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ANDERSON COOPER 360 DEGREES

Stocks Tumble; Attack Politics; Ten Most Wanted Culprits of the Financial Collapse; Michelle Obama on "Larry King Live"

Aired October 8, 2008 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight breaking news and your breaking bottom line; major new action, global action to inject cash and confidence into the sinking world economy. The Federal Reserve and Central Banks around the world cutting interest rates by half a point. Britain's government nationalizing a major chunk of its private banking system, drastic new steps that did not shake investors' gloom; the Dow Industrials dropping 200 more points at the close. But as we speak Asian markets up slightly.
There's also this and if you're not angry already after you hear this you will be. The government is giving nearly $38 billion more in emergency loans to AIG, now that's on top of $85 billion they gave last month. That's taxpayer money. It's your money.

It turns out after that first bailout; AIG executives spent hundreds of thousands of dollars in a fancy hotel on rooms and spa treatments -- spa treatments. They're soaking it up mad and we are getting soaked.

We'll have more on that later and a lot of politics to cover as well as last night's debate.

Suze Orman is also here to talk about your money and what to do with it now.

But first the big picture; with us again tonight, Ali Velshi. Ali, Feds slashed interest rates again today. That should be good news for the stock market.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: What an unbelievable 24 hours it's been. When we were on last night, markets were sinking around the world dramatically. Before the sun rose in New York, markets were down and then this massive coordinated worldwide rate cut which slashed rates on markets.

Take a look at this. Nothing like this has ever happened before. The United States, Canada, the United Kingdom, Sweden, Switzerland, European Central Bank, even China, we're doing things in concert with China, Australia did it yesterday; cutting half a percentage point.

It should have held the markets up. But it didn't. Soon enough things were done. Why, Anderson? Because it is not seen as the thing that is going to instill confidence in the American investors, markets around the world are looking for something else. This wasn't it. It should have done it. It didn't do it -- Anderson.

COOPER: Treasury Secretary Paulson spoke to the country earlier and say, I want to play some of what he said. Let's listen.

(BEGIN VIDEO CLIP)

HENRY PAULSON, U.S. TREASURY SECRETARY: But patience is also need because the turmoil will not end quickly and significant challenges remain ahead. Neither passage of this new law nor the implementation of these initiatives will bring an immediate end to current difficulties.

(END VIDEO CLIP)

COOPER: So Ali, I mean, do we even know what kind of a timeline we're looking at for some kind of relief? And I know it's not an instant fix.

VELSHI: Well, we've worked to try and get you some kind of a timeline. And nobody tells you this better than Suze is going to tell you in a few minutes, but we do actually have to be patient.

Let's look at how we have tried to solve the ills of the financial system. On October 3rd we passed the $700 billion bailout bill with great difficulty. That is going to take, Treasury Secretary Paulson says it will be several weeks before the first check is cut and it'll be several months before you see an effect. So between one and 14 months is what that medication is going to take.

Then, yesterday we saw the Federal Reserve say that it will loan money directly to companies that needs short-term financing and that's the credit squeeze we're talking about. Loaning companies money is going to start in about a week and it'll take maybe up to six months to work. These are these antibiotics. You've got to take them, you've got keep taking them before they work.

And then, today these coordinated global interest rate cut. Well, we know interest rate cuts take between nine and 18 months to work through the system. They create quite a shock. And sometimes you get a market response. But fundamentally they take that kind of time to trickle down and actually free up the money.

So we have thrown everything we've got at this disease. And maybe there's more to throw. We don't know. We're going to wait and see. We've thrown a lot at this Anderson, it will work but it may take some time. And that time is something you've got to try and work with you.

You've got to not panic because we've thrown the drugs at it. You've got to try and wait to see if they work.

COOPER: A lot of prescription bottles there. I wouldn't mind a little morphine at least before they kick in.

VELSHI: That's right.

COOPER: Let's turn now to Suze Orman, a personal finance expert. Host of CNBC's "Suze Orman Show." A lot of questions tonight, a lot of them submitted on the ac360 blog. First of all, there's of just a down right fear out there, almost panic. Is that counterproductive?

SUZE ORMAN, PERSONAL FINANCE EXPERT: Well, it's not counterproductive, it's real. It's really -- it's how people feel and the markets are made up of how people feel. They buy or they sell based on their emotions, Anderson. It's how its always has been.

And when Ali actually do these things with the drugs, I was talking to you before we went on air, that's exactly what's happening.

People feel like they need some medication because they are panicking right now. So as I was saying to you it's as if the economy right now is in the ICU unit of a hospital. We are in Intensive Care and they are throwing every type of medication at us to cure what's going on.

And they're panicking because why? Nothing is working. They tried this, it didn't work. They tried that medication, it didn't work. They are running out of prescriptions to give it. So we're going to be in the ICU Unit for a while. Eventually and I don't know when that will be -- it will probably be six months, a year, year and a half -- we will get out. We will be in the hospital then.

We'll stay in the hospital for about a year or two. And after another year or two of that we'll end up in rehab for a few years. And then, we'll be OK.

So this is a long stretch. So people actually have to stop panicking. And they should get used to this because this is here to stay, if you ask me, for a long time.

COOPER: Panic produces paralysis. What people need is action. And how low do you think the markets can go? And we look at the stock market and the credit market is what really matters, but in terms of stock market you talked about sort of in the 8,000 range.

ORMAN: I've always thought when this started that we would end up at about 8,200; 8,000. And hopefully that will be as low. But I do think we're about 1,000 points still off from where the bottom should be.

COOPER: All right, I got a couple questions from our viewers on the ac360.com blog.

This is from Lorie Ann in California and she asked, "If it's a possibility that everything we throw at the crisis doesn't work, what will that result look like, bread lines or something less frightening?"

ORMAN: Oh, boy, you know, I'm sorry to say that it could look like bread lines. And I know that's not really a great thing for me to say. But I want you to think about the reality of this. For those of you out there who all you have is credit card debt, you're losing your home because you're behind on your payments, you can't make your car payment, you work in an industry possibly that you're going to lose a job in, you have absolutely no money and this keeps going on and you can't get another job. What are you going to do?

So it is very, very possible out there that you will start to see things, not where there are bread lines like we saw and nobody having -- but that a lot of people are out on the streets. I have people calling in to my show that are actually starting to live in their car because they don't know what else to do. That is the reality today.

COOPER: A lot of people are losing their jobs already.

This is from Lilibeth in Edmonds, Washington. "You said that, for those who have ten or 20 years before retirement to ride this out. But I cringe as I see the DOW plummeted to 9500. At what point do you say enough is enough? When the DOW hits 8,500? 8,000? When?"

ORMAN: No and in fact if you have, let's say you are one of those ones that -- let's say you have ten, 20, 30 years until you need your money; the biggest mistake you will make -- please listen to me, everybody -- the biggest mistake that you will make if you stop contributing to your retirement accounts now.

So if you've been putting money in your 401(k)s, now is not the time to stop. You want to see -- if it continues to go down you want to see your contributions continue. Because again, as I've said over and over again, the lower your market goes the lower your shares go in your 401(k).

COOPER: But even if it's going down every month.

ORMAN: You have to, if they make a stoppage here and they just freeze everything they have to get out of the market then. Because otherwise they're not dollar cost averaging down, Anderson and they don't accumulate more shares and then there's no way to make the money back when they come back up.

COOPER: All right, Suze Orman thanks so much, I appreciate it as always.

ORMAN: Thank you, any time.

COOPER: More "Breaking News" ahead in the investigation to whether Sarah Palin abused her powers as Alaska governor.

As always I'm blogging throughout the hour. To join the conversation, go to ac360.com. I'm about to log on. Check out Erica Hill's live show during the break.

Also harsh words on the trail from Sarah Palin, John McCain and their supporters; did they cross a line? Some Democrats are saying Republicans are injecting race into the race, even putting Barack Obama safety in danger. Are they right? We'll investigate and look at all sides.

Plus, Obama on the trail and how he is reacting to the attacks and Michelle Obama talking tonight about her husband's relationship with Bill Ayers, the unrepentant '60s radical.

(BEGIN VIDEO CLIP)

LARRY KING, CNN "LARRY KING LIVE" HOST: She said that your husband pals around with terrorists. And she is referring to William Ayers I guess. Do you know William Ayers?

MICHELLE OBAMA, BARACK OBAMA'S WIFE: Yes. Yes. Yes. Barack served on the Board of the Annenberg Challenge with Bill Ayers.

(END VIDEO CLIP)

COOPER: And later, it is time to figure out who is to blame for this financial collapse. We are naming names tonight, the first in our rogues' gallery. The ten most wanted culprits of the collapse.

Tonight's -- what happened over at AIG is going to make your blood boil. And we have that story and more when "360" continues.

COOPER: More "Breaking News" tonight being felt on the campaign trail. CNN has learned that Todd Palin has submitted written answers to the abuse of power investigation of his wife.

Seven Alaska state employees have also done a 180 agreeing to testify in the probe. Alaska lawmakers are trying to determine if Governor Palin overstepped her authority when she fired the state's top law officer because he refused to fire Palin's ex-brother-in-law. Governor Palin denies any wrongdoing.

Meantime, she and John McCain today, drawing fire for what they are saying and what is being said on their behalf "On the Trail." Critics say they are trying to paint Barack Obama as untrustworthy and less than 100 percent American.

As always, no judgments from us; just the allegations from both sides, the facts and our political panel so you can make up your own mind.

But first Ed Henry.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice over): After failing to score a knockout in round two, John McCain came out swinging with a familiar line meant to saw doubts about his opponent's character.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: So who is the real Senator Obama?

HENRY: But it was his wife Cindy who tried to deliver the body blow.

CINDY MCCAIN, JOHN MCCAIN'S WIFE: The day that Senator Obama decided to cast a vote to not fund my son when he was serving, it sent a cold chill through my body.

HENRY: Never mind the McCains had previously said their son Jimmy, a marine serving in Iraq, should not be dragged into the campaign or that earlier this week Cindy McCain charged Barack Obama is running the dirtiest campaign ever.

That was then.

Now the Senator is slipping in battleground states and running out of debates to turn it around.

ED ROLLINS, REPUBLICAN STRATEGIST AND CNN CONTRIBUTOR: He had to score a big night and I think it was probably a draw.

HENRY: And most polls show Obama won the debate.

The candidate's wife is not the only ally lashing out at Obama. Twice this week at McCain-Palin rallies someone warming up the crowd used Obama's middle name.

SHERIFF MIKE SCOTT, LEE COUNTY, FLORIDA SHERIFF'S DEPARTMENT: On November 4th, let's leave Barack Hussein Obama wondering what happened.

HENRY: Both times the McCain campaign put out statements afterwards saying "We do not condone this inappropriate rhetoric." But that has not stopped some of the surrogates from using that rhetoric.

Some Republicans say the attacks are not a winning strategy for McCain. Conservative activist Richard Viguerie is saying McCain should focus harder on differences with Obama on issues like taxes and the size of government.

For John McCain he said, "The opportunities to win this election are dwindling down to a precious few."

(END VIDEOTAPE)

COOPER: Ed, how concerned is the McCain camp that they're at a point or tipping point that they can't come back from at this point?

HENRY: They are very concerned and I'll tell you what they're taking comfort in is quite interesting. Some senior McCain advisers are basically telling me that they're taking comfort in the fact that this financial crisis is such an awful disaster that they should actually be behind in double digits in a lot of these battleground states.

They are actually taking comfort in the fact that they are only down six or eight points. And they're basically saying, if they keep chipping away and raising questions about whether Barack Obama is risky as commander-in-chief in such a difficult and perilous time both economically but also with the nation at war in two places right now, they are hoping that they can chip away, but they honestly are privately admitting that the bottom line is a very steep hill for John McCain to climb at this point -- Anderson.

COOPER: And Ed, is it Friday that we learn one way or another whether Governor Palin -- what this investigation results from on Governor Palin? HENRY: Well, there's been a lot of anticipation that each time there's a deadline that there's going to be something that is actually extended. So I wouldn't put too much on that one date. A lot of people have been anticipating there'll be some sort of information coming out soon. But you can bet that there are going to be a lot of maneuvering to try to get this pushed back as far as possible and maybe even past the election -- Anderson.

COOPER: No doubt about that. Ed Henry thanks.

On Monday, when John McCain asked who Barack Obama is, someone in the crowd screamed out a terrorist. The question tonight is, is the Republican side stirring hatred or even racism or worse? That's what some Democrats are now saying. And today, Joe Biden called some of their rhetoric dangerous. Or is the Democratic side just being too sensitive in the face of tough but legitimate questions about Barack Obama's character?

With that here is Candy Crowley "On the Trail" with the Obama campaign.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: It says something that Barack Obama's response to incoming missiles from camp McCain is to bat them away. His strategists believe the hotter John McCain, gets the cooler Obama seems.

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: I can take four more weeks of John McCain's attacks but the American people can't take four more years of John McCain's Bush policies.

CROWLEY: A top leads in the national polls in nearly every battleground state Obama has no need to mix it up with McCain or address the sharp charges of Sarah Palin.

Besides that's what Joe Biden is for. An aide calls him the defender-in-chief. And today, Biden proved himself up to the job, calling McCain an angry man who opted out of intellectually honest policy discussion to change the subject.

SEN. JOE BIDEN, VICE PRESIDENTIAL CANDIDATE: There's one other option. The one they had chosen is to appeal the fear with a veiled question, who is the real Barack Obama?

Ladies and gentlemen, to have a vice presidential candidate raise the most outrageous inferences, the ones that John McCain's campaign is condoning, is simply wrong.

CROWLEY: An aide to Biden says he's talking about Palin linking Obama to an acquaintance, '60s radical-turned-Chicago professor, William Ayers, co-founder of a group blamed for a series of bombings on the Vietnam War era.

On ABC's "Good Morning America" Biden linked Palin with anecdotal stories of incendiary reaction from some in her crowds. (BEGIN VIDEO CLIP)

BIDEN: And I mean some of the stuff she is saying about Barack Obama and the stuff that people are yelling from the crowd that if she hears it she should be at least saying, "Whoa, whoa, whoa. That's overboard."

I mean, this is volatile stuff and it's -- I just thought we were kind of beyond this place that it seems to be going.

(END VIDEO CLIP)

CROWLEY: But even Biden's responses are somewhat muted, a reflection of the Obama campaign's belief that McCain isn't gaining any traction.

(END VIDEOTAPE)

COOPER: Do you hear from anyone in the Obama camp suggesting that this is racism because there is that allegation out there?

CROWLEY: I don't hear that from anyone inside the campaign.

They say, listen, this is about changing the subject. That's how they're approaching it. And honestly, Anderson, every time I said what specifically is Biden talking about, because there was accusations plural, some of the stuff that she is saying, it all gets down to William Ayers. They didn't cite any other thing that she is saying as something that's bothered them.

So it is all about Ayers and Palin's saying like what is his relationship with this man? That kind of thing, so that seems to be the sole thing that is bothering the Obama campaign at this point.

COOPER: All right, Candy thanks.

Coming up, new polling numbers; state by state. John King's at the magic map and walking us through the new numbers and what they mean for Barack Obama.

And later, you're bailing them out and they are spending your money on facials and pedicures for their sales people at a cushy resort and spa. The latest outrage and the brain trust executives at AIG.

And who is really to blame for this financial fiasco. Tonight we start naming names. The ten most wanted culprits of the collapse. You should know who they are and what they have cost you.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: There's an energy bill on the floor of the senate loaded down with goodies, billions for the oil companies and it was sponsored by Bush and Cheney. You know who voted for it? You might never know, that one. Know who voted against it? Me.

(END VIDEO CLIP)

COOPER: John McCain's now famous line from the debate last night, a lot of people talking about it, some taking umbrage, others, rising to John McCain's defense. So exactly did he mean? It's certainly open to discussions, let's "Dig Deeper" on the tone and tenor this campaign is now taking.

We're joined by CNN's senior political analyst and former presidential adviser, Republicans and Democrats David Gergen, and radio talk show host, Joe Madison and Mary Frances Berry, former Chairwoman of the U.S. Civil Rights Commission.

Joe, Michelle Obama was on Larry King earlier tonight was asked about that very comment that we've just heard from Senator McCain. And let's listen to what she said.

(BEGIN VIDEO CLIP)

L. KING: Do you take offense to "that one?"

M. OBAMA: No. No. I mean --

L. KING: People are talking about it.

M. OBAMA: Well, I think there are two conversations that have been going on throughout this whole election. There's the conversation that has been happening with the pundits and the polls and then there's the conversation that's been happening on the ground. And the folks out there right now are scared. They're nervous about the economy. They don't care about the sort of back and forth between the candidates.

(END VIDEO CLIP)

COOPER: Joe you hear a lot from the folks out there on your radio program. Did they read anything to John McCain's remarks?

JOE MADISON, RADIO TALK SHOW HOST: Well, I think Michelle Obama has proven that she's not an angry black woman. Two, I think that she is absolutely right. People are more concerned about the economy.

And what I heard on my show was in part they are code words being used that African-Americans in this country are very sensitive to and their antennas go up. But what I heard mostly, Anderson, was that it was condescending.

COOPER: What code words do people believe they are hearing?

MADISON: Oh, let's take this whole thing that he's a Muslim; this use of his middle name "Hussein." I mean, folks understand what they are attempting to do.

But you know what? These people who have that kind of mentality quite candidly don't count that much in this election. Because we are living in a post-colonial society, a post-apartheid society, a post- segregation society and you have an entire generation that does not want to go back in time.

COOPER: Huge generational shift.

David, "The New York Times" published a scathing editorial about the McCain campaign today and saying in part "They have gone far beyond the usual fare of quotes taken out of context and distortions of an opponent's record into the dark territory of race baiting and xenophobia."

McCain campaign says, "Look this is just standard fair from 'The New York Times' what else do you expect?" Do you think the "Times" is on to something?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think "The New York Times" has a serious point and it should be considered.

The good news, Anderson, is that over the past 24 hours or so there have been very encouraging signs from John McCain himself.

He did not bring out Bill Ayers last night. He has put Reverend Wright off limits for his campaign. And after the debate last night his top aides told "Politico" that he did not intend to bring up Bill Ayers. He wasn't going to go down that road. And he wanted to keep Reverend Wright off the -- out of the campaign.

The issue has been what's been going on at Sarah Palin's rallies. That's where the real trouble is because it's the combination of her rhetoric, which is whipping up these crowds, and these ugly scenes that have occurred in these rallies.

And when Obama's name has been used it not only brought these boos, but we've had reports now of somebody yelling out "terrorist," about Obama. And at another rally somebody yelling out "kill him, kill him." At another rally people shouting racial epitaphs --

COOPER: You can't control though what people say in a crowd though, can you, David?

GERGEN: Yes, you can.

MADISON: Oh yes.

GERGEN: And it is up to Sarah Palin at her rally and for John McCain to tell her if she doesn't start doing this, to stop right there and take issue with what's been said and say this has no place in our campaign and we do not condone this and please let's show more respect.

COOPER: That's a fair point.

GERGEN: I think it's up to her.

COOPER: We're going to talk more about this with Mary Frances Berry and Joe Madison and David Gergen. Mary, I'll get to you in just a moment and we've got to take a quick commercial break.

Barack Obama is ahead in most polls. Could the polls be wrong, could concerns about race play a role on how people are responding once they are in the voting booth or to pollsters?

We're "Digging Deeper" into race and politics.

Also tonight, the latest outrage from AIG; they get another bailout but after the last one -- get this -- they spent hundreds of thousands at a luxury resort. Senator Obama talked about it last night.

(BEGIN VIDEO CLIP)

B. OBAMA: We just found out that AIG, a company that got a bailout, just a week after they got help went on a $400,000 junket. And I tell you what, the Treasury should demand that money back and those executives should be fired.

(END VIDEO CLIP)

COOPER: And do you recognize this guy? Well, you are paying for his mistakes to the tune of tens of billions of dollars down the drain in the financial collapse. So who is he, who are the executives, the companies, the lawmakers who got us into this mess? And who is to blame?

Our new series "Ten Most Wanted: The Culprits of the Collapse." We're naming names and "Keeping them Honest."

We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SCOTT: On November 4th, let's leave Barack Hussein Obama wondering what happened.

(END VIDEO CLIP)

COOPER: That was Sheriff Mike Scott of Lee County, Florida, on Monday. Tonight he is under County and Federal investigation for participating in a political rally while in uniform.

Today in Pennsylvania the Lee High County GOP chairman also used Obama's middle name in a McCain event.

Back with our panel, David Gergen, Joe Madison, and Mary Frances Berry.

Mary, what about that? Is it inappropriate -- I mean the McCain says look, they don't condone including Senator Obama's middle name in this kind of introductions and yet it keeps happening.

MARY FRANCES BERRY, FORMER CIVIL RIGHTS COMMISSION CHAIRWOMAN: Well, it is his middle name. But clearly they want people to think about whether is he a Muslim or is he somehow strange. But if he is President of the United States we're going to call him Barack Hussein Obama just like we say William Jefferson Clinton or George Herbert Walker Bush.

But I wanted to say was that I don't think it's racist to talk about Jim Ayers. I think if Obama were a white guy --

COOPER: Bill Ayers.

BERRY: Bill Ayers. If Obama were a white guy, McCain at this point where he's losing in the election and Republicans are tossing him over the side and giving up on him would be using everything he could or let his surrogates use everything they could.

COOPER: So this notion of code words you don't buy?

BERRY: Well, I don't buy that that's racist. I mean, Ayers is a white guy. And what is racist about that? And there is a kernel of truth in it. it was "The New York Times" itself, although they have the editorial, they were the ones who put the front page story out that said that Obama was trying to downplay his relationship with Ayers. So they gave a little credibility to him.

But in every election that I've watched, when it is hotly contested like this, down near the end everybody starts throwing mud in one direction or the other. The most mud is thrown by the person who is behind. It doesn't surprise me he is doing it.

COOPER: Joe, the Obama campaign isn't free of blame when it comes to this increasing negative campaign, the McCain folks point out. They have run some pretty downright deceptive ads linking John McCain to comments that Rush Limbaugh made and others. What happened to staying above the fray? Do you think this is just kind of the normal run of a campaign? Or are you saying what's going on now is something different?

JOE MADISON, RADIO TALK SHOW HOST: Oh, no. This is the normal run of the campaign. I agree with Mary Francis Berry. We are going to see this for the next 27 days. I think the more you see, the more you turn people off on this one.

I've got to tell you, if they keep at this with Obama they're going to prove that he has the temperament to be a leader, because the one thing about Obama, there's one word that everybody uses. He's cool.

COOPER: David, do you buy -- Candy in her piece was saying that the Obama campaign kind of is trying to just, or Obama is saying he is trying to rise above this. Does it make him look more presidential or do they risk being too aloof, too cool that they're not responding?

GERGEN: I thought it was smart tonight for Michelle Obama on Larry King to be dismissive just as Joe Biden was this morning about that comment last night about "that one" and not take it too seriously. I think Obama does need to avoid trying to get down in the mud with McCain. I think the coolness is really translating in my mind to steadiness.

Again, I think we should give credit to John McCain for not going down this road himself last night in the debate. And for making it clear he does not want to go down the road in the next few days.

What I do think he has to do is to come forward. He didn't explain that home mortgage plan at all last night. It was one of the few innovations he's had; $300 billion, a price tag on that plan. I think he needs to take his campaign off the road, meet with the best economic minds in the country who support him and come out with a serious comprehensive plan for the future of the economy before the debate next week. Come out with this before the debate.

COOPER: We've got to leave it there. I'm sorry, Joe. We are out of time. We will have you on again this week.

Joe Madison, Mary Frances Berry, thanks. David Gergen as well.

Still ahead, Michelle Obama in her own words. Her thoughts on race and politics, what her husband doesn't know and what she thinks of Hillary Clinton. We'll have that tonight.

Right now, the numbers are working in Obama's favor. John King is at the magic map.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: You know the math, it takes 270 to win, Obama we now project leading in states with 264 electoral votes, McCain leading in states with only 174. Translation, a menu of options and a broad menu of options for Barack Obama to get to the magic number of 270.

COOPER: More from John King and the magic map coming up. That's next on "360."

(COMMERCIAL BREAK)

COOPER: One week from tonight, Barack Obama and John McCain face off for their third and final debate. A lot can happen of course between now and then? But where does the battle stand right now.

Let's look at the latest numbers. A new CNN national poll of polls, survey of a lot of polls, shows that Obama leads McCain on likely voters 48 percent to 44 percent, eight percent are undecided. And frankly, they'll probably decide the outcome next month.

As for last night's debate, CNN Opinion Research Poll has Obama the overwhelming winner, 54 percent said he did the best job, McCain 30 percent. Most of the post debate polls are in Obama's favor but it's unlikely the debate itself was a game changer.

Let's see where the electoral map stands now state by state. John King has a look across the board.

KING: Anderson, just one more presidential debate on the schedule and just a little more than three weeks left for the candidates to campaign and the electoral college map is leaning lopsidedly in favor of Barack Obama and the Democrats.

You know the math, it takes 270 to win. Obama we now project leading in states with 264 electoral votes, McCain leading in states with only 174. Translation, a menu of options and a broad menu of options for Barack Obama to get to the magic number of 270.

He could, for example, win just the state of Florida where Joe Biden was campaigning today. If that one goes blue the Democrats win the White House assuming nothing else changes. But let's assume that one stays red. George W. Bush carried it twice.

Where else could Barack Obama go? Well, he is doing very well at the moment out in the state of Colorado. Again, that was a Bush state four years ago. If Obama wins that and nothing else changes he wins the White House.

So maybe it is better to look at the map from the other perspective. Come back to where we begin today, how does John McCain get to 270? Well, without a doubt, he has to hold Florida's 27 electoral votes. He has to put North Carolina back in the Republican column, must hold on to Virginia and its 13 electoral votes, keep that one red. Ohio had 20 electoral votes; a must win for the Republicans.

Even if he gets all of those, throw in the Midwestern battleground of Missouri, that would just get McCain back in the race there. He would then have to run the board. Win the state of Colorado and the state of Nevada and he would just get over the 270 mark.

So if you look at the tossup still on the board, seven states all carried by George W. Bush. If nothing else changed Barack Obama would need just one and he wins the White House -- Anderson.

COOPER: All right, John King, thanks.

Up next, we are naming names. Our new investigation the ten most wanted culprits of the collapse. Our first member of the rogue's gallery is that guy. Recognize him? Do you know his name?

You should you are paying for his mistakes to the tune of tens of billions of dollars. And the tab just keeps getting bigger. We'll tell you who he is.

Plus Michelle Obama in her own words talking about the race factor in the voting booth. Plus what she says Barack Obama does not know when "360" continues.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: Now is not the time to fix the blame. It's time to fix the problem.

I would hope that all our leaders, all of them, can put aside short-term political goals and do what's in the best interest of the American people.

(END VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: One of the messages that I have to Congress is get this done. Democrats, Republicans, step up to the plate. Get it done.

(END VIDEO CLIP)

COOPER: Both candidates have said that now is not the time to talk about blame for the financial collapse. Frankly that is what politicians always say. They said it in the wake of hurricane Katrina. When attention passes no one is ever, ever held accountable.

The truth is now is the time to talk about blame now the world is focusing on this. People deserve to know how we got into this mess. We're talking about naming names and holding these culprits accountable.

For the next two weeks, every night we are going to be naming names. The ten most wanted culprits of the collapse. We start tonight.

For sheer greed and gall, it is hard to beat the executives of AIG, the nation's largest private insurance company now on its second bailout and it is costing you $38 billion.

Now what's worse, we now know after they got their first $84 billion bailout, AIG executives spent hundreds of thousands on fancy hotels and spa treatments for some of the company's biggest earners.

Joe Johns explains why they go on our list of the ten most wanted culprits of the collapse.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice over): First, insurance giant AIG gets an $85 billion lifeline from the taxpayer and then today it comes back for more; another $38 billion. And now word of what the company was up to as it blew through the first installment. Get ready for this.

As the ink was still drying on bailout number on, AIG was treating 100 independent insurance agents some of the company's top earners, to the glamorous life at the ultra luxury St. Regis Resort in Southern California.

The bill tells the story: $140,000 for hotel rooms, $147,000 for banquets, $23,000 for the spa. All told the bill came to a whopping $443,343.71. Needless to say, from Capitol Hill to the campaign trail to the White House, no one was happy.

REP. ELIJAH CUMMINGS (D) MARYLAND: They were getting their manicures, their facials, their pedicures and their massages.

OBAMA: And I tell you what, the Treasury should demand that money back and those executives should be fired.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: It is pretty despicable.

JOHNS: AIG says the event wasn't for company executives but a reward for independent agents who sold AIG products.

NICHOLAS ASHOOH, AIG SPOKESMAN: It is a way of rewarding people who have gone out and done a good job of selling our product.

JOHNS: But he admits it didn't look good.

ASHOOH: You've got to recognize this has been a very entrepreneurial company for a long time and that mindset just isn't at work. People are certainly now very sensitized to the fact that even things that we have done that are good operating procedures can have perception problems.

JOHNS: Perception problems? The problem is a lot bigger than that.

AIG has become a symbol of the financial collapse because it gambled billions of dollars on what turned out to be bad mortgages without the collateral to make good when business went bad. In fact, AIG once boasted it pioneered some of the exotic investments that have now brought down much of Wall Street and is now dragging down the global economy.

Now the taxpayer is on the hook for $120 billion for one company's bad bet. And that's why AIG is one of our ten most wanted culprits of the collapse.

(END VIDEOTAPE)

COOPER: There's a lot of executives at AIG who bear a burden of blame. But in particular we are focusing tonight and we're going to add the name of Joe Cassano to our ten most wanted list.

Joe Johns, who is Joe Cassano and what did he do?

JOHNS: He is one of the guys who ramped up the swap deals that have caused so many problems for AIG. He was the guy who ran the Financial Products Department for that company. And when he walked away, which was earlier this year, they started paying him something like $1 million a month. They really got hammered for that on Capitol Hill just yesterday.

The company says we had to have him on because we wanted to wind down the business. And he was the guy with the institutional memory. Still a lot of questions about AIG's judgment when it comes to Joe Cassano.

COOPER: Well, Joe Cassano is on our ten most wanted culprits.

Joe thanks very much. We are going to continue looking for the next two weeks, adding names to the list. Tomorrow night another name, another photo on the list.

We've got a lot more ahead tonight, including the brutal dollar amount. What has been lost in retirement accounts these past few months?

Plus the man who's accused of hacking into Governor Sarah Palin's e-mail account turned himself in to police. What he faces, coming up.

And Michelle Obama in her own words.

(BEGIN VIDEO CLIP)

LARRY KING, CNN HOST: Speaking of Hillary, are you happy with the way she is supporting your husband?

MICHELLE OBAMA, WIFE OF BARACK OBAMA: She has been phenomenal from the minute after this was done, right, she has always been just cordial and open.

I've called her. I've talked to her. She's given me advice about the kids. We've talked at length about this kind of stuff, how you feel, how you react. She has been amazing. She is a real pro and a woman with character.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CINDY MCCAIN, WIFE OF JOHN MCCAIN: This race has become about serious differences between these two candidates. How do you think my husband did last night?

I think he was great. And he should be the next president of the United States.

(END VIDEO CLIP)

COOPER: Cindy McCain at the McCain-Palin rally in Bethlehem, Pennsylvania today, praising her husband's performance in last night's debate although as we showed you, most major polls have shown people felt Obama won.

We also heard from the other potential first lady today, Michelle Obama. She sat down with Larry King right here in New York. Here's Michelle Obama in her own words.

(BEGIN VIDEOTAPE)

L. KING: how do you react when people talk about the Tom Bradley effect? Tom Bradley was mayor of Los Angeles, he ran for governor of California. The polls had him 65 percent, a sweep, it's over.

I think he was practicing his acceptance speech and he lost. And the Bradley factor has become people were afraid to say I'm against a black and then voted against him. Do you fear that here, an anti- black vote?

M. OBAMA: People talk about it all the time, but it's theoretical in the case of this election, because --

L. KING: But you have a past case to look at.

M. OBAMA: -- but also look where we are, Larry. Barack Obama is the Democratic nominee. If there was going to be a Bradley effect, or if it was going to be in play, Barack wouldn't be the nominee. We have to focus on the country as it is.

That was several decades ago and I think that there's been growth in movement. Now, there will be people who will never vote for Barack Obama. But there will be people who will never vote for John McCain either. I think right now people are so focused on what is the fate of our country, not just here domestically but internationally.

And I just believe that the issues are going to weigh in people's hearts more so as they go into the voting booths this time around than anything else.

L. KING: Your husband gave you a shot out near the end of last night's debate in response to what moderator, Tom Brokaw described as a Zen-like Internet question from a woman in New Hampshire.

Let's watch.

(BEGIN VIDEO CLIP)

TOM BROKAW, NBC ANCHOR: What don't you know and how will you learn it? Senator Obama, you get first crack at that.

B. OBAMA: My wife Michelle is there and she could give you a much longer list than I do. And most of the time I learned it by asking her.

(END VIDEO CLIP)

L. KING: How did you react to that?

M. OBAMA: I thought he's so cute. And then I started going down my list.

L. KING: What doesn't he know?

M. OBAMA: You know, whatever he doesn't know, the beauty is, he knows he doesn't know it and he's not afraid to reach out to people who are smarter, more prepared. I think his vice presidential pick is an indication of how Barack thinks. Barack looked around the room and he got somebody who was smart, who was an equal, who would be his partner. Who would challenge him.

L. KING: Had more experienced than him.

M. OBAMA: In some areas, absolutely. He surrounds himself with experienced people because he knows what he doesn't know. (END VIDEOTAPE)

COOPER: Michelle Obama in her own words.

Still to come, the very strange story of a naked man in the palace moat. Good lord. It's our "Shot of the Day."

(COMMERCIAL BREAK)

COOPER: The "Shot of the Day" is coming up. A naked guy leads police on a wild chase. We'll have the full skinny in a moment. Yikes.

First, Erica Hill joins us with the "360" News and Business Bulletin -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, a 20-year-old Tennessee man indicted today for hacking into Governor Sarah Palin's personal e- mail count. David Kernell who turned himself in to authorities now faces a maximum of five years in prison and a $250,000 fine.

$2 trillion in retirement savings have been lost in the past 15 months; that grim news coming today from Congress' top budget analyst who also says the loss is causing people to consider delaying their retirement.

In Portland, Oregon, a housing crisis of a different kind; a mudslide there sends a home into oblivion and then it also forced the evacuation of about 12 others. Luckily, no one was injured.

And 373 young penguins back home tonight after a more than 1,500 mile flight aboard a Brazilian cargo plane. Why? Well, it turns out the little guys were searching for food; they ended up too far north in Brazil. They were emaciated when they were found, but as one of the vets responsible for their rescue put it, the penguins now have a second chance at life.

I wish you could have seen AC's little --

COOPER: I liked it when the penguins got all excited when they hit the water again.

HILL: I love the penguins. They're just so cute.

COOPER: Time now for our "Beat 360" winners. It is our daily challenge to viewers to come up with a caption for a photo better than the one we come up with. I said twitter and I was thinking of Rick Sanchez.

HILL: Oh, the Ricker.

COOPER: Yes, well you know all about that twitter. He twits, he twitters. Tonight's picture, President Bush speaking with business leaders in Virginia yesterday. Our staff winner, Steve said, "See the economy is like a big ball and I just dropped it." HILL: I think it's good.

COOPER: Baby cry. Our viewer winner is Judy who came up with this: "Those guys from AIG got ripped off. My manicure only cost $2,000. Maybe they got polish."

HILL: Not bad Judy, I got to say though. I think Steve won the "Beat 360" tonight.

COOPER: Oh, really. Yes, I agree with you on that one.

But Judy, you did "Beat 360." You get a T-shirt, it's on the way.

You can check out all the entries we've received in our blog and play along tomorrow, why don't you, by going to ac360.com. You know what that is? That's our web site.

Time now for the "Shot of the Day." The most recent buzzer in Japan's imperial palace wasn't about politics, it was about the man in the moat who had a bit of a swim in his birthday suit before climbing and chasing police with a pole.

Then he jumped back into the water, did a few more laps to the other side of the moat, climbed out again and the chase is on again. And it took police an hour and a half to catch the man who they said was British but police had no explanation for his bizarre stunt.

HILL: It's crazy, I think at one point somebody said, thanks for clearing that up.

COOPER: What? I don't know what you're talking about.

HILL: I don't either. I'm just happy you clarified what that was there.

COOPER: He was attacking them, the police, and then jumped back in the moat.

HILL: Somebody said he went in after a bag. Maybe it had his clothes in it.

COOPER: Wow. Sorry? What is that, do they have a special equipment to deal with naked people?

HILL: It's a shield. You got to be careful of the naked moat people. You must be prepared.

COOPER: And he's back in the moat. Wow. Crazy. Wow.

HILL: It's just wrong on so many levels.

COOPER: It's hard being a police officer. You got to deal with this.

Erica, a programming note. Tomorrow on "American Morning," we have got a special announcement, we're going to be revealing CNN Hero's Top Ten. It's your chance to vote and make one of them CNN's Hero of the Year.

Be sure to join us tomorrow on "AMERICAN MORNING" for all the details.

That does it for this edition of "360." Thanks for watching.

"LARRY KING" starts right now.

Have a great night and I'll see you tomorrow night.

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