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American Morning
Global Markets Plunge on Fears of Recession; Economy Dominates the Presidential Debate; Polls Say Obama Won the Debate
Aired October 08, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR (voice-over): Breaking news. Markets plunge overseas, and America demands answers on the economy.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I got some news, Senator Obama, and the news is bad.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We've got to help the middle class.
ROBERTS: But what's the fix? The swipes. The slants.
MCCAIN: That one.
ROBERTS: The bottom line.
OBAMA: How is this going to impact you?
ROBERTS: With all eyes on the economy, who won this one on this AMERICAN MORNING?
(END VIDEO CLIP)
ROBERTS: Good morning, thanks very much for being with us this Wednesday morning, the 8th of October, the day after the second debate between the presidential candidates. A lot to talk about there, but so much to talk about with issue number one on the economic front.
KIRAN CHETRY, CNN ANCHOR: Yes. Who would have thought that the morning after the debate, there's something bigger to talk about as well and that is, unfortunately, the massive losses that we're seeing in the global financial markets.
We start with Asia. Fears this morning of a worldwide recession. In Japan, the Nikkei lost more than nine percent. That's the Tokyo market's biggest one-day drop in 21 years sending the Nikkei to a five-year low. Hong Kong's Hang Seng index down eight percent.
Trading was suspended in Indonesia after the Jakarta market fell 10 percent, and many European markets are trading lower this morning as well. All of it comes on the heels of Wall Street's latest stock plunge. The Dow losing 508 points yesterday, and this is despite the prospect of another interest rate cut by the Fed.
Christine Romans is here "Minding Your Business" this morning, helping us put it into perspective and maybe with a little advice, or in any way can you calm the fears of investors.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I mean, it's a grave situation but fear is the problem here. Fear is what's hopscotching around the globe and why people are selling stocks. Remember, the stock market is simply one way to look at what's happening in the global economy, all the different stock markets. It's the credit market that has started this whole thing, and the credit market has been frozen.
This means that the banks aren't lending to each other, and they're not lending to businesses. Even businesses that are in perfectly fine shape have been having a hard time getting money, and consumers have had a hard time borrowing money. And it is that borrowed money that has been the oxygen of the economy for so long.
We saw these global stock market losses in Asia. Kiran took you through those. Also in Europe. Look at Jakarta, that was down 10 percent. That was the worst one in Asia.
Tokyo down nine percent. Hong Kong and Shanghai also falling. European stocks also falling. The British authorities announced that they are doing a huge banking bailout similar to the United States banking bailout but different in a few respects. The taxpayers will actually be taking shares in some of these companies. So we're watching the details of that.
And Gordon Brown, the prime minister, said that, you know, this began in the United States and it's spreading around the world, and they're going to make sure that people who deposit money into British banks will be safe and that's what this is all about.
This is about the safety of your money. That's what hurt stocks here yesterday. A huge decline, two days in a row, some 900 points on the Dow in just a couple of days. A five-day point loss that exceeds 12 percent, some 1,400 points the Dow lost in just the past five trading days. And this is the damage report year-to-date. This is the number that is probably close to what you're going to see on your 401(k) statement if you get it in the mail.
The Dow down 28 percent this year. The Nasdaq down 33, a third of the value of the Nasdaq wiped out. The S&P 500 down 32 percent so far this year.
Which brings you to the question, gee, should I jump out of the market today? Well, we've been cautioning for some time that -- then that paper loss becomes a real loss. When do you need the money? And if you needed the money right now, why did you have the money you need to live on in the stock market in the first place?
ROBERTS: You got to have a strong stomach, Christine, to look at this.
ROMANS: That's true. That's absolutely true.
ROBERTS: Christine, thanks for that.
ROMANS: Sure.
ROBERTS: Well, let's go overseas to find out what's going on over there. London's stock markets sharply lower this morning despite the British government announcing plans for nearly $90 billion rescue package for banks in the U.K.
CNN's Becky Anderson is live for us in London. No question, Becky, a bloodbath across the Asian and potentially the European markets this morning.
BECKY ANDERSON, CNN CORRESPONDENT: Yes.
ROBERTS: Leaders scrambling to try to stem the bleeding. Who's doing what?
ANDERSON: Well, let me tell you what "The Daily Telegraph" says on its front page. But I think it very much reflects what's going on here.
"A day of reckoning," says "The Daily Telegraph." Not just in the U.K. but across Europe, in Asia and indeed when your U.S. markets open again today. You just mentioned a $90 billion bailout by the chancellor head, the finance minister, Alistair Darling, and the prime minister, Gordon Brown. That, in fact, John, is just a tenth of the money that the British government is pumping into the system.
They're looking at 90 billion to bailout some of these banks to effectively take them into. Government hand is indeed bail stricken at present, but that is only a small part of what is going on.
We're also looking at $400 billion being pumped into the money market and another $450 billion to guarantee what's known as medium- term debt all hoping that they can restore some sort of confidence in the U.K. market. It hasn't worked this morning, 4.5 percent down. It's what Christine told you the market was today.
Some of the banks are doing a little bit better. A couple of the banks that have done very badly recently, lost about 90 percent of their share value or up about 40 percent today. But we're talking about a big move in what is a very, very volatile market.
I would wage that there's not a lot of people actually playing this market today. When you look at the volumes out there, a lot of people have moved away so you see a lot of volatility because there's less people playing what is a small number of stocks at this point.
Let me give you a look at some of the other headlines here. "The Independent," this paper went out before the finance minister hit the markets with his news this morning. Fifty billion bailout to save Britain's banks, but will it be enough to save us? And that is the big question at present because as far as the markets are concerned, it isn't enough.
I'm not sure how much they can do, how much more they can do. But let me tell you this, and this is a very frightening thought to live you with. Gordon Brown said today, the prime minister here, that the reason he did this is because he sees the potential crippling of the global financial system at the moment.
And one last thought for you. Iceland yesterday, small country, not even in the EU, but its prime minister told CNN yesterday that it's facing a national bankruptcy. Very, very scary stuff -- John.
ROBERTS: All right. Things looking fairly gloomy over there across the seas.
Becky Anderson for us this morning from London. Becky, thanks very much.
Are you wondering what this all means for your money? Go to CNN.com/am and submit your question. Our personal finance editor, Gerri Willis, will answer them live later on this hour.
CHETRY: Well, not surprisingly, the economy dominated last night's presidential debate in Nashville. We have some brand new numbers out on who viewers believe came out on top.
A CNN/Opinion Research Corporation poll found that 54 percent of people who watched the debate think it was Barack Obama who won compared to 30 percent who think it was Senator John McCain who won. When it comes to who's better at handling the economy, 59 percent picked Barack Obama, 37 percent picked John McCain.
CNN's Ed Henry is live in Nashville. It was very interesting, Ed, because there was a lot of talk before the debate this is going to get nasty. Are they're going to bring up personal attacks against one another, dating back, you know, to the '60s, '70s and '80s? Last night, though, it was the economy, stupid.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Kiran. It was pretty civil. There were some shots on each side.
This town hall format was supposed to benefit John McCain. He certainly looked comfortable, but he never really broke out, really did not change the dynamics of this race.
(BEGIN VIDEOTAPE)
HENRY (voice-over): Five hundred eight points, the financial crisis dominated round two. And the front runner, Barack Obama, spent most of the night in control after immediately tying John McCain to the status quo.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I believe this is a final verdict on the failed economic policies of the last eight years, strongly promoted by President Bush and supported by Senator McCain that essentially said that we should strip away regulations, consumer protections, let the market run wild.
HENRY: McCain moved just as quickly to break from the White House, touting a plan for the government to buy mortgages homeowners can no longer afford.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: And it's my proposal, it's not Senator Obama's proposal, it's not President Bush's proposal. But I know how to get America working again, restore our economy and take care of working Americans.
OBAMA: We --
HENRY: After barely looking at Obama in the first debate, McCain, again, could not hide his disdain, especially over a 2005 energy bill.
MCCAIN: 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.
HENRY: They also offered deep differences on foreign policy.
MCCAIN: And in his short career, he does not understand our national security challenges. We don't have time for on-the-job training, my friend.
OBAMA: It's true. There are some things I don't understand. I don't understand how we ended up invading a country that had nothing to do with 9/11.
HENRY: And a sharp contrast in the closing statements. Dramatic change versus steady leadership.
OBAMA: But we're going to have to have the courage and the sacrifice, the nerve to move in a new direction.
MCCAIN: And I'll rest on my record but I'll also tell you, times are tough. We need steady hand at the tiller.
(END VIDEOTAPE)
HENRY: The bottom line is that John McCain has been falling behind in a lot of the key battleground states. He needed some sort of a game changer last night. Did not get it. This just puts more pressure on him before the final presidential debate next week in New York. Bottom line, time is running out quickly, Kiran.
CHETRY: And bottom line, the only game changer seems to be the worsening economic news that's coming out every single day.
All right, Ed, thanks for being with us this morning.
HENRY: Absolutely.
ROBERTS: Well, John McCain and Barack Obama did clash over the economic crisis and foreign policy in their second debate. If not a game changer, did McCain help himself last evening? We'll take a look at last night's debate.
And with markets across the globe in a nosedive, practical advice on what you should do during this financial rollercoaster.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. We're following breaking news today as the markets across the globe dropped. Nikkei's, Japan's index, slumped more than nine percent. It's the biggest drop since the 1987 stock market crash. Also, Hong Kong closed down more than eight percent. And right now across Europe, the orders to sell.
Markets are down across the board, but some are beginning to recover from their earlier lows. Dow futures also, though, unfortunately, in strong negative territory this morning. There's a look yesterday closing down 508 points. Ouch.
ROBERTS: Does not leave a good feeling in your stomach, doesn't it? Oh, perhaps the Dow futures will change depending on what happens in Europe throughout the day here.
The economic crisis certainly front and center at last night's town hall debate in Nashville. John McCain and Barack Obama sparred over who caused it, what needs to be done to fix it.
CNN's Suzanne Malveaux joins us this morning with some morning after analysis. So this was a debate that John McCain went into, according to most analyses, that he really had to win. Where does he find himself this morning?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, you know, John, I talked to a lot of demoralized Republicans after this debate and they really believe that this was not a game changer, that is exactly what they needed here to somehow mix things up that that did not happen last night. He didn't have this kind of knockout punch. Instead what you had is a lot of Republicans say some missed opportunities to go after health care and tax policy.
Some jokes that fell kind of flat that people didn't respond to. And then also, you know, even if you looked at the body language and some of the things they said when he called Obama "that one," even if he didn't mean it in a bad way, there are some Republicans who said it didn't come across very well, that it wasn't very polite.
ROBERTS: Right.
Now, in terms of where Obama finds himself this morning, you know, we had the CNN/"Time"/Opinion Research Corporation battleground polls out, change the look of the electoral map. We had our post debate poll which showed that by a wide margin, people thought that Obama won it.
You've been talking to people behind the scenes in his campaign. Do they believe they have this election locked up at this point?
MALVEAUX: No, they don't actually. I mean, they're not cocky about this. They're very pleased about last night's debate, but essentially the campaign is very much like the candidate. They say it's when the highs are not too high, the lows are not too low and it's very steady.
Their strategy now is to simply stay on message, to be steady, to talk about the economy. They believe that this is working for Barack Obama, to stay away from kind of these personal attacks or character issues, that that is not really necessary. But if there's a punch that's delivered to punch right back. And, they feel that this is working in their favor.
One of the other things, however, is that what they're going to do is focus on voter registration. Look at Ohio, look at Georgia, look at Florida, look at Virginia. If they can increase voter registration in those particular states, they believe they have a pretty good shot at this.
ROBERTS: The indications are that they have been leading in that drive lately, too.
MALVEAUX: Absolutely.
ROBERTS: All right. Suzanne Malveaux for us this morning. Suzanne, good to see you. Thanks.
MALVEAUX: Thanks.
CHETRY: Well, our coverage continues of breaking news. A lot going on this morning. We have stock markets in a free fall across the globe. And this crisis is having a very real impact on your money. Our financial experts with what you need to know to protect it.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Special interest whether they be the big money people by reaching across the aisle and working with Senator Feingold on campaign finance reform, whether it be a variety of other issues working with Senator Lieberman on trying to address climate change, I have a clear record of bipartisanship.
(END VIDEO CLIP)
CHETRY: That was John McCain in last night's town hall debate stressing his record of reaching across the aisle to get things done. So how will that play with voters tired of inaction and gridlock in Washington?
Joining us now from Washington, Patricia Murphy. She's the editor of Citizenjanepolitics.com.
Good to see you, Patricia. PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: Good morning.
CHETRY: Also in New York this morning is John Avlon, a registered independent and a contributor to "Politico."
Good to see both of you this morning.
JOHN AVLON, AUTHOR, "INDEPENDENT NATION": Good morning.
CHETRY: I'm sure you're a little bleary-eyed from staying up to watch the debate. But, let me start with you, Patricia, what did you think the best moment was for John McCain last night?
MURPHY: I think his best moment was certainly at the end. Unfortunately, for him, because people probably had stopped watching the debate by then, but that was when he came forward with his main theme of country first, saying that he has sacrificed for his country before. He will continue to sacrifice for his country and put his country first.
The problem for McCain is that I don't think that that was enough. He needed to turn around the momentum here in terms of what -- how he's connecting with voters, but also how they trust him with the economy. Right now, Barack Obama has a 20-point advantage in terms of who voters think is best able to handle the economy. Sixty percent of voters think that the economy is the number issue. Those numbers do not add up, and John McCain didn't do a whole lot last night to turn that around.
CHETRY: John, I want to ask you about that as well because the CNN poll shows that 54 percent of debate watchers did think that Barack Obama did a better job. What do you think Barack Obama's strongest moment was?
AVLON: I think just connecting to voters on the economy and making his policies relevant to people's real lives. When he's talking about his health care plan, for example, talking about how his mother when she was dying of cancer spent too much time battling the insurance companies over whether it was a preexisting condition, that's the kind of detail that really humanizes policy and goes against the stereotypes of Obama as somehow aloof or too professorial.
And for independent voters, they thought Obama won this debate almost 2-1 because of the economy. He absolutely owned the economy section. Even though McCain did very well on foreign policy, this is an economic election now and Obama owned the economy.
CHETRY: This is very interesting because you talked about, John, about the specifics given by Barack Obama. But I want to ask Jane, I want to get both of you to weigh in on this. This is what McCain said about home mortgages, something that you're probably not used to hearing from a Republican. Let's listen.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I would order the secretary of the treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished value of those homes and let people make those -- be able to make those payments and stay in their homes. Is it expensive? Yes.
(END VIDEO CLIP)
CHETRY: Let me start with you, Patricia. We know the conservative base certainly doesn't like talk like that. But for independents, is that something that resonates, that maybe he's willing to think outside the ideological box trying to solve a problem?
MURPHY: Well, it's something that could resonate if that's the program that they understand fully. And I'll tell you why John McCain is going there. Because if you look at the states where Barack Obama has picked up a lot of support lately -- Florida, Nevada, Ohio, Michigan -- those are all states in the top five for foreclosures. They are hurting in their housing policies. The problem with this proposal, though, is that this is actually already been passed by Congress. It's not a new idea and it's actually already law.
CHETRY: John?
AVLON: Well, I think Patricia makes a couple of great points there. But you know, this thing is designed to appeal to "swing voters who are feeling that middle class squeeze which is so real and (INAUDIBLE) dead at this Wall Street crisis. But for small government conservatives, I mean, this is the exact opposite of Sarah Palin at the VP debate government, just get out of the way.
CHETRY: Right.
AVLON: And there's a certain ideological crisis in the Republican Party right now, and this is evidence of it.
CHETRY: All right. We're going to check in with you guys later on throughout the show.
Patricia Murphy and John Avlon, thanks for joining me.
AVLON: Thank you.
MURPHY: Thanks.
ROBERTS: Twenty-one minutes now after the hour. Breaking news, the global market plunge ahead. The candidates' plan to steer America out of this financial hole.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy. We've got to get some trust and confidence back to America. I know how to do that, my friends, and it's my proposal, it's not Senator Obama's proposal, it's not President Bush's proposal.
(END VIDEO CLIP)
ROBERTS: John McCain talking about the economy in last night's town hall debate. And this morning, breaking news as the global financial crisis appears to deepen. Stock markets in freefall as fears of a global recession reach a fever pitch.
Japan's Nikkei index down nine percent. That's a five-year low. The worsening crisis also bring steep falls across Asia and Europe. Europe, though, not doing quite as badly as it was earlier today so hopes that it won't be such a bloodbath as it was in Asia.
Joining me now, Chrystia Freeland. She is the managing editor in the United States for the "Financial Times" newspaper, and Jeffrey Sachs, an economist, director of the Earth Institute in Colombia University. Also a special adviser to Ban Ki-moon at the United Nations, back with us again.
What we're seeing happening overseas, and particularly in Asia, is this a slide or is this on the verge of being a crash, Chrystia?
CHRYSTIA FREELAND, U.S. MANAGING EDITOR, "FINANCIAL TIMES": Well, I think the only people who know that are people who are running hedge funds and will make a huge amount of money out of this and even those people are really, really scared right now. And what's been interesting for me is talking to people in the markets this week, is the level of fear and the lack of preparedness to put their money to work. People really are sitting on the sidelines.
One interesting factor in the Asian sell-off today, though, is the emerging markets piece of that. I think you pointed out earlier this morning that Indonesia was particularly hard hit. And one of the things that we've seen is this slight equality. So all of the markets that we thought were really go, go, were going to be the markets that pulls the global economy forward are the markets hardest hit, and that includes places like China.
ROBERTS: Jeffrey, we seem to have three parallel thrust going here. We got the problem with the banks. We got the problem with the credit market, and we got the stock market problem. How do all of those work together and when does it all end? That's what a lot of people are wondering here.
What should they do if they are invested in stocks in their 401(k)? Can they bail now or have they missed the opportunity?
JEFFREY SACHS, INTERNATIONAL ECONOMIST: The credit markets are the biggest problem because if the economy freezes up, if companies can't even get seven day loans, then we really go into a tumble. So that's the Federal Reserve and the other central banks main job, keep the arteries open. Stock market, who knows exactly where the bottom is. It's lost 30 percent of its value from the peak, and nobody can really predict whether it's down, whether it's hit bottom except if they can't get the credit flowing again, then we know that there's a loss.
ROBERTS: So if you're the average investor with a 401(k), what do you do?
SACHS: Well, I think the main point right now is people that were borrowing and dissaving for so long, that's -- they're being hit and all one can say is be prudent and careful. There's no general principal right now. There is no way to give simple investment advice because nobody knows. But be careful.
ROBERTS: Chrystia --
FREELAND: If I may.
ROBERTS: Go ahead.
FREELAND: I was going to say one slightly positive development, if that's possible...
ROBERTS: Please.
FREELAND: ... in the credit markets this week was the Fed did a very radical thing, which is, it went in and said it would buy commercial paper.
ROBERTS: Right.
FREELAND: And we did see a little bit of an improvement in confidence in the credit markets yesterday.
ROBERTS: Right. But the Dow is still down 508 points.
FREELAND: Right. But --
ROBERTS: I didn't know that these are sort of disassociated to some degree. But let me on the issue of buying things up, let me turn to last night's debate.
John McCain floated a proposal which was originally floated by Hillary Clinton, which was originally from the 1930s of the Depression Era, to buy up toxic mortgages for the Treasury Department to buy up these mortgages and help out homeowners. Was that a valid plan? Is that the best thing you heard last night out of these two candidates about how to address the current crisis?
FREELAND: In terms of a new idea?
ROBERTS: Yes.
FREELAND: I think it was a pretty good idea. And one of the problems with these mortgages is they've been sliced and diced into different pieces. So it would be a good idea for someone to put them together and have a better work-out process to let people stay in their home. But I do think that Obama won the debate mostly because if the question is the economy, Barack Obama and the Democrats are going to win.
ROBERTS: All right. Chrystia Freeland, Jeffrey Sachs, thanks for being with us this morning. I appreciate your expertise and your analysis.
Kiran?
CHETRY: Well, we have more in our breaking news, the global freefall in financial markets. Panic and fear ruled in Asia as the Nikkei fell more than nine percent. It's the biggest one-day drop on the Tokyo market since 1987. Also stocks in Hong Kong losing eight percent.
Indonesia, down 10 percent before they suspended trading. Major European markets also trading sharply lower. You can look for Wall Street slide to continue at the opening with Dow futures now down more than 200 points.
Also, some sobering news from President Bush on the prospects of an economic recovery here at home. The president says Americans should not expect financial relief to come quickly. Instead, he sees a gradual rebound that will test people's patience. He says the nation's credit system took time to freeze, and it will take a while to "get it unstuck."
So how did the candidates fare in last night's debate? There's a brand new CNN Research Corporation poll showing that 54 percent say they felt Barack Obama won the second match-up with 30 percent saying they felt John McCain performed better. Also, 64 percent had a favorable opinion of Barack Obama after the debate. That was up four percent from before the debate. And 51 percent had a favorable opinion of John McCain after the debate. That remained unchanged from before the debate. The two candidates addressed concerns about energy and health care last night in front of an audience of 80 uncommitted voters.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We can't simply drill our way out of the problem. And we're not going to be able to deal with the climate crisis if our only solution is to use more fossil fuels.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: It was 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. You know who voted against it? Me.
I want to give every American a $5,000 refundable tax credit they can take anywhere across state lines. Why not?
OBAMA: You know what insurance companies will do? They will find a state, maybe Arizona, maybe another state, where there are no requirements for you to get cancer screens. Where there are no requirements for you to have to get preexisting conditions. And they will all set up shop there.
(END VIDEO CLIP)
CHETRY: Well, this morning both candidates are back out on the trail. John McCain will be in Pennsylvania and Ohio, and Barack Obama will be in Indiana.
ROBERTS: And this election may come down to undecided voters -- will come down to undecided voters. They weighed in on the debate in the CNN exclusive dial test which gauge how much or how little they like what the candidates were saying. CNN's Soledad O'Brien was checking in.
(BEGIN VIDEOTAPE)
SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT (on camera): The economy is the number one issue here in Ohio just as it is across the nation.
(voice-over): Over the last eight years, the state lost nearly a quarter of a million manufacturing jobs. And Ohio has the sixth highest unemployment rate in the nation. So it was no surprise that's what our panelists wanted to hear about.
UNIDENTIFIED FEMALE: What are they going to do to bring jobs for -- not only for the middles class but also for the low class people?
UNIDENTIFIED MALE: I was looking for information on the tax policies of both men.
UNIDENTIFIED MALE: I wanted to hear more specifics about the economy proposals by the gentleman. My concern was lack of specific.
UNIDENTIFIED MALE: I would like to know what they're going to be doing about social security and Medicaid and all that for us old people that are going to be coming up on it. You know they're saying, we're going to do this and we're going to do that. But it's just blowing smoke.
O'BRIEN: Our 25 registered voters, six registered independents, 10 Republicans and 9 Democrats all say they haven't made up their minds yet, and they are all watching the debate because they are persuadable. Armed with perception analyzer, they measured second by second the high points and the low points of the debate.
OBAMA: We are mortgaging our children's future.
MCCAIN: I think you have to look at my record and you have to look at his. Then you have to look at our proposals for our economy.
O'BRIEN: The format a town hall hosted by Tom Brokaw who sometimes struggle to keep both men on time and sticking to the rules.
TOM BROKAW, DEBATE MODERATOR: Senator Obama, we have another question from the Internet.
OBAMA: Tom, can I respond to this briefly?
O'BRIEN: As usual our panelists immediately dialed down for negativity.
MCCAIN: We don't have time for on-the-job training, my friend.
UNIDENTIFIED FEMALE: I think they just need to deal with the issues rather than digging at each other because we're getting nowhere with the way their doing this.
O'BRIEN: Push to make a decision, if you had to vote today, how would you go? Raise your hand if you would vote for Senator McCain. One, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve, thirteen, fourteen. Do I assume the rest of you for Obama. That would be 11 because -- so a slight advantage to Senator McCain. But our undecideds have 27 days before they vote. Time both candidates will surely use to try to sway this critical group. Soledad O'Brien, CNN, Columbus, Ohio.
(END VIDEOTAPE)
CHETRY: Well, Barack Obama is looking to votes in southern states, a former Georgia Congressman joins us live on why the Democrats actually have a chance to turn some red states blue this time around. You're watching the "Most News in the Morning."
Door-to-door. Could the presidential race come down to race?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Is it a father couldn't see himself voting for a black man.
(END VIDEO CLIP)
CHETRY: Inside the small town effort to convince voters that skin color shouldn't matter.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Look, you know, we got to get pass that.
(END VIDEO CLIP)
CHETRY: Carol Costello with the voice of the people. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: The middle class need a rescue package, and that means tax cuts for the middle class. It means help for homeowners so that they can stay in their homes. It means that we are helping state and local governments set up road projects and bridge projects that keep people in their jobs.
(END VIDEO CLIP)
CHETRY: That's Barack Obama laying out his tax plan during last night's debate. But will his ideas be enough to sway southern voters who typically vote Republican. Joining me now to talk about it this morning is Barack Obama supporter and former Georgia Congressman Ben "Cooter" Jones. Also, of course, "Dukes of Hazard" fan and the author of "Redneck Boy in the Promised Land."
Thanks for being with us this morning. Great to see you.
BEN "COOTER" JONES, OBAMA SUPPORTER: Great to see you. Thanks for having me on.
CHETRY: I want to ask you, you watched the debate last night. What about both of the candidates? Did they speak to the issues that are going to be important to rural white southern voters?
JONES: Well, rural white southern voters are concerned about the same issues as everyone else, and I think there's a presumption on the part of a lot of people particularly in the national media that somehow, you know, we're prejudice against Barack Obama or whoever.
I don't find that to be the case. I think, you know, people here don't like being taken for granted by either party. Very independent streak here. And I think people are listening because they are more concerned about this country than anything else.
And when Barack Obama talks about, you know, a rescue package for the middle class, everybody can relate to that. There's prejudice in every part of this country, racial prejudice. In fact in every part of the world. And it's no more here than anywhere else as I can tell. So I think a lot of people -- I think I'm in Virginia right now. I think Barack Obama is going to win Virginia. And as I said before, I think he may, indeed, win North Carolina. And I think he's running very, very strong in Florida.
CHETRY: But if he does win Virginia -- let's take Virginia as an example, where you are, that's a big turn around. I mean, Virginia hasn't gone Democrat since the 60s -- since one election in the 60s. So, what has changed?
JONES: Nor has North Carolina. I think may have gone for Jimmy Carter in his first election. But, yes, there's a change going on in this country. And I go back to, you know, James Carville. It is the economy. That overwhelms everything else and what happened overnight overwhelmed that debate. I thought the debate was style versus substance. McCain was being very emotional. My friends I know the answer to all these things and all that. And Obama was being cool but much more substantive I think. And I think that's why he won. This is a serious election. The most serious in our lifetime. And people, I don't believe are going to make that decision based on, you know, somebody's DNA.
CHETRY: It's very interesting, though. McCain did tried to highlight his experience reaching across the aisle, bringing that bipartisan nature into it. He reminded the audience that Barack Obama has voted with his party 95 percent of the time. Does that hurt Barack Obama in places like Virginia and North Carolina?
JONES: No. Those were the right votes. The Democratic Party has always been looked to in hard economic times, and this is one of those. I think those were right votes. After all John McCain has voted with that president over 90 percent of the time and look where its got us into an economy that's a collapse worldwide on their watch, and a quagmire of a war while we have serious problems in Afghanistan. So, you know, all of this has happened on their watch. They weren't watching. They were wrong. It is time to give someone else -- it is time for a change, as we say.
By the way, I would like to correct something. We don't talk down south about Joe Six-Pack. I mean, maybe Harvey 12-pack. But this Joe Six-Pack stuff doesn't fly down here. And this negativity that we're seeing now as these attacks began on Barack Obama, they come late and they are very hollow.
CHETRY: Yes, it was very interesting, though, because, you know, there's a lot of talk leading up to last night's debate that it was going to get negative and personal, and while they did try to point out differences in each other's record, they really -- the economy seemed to dominate the discussion and what is in the national consciousness right now. So, it was very interesting. It didn't get personal and nasty last night.
JONES: No. And it shouldn't have. It's too late for that. And I think, you know, at this point, it appears because the McCain campaign is behind they think that's the only shot they've got left is to bring -- but when they do those negative campaigns and those negative attacks, it also brings them down. So, it really doesn't do any good and people are sick and tired of it.
CHETRY: Yes and we didn't see a lot of that from John McCain or Barack Obama last night. Ben "Cooter" Jones, former Georgia congressman, always great to see you. Thanks for being with us this morning.
JONES: Thank you for having me, Kiran.
CHETRY: Also with the polls going against McCain in several key battleground states, some are asking this morning, is the race over? Coming up in our next hour, we'll get Republican strategist Ed Rollins on about the state of the McCain campaign.
John?
ROBERTS: We are following breaking news. Overseas markets in a major selloff. It's got lots of people wondering what it could mean for their money. Our personal finance editor Gerri Willis taking your questions and answering them live. That's straight ahead. There's still time to send one, head to cnn.com/am.
(COMMERCIAL BREAK) CHETRY: We're following breaking news at a worldwide financial scare this morning as the orders to sell are piling on. Here's a look at some of the world indexes. That's Japan's Nikkei off more than 9 percent. Hong Kong also closing down more than 8 percent. And there you see Jakarta down 10 percent. That's before they suspended trading. In Europe, trading is still underway and markets are in negative territory. But some are beginning to recover from the earlier lows. The Dow futures, though, in strong negative territory as well this morning.
ROBERTS: 15 minutes to the top of the hour. We're "Minding Your Business" this morning, answering your questions that you got about money, the economy, what's happening with your 401(k). CNN's Personal Finance Editor Gerri Willis has got big glove on this morning. She's fielding it all.
Good morning to you.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, I'm doing what I can. You know, another day, another 300, 400, 500 points. Let's talk about the questions from viewers here.
Kerry from Florida writes, "Do you agree with Jim Cramer that even if you've hung in this long with your 401(k), it's time to get out?"
Again, it's fear that is causing all this panic and people to sell. Look, at the end of the day, you've got to realize how long do I have to retirement. If you're five, 10 years out, you have to stay absolutely put. I know this is a very fearful time for folks. But at the end of the day, you know, the economy is going to go on, the country is going to go on, it will be here tomorrow.
ROBERTS: So, tell Kerry to stop watching the competition.
WILLIS: Yes, exactly. And one other thing to say here, I think for so many of us, maybe 90 percent of us, looking at the stock market is the wrong thing, you need to be focus on your job. Are you going to keep your job? That's the real thing to focus on. We're headed right into the teeth of a recession here.
John from Florida writes, "Hypothetically, if every savings account in the country failed, is there enough money in the FDIC to cover everybody?"
Yes, the FDIC assures us that they have the money they need. They have 45 billion plus two lines of credit from the Treasury. They just raised premiums on banks across the country and they've also told you that you're going to have more coverage than you had even a week ago. Some 250,000 for folks with individual accounts at banks. So, the coverage is there.
Kay from Michigan writes, "We're carrying about $12,000 of credit card debt. I've been paying it down with much larger payments than the minimum. Should I be putting the cash away in savings instead?" OK. One thing to think about, hearing a lot of folks out there. They don't have any emergency savings and this kind of marketplace that's something you absolutely need to have. Get some cash savings just in case. If you lose your job, you want to make sure you can pay your rent, your mortgage, get food on table.
ROBERTS: All right. How much should people have?
WILLIS: Three to six months worth of savings. And you know, some people are even saying nine. But I think nine for most folks is just to difficult to bail.
CHETRY: Unfortunately, for most people three to six is too right now.
ROBERTS: Yes.
CHETRY: We're talking about home heating bills and that's another thing that you always talk about. We're going to be in that cycle again in just a couple of weeks.
WILLIS: Already are.
ROBERTS: Gerri, thanks.
WILLIS: My pleasure.
ROBERTS: 47-1/2 minutes after the hour now.
CHETRY: Rating the debate.
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OBAMA: Remarkable.
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CHETRY: Jeanne Moos picks her own winners in the big showdown.
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MCCAIN: My friends, my friends, my friends.
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CHETRY: From best mental image to lamest joke. The most unusual moments of the night.
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MCCAIN: You know, like hair transplants. I might need one of those myself but the point is...
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CHETRY: You're watching the "Most News in the Morning." (COMMERCIAL BREAK)
CHETRY: Well, with the second presidential debate lacked in drama, it made up for in some moments. CNN's Jeanne Moos found out.
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JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): Before starting, the debate moderator got rid of his gum leaving us to chew over a debate. One Internet blog described it's being like watching small claims court. The award for most annoying repetition goes to an over friendly John McCain.
MCCAIN: My friends, my friend, my friends, my friends, my friends. At the end of the day, my friend.
MOOS: The award for best smile.
MCCAIN: Remarkable.
MOOS: While be attacked.
OBAMA: What Senator McCain doesn't mentioned is he's been there 26 of them.
MOOS: Goes to Barack Obama.
MCCAIN: He will still not admit that he was wrong about the strategy of the surge in Iraq.
MOOS: Best conjuring up of a mental image goes to Senator McCain.
MCCAIN: Nailing down Senator Obama's various tax proposals is like nailing jell-o to the wall.
MOOS: Nailing the pronunciation of Pakistan earns Senator Obama of the award for sounding either most wordily or most elite.
OBAMA: Nobody called for the invasion of Pakistan. If Pakistan is unable or unwilling --
MOOS: Since Senator Obama didn't really attempt any jokes, Senator McCain by default wins the lamest joke award for this remark discussing what health insurance might or might not cover.
MCCAIN: You know, like hair transplants. I might need one of those myself, but the point is --
MOOS: The award for most casual debate watching attire goes to Governor Sarah Palin. She showed up in jeans at a restaurant in North Carolina. Sipped on a soft drink, watch her blackberry and josh around. During the debate she took notes and laughed heartily. And our next winner, moderator Tom Brokaw takes the award for pushing around two would be presidents.
BROKAW: And you're in my way of my script there if you will look.
MOOS: The award for weirdest way not to call your opponent by name goes to Senator McCain.
MCCAIN: You know who voted for it? You might never know. That one.
MOOS: Though that one didn't seem to mind, two candidates will have to share the award for most macho campaign promise.
OBAMA: We will kill Bin Laden. We will crush al-Qaeda.
MCCAIN: I'll get Osama Bin Laden, my friends.
MOOS: My friends doesn't seem to include his opponent. Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
ROBERTS: Economy in crisis. What it means all over the world.
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: We live in a globalize world.
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ROBERTS: Plus, could racial prejudice cost Obama the White House?
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UNIDENTIFIED MALE: He flat out said to me, I can't vote for that black boy.
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ROBERTS: What they say? How they vote? How many people lie?
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UNIDENTIFIED MALE: We got to get past that. We live in America. We're the best nation on earth. We got to get to the real issues of what's going on in this campaign. CNN special series "VOICE OF THE PEOPLE." You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: We got to fix our energy system that is putting such an enormous burden on families. You need somebody working for you and you got to have somebody in Washington who's thinking about the middle class and not just those who can afford to hire lobbyists. MCCAIN: It was 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. You know who voted against it? Me.
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ROBERTS: Well, that was one of the more testy exchanges in last night's debate in Nashville, and it maybe one of the more telling exchanges between the two presidential candidates because it's not just what the candidates say, but it's often how they say it that actually gives us more insight. And helps more people make up their minds about who to vote for.
Joining me now is T.J. Walker. He's a body language expert and media consultant. He watch the debate last night. He's here to comment on it. So, this is supposed to be John McCain's strong point. Seem fairly facile with the information. But in the overall, how do you think he did?
T.J. WALKER, BODY LANGUAGE EXPERT AND MEDIA CONSULTANT: Well, it is better for him than giving a speech where he is tripping over words. Unfortunately for him he was against Barack Obama. He did a great job. McCain wasn't bad but compared to Obama, he didn't quite measure up.
ROBERTS: What he said in that sound bite that we just aired there, that one, how did that go over?
WALKER: It trucks some people as odd. I mean, you have to give Obama credit. He wasn't instantly shouting racism. But, again, it just strikes people odd whether he's saying that one or my friends dozens of time. There just certain verbal ticks that come out from McCain that you don't see from Obama. He talks about he's the steady hand on the tiller, but whether it's saying awkward phrases like that or going over notes quickly, hunched over while Obama is speaking, there's just a few things off.
ROBERTS: Well, certainly the McCain campaign and the senator has done everything they can to try to portray Barack Obama as wet behind the ears, particularly in foreign policy, not ready to occupy the oval office at the White House. Senator Obama had a come back to John McCain's attack on him for saying, you never announced that you're going into Pakistan to attack another country. Let's listen to how Barack Obama came back from that.
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OBAMA: Senator McCain, this is the guy who is saying bomb, bomb, bomb Iran. Who called for the annihilation of North Korea. That I don't think is an example of speaking softly. This is the person who after we hadn't even finished Afghanistan, where he said next up Baghdad.
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ROBERTS: How did he do in that response? Did he redeem himself?
WALKER: That was a great way for Obama to put McCain on the defensive, and then McCain is left talking about well, you know, I was only sort of joking, and he was going to tell us the joke but didn't. That was an excellent moment for Obama because he didn't defend himself, he attacked. He did that consistently throughout the debate.
ROBERTS: And then, the McCain campaign said his best moment came when he talked with that chief petty officer after the -- he asked the question. Let's take a listen to how that went down.
(BEGIN VIDEO CLIP)
MCCAIN: Thank you for your service to the country. I want to say thank you for your service to the country. I want to say everything I ever learned about leadership I learned from a chief petty officer, and I thank you. And I thank you, my friend. Thanks for serving.
(END VIDEO CLIP)
ROBERTS: You say that was both positive and negative for McCain. How is that?
WALKER: Well, it's a warm human moment. You definitely felt there was affection there, McCain had. But on the other hand, when you see McCain moving, he just seems slow. He reminds me of my grandfather patting a small child on the head. So, I think it reminds people of what they like about McCain, but also when you compare him to Obama, he just doesn't seem as forceful, as youthful, as vigorous.
ROBERTS: Well, one more debate to go. And more of the traditional format. T.J. Walker, thanks for coming in this morning.
WALKER: Thank you.
ROBERTS: It's good to see you -- Kiran.
