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On the Stump: Presidential Hopefuls Talk Economy; Criticizing Culprits of the Financial Collapse; GM Stocks hit the Skids

Aired October 10, 2008 - 14:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: This hour of CNN NEWSROOM starts right now.
Hi, everyone. I'm Kyra Phillips live at the CNN Headquarters in Atlanta, and you are live in the CNN NEWSROOM.

We are going to go ahead to start in the top of course with talking about our money, anxiety can feed on anxiety says President Bush and now it is a feeding frenzy and we are two hours away from the eighth straight day of bit losses on Wall Street. The first seven cost blue chips more than 20 percent of their value. Markets overseas are hurting just as badly and down another six to eight to almost 10 percent. All eyes are on a meeting this week of G-7 finance ministers and central bankers in Washington, and General Motors stock is holding steady a day after falling 30 percent to a 58-year low. The auto maker is denying it is heading for bankruptcy or planning still more cutbacks or shutdowns at this point.

Well, here is the all-star lineup. Susan Lisovicz is counting down to the closing bell, and Ali Velshi tells us when and how the markets have simply shutdown and Gerri Willis looks for shelter in the economic storm.

Let's go ahead and start on Wall Street. Susan, how bad is it right now?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, Kyra, unfortunately we are starting to creep back getting toward the session lows. Anybody who watched the opening bell would remember, within seven minutes the Dow even after seven days of vicious selling plunged nearly 700 more.

If we could describe it in just a letter, the first 35 minutes of trading were like a V. The Dow drops only to recover and to pare all of the losses and to actually go into positive territory for a nanosecond, and then start drifting down. As we get closer to the closing bell, that is when you really start to see emotion, and that is fear take hold, and what we are seeing is another big sell-off.

Right now for every advancing stock there are 15 to the downside, and some of them are being sold off with just ferocious levels. Goldman Sachs for instance right now down 19 percent. Morgan Stanley shares down 36 percent. You know, one analyst said what the market is trying to do desperately is to find value. We did see a burst of optimism that we were able to rally back and perhaps a sign that a bottoming process was near, but not quite yet.

And maybe not today as we go into the weekend, a long weekend for many people.

PHILLIPS: Well, you mentioned Goldman Sachs, and I mean I thought that Warren Buffett put millions of dollars into Goldman Sachs?

LISOVICZ: That is right, Kyra, he did. And even Warren Buffett can't -- can't really dissuade what is for many people just a deep rooted fear. A lot of people are just simply staying on the sidelines waiting for a sign that -- to get back into the water. Right now they seem electrified -- Kyra.

PHILLIPS: Well, we can see what is happening there, because when it gets tough, the tough stop trading that sure but only when the trading gets really, really tough and I am talking about circuit breakers and other damage control in plunging markets, and that brings us to Ali Velshi who told us about the circuit breakers not too long ago. Let's tell us about how tough it is and when those start to turn off and on.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: And if the market does close, can I go home?

PHILLIPS: You can probably get some sleep, you, Susan and everybody else.

VELSHI: The New York Stock Exchange sets the level for circuit breakers at point level once every three months. And it is basically a percentage, so that the worst thing that could happen is a 30 percent drop in one day on the New York Stock Exchange and the Dow would shutdown for the rest of the day automatically.

At this point based on their calculation, that would be 3,350 points and they will adjust this again on January 1st, but right now if the Dow drops 3,350 points it would shut down for the day. If it were to drop 20 percent, which is 2,200 before 1:00 p.m. they would halt trading for two hours and after 1:00 p.m. it would be a one-hour halt. If it were to drop 1,100 which is the smallest circuit breaker, that was set at 10 percent, it would be a one-hour halt, and before 2:00 p.m. A half hour halt between 2:30 and 3:00 - 2:00 and 2:30, and after 2:30 there would be no halt at all.

And even that, it's 1,100 so the worst drop we've seen has been 777 points and that came in the last hour of trading not last Monday but the one before and as a result of that it wouldn't have triggered a halt.

So there is virtually nothing that has happened that would have actually triggered a halt in trading on the New York Stock Exchange and part of that is because people invest knowing that they may not get the price on the stock but if they needed to get their money they could get out of the market. When you stop trading, it is not that it prevents the investors from getting in, it prevents people who need their money from getting out. So it is a very, very serious decision in order to do that. Even after 9/11, the stock market closed, because it was in Lower Manhattan and while there is an alternate trading place they didn't reopen trading for a few days and they could have, because partially, there was so much uncertainty around the world. When you actually stop trading once it's reopen, that is a bit of a problem.

I should tell you one thing. The market is down, it took sort of a but of a dive a little while, a few moments ago when you talked to Susan. It is going through up and down and still keeping the 8,000 level at the base which is an interesting sign. But if you were to take out the oil companies from the Dow right now and Chevron and ExxonMobil, ExxonMobil is by far the biggest loser on the Dow at the moment, because the price of oil is down more than $9 right now, Kyra. We are paying believe it or not less than $80 right now for a barrel of oil.

PHILLIPS: Wow. Ali Velshi will be talking a lot in the next couple of hours. Also President Bush urging Americans to remain calm and give the government's financial rescue package time to work. Take a listen.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our system of credit is frozen, which is keeping American businesses from financing their daily transactions and creating uncertainty throughout our economy. This uncertainty has led to anxiety among our people. That is understandable. That anxiety can feed anxiety and that can make it hard to see all that is being done to solve the problem.

(END VIDEO CLIP)

PHILLIPS: Well, Mr. Bush has spoken out about the financial crisis 27 times since September 15th and that is the day that the Lehman Brothers investment bank filed for bankruptcy. So where can you put your money in this volatile market? Is any investment safe anymore? Let's ask our personal finance editor Gerri Willis to try and make sense of it all.

Gerri, where do we begin?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, anxiety does breed anxiety and I have to tell you I am getting e-mails from people all over the country and they are very, very, very anxious and I can see that they don't really understand what is safe in the market and what is not safe.

Now, these are all relative terms, understand. But I have gotten questions like, are treasuries safe? Treasuries are IOUs by Uncle Sam and they are paid by the federal government, and if the federal government is not paying the debts, you have more problems than your retirement, believe me. Treasuries are safe. Money market mutual funds are safe because the government is standing behind them for the next two years.

So those are two things, Kyra, you can take these things off of the table and say, these are things you don't have to worry about and another thing you can take off the table and not worry about right now, your corporate pension. If you have a pension, you know, the Cadillac of retirement plans, your company invests in it and gives it to you and if you are vested in a pension plan, you don't have to worry about it. Even if the company goes out of business, there is a federal agency that will make good on that promise.

So there are a lot of things that people have worried about that are not worth worrying about at this time. You know that 401(k) is not insured and those losses are yours and your choices for the retirement so at the end of day, you'll have the make it up. I want to give people advice and places to go if you are looking for help in this situation and if you're worried about your retirement, check out the National Foundation for Credit Counseling -- nfcc.org.

These folks counsel people with money problems. Let's say that maybe the problem is not just the retirement but maybe you owe a lot of money and maybe you are under the gun with credit card debt or auto debt or mortgage debt, they are great people to call on.

Fee only planners, the National Association of Personal Finance Advisers at napfa.org, some of those folks will come in and review your finances for you and kind of give you a passing grade and tell you how you are doing in terms of the investments and in terms of your savings. That's a great place to go.

And some folks instead of paying a percentage of the portfolio for a year, you can have them come in for just an hour and give you a drive-by grade on how you are doing.

There is also something called an adviser that is affiliated with your 401(k) plan and about half of the plans have them, that have somebody that you can pick up the phone and call, say, look at my 401(k) right now and get some real time advice.

If your problem is that you are worried about the asset allocation, maybe you are approaching retirement and in it and concerned that you have too much money in the stocks and too much of the portfolio is invested in what we are seeing right down there in the right-hand corner of the screen, go to cnnmoney.com/retirement and they have incredible tools there to help you figure out the asset allocation and give you information to help you make the right decisions and put your money in the right places.

But I just want to make sure, Kyra, that folks are not worrying about things that they don't need to worry about right now. For goodness sake, there is enough out there that is concerning, but forget about the worries about treasuries, money market mutual funds and treasuries and the like.

PHILLIPS: But what about the advisers at the local bank? Every bank has a financial adviser, and is that someone to go see, because that is for free?

WILLIS: And the suggestions I am making here are low cost or no cost. Bank advisers is definitely an option out there and remember, that the advisers are paid by the bank and they might be recommending bank products.

PHILLIPS: Got it. Gerri Willis, thanks so much.

WILLIS: My pleasure.

PHILLIPS: Crunch time to the road to the White House. John McCain and Barack Obama stumping in familiar territories as the race heads into its final weeks. We've got the latest from the campaign trail.

And who can forget the 2000 presidential battle? What about four years ago? Well, guess what, concerns about voter fraud and voter purging back in the spot light this time around, and we are going to get some tips from expert on protecting your vote.

(COMMERCIAL BREAK)

PHILLIPS: Twenty-five days before Election Day and John McCain and Barack Obama are turning up the heat on each other. McCain is in Wisconsin and in Minnesota today. At a rally this morning in lacrosse, the Republican candidate threw some barbs at Barack Obama.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: Rather than answer his critics, Senator Obama will try to distract you from noticing that he never answers the serious and legitimate questions he has been asked.

He has even -- you know, my friends, he has even questioned my truthfulness. And let me reply in the plainest terms that I know. I don't need lessons about telling the truth to the American people and were I ever to need any improvement in that regard, I probably wouldn't seek advice from a Chicago politician.

(END VIDEO CLIP)

PHILLIPS: Ohio is a state that could tip the scales in the presidential race. Barack Obama is back there today hoping to sway undecided voter after a stop in Chillicothe. The Democratic candidate headed to Columbus for another rally and took aim at John McCain and his plans for the economy.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: I know that John McCain is worried about his campaign. But that is not what I am worrying about. I am thinking about Americans losing their jobs. And their homes. And their life savings. I am worried about folks who started off with a 401(k) and now they have got a 101(k).

We cannot afford four more years of the same economic theories that says we should give more and more to those with the most, the billionaires and the millionaires and the CEOs and the executives and that somehow prosperity trickles down on everybody else.

(END VIDEO CLIP) PHILLIPS: Well, the latest CNN poll of polls in Ohio shows that the race there is still extremely close. Fifty percent of likely voters back Obama and 46 percent support McCain. Two days ago Obama had a five-point lead and the Ohio poll of polls is an average of three different surveys.

Feeling to financial fears on Main Street, Chillicothe, Ohio is one of the countless areas where the downturn in the economy is turning lives upside down. Barack Obama certainly heard those concerns as he campaigned there today.

CNN's Mary Snow is there talking with voters.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): It is a small Ohio town that has been called America's bellwether, the thinking goes, the way Chillicothe votes, Ohio votes and so does the country.

But with less than a month to go with the election its concern about the markets and the economy dominate the airwaves at the town's radio station.

UNIDENTIFIED MALE: The only people who have experienced what we are experiencing now are our grandparents or our great grandparents.

SNOW: And across town, the outlook among the breakfast crowd was dim.

MIKE MILBURN, CHILLICOTHE, OHIO RESIDENT: I think the money that they just passed in congress is postponing what is going to happen in the future which I think is going to be another depression.

SNOW: Mike Milburn says he lives paycheck to paycheck to support his four kids and for Dan Degermo (ph), it is the same with his fourth child due soon.

UNIDENTIFIED MALE: I don't see how either of the candidates offer any solid solutions that give Americans comfort.

SNOW: Both are registered Republicans and Mike says he might not vote at all. Dan says he will vote for McCain. Jeff Ragland is a cement worker who already knows he is voting for Obama.

JEFF RAGLAND, CHILLICOTHE, OHIO RESIDENT: I feel he is more for the people, people like me.

SNOW: And it is people like Theresa Hall that both candidates want to target, because she is an independent who remains undecided.

THERESA HALL, CHILLICOTHE, OH RESIDENT: When you watch them, it seems like they are pretty much at each other and he says this and he says that.

SNOW: Along Chillicothe's main streets, there are reminders that it is a once booming industrial town that has seen better days. Team Obama is trying to make inroads among the population of 22,000 that went for George Bush in the last two elections. Down the block, team McCain is working to keep the county red. Right now people say that the town is divided and so are the predictions from two Republicans.

DAN RAMEY, RADIO HOST, WBEX-AM: This community seems just be enough Republican to help that hand (ph).

SNOW: Is that going to be the case this time?

RAMEY: My gut feeling -- yes.

UNIDENTIFIED MALE: Honestly I think that Obama is going to win.

(END VIDEOTAPE)

PHILLIPS: So Mary Snow joins us live from Chillicothe.

We hear that people there are saying a lot about the campaign, and just how nervous are they getting?

SNOW: Well, Kyra, it seems that the anxiety level is so high as people we spoke with throughout the day as they watched global markets really tanking, they are worried about whether they can keep their jobs and their 401(k)s, and this is a working class town and a number of older people are worried that they may have to go back to work.

But in terms of what they are doing, some people say they are going to hold on tight, and keep their money where it is, and others have said that they have already moved their money out of the stock market and put it into CDs and other investments that they feel are safer.

But across the board, we are hearing that people are really cutting back and just not going out as much. Watching very closely how they spend their money.

PHILLIPS: All right. Mary Snow, appreciate it. Thanks so much.

And you are pretty excited about the presidential race, but what if your vote doesn't get counted? With what has happened in the past, a lot of folks might be worried about that. Last hour our Drew Griffin showed us problem with the fake voter registrations and there are also reports of several states possibly breaking the law when they purged the voter rolls. Joining me now from New York is Michael Waldman, the executive director of the Brennan Center for Justice.

Good to see you, Michael.

MICHAEL WALDMAN, BRENNAN CENTER FOR JUSTICE: Good to be with you.

PHILLIPS: All right. So I was reading through many of the warning signs of what to do before Election Day and on Election Day, etc, and I tried to kind of gather news you can use for our viewers. So why don't we go and start before Election Day. You talk about making sure you confirm the registration in advance and also know where the correct polling location is. What is the best way the do those two things?

WALDMAN: The best way to find that kind of information out is actually from the government, itself. And through Web sites or phone calls in your local state or county board of elections. And people given the massive numbers of new voters, which is a great thing, but the confusion and worse that could result on Election Day, it is good for people to check and see if they are actually registered. There are also all kinds of nonprofit Web sites that tell you that if you put in your address, they will tell you where to be voting.

PHILLIPS: OK. Voter purging and I am not talking about getting sick, but then again in the economy we are in, maybe a lot of voters that are purging. But you bring up a lot of examples like in Mississippi earlier this year, a local election official discovered that another official had wrongly purged 10,000 voters from her home computer just a week before the presidential primary and in a really small town in Georgia, in Muskogee, a county official purged a wrong number of people from their list, supposedly because they were ineligible to vote due to criminal convictions and that was purged to people who had never even received a parking ticket.

WALDMAN: That's right. Voter purging is when officials kick people off of the rolls. You don't want people on the rolls who are not eligible, but we know at least 13 million people were purged from the rolls in the last several years in a system that is very secretive, that is rife with error and has a lot of opportunities for partisan mischief, too. So this is all of the more reason that people should check and see if they are registered.

We want to make sure that when voter purging happens that only people who are really not eligible to vote are kicked off of the rolls. Nobody should show up on Election Day as too often happens that discovered although they are very much alive, they are told no, you are dead and you cannot vote.

PHILLIPS: Wow. So we have -- OK. So then on Election Day, we address what to do if you are told you are not on the polls. You are also saying, don't allow yourself to be turned away without at least casting a provisional ballot.

WALDMAN: Well, that is right. The basic thing that I would say to any voter is don't take no for an answer. If you show up, and you are not on the rolls and you think that you are supposed to be, what you want to do is to cast what is called a provisional ballot, but it is very important, also, that if you show up and there is a really long line and maybe the voting machines are broken or these electronic machines have all their glitches, you don't want to ask for a provisional ballot, you want to ask for an emergency ballot.

PHILLIPS: I never knew there was such a thing as an emergency ballot.

WALDMAN: Well, it is a high finagled new technology called compressed tree product called paper. They have paper ballots that are ...

PHILLIPS: Hopefully no hanging chads.

WALDMAN: Exactly. That is for people who have no doubt they are eligible to vote, but there is ought to be able to cast your ballot and then call the voter hotline, 866-OUR-VOTE which is a nonpartisan and nonprofit voter hotline across the country to help you with problems and it is also helpful to them to know what the troubles are in various places.

PHILLIPS: Fabulous advice. Michael Waldman, executive director for the Brennan Center for Justice.

Appreciate it, Michael.

WALDMAN: My pleasure.

PHILLIPS: Whether or not she makes it to the White House, Sarah Palin has already made it as a pop culture phenomenon showing everywhere from "Saturday Night Live" to your front door.

Yes, we'll explain.

And the economic fallout isn't just landing on the little guy. The very biggest guys are feeling the pinch, too. Bill Gates for one is not number one any longer.

(COMMERCIAL BREAK)

PHILLIPS: Nightmare scene at the annual ballooning event in New Mexico. Take a look at this, a fire burns a basket with two people on board.

(COMMERCIAL BREAK)

PHILLIPS: A tragic accident in the final few days of the Albuquerque Balloon Fiesta. At least one person was killed after a hot air balloon hit the ground today and bounced back up and ran into some power lines. As you can see that the basket caught fire and eventually separated from the rest balloon. A second person was found unconscious on the ground. At last report, that individual was listed in critical condition.

A rain in the plains and you can blame actually hurricane. Say that three times fast, Chad.

(WEATHER REPORT)

PHILLIPS: Well, will this trading week ever end? Not soon enough for investors. The Dow Industrials down 474 points. We will try to continue to assess the damage. Can Wall Street actually blame Main Street for the mess? Why some economists think our emotions are getting the better of us.

(COMMERCIAL BREAK)

PHILLIPS: 2:31 Eastern time. Here are some of the stories we're working on in the CNN NEWSROOM right now.

We are about 90 minutes away from the end of a devastating week for the stock market. Here is a live look at where the Dow stands right now, down now 449 points. It plunged 700 points at the opening bell, then moved back into positive territory for a while before falling back to what you are seeing right now.

And in Wisconsin, John McCain proposed a spending requirement that people over 70 must start selling off their retirement investments.

In Ohio, meantime, Barack Obama repeated his criticisms of McCain's economic plan.

And we're standing by to learn what is in the investigator's report on Governor Sarah Palin's firing of her public safety commissioner. A legislative is discussing the report in private right now. A portion of the report is expected to be made public when that meeting ends.

We are keeping a close eye on Wall Street. The Dow kicked off the week by falling below the 10,000 mark. And now, the blue chips are ending the week by threatening to plunge below 8,000. Susan Lisovicz is at the New York Stock Exchange.

Put that all into perspective for us -- hopefully some sort of silver lining somewhere, Susan?

LISOVICZ: Well, there is. I mean, we are optimists.

PHILLIPS: As she slowly says that.

LISOVICZ: I choke on it.

(CROSSTALK)

PHILLIPS: Hesitates. I know.

LISOVICZ: It has been tough, Kyra. We really can't downplay this story.

It is painful for millions of us. We are coming off of a stunning seven-session losing streak, during which the Dow Industrials tumbled 20 percent. We have never seen anything like that in seven sessions since the Dow was invented in the late 1800s. The "Wall Street Journal" calls it a slow motion crash, and we are seeing more selling today in heavy volume.

We saw volume top one billion shares a few hours ago. And investors, where are they turning? From stocks to treasuries, just to get a guarantee that their investments are safe. We see that by the yields on the three-month T-bill plunge to less than a third of a percent.

And the silver lining is oil prices. Crude is down right now -- wait, -- it is settled, down 3 percent or -- is that $27 -- no, that cannot be. I think that's wrong there. But it has settled below $90 a barrel -- below $80 a barrel. My bad on that.

And when you think about it, just a couple of months ago, Kyra, we were looking at $150 barrel oil. And that is trickling down, literally, trickling down to us. In Kansas, Missouri and Oklahoma that drop has actually pushed gas prices below $3 a gallon. We could use that.

Now, of course, oil is dropping so substantially because of the economic slowdown. It means we're going to use less. That is -- we consumers, corporations and so on. However, OPEC said it is planning on holding a special meeting next month and the head of Libya is calling for a production cut.

What we are seeing in stocks are cuts indeed. The Dow Industrials down, off of their lows. They reached -- we saw nearly a 700-point decline within the first 15 minutes of trading. Blue chips down 481 points, or 5.5 percent. The Nasdaq and the S&P down by similar amounts.

And, should I just say, we are getting close to the final hour. I'm just going to leave it at that, Kyra.

PHILLIPS: I know. And the numbers change so much, it is hard to keep track of all of them.

Susan, thanks.

People everywhere are trying to cope with the staggering losses. We're bring your reactions from overseas as well. Here is a businessman in South Korea.

(BEGIN VIDEO CLIP)

EUN-SEOK LEE, SOUTH KOREA BUSINESSMAN (through translator): The U.S. and our country have cut interest rates and I can see they are make an effort to alleviate the situation. But I don't think things will cool down that easily. I believe this might continue onto the first half of next year. Unless they take drastic measures, I think this will go on for quite some time.

I have stopped putting money in my fund for the time being. I am going to wait until the market hits bottom and then I will see what happens.

(END VIDEO CLIP)

PHILLIPS: So here is what all of us want to know -- what led to this point? What caused the crisis? Easy money, certainly. But human nature also plays a part. Here is the ever-so creative Miles O'Brien.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN CORRESPONDENT: Feeling a little like a lemming these days? Well, you are not alone. Listen up, fellow lemmings, the freefall is not over yet. TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: People are running on emotion, and there's a tendency just to basically throw the baby out with the bathwater.

O'BRIEN: But the stampede down Wall Street began rumbling years ago on Main Street. We might have seen it if we bothered to look. Our houses became ATMs, and we used them to fill our McMansions with McStuff.

RICHARD THALER, BEHAVIORAL ECONOMIST: That is risky and it -- it can be fun while it lasts, but it is a pretty hard fall.

O'BRIEN: No kidding. That is behavioral economist, Richard Thaler, who spends a lot of time trying to get inside of our heads. His latest book is called, "Nudge: Improving Decisions about Health, Wealth and Happiness."

THALER: We have that tendency to follow what other people and we apply it even when the herd we're following is jumping off of a cliff.

O'BRIEN (on camera): But the herd mentality is not always bad. Let's say you're in a strange city, you're hungry for lunch, you don't know where to go. What do you do? Well, you find a restaurant like this one with a big long line. Surely these locals know something about this place.

It's a good meal, right?

UNIDENTIFIED MALE: Right.

UNIDENTIFIED FEMALE: Right.

O'BRIEN: Really what I should be ordering is the chicken ceasar salad. I'm trying to watch the calorie intake a little bit. Economists call that a cold state decision, cold and calculating. But when you get in gear -- I wish you could take a whiff, it smells great -- take a look at those fries. Temptation takes root.

THALER: This has become a more tempting society. Easy credit, you know, when you get a new credit card solicitation every week.

O'BRIEN: So while this is meal of my cold state intentions, inevitably this is what happens to me -- I take one whiff, one look and I get the cheese fries and the milkshake. Economists say decisions like that are made in a hot state. And if you are making financial decisions that way, you are in for trouble.

THALER: Everybody knows that we don't make great decisions when we're aroused and people can get financially aroused.

O'BRIEN (voice-over): And suddenly, we are running toward the cliff.

But here is something you may not know, lemmings don't really do this. It is a myth, made popular by this Disney documentary. Too bad we can't say the same about us. Miles O'Brien, CNN, San Francisco.

(END VIDEOTAPE)

PHILLIPS: Well, an especially painful week for General Motors. The automaker's stock is trading at its lowest level in decades. Now the company is having to put down rumors about a bankruptcy.

And the rich get richer? Depends on which multibillionaire you are talking about. The financial crisis shakes up the Forbes 400.

(COMMERCIAL BREAK)

PHILLIPS: Well an iconic American brand is on the skids. General Motors' stock this week plunged to its lowest level in decades. The company has issued a statement insuring investors that bankruptcy is not being considered. CNN's Brooke Baldwin is at a GM plant in Warren, Michigan.

(BEGIN VIDEOTAPE)

BROOKE BALDWIN, CNN CORRESPONDENT: We are here in Warren, Michigan, just a couple of miles outside of Detroit, the Motor City. Called the Motor City for a reason. These automotive industry jobs -- the bread and butter for folks all around here, tens of thousands of people, rely on these jobs, their families, the local restaurants, the businesses, the schools -- all rely on this kind of work. So, when we hear the news about the stock market plunging to a low in terms of G.M. stock, not good news for folks here in Warren, Michigan.

I want to show you the cover of this particular newspaper this morning, you see the middle word? Fears. That is the word on the tongue and the lips of many workers we spoke with this morning as we caught them heading into this transmission plant before their 6:00 a.m. shift. They are fearful about the future, about potential plant closures, about their own pensions.

I talked to one worker. He has been here for 29 years, he's hoping, key word there, hoping, to celebrate his 30th year with General Motors next year. And I asked him about the atmosphere inside this plant. He told me in a word -- it is tense.

(BEGIN VIDEO CLIP)

RICK BROWN, GENERAL MOTORS EMPLOYEE: I don't know if I'm going to be working, or if I'll be laidoff, or I'll be at a jobs bank, or I'll be in the 85 percent where they let you go and they'll pay you 85 percent. So I don't know. Right now, it is starting to get scary.

(END VIDEO CLIP)

BALDWIN: There were also fears among workers this morning about the word bankruptcy. But General Motors did come out this morning and they said bankruptcy is not an option. So, workers here, families, businesses crossing their fingers that the economy, in terms of the automotive industry, doesn't completely hit the brakes, doesn't completely bottom out here in Motor City.

In Warren, Michigan, Brooke Baldwin, CNN.

(END VIDEOTAPE)

PHILLIPS: And the war for Wachovia is over. Winner -- Wells Fargo, the banking chain that swooped in with a higher offer after a deal had been struck with Citigroup. Citigroup walked away from talks that could have led to some kind of three-way deal. And now, the Fed has signed off on a Wells Fargo buyout of once mighty Wachovia. Price tag -- $11.7 billion. Citi doesn't want to leave empty handed, though, it reportedly plans to seek $60 billion for breach of contract.

And the economic crunch has cost Bill Gates his No. 1 position on the Forbes 400 list. "Forbes" calculates that Gates lost $1.5 billion in the month of September, trimming his net worth to $55.5 billion. I know you're upset.

Warren Buffett, on the other hand, made another $8 billion to bring his fortune to $58 billion. He's now the richest American.

So with the market in turmoil, many people are looking for a lifeline. CNNMoney.com's Poppy Harlow talked with one of the most powerful men in the world about what can be done. She joins us now from the Nasdaq market site.

Hey, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hey, Kyra.

We talked to Richard Branson this morning. He's an entrepreneur, he's a billionaire from Britain. And he has an idea. He does not think that what has happened in the U.S. is enough to get these markets propped back up.

We know that Congress has passed the $700 billion bailout bill. A lot of people hoped that would turn the market around just by passing it. It did not work. Henry Paulson there, at the helm of it all, President Bush this morning backing the plan, saying it is aggressive, it is the right plan. But many say it is clear we need more.

One option -- the United States could insure all of the bank deposits. Britain right now is doing something similar. The idea behind it, prevent a run on the banks.

Sir Richard Branson, he is backing that. He'd also take it one step further.

(BEGIN VIDEO CLIP)

SIR RICHARD BRANSON, FOUNDER, THE VIRGIN GROUP: In America, banks will not lend between each other. If the government could step in and guarantee the loans between the banks, then they could get that flow of money going. (END VIDEO CLIP)

HARLOW: He says we don't only need a flow of money, we need some confidence in this market. What he wants to see is basically the federal government stepping in, backing up all of the loans between the banks so the banks don't just sit on the cash right now. He says it doesn't need to be just in the U.S., or just in the U.K., Kyra, he says it has to be a global effort -- Kyra.

PHILLIPS: He is talking about socializing the banks.

HARLOW: Yes.

PHILLIPS: We are a capitalist society.

HARLOW: No, I said that to him. I said, are you suggesting nationalizing the banks? He did not really answer that directly. But he said we need some sort of -- form of confidence here. We have to do something. It's obviously that just passing this bill has not worked.

And a lot of people, Kyra, are asking -- what are the other options? What will this look like if there is not a bigger rescue?

It's kind of, right now, Kyra, it looks like it's picking the lesser of two evils. So we will see if lawmakers listen to him, but a lot more people are talking about that right now.

PHILLIPS: Well people are talking about Buffett beating Gates, too. What do you make of that?

HARLOW: It's -- we talked to him last week in California. It's interesting -- he made $8 billion more this year, just two weeks ago he invested $8 billion in the stock market. I don't know what that money is worth right now, but in General Electric and also in Goldman Sachs. So I guess he had a little extra change to invest.

PHILLIPS: Wish we all could have a little extra change. Thank you, Poppy.

HARLOW: Sure.

PHILLIPS: Well, September 15th, the day Lehman Brothers filed for Chapter 11 and everything in the market started going south. CNN's Joe Johns has been looking into some of the culprits of the financial collapse, including the former head of Lehman Brothers.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN ANCHOR: Lehman Brothers' former CEO, Richard Fuld, is living pretty -- a multimillion dollar estate in Florida, a $21 million apartment on Park Avenue, another lavish estate in Greenwich, Connecticut. And it is no wonder, "Fortune" magazine says as CEO, Fuld was paid around $500 million. But now, he's on the hot seat.

REP. JOHN MICA (R), FLORIDA: If you haven't discovered your role, you're the villain today.

REP. HENRY WAXMAN (D), CALIFORNIA: Your company is now bankrupt, our economy is in a state of crisis, but you get to keep $480 million. I have a very basic question for you -- is this fair?

JOHNS: Call it a half billion dollar question. But to Fuld, there is nothing wrong with getting paid for good performance.

RICHARD FULD, FMR. CEO, LEHMAN BROTHERS: When the company did well, we did well. When the company did not do well, sir, we did not do well.

JOHNS: Sean Egan evaluates companies like Lehman for investors. He says Fuld isn't the kind of guy to fall on the sword when things get bad.

SEAN EGAN, EGAN-JONES RATING: So you'd like when the firm gets into trouble that he would be the first in line to make the sacrifices to right the ship, so to speak. He wasn't.

JOHNS: Fuld is the guy who ramped up Lehman's businesses in mortgage-related securities, at least until the bubble burst. But unlike many other firms, when the subprime market went south, he didn't pull back. Instead, he got in deeper.

JOE NOCERA, "NEW YORK TIMES" BUSINESS COLUMNIST: Lehman wound up thinking, people are making a mountain out of a molehill, and if we go in now, when everybody else is in a state of quasi-panic and buy up a lot of these things, we'll make a lot of money. And it was a bad bet.

JOHNS: The doom mounted quickly. In September, Lehman needed billions in cash to keep the company afloat. But according to the "Wall Street Journal," just five days before declaring bankruptcy, on a conference call to shareholders, executives were talking about selling assets, but didn't explicitly say anything about needing extra cash.

REP. DENNIS KUCINICH (D), OHIO: Did you mislead your investors? And I remind you, sir, that you are under oath.

FULD: No, sir, we did not mislead our investors and to the best of my ability, at the time, given the information that I had, we made disclosures that we fully believed were accurate.

EGAN: Either he should have known that the company was in difficult circumstances, or if he did know and didn't tell, it creates another problem. So on the one hand, he is either a liar, or else on the other hand, is stupid.

JOHNS: Most people know the rest. Lehman Brothers goes down, the largest bankruptcy in U.S. history, helping spark a financial panic that continues today.

And that is why Lehman Brothers, and CEO, Richard Fuld, are one of our 10 most wanted culprits of the collapse.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: Well CNN requested an interview with Richard Fuld or any other executive for the now bankrupt company, and a spokesperson declined that request and pointed us to Fuld's congressional testimony to answer any of our questions.

It is a different world out in Hollywood, but that doesn't mean they are immune from the economic crisis and election drama. We'll take a look at Tinsel Town's real life concerns.

Plus, Tina's terrific at playing Palin, so now "SNL" is ready for primetime? Details, live from L.A.

(COMMERCIAL BREAK)

PHILLIPS: Talk about a cliffhanger. Hollywood started this year locked in the writers' strike and now it's watching and worrying with the rest of us as the economy melts down. Entertainment correspondent Kareen Wynter is here to tell us about how the industry is faring.

And Kareen, what's the world around Hollywood right now?

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: Well, know you, Kyra, so many people are feeling the pinch all across the board. But listen to this, despite the hard economic times the major Hollywood studios they say that they're still doing pretty darn well.

They've taken in almost $7.5 billion at the box office, which is slightly off of last year's record pace. Now, studios are still expecting box office sales to be strong for big budget films like the new James Bond movie, "Quantum of Solace." If it does well as expected, Kyra, well Sony Pictures would join the other five major studios in the billion dollar club for the second straight year.

As for the credit crunch, the studios have already locked up billions of dollars in financing for their next big batch of films. And there are some analysts, Kyra, who spot storm clouds far off in the distance. Media companies who are seeing their stocks suffer along with the rest of the markets and the negotiations between the studios and the actor's union could wind up in a work stoppage. That of course, be quite disastrous for the economy.

PHILLIPS: Well, I tell you what. I'm looking forward to interviewing Oliver Stone next week. He's got that controversial biography of President Bush that's releasing next week.

What do you the reaction's going to be like?

WYNTER: Well, this is pretty interesting. I actually spoke with a USC professor who told me that Stone's film "W," could have some impact here, on the presidential race.

How, you might ask? Well, he said Stone's timing is of course, no accident and could influence Independent voters. While some critics think the movie is relatively fair to the president, it's hardly a flattering depiction. And then, Kyra, there's the marketing behind it. Even if you don't see the movie, some analysts say the many commercials and billboards plastered just about everywhere out there could convey a negative image of the president.

But, movie get getting a lot of buzz. Should be a good interview for you, Kyra.

PHILLIPS: The timing is quite ironic. All right. Let's talk about "Saturday Night Live." I'll tell you what, I used to not be able to stay up through the show and now, this is one -- remember? I mean, really, all of the time we'd watch it and it kind of went into a little bit of lull. And they changed comedians. Now it's completely grateful for this election campaign. I mean, they've ridden right into a primetime slot.

WYNTER: It's been absolutely terrific and a great year for SNL. It's numbers have been so good that they kicked off the first of three primetime specials last night.

They'll also have a primetime special the night before the big presidential election. Last night's episode was well received by critics and it didn't even have Tina Fey doing her popular impression of, you guessed it, Governor Sarah Palin.

There is a chance that Palin will appear in person on the show. Kyra, she has told reporters that she'd love to appear, but according to "SNL," nothing has been set up at least not yet. Although a show spokesperson says the door is always open to the candidates.

And we'll have so much more coming up tonight on "SHOWBIZ TONIGHT." "Saturday Night Live" strikes again. John McCain, Barack Obama. Tonight, the debate over who won the hilarious fake debate and if Sarah Palin does SNL, what she should not do on the show. It's all ahead on "SHOWBIZ TONIGHT." You have to love it.

PHILLIPS: Yes we do. We can't get enough of it. Kareen, thanks.

Well, Tina Fey clearly doesn't need one. But, lots of other people are scrambling to buy Sarah Palin's Halloween mask. Costume companies selling out on the governor's face. You might luck out on eBay though. The last time we checked, there were seven of them up for grabs.

And the Nobel Peace Prize goes to the most respected, most successful diplomat that you have probably -- no, Rick Sanchez -- it's actually all the way in Finland, thank you very much. Not Cuba.

(COMMERCIAL BREAK)

PHILLIPS: Well, the Nobel Peace prize goes to a former president of Finland. Martti Ahtisaari watched the announcement this morning with his wife in his Helsinki home. The Noble committee said that Ahtisaari is being honored for mediating several international conflicts. (BEGIN VIDEO CLIP)

MARTTI AHTISAARI, NOBEL PEACE PRIZE WINNER: This hopefully will facilitate my (INAUDIBLE) also, and create conditions for my colleagues in CMI.

(END VIDEO CLIP)

PHILLIPS: Ahtisaari heads the group Crisis Management Initiative. The Nobel laureate will receive $1.4 million.

Sorry, Rick Sanchez, you were not selected this year.