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Obama Speaks to Indiana Voters; Fed Works with Key International Allies to Address Crisis; Fed Makes Emergency Rate Kate

Aired October 08, 2008 - 13:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Cue the music. Barack Obama there in Indianapolis riling up all his supporters. Meanwhile, we're going to hear from McCain and Palin. They will be in Bethlehem, Pennsylvania. Once again, Barack Obama and Joe Biden, hearing from them in Indianapolis.
We're going to start this hour of CNN NEWSROOM right now.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Unprecedented, urgent, united. Rate cuts on three continents. The Fed and its overseas allies try to make borrowers, lenders, investors an offer they can't refuse.

Can one of these guys fix things? People who watched the second presidential face-off seem to think so. We'll hear from voters, pollsters, spinners and the candidates themselves.

And we know times are tough, but a million dollar home for $50? It's a gamble for the sellers, but they're not crazy. You'll meet them, live, this hour.

(END VIDEOTAPE)

PHILLIPS: Hello, everyone. I'm Kyra Phillips live at the CNN World Headquarters in Atlanta. And you're live in the CNN NEWSROOM.

OK. First the good economic news and how long has it been since you've heard that? If you have credit-card debt, home equity debt, it's likely to start costing you less, and that's because the Fed, in concert with the central banks of Britain, Europe, Canada, Sweden, Switzerland and China cut interest rates in yet another bid to free up credit.

Well, the Fed cut its all-important federal funds rate half a percentage point, to 1.5 percent. And Britain's not stopping there. It, too, is launching a bailout of faltering banks and lenders, taking ownership stakes in return.

Overseas stocks went through the shredder again, though banks' shares there soared in London. Japan's Nikkei suffered its worse one- day plunge since the crash of '87. Wall Street, where the Dow has given up almost 900 points just this week, can't make up its mind today. Right now Dow Industrials are down 27 points.

Well, Susan Lisovicz is keeping watch on stocks for us. Charles Hodson is in London with what's happening overseas. Ali Velshi is cutting through all the money-speak to explain what's actually going on with the economy. And Gerri Willis is here to help us with any personal money issues and worries that you might have. And Christine Romans is in New York.

Christine, what exactly did the Fed do and what does it mean for all of us?

CHRISTINE ROMANS, CNN CORRESPONDENT: This was an emergency rate cut: a half a percentage point cut, in concert with all those other banks. And that's the key part of this. This global coordinated move was meant to send a sign out there that the world central bankers, Kyra, are on the case. They're going to do whatever it takes to try to restore confidence into the money system.

Now, one of the things they said in their statements this morning, they talked about it, intensification, a recent intensification of the financial crisis. They're admitting that things are getting worse, and they're stepping in to do whatever they can.

They've done so much. I mean, it's incredible. The British banking authorities overnight also said that they're stepping in with this huge bailout package. And Charles will have more on that. But one after another, we're seeing global central bankers and governments doing everything they can to try to put this fire out and try to restore confidence.

And that's, I guess, the best way to put it. I mean, they want to return confidence to the system so that banks will lend to each other so that good companies can get credit, so that people can get credit and so the oxygen of the economy can continue to flow.

You know, if it doesn't what does it mean for people? I mean, it's just not good to have more job losses. It's just not good to have people not able to borrow money when they need to, to expand their business. It's just -- there's a lot of dislocation happening right now in the financial markets, and they're worried what that's going to mean for the economy. That's not good for anybody, Kyra.

PHILLIPS: And how about thinking about the future? Ali Velshi -- V. Money as he likes to call himself -- tell me about what this is going to do for my 401(k)?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Look, it's taken a big piece out of your 401(k). We know two things. One is the value of 401(k)s has dropped dramatically recently. And, two, we know that people are taking their money out of their 401(k)s right now.

Now, what we looking for before this interest rate cut was something that we call in the business world capitulation. I'm sorry to introduce words like that. But what that means is that's the term that describes people bailing out of the stock market, letting their stocks go at any price, and then the level that the market falls to is thought of as a bottom, and that's when investors come back in and start buying stocks. Now, we were sort of expecting that to come soon, and then the Fed got in here with this interest rate cut, which some people say isn't really going to change the world. Because the problem wasn't that interest rates were too high; it's that people aren't lending to each other.

So now, the way this interest rate cut affects you is that it takes the prime down from 5 percent to 4.5 percent. And if you have loans that are tied to prime rate, that makes it a little cheaper. I don't know, Kyra. I don't think that's going to send America out shopping or cause businesses to make big expansion decisions.

But the bottom line is, it may have delayed us getting to bottom of this market. Now, at some point we will get to the bottom of this market, and those of you who stayed in, your 401(k) should start to see the benefit of it. Those of you who are not invested might want to take that opportunity to start getting in. But that's where we are now.

This -- Christine called this a concerted global effort, a coordinated effort. It's a sign to say we're on the case. It may not really be the tool that we needed, an interest rate cut, but this combined with the bailout package, combined with yesterday's decision by the Federal Reserve to buy loans, to give loans directly to U.S. businesses, over some time should come together, start to ease the credit -- the credit crisis and start to get people spending again. One hopes. That's what we're looking forward to at the moment.

But as you can see from this Dow, it's up, down. It's almost not worth paying attention entirely to that. It's only part of the story.

PHILLIPS: All right. You mentioned the numbers. Susan Lisovicz, let's go to you at the New York Stock Exchange.

Why aren't we seeing a rally? I mean, you made the point that, I mean, the market wants to see rate cuts, right? So we should be seeing a rally with the numbers?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, there's a couple things, Kyra. You're absolutely right. Usually you'd see big rebound in financial stocks, for instance, who'd benefit from this. And they're mixed at best in this very volatile session.

I mean, basically, we've been seeing unprecedented moves every day since Friday. The Federal Reserve has been using bullets every single day, which points to just how dire the situation is.

Now, in terms of mortgages, for instance, it's access to money, as Ali points out. It's not that money isn't cheap enough; it's the access to money. It's going to take a while for that to filter through.

Just yesterday the Bank of America, Bank of America's CEO, was quoted as saying during a conference call with analysts that lending conditions were a damned disaster. That's his quote, saying, "We're trying to make good loans, every good loan we can, but it's not going to be pretty for a while."

In the meantime, what's happening? Well, we're getting corporate earnings reports, among other things. Alcoa makes aluminum, used in everything from soda cans to airplanes. It reported its quarterly profit is down more than 50 percent. Perhaps more importantly, it's halting major capital projects in the face of these uncertain markets.

B of A, which I was just referring to, saying that consumers are having trouble repaying their loans. It's trying to raise $10 billion. And B of A, of course, one of the stronger financial companies.

Also, we're hearing from retailers for the month of September. One retail analyst says the financial crisis is both clearly hurting an already soft spending environment.

So you've got all of these statistics coming as we have these unprecedented moves. And we don't have any clear signs that -- yet that the credit crunch has unfrozen. It's not going to happen overnight. In the meantime, you get grim statistics like that, and the market gyrates wildly. And that's what's we're going through today, Kyra.

PHILLIPS: All right. A little less grim. Gerri Willis, I took your advice. I actually went and sat down with my banker yesterday, talking about everything: my money, my savings, my stocks, my mortgage.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Good.

PHILLIPS: And it was interesting -- yes -- and it wasn't nearly as bad as I thought it was going to be, because my bank really hasn't gotten into any trouble, which I found interesting. They said, "We didn't do subprime mortgage. We didn't take a lot of risks like other banks did."

So it leads me to my question. Some banks are doing much better than others, right? So it depends on where you bank?

WILLIS: Some banks are doing better than others. There's no doubt about that. But you have to keep in mind here, Kyra, that there are going to be more bank failures out there. So just like you did yesterday, you went to your bank, you figured out, hey, what do I really own, where is it? That's the first thing that consumers need to do.

Secondly, they need to make sure that they have the kind of coverages, the kinds of protection that the federal government takes care of. The FDIC coverage. Is your individual accounts under $250,000? That's where the federal guarantee kicks in.

And finally, you need to understand for your retirement savings, for what's in the market, how is it allocated? What am I invested in? Hey, take a look at those mutual funds. Understand what that money is in. And so at the end of the day, no one's going to keep you from losing money in your 401(k) but you. It's your responsibility to understand it and to manage it.

I have to tell you, Kyra, I've been looking at e-mail from our viewers for days now. And they are really anxious, nervous, worried about the market. They're all focused on that number in the right- hand corner of your screen there, the 9,474.

I say it's time to focus on your own numbers. Break away. Take a breath and get away from all this anxiety.

PHILLIPS: Well, that sounds so good.

All right. Let's go overseas to London. A lot of anxiety there. Charles Hodson covering that for us.

Charles, what do you think? How are the rescue plans playing with British taxpayers?

CHARLES HODSON, CNN CORRESPONDENT: Well, British taxpayers, you know, the poor old British taxpayer woke up to another $1,700 bill this morning. Eighty-seven billion dollars is the amount of money that the UK government here is going to pump into the banking sector, essentially shoring up the banks. To get technical, they're going to be boosting the T-O-1 (ph) capital of eight leading banks that have started to have a few difficulties. And that should essentially unfreeze them, get them money again.

But the important thing is that the government is going to part nationalize those banks. And that's one of the things they're promising, very much in the way as Henry Paulson and so on are promising over there. They're saying in the end, the banks are going to recover and in the end the taxpayer is going to make some money back from all this.

But I think, you know, we're in very much the same position as you are. We have very much the same situation with our economy. We may be used to paying a lot of taxes, but we still feel that we've got a lot of big bills out there. A lot of commodities are more expensive. Gas is costing us more. Mortgages are costing us more. And you know, people are getting fed up with -- again, it's the news, is ever so familiar to you over there in the United States. Every time they're cutting interest rates, a lot of people say, "How come my mortgage bill doesn't go down month after month?"

Having said all of that, I would say that -- you know, that we are looking possibly towards the bottom. We may be bumping along towards the bottom of this crisis.

And certainly the fact that, as was mentioned earlier, this is a concerted effort by everyone. The Fed, the Bank of England, the European Central Bank, Bank of China, all of those other banks, Canada and so on, that is really encouraging. And I think there is a feeling here that maybe we are getting -- it's not the time to get into the market, make a big hero of yourself. But we could see a bounce. And when that comes that is going to be a very big, strong one according to the experts, Kyra.

PHILLIPS: Charles Hodson, live in London. Thanks so much with the world perspective.

Gerri Willis, Susan Lisovicz, Ali Velshi, Christine Romans, the best money team on television. Thank you all so much.

And you know, we were going through all the pictures of various people from you, the taxpayer, to traders on the floor, and we found this picture. Does that put it all in perspective or what? It was a trader in Indonesia. Feeling it all the way from here in Atlanta, Georgia, to overseas.

All this money drama stressing you out? Well, try not to bottle it up. Tell us all about it. Here's our e-mail address: cnnnewsroom@cnn.com. Tell us how it's affecting you. We want to share your stories, actually, with a therapist that we've got joining us live next hour. Maybe she can help you find a calm, happy place to be while we're all feeling the anxiety.

Well, they've got a million-dollar home. Now they need to sell it. We're going to meet a Maryland couple who decided to raffle off their expensive real estate instead of taking the conventional approach.

Tough times all around. The financial mess is taking a toll all across America. We're going to hear what some of our iReporters are saying about its impact on their lives.

(COMMERCIAL BREAK)

PHILLIPS: Nothing like a little Keith Urban there at this event in Bethlehem, Pennsylvania. Waiting for John McCain and Sarah Palin to step up to the mikes there and rally their supporters. We heard from Obama and Biden last hour. We will take this event live as soon as they step up.

Well, if you can't sell your house in this horrific market, how about raffling it? Desperate times creating some desperate measures for a Maryland couple. We're going to talk with them about their game of chance.

But first, "Fortune" magazine is out with its list of the 50 most powerful women in business. One of the newcomers on the list is a woman known as someone who moves the markets. Before we tell you who she is, Fredricka Whitfield gives you a chance to guess.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: When I was growing up I always thought I'd be a veterinarian.

FREDRICKA WHITFIELD, CNN ANCHOR (voice-over): She had a change of plans, but it didn't stop this businesswoman from playing with the big dogs. Taking the financial industry by storm, this analyst is calling it like it is, and investors are all ears. Who is this Wall Street powerhouse? Find out after the break.

(END VIDEO CLIP) (COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

WHITFIELD (voice-over): New to "Fortune" magazine's list of the 50 most powerful women, Meredith Whitney of Oppenheimer and Company comes it at 35. Known as the woman who moves markets ,Whitney first got attention when she predicted Citigroup's troubles back in 2007. A bold move she made alone.

MEREDITH WHITNEY, OPPENHEIMER & CO.: I've made some gutsy calls throughout my career. This one was a big one. I was very confident and I was surprised that I was the only one making it.

WHITFIELD: But far from being concerned. For Whitney, it's just about keeping it real.

(END VIDEO CLIP)

PHILLIPS: 1:31 Eastern Time. Here are some of the stories we're working on in the CNN NEWSROOM.

Another crazy day on Wall Street, with stocks ducking in and out of positive territory in reaction to rate cuts here in the U.S. and central banks overseas. All this triggered by plunging markets across the globe.

Adding more fuel to the crisis, retailers here at home report anemic sales figures for September, an obvious reaction from shoppers worried about the mess on Wall Street.

And we may get more possible solutions in about an hour and a half when the architect of the Wall Street bailout, Treasury Secretary Henry Paulson, holds a news conference. CNN will bring that to you live starting at 3:00 p.m. Eastern Time. While we wait to hear what Secretary Paulson has to say, we're hearing lots from you guys about how you're coping with all this.

Take our i-Reporter Kathleen in New Mexico, she says she's a state worker who has got to live paycheck to paycheck these days. She and her kids cut out a lot of stuff. Some are just those nice extras like going to the movies but they've also had to cancel their renter's insurance. Which was a tough choice, by the way, and also gone, cable TV, their land line phones and the kids' allowances. Still, Kathleen says they're better off than a lot of folks out there and are really working as a team to get through these tough times.

Check out these two handsome guys. Mom Rebecca Stokes sent this picture from Liverpool, New York. Rebecca was laid off just a little while ago and she had to sell her older son's door help pay the bills, and still not all of them are getting paid. Thank you, ladies, for sharing your stories, and keep those I-Reports coming.

And if you're stressing out through all this money madness, we totally understand and want to hear from you. Zip us an e-mail to CNN.com. We're going to share some of your stories with a therapist coming up next hour.

And you heard how some I-Reporters see the financial crisis. Now let's see how two political pros saw last night's debate and how the two candidates did when it comes to money crunch.

Amy Holmes is a CNN political contributor and former speechwriter for Republican Senator Bill Frist and Jamal Simmons worked on Al Gore's presidential campaign, he's an adviser to the Democratic National Committee. I want to see what you guys think about our CNN poll of debate watchers. We asked, who they thought did better and more than half of the independents you guys, we polled, said Obama did better. So does that mean they're going to vote for him? Amy?

AMY HOLMES, CNN CONTRIBUTOR: Well, you know, last night, there were not any pyrotechnics, no huge knockout punches and the candidates really had different tacks. Barack Obama, he needed to stay steady. He is the front-runner, the polls show him ahead. Where John McCain, he had to gain ground. I think McCain took one step towards that last night, but he has many, many steps to go in the 28 days between now and November 4th, and we have a third presidential debate. We have political ads and all those tools in the arsenal for John McCain.

But you know, I agree with the CNN viewers, that last night, Barack Obama, I think he did better.

PHILLIPS: What do you think, Jamal? Fifty four percent of these independents said Obama did better. Do you think that he did and does this necessarily mean the 54 percent of those independents will vote for him?

JAMAL SIMMONS, CNN POLITICAL CONTRIBUTOR: Well, we won't know whether or not they'll vote for him until we get close to election day. A lot of people don't really make up their minds until they get right there to the last weekend right before an election.

But here is what we do know. What we do know is that campaigns and elections are really good on the presidential level of cutting through a lot of the chaff and getting right to who the person who really is that is running for president. And so the one thing we've seen with Barack Obama is they've seen a strong and steady hand, somebody who doesn't get roused very easily. He has a good family that he loves, all that.

But with John McCain, a little more erratic. Picked Sarah Palin without really knowing her, he met her one time before he picked her. He came back out. The first day of the economic crisis, the fundamentals were bad, he canceled his campaign. He went back to D.C. The thing blew up in his face. There is just a little bit of that kind of itchy trigger finger that makes people nervous.

So I think we are cutting through that and you are starting to see a little of that last night even. He called Obama, "that one." He just looked a little bit irritated.

PHILLIPS: Amy, you know what's interesting, you mentioned the attack ads we're going to start seeing 27 days before we vote for a new president, and Candy Crowley was saying to me yesterday that playing nasty does not play well with the voters. So why do the candidates do that? Why do they pull out the attack ads and start pulling out the old alleged scandals from years' past?

HOLMES: You know, attack ads work. And what they can do is frame your opponent and frame him negatively. Look, Barack Obama is still a blank state for slate for a lot of voters. They are projecting their hopes and their dreams onto him but they don't know a whole lot about him, hasn't been on the national scene for very long and John McCain's task then is to draw the contrasts and that John McCain, you know him, you trust him. He's ready to lead. Whereas Barack Obama, who is this guy from Chicago?

So you're going to be seeing a lot of that. Good government folk, people who love politics say, oh, we hate attack ads. The point is, they work. You can look back in election 2000. George Bush was actually surging that weekend before the election. And that's when the Al Gore campaign, they dropped that DUI bomb and George Bush did not have time to respond and the polls started closing and narrowing because people said, who is George Bush? What is this DUI business?

So as much as people throw up their hands and tear out their hair, voters really listen because they want to know who is on the ballot.

If you watched the debate last night, we got this little people meter at the bottom of our screen. And when they started attacking each other it started to dip.

SIMMONS: Yes. Nobody really likes that. Nobody really likes it at all. One thing again getting back to the, this notion that character does count and people get an eye and a sense of a person's character, John McCain and Sarah Palin have been pretty tough on Barack Obama on the stump. And they've been pretty tough on Barack Obama in their ads. But you didn't really see John McCain bring up any of that stuff last night when Barack Obama was sitting there.

He could have very easily said to him, Senator Obama, what's going on with you and this person or that person? Why is this an issue? But he didn't do that when face to face. Instead he talked the economy which we're happy about. Because the economy is certainly the number weren't issue. But you would think somebody who had that much trouble and thought he was that risky, should have said it in person.

PHILLIPS: So Amy, Jamal, can you guys define Joe Sixpack? Anyone? Can you?

SIMMONS: I don't know. I think Joe Sixpack is probably a lot of people who are watching, but also probably a little bit of an overstated stereotype.

PHILLIPS: Amy?

HOLMES: Well, it's hard for me to hear, because the sound came out of my ear, but in terms of frontal attacks right on the stage in front of voters, people don't want to see it. They don't want to know what you have to say about the other guy, they want to know what you have to say to me. What you're going to do for me.

PHILLIPS: Amy Holmes, Jamal Simmons, thanks guys.

SIMMONS: Thank you.

HOLMES: Thank you.

PHILLIPS: Well, he's a war hero, but is he healthy enough to be the next commander in chief? Our Dr. Sanjay Gupta has been looking at the candidates' health. Next we're going to have his report on Senator John McCain.

And money problems got you down? Guess what. Misery doesn't love company but help's on the way. Psychiatrist and best-selling author Gail Saltz is going to join us in the NEWSROOM next hour.

(COMMERCIAL BREAK)

PHILLIPS: Ready for John McCain and Sarah Palin to Bethlehem, Pennsylvania, to step up. We heard from Senator Obama in Indianapolis last hour. We're going to bring you the candidates as soon as they step up to the mike.

How old is too old to be president? Some say it is an issue for Senator John McCain's campaign. Should his age be a factor? According it to a new CNN-Opinion Research poll nearly half of Americans are concerned the Arizona senator might not make it through a first term in good health. Just 19 percent are worried about Barack Obama's health. Are their concerns valid?

Here is CNN chief medical correspondent Dr. Sanjay Gupta.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: When questions come up about his age, 72-year-old John McCain likes to point to his mother Roberta.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: People will judge, will judge by the vigor and the enthusiasm associated with our campaign.

GUPTA: According to actuarial tables, a 72-year-old man can expect to the live another 12 years and McCain has some advantages, like good health care and good genes. Dr. Thomas Perls is an expert on aging.

DR. THOMAS PERLS, BOSTON UNIVERSITY: We found longevity runs very strongly in families. Having a 96-year-old mom who's in pretty good shape definitely bodies well bodes well for him.

GUPTA: The biggest issue for McCain is cancer. Specifically melanoma. This spring I had a rare and somewhat unusual look at Senator McCain's medical records. We're going to be ensconced in this room a period of time. No electronics devices are allowed in. I have my notes, preparing the things I'm looking for and we're going to see what we find.

They gave us three hours to pore through more than 1100 pages. They only covered the last eight years and there was no way to determine what might be missing. That same day in a conference call with reporters John McCain's doctor gave the candidates an unequivocal thumbs up.

DR. JOHN D. ECKSTEIN, MAYO CLINIC: I and my colleagues can find no medical reason or problems that would preclude Senator McCain from fulfilling all the duties and obligations of the president of the United States.

GUPTA: But that didn't silence critics, including fellow senator and Obama supporter Claire McCaskill who says McCain's health is fair game as an issue.

SEN. CLAIRE MCCASKILL, (D) MO: Other people talk about his melanoma, we're talking about a reality here, that we have to face.

GUPTA: Just this month, a liberal activist group, Brave News Films, ran a full-page ad in the "New York Times." this petition signed by more than 2,700 doctors. It calls on McCain to release his medical records to the public. Everyone, not just a few reporters.

DR. WENDY EPSTEIN, PETITION SIGNER: This is a skin cancer that can kill people. And that's what we need to find out. We need to know, did think melanoma spread or didn't it? And that can be only answered by an independent group of dermatic pathologists looking at the slides

GUPTA: McCain's doctors stay didn't spread and the pathology report I saw supports that.

The campaign says it's unacceptable for doctors who haven't examined McCain to second guess his own physicians.

What about Barack Obama? Age 47, he was longtime smoker who quit just last year. But when we asked for his medical record, the campaign only handed out a one-page letter. It does say he's in excellent shape.

Tomorrow, though, we'll look at what we know about Senator Obama's health.

Dr. Sanjay Gupta, CNN reporting.

(END VIDEOTAPE)

PHILLIPS: And this programming reminder. Join our Dr. Sanjay Gupta Saturday and Sunday night for a CNN special investigations unit report, is the next president fit to lead? Airs at 8:00 p.m. and 11:00 Eastern right here on CNN. If you have 50 bucks, it could guess you a million dollar six bedroom home. We're talking with the couple who's selling, next in the NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: A record number of home foreclosures, for sale signs becoming permanent fixtures on the front line and not the best time to put your house on the market. Right? Well, one suburban Maryland couple desperately needs to sell their million dollar home decided instead of trying to find one buyer they'd have better luck finding 31,000 of them. That's right. They're raffling their house. If everything works out they'll be able to pay off the mortgage, downsize to a smaller home and help out a local charity.

Tom and Dianne Walters join me now live from our Washington bureau, Tom, you're a mortgage broker. So probably about now you wish you went to med school. Right?

TOM WALTERS, RAFFLING HOME: Exactly.

PHILLIPS: And Dianne's thinking, honey, why did you go into that business? But -- in all seriousness, how much money did you borrow to work on this house?

T. WALTERS: Well, it's more than just what borrowed. It's what we put into it. Just about everything we have into it. In addition to obtaining a construction loan, we've pretty much tapped all our resources to finish the property. We got into it with the intent of putting in about half a million and to date we put in about three quarters of a million dollars.

PHILLIPS: So Dianne, did you know, at any time say, this might not be a good economy, this may be a little risky or was it at a time where everything looked great? There were no warning signs of anything?

DIANNE WALTERS, RAFFLING HOME: Right. We had thought we actually had passed that point and things were startinh to look a little better, so we were -- we just wanted to build our dream home.

PHILLIPS: Your dream home.

D. WALTERS: Yes.

PHILLIPS: OK. So how did you come up with this raffle idea, Tom?

T. WALTERS: It was done successfully out in western Maryland back in the spring and that kind of spurred the idea. And then looking at the local real estate market, we have had several people right in our current neighborhood having varying degrees of success selling their home the normal way.

A few of them sold right away at the full sales price and others sat for months so rather than risk it we thought let's be a little more proactive and go out there and try to sell it to a bunch of people.

PHILLIPS: OK. So, Dianne, take me through and tell me how it works. I am looking at the Web site here. It is fiftydollarhouse.com, so you logon to the Web site, fiftydollarhouse.com. And tell me what you see and what you do from there?

D. WALTERS: Well you see an explanation, you have several options, you can go to the tour or the rules and then you can click on purchase your ticket now and you can buy with a credit card through the Web site, your ticket for $50, as many as you would like, and that's pretty much how you do it or you can call us and order them. The number is listed in the Web site.

PHILLIPS: In the Web site. OK. How much have you made so far, Tom?

T. WALTERS: We have sold over $100,000 worth of tickets so far.

PHILLIPS: Wow. So you have $100,000 sitting in the bank right now.

T. WALTERS: That is correct.

PHILLIPS: And how long are you going to wait this out before you say, OK, forget it, I have to do something else?

T. WALTERS: Until the very end.

PHILLIPS: Really? You are going to stick it out?

T. WALTERS: We're going to stick it out and things are going well and if they continue to go like they are going, that is not even going to be an issue. We also put the drawing date just after the holidays, and we have, and are expecting quite a big push right around that time if we have enough tickets to sell, because we are limited to the number we can sale.

PHILLIPS: But wait, there's more. Let's talk about the charity, this is We Care and Friends Charity. Dianne, tell me about the charity and why you picked it and how the proceeds and how much of the proceeds will go towards the charity?

D. WALTERS: Well, the charity is called We Care and Friends and we picked this charity, because it not only helps Annapolis local, the community of Annapolis, the children who do special programs and Toys for Tots and meals, and they also have a long-term drug and alcohol rehab program for those who are seeking help, and we picked this charity, and they are great to work with and they get about 10 percent.

PHILLIPS: Wow.

D. WALTERS: Of the overall.

PHILLIPS: Well, I have to tell you not only are you a beautiful couple, but in times when everyone is stressed out and getting divorced and worrying about money, you guys are coming together and coming closer and coming up with a fascinating idea. You have to update us and let us know when you are close so we can plug the Web site and help you out.

D. WALTERS: We didn't say it was easy, though.

PHILLIPS: That is true. Nothing is ever easy, right, Dianne.

D. WALTERS: Absolutely.

PHILLIPS: All right. Tom and Dianne Walters. Thanks so much.

D. WALTERS: Thank you.

PHILLIPS: All right. Let's check in with Jacqui Jeras real quickly with some severe weather going on in Enterprise, Alabama.

Jacqui, what do you have for us?

JACQUI JERAS, CNN METEOROLOGIST: Well, there is unconfirmed reports of a possible tornado touchdown, the National Weather Service did issue a tornado warning about noon local time, and we're getting some reports now that there has been a little damage, some trees down and roofs damaged across parts of the town as well. We are looking into more information with that as we get it and we will continue to bring it along to you, but I also wanted to tell you that the same cell continues to push up to the north and the east and so Dale County is under a tornado warning and this one potentially has a tornado with it, so you need to take it seriously and take cover now.

The whole area has a slight risk of getting some isolated tornadoes or severe weather today, so we are going to continue to track this across Alabama as these storms move over the state line and into Georgia that may be a concern. The storm prediction center is questioning whether or not to issue a watch, but we just wanted you to know of the developing situation, and we will continue to follow it. Kyra?

PHILLIPS: All right, we'll keep track of it with you. Thanks, Jacqui.

Also, we are waiting for John McCain and Sarah Palin to step up to the mikes in Bethlehem, Pennsylvania, getting ready to kick off a rally there. Last hour we heard from Barack Obama and Joe Biden in the last hour, so time to hear from the Republican side this hour. We'll bring it to you live when it happens.

(COMMERCIAL BREAK)

PHILLIPS: Well, there is still tons of confusion and fear over the financial debacle that we are in. But you can take it to the bank, people are also starting to get pretty mad. Check out the sound and the fury courtesy of our Jeanne Moos.

(BEGIN VIDEOTAPE) JEANNE MOOS, CNN CORRESPONDENT (voice-over): Don't just use your fingers to count your losses, it is time for the finger pointing. Why look at your 401(k) statement and scream. When we can scream at each other.

BILL O'REILLY, FOX NEWS HOST: Stop the B.S., here! Stop the crap! Come on you coward. Say the truth.

REP. BARNEY FRANK, (D) MA: What do you mean, coward?

O'REILLY: You blame everybody else!

FRANK: Are you going to let me talk?

MOOS: Financial meltdown has everyone feeling like the guy in "Network" ...

UNIDENTIFIED MALE: I'm as mad as hell.

MOOS: Members of Congress are acting mad as hell as they grill the company execs.

UNIDENTIFIED FEMALE: I think you should be apologizing.

UNIDENTIFIED MALE: It is just so disgusting.

UNIDENTIFIED MALE: Clean up its own dirty cesspool.

MOOS: Make that whirlpool.

REP. ELIJAH CUMMINGS, (D) MD: Listen to, this $23,000 at the hotel spa.

MOOS: A week after AIG was bailed out with $85 million in taxpayer money, the company spent $200,000 on rooms at a luxurious resort. AIG says it was a recognition event for high-performing sales agents who were not even AIG employees.

CUMMINGS: When it comes to pedicures, facials, manicures, the American people are paying for that.

UNIDENTIFIED MALE: I agree.

CUMMINGS: And they are very upset.

MOOS: Regular folks were upset down at Wall Street.

(on camera): Who are you mad as hell at?

UNIDENTIFIED FEMALE: I'm mad as hell at Bush.

MOOS (voice-over): George Washington would be agog at the carnival atmosphere as the Dow plunges.

UNIDENTIFIED MALE: You're all a bunch of whiners, get a second job. MOOS: He is playing Treasury Secretary Hank Paulson as part of a protest against the bailout and the companies' being bailed out.

UNIDENTIFIED FEMALE: I am mad as hell. How do you sleep at night? The truth is we know, on fine French linens, right?

UNIDENTIFIED FEMALE: Taxpayers are the one that are taking it up the (EXPLETIVE DELETED).

MOOS: No wonder Washington's face looks like this on a joke dollar circulating on the Web and then there is the more serious zero dollar handed out by artist Laura Gilbert.

Look, I am mad, I am losing a lot of money, but I don't know who to be mad at.

UNIDENTIFIED FEMALE: Oh, I can tell you.

MOOS: She blames the financial wizards who peddled bad mortgages. As for the zero dollar.

(on camera): What are you going to do with that.

UNIDENTIFIED MALE: Frame it of course, same what that I've been framed.

MOOS (voice-over): We decided to try and spend ours.

Will you give me a soda for a zero dollar?

UNIDENTIFIED MALE: Me?

MOOS (on camera): A hot dog for a zero dollar.

I don't suppose you would give me a fruit shake for zero dollar would you?

UNIDENTIFIED MALE: I would do it for you.

MOOS: Would you?

UNIDENTIFIED MALE: Yes.

MOOS (voice-over): There is nothing like a bargain after losing thousands, and $3.00 razzle-dazzle fruit shake for zero dollars.

There is your zero dollar.

UNIDENTIFIED MALE: Thank you.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

PHILLIPS: Well, if you can't bear to look at your 401(k) statement, your credit card statement, may make you feel a little better. Early this morning the Fed cut interest rates again. And it didn't act alone. In an extraordinary emergency response to troubled banks and tanking markets central banks cut rates from China and Britain. And Britain is not stopping there. It, too, is rolling out a bailout of banks and lenders taking ownership stakes in return.

Overseas stocks went through the shredder again. Bank shares soared in London, though. Japan's Nikkei suffered its worst one-day plunge since the crash of '87. And Wall Street, where the Dow has given up almost 900 points just this week, can't make up its mind today. Right now, Dow industrials are down 107 points.