ago when that report first crossed the news wires. A lot of rush to check around. But no reports of any U.S. military aircraft missing, not where it should be, or any U.S. military personnel not where they should be.
U.S. officials, however, are now watching the reports which are continuing to come in from news agencies in the region that some type of aircraft was forced to land inside Iran, that it was a small passenger plane according to some Arab news agency reports.
That suggests if this all proves to be true, it is some type of aircraft that may have belonged to some sort of other government, some other government agency, perhaps a relief organization. Perhaps they are also looking at the possibility it belonged to the government of Iraq. The latest reports crossing the wire now say that the people on board that plane were questioned and then allowed to proceed on their journey.
We have not independently confirmed those details. That, all according to news agency reports, but we, again, are told by the pentagon and the U.S. central command, there are no U.S. military aircraft downed inside of Iran today.
T.J.?
HOLMES: All right. Our Barbara Starr at the Pentagon getting this all sorted out for us. And Barbara we know you'll get any more on this. We know you'll get back to us. Thank you so much. Again, for getting right on top of that on this breaking story. Stay with us here. We're keeping an eye on that story and other political stories. Also, economic stories. Live look there at Belmont University at Nashville, Tennessee, where the big debate is happening this evening. More talk about what the two needs to do tonight.
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HOLMES: The collapse of a giant. Next hour, law makers will grill executives of AIG, the world's largest insurance company. Billions of your tax dollars helped bail it out. CNN's Kate Bolduan is in Washington. And, Kate, we saw a little bit of this yesterday with the other business from Lehman Brothers. We expect to seeing the same kind of stuff today.
KATE BOLDUAN, CNN NATIONAL CORRESPONDENT: Yes. We do expect some fireworks today. I mean, really the big question that lawmakers are trying to get to with these hearings, and this is part two of a several part series I'm looking into financial markets. But they really want to understand how we got where we are today. And that's one of the big questions they're going to be looking at, T.J. And as you mentioned, the two people that are really going to be talking to and asking some very tough questions of are two of the former CEOs of AIG, American International Group.
And we -- and I talked to the committee today, and they said really, they are fundamental questions, but very big questions of partly, what is the responsibility of CEOs and executives in terms of this financial collapse. What did they do that they could have done differently to keep us out of where we are today? So, that's one of the big questions they are going to be asking.
HOLMES: You say big question there they want to find out from these executives, but also, explain to us -- and we know, all these guys are up for re-election here in a month. How much of this is really political grandstanding on the part of some these law makers who just want to show -- certainly want to appear that they are being tough on these guys that a lot of people in the country blame for being in the situation we are in.
BOLDUAN: Well, there is no question, T.J., that -- they -- lawmakers do believe that these hearings are very necessary. They kind of laying out the foundation of regulation. And legislation that could come later. But we would be lying if we didn't say that there is an underlying tone of politics and there always is in terms of these kind of hearings on hot button issues or issues of the day.
Yes, lawmakers do want to be seen and have their -- have voters see that they are working for their constituents. And really getting out there and looking for the answers that so many people have questions to -- questions of. But at the same time, these -- they do say these are important hearings because how do we figure out where we go from here. It's kind of taking a step back now that the -- that the bailout has been passed. Taking a step back and figuring out how did we get here.
HOLMES: All right. Yes. It's a big question there. Where do we go from here? Kate Bolduan, watch out. A lot of fireworks going to be around there today so be careful. We will see you again here soon. Well, Congress of course looking for all those answers. I got three former AIG executives up on The Hill today. Yesterday, of course, it was the Lehman Brothers Chief Executive Richard Fuld. And CNN's Brian Todd shows you a little bit of what he went through yesterday.
(BEGIN VIDEOTAPE) BRIAN TODD, CNN CORRESPONDENT (voice-over): He's the first Wall Street titan to be publicly skewered in Congress over the financial crisis. Richard Fuld presided over the collapse of Lehman Brothers, the only major investment house not to have been bought out or bailed out. One of the first tense exchanges, over the claim that Fuld was paid nearly $500 million during his 14 years as CEO, even while his bank dove into the shaky real estate market and started to lose everything.
REP. HENRY WAXMAN (D-CA), GOVERNMENT REFORM COMMITTEE CHAIRMAN: Is that fair, for the CEO of a company that's now bankrupt to have made that kind of money? It's just unimaginable to so many people.
RICHARD FULD, CEO, LEHMAN BROTHERS: I believe my cash compensation was close to $60 million, which you have indicated here. And I believe the amount that I took out of the company over and above that was, I believe, a little bit less than $250 million, still a large number, though.
TODD: Fuld defended the practice of giving huge bonuses and other payments to top executives, even as Lehman was hemorrhaging, saying at the heart of his company were employees doing business every day with clients. But he also had to defend a conference call in Lehman's final days before bankruptcy, where, according to the committee, investors were told the company didn't need new capital.
REP. DENNIS KUCINICH (D), OHIO: Did you mislead your investors? And I remind you, sir, you're under oath.
FULD: No, sir, we did not mislead our investors. And to the best of my ability at the time at the time, given the information that I had, we made disclosures that we fully believed were accurate.
TODD: Is Fuld being made a scapegoat for a market gone wild? One former Lehman exec who left 14 years ago, but who knows Fuld and the culture of Lehman, believes he is.
BRUCE FOERSTER, FORMER LEHMAN BROTHERS EXECUTIVE: I thought he was bringing Lehman Brothers back together to a customer-first culture, which was sadly missing at the firm when I was there.
TODD: Still, Bruce Foerster believes decisions made at Lehman and several other firms over the past five to ten years led to the financial industry's meltdown.
(on camera): Foerster says the real estate market with so many properties whose value was wildly distorted basically killed the firm. Richard Fuld said if he knew then what he knows now, he would have shut down his company's mortgage operations, and Fuld says he will be living with the pain of Lehman's collapse for the rest of his life.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
HOLMES: And we are asking for your money questions this morning. Like this one we got from Joe. It says, "Since the Dow dropped 777 points a few days ago, the market gained 777 points. Does that mean that our stocks are theoretically back to where they started?"
We're going to bring along some people a lot smarter than I to answer that question for them a little later. That's coming up at the top of the hour. Stick around for that.
Well, police officers being hailed as heroes. How they rescued a woman from this burning car just before it exploded.
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HOLMES: A month of anti-government protests boiling over today in Thailand. Police fired tear gas to disperse protesters who barricaded parliament trying to stop government officials from leaving. More than 120 people were hurt. The rising prompted the country's deputy prime minister to resign. The prime minister was forced the sneak out of parliament to avoid being spotted by those protesters.
Well, a man who is in the hospital critically injured has now been arrested. This man is the driver of that charter bush that crashed in northern California. Police have now arrested him on suspicion of driving under the influence. Eight people were killed. 30 others injuries when the bus run off the road en route to a Casino on Sunday. The driver's mother said he has struggled with drug and alcohol problems and had been jailed several times on drug charges. She also said she thought it was his first day driving that bus. She said he had been unable to get his regular job as a trucker since being released from jail.
Well, five Indianapolis police officers credited with saving the life of a woman trapped in her burning car. The woman's car had hit the bank of a tanker truck catching the car's engine on fire. The first responding officer at the scene describes now for us what she saw.
(BEGIN VIDEO CLIP)
OFC. MADALINE LOTHAMER, INDIANAPOLIS POLICE: I heard the help me, help me and saw her shadow through the smoke. The goal was to just get her out quickly.
(END VIDEO CLIP)
HOLMES: They did get around, got her out quickly. And one of the officers used a baton to bash in a car window. The car was actually locked at the time. The driver was pulled out just before that car exploded.
Well, you have seen your investments shrivel. And your confidence shriveling as well. Investors from all walks of life share a common question -- what now?
(COMMERCIAL BREAK) HOLMES: Well, whether you own a big stock portfolio or a modest retirement account, it's almost certain you have lost money. Lots of people from the country clubs to the cul-de-sacs are asking, whatnot. CNN's Deborah Feyerick looking for answers.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): As the Dow dropped below 10000, everywhere brokers, and financial advisers were fielding calls from thousands of investors.
UNIDENTIFIED MALE: Transfers to those banks and rolling them over.
FEYERICK: Getting messages like this one.
GREG OLSEN, LENOX ADVISERS: "I know it's the wrong time to sell," he just said, "but I have to pull the money out, because I can't take this anymore."
FEYERICK: Greg Olsen is a partner with Manhattan's Lenox Advisers.
(on camera): People who you wouldn't think would panic are now calling you.
OLSEN: Sure.
FEYERICK: They're worried.
OLSEN: Yes.
FEYERICK: They're saying what?
OLSEN: They want to know, when is the pain is going to stop? And the answer to that question is, we don't know.
FEYERICK: Are they saying, I can't do this; pull me out?
OLSEN: You have some clients that are very upset, because they thought they had a higher level of risk tolerance than they actually did. They're making the decision to pull out because they want to sleep at night knowing there can't be any more losses.
FEYERICK (voice-over): Olsen says his advice depends on how much time and how much money clients have.
OLSEN: It's the person that has the lesser amount of money to invest that you're worried about, because they can't afford to have these types of losses. Anybody who has a long-term time horizon, a 10-, 20-year time horizon, at this point, it's not the time to make any rash decisions.
FEYERICK: As for investors nearing retirement:
(on camera): You're actually telling some people that they may want to consider putting off their retirement.
OLSEN: I have that -- it was a very difficult conversation with a couple last week. And it's a very difficult conversation to have.
FEYERICK: I think a lot of people are rethinking just how good of a bet the stock market is. What is your advice?
OLSEN: Well, long-term, the stock market has always been the best place to be. As long as you don't have to pull the money out today, you didn't lose anything.
FEYERICK (voice-over): As for when it will stop, that's something even the best advisers can't answer.
Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
HOLMES: Well, most people selling their home these days look for a realtor. One Arizona family looking for a charity. This family has got a real deal out there. They're offering their home for a hundred bucks. And all you have to do is win the raffle.
(BEGIN VIDEO CLIP)
LORIANN GAUNT, HOME SELLER: With the market, the way that it is today, we can't just sell it outright, because we would owe more on it than somebody would be willing to pay.
(END VIDEO CLIP)
HOLMES: Well, one catch here, though, under the law, the family must partner with a non-profit group to run that raffle.
We're talking about the economy and the Election Today. Two big stories on our radar. You see what's happening there on Wall Street. Investors looking for a bit of a confidence boost. The may have gotten one. Today, the fed has a new move to ease the credit crunch. They're pulling something else new out of their bag of tricks. You can see right there how the Dow is responding, up 16 points right now.
Also, we're setting the stage for tonight's debate. A live look there at the debate hall in Belmont University in the State of Tennessee, Nashville, specifically. We want to bring you some new poll as well.
But hello there, it's Tuesday, October 7th. Heidi is off today. I'm T.J. Holmes. And you are in the CNN NEWSROOM.
