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American Morning
World Markets Plummet, Dow Futures on the Red; McCain and Obama Trading Shots Over How to Handle the Mortgage Crisis; Financial Habits to Blame for the Failing Economy?
Aired October 10, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: It is now one minute after the hour, and here are this morning's top stories.
We are watching global markets again taking huge losses this morning. Japan's Nikkei index and Hong Kong's Hang Seng closed in the red by more than seven percent. Major markets in Europe are still open taking a beating. They're down about nine percent.
Dow futures show a sharp selloff to begin the day on Wall Street, down about 280 points. We should point out that the Nikkei closed down more than nine percent. The Hang Seng was off a little bit more than seven.
President Bush is scheduled to address the nation this morning at 10:25 Eastern. He's expected to reassure Americans that the government is working hard to stabilize the volatile economy. The White House says Mr. Bush is not expected to announce any new policies, though.
And in Oslo, Norway, just about two hours ago, former Finnish president, Martti Ahtisaari, is the winner of this year's Nobel Peace Prize. Finland's ex-president won the award for his efforts to build a lasting peace across the globe in Africa, Asia and the Middle East.
More now on this morning's breaking news. A crisis of confidence is causing markets to slide across the globe. Japan's benchmark index, the Nikkei, closed down almost 10 percent. It's done that before this week.
The same fate in Hong Kong. The Hang Seng was off 7.2 percent. In London, the FTSE opened with a sharp loss. It's down about eight percent right now. The same thing with the DAX and the French markets as well. And both Thailand and Vienna markets plunged 10 percent at the opening bell. Trading was immediately suspended.
Today's steep selloffs come after the Dow Jones Industrial Average plunged to a new five-year low closing Thursday down nearly 680 points.
And yesterday's biggest loser, General Motors. It fell to $4.76 a share on Thursday. That's its lowest price since 1950. It's lost 31 percent of its value.
Christine Romans joins us now this morning. And we talk about confidence and fear, a lack of and an abundance. CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's absolutely right. A deficit of confidence and a surplus of fear and that's what you're seeing around the globe.
I mean, you got Russia closing its stock market. Indonesia was already closed. You know, Thailand, Australia having to halt trading on the open. You've got a record plunge in Australia where the economy has been doing fine so far. I mean, this is really a grave situation.
Take a look at what the Dow has done over the past year because this is what you're going to feel in your 401(k), and this is something that has accelerated. 8,579 is the close for the Dow. It has plummeted from the record high set a year ago yesterday.
I can tell you that the Dow is down 35 percent. The Nasdaq is down 38 percent. The S&P is down 38 percent. These numbers are numbing. So look at it this way.
If you had $100,000 in your 401(k) at the beginning of the year, it is worth $62,000 today. Those are real numbers, folks, and that's why people are so concerned about their retirement savings, about their other savings, they're worried about the money in the bank.
As Gerri Willis has reported, and we've heard over and over again, your money is safe in the bank. You are safe up to $250,000. No reason to be concerned about that. And you saw the huge decline in stocks. Bailing out now, you are making that more than just a paper loss but a real loss. And there are a lot of people in the market right now who are simply just throwing up their hands and getting out and that's what's spreading around the world.
But this is a confidence story. There's an utter lack of confidence and so far, policymakers have not been able to restore that confidence because it is the very basis of the system, the banking system, the financial system where people are concerned about what's happening there and everything feeds from that. Everything.
ROBERTS: Christine, thanks so much.
CHETRY: Well, markets across Europe, as we said, tanked on the opening. Just a few hours ago, they've made some modest gains. If we can take a look at that.
Oh, actually, you know what we're going to do right now? We're actually going to bring in Jeffrey Sachs. He is one of the preeminent economic leaders when it comes to sorting this out, understanding it.
And, Jeffrey, as I understand it, you're going to this IMF meeting -- this meeting to try to figure out the roots of this and whether or not there's a global solution.
JEFFREY SACHS, PROF., COLUMBIA UNIVERSITY: This is a meeting that normally takes place every year at this time. It just happens that it's taking place in the middle of the crisis, so all of the world's finance ministers come together once a year. And now, they have something pretty urgent to talk about.
ROBERTS: So what will the tone of this year's meeting take? I mean, will you actually be looking for solutions or will it just be a general meeting where they talk about the situation and say, well, this is something we need to look at when we go back home?
SACHS: I hope that they do more than just talk. Certainly the normal plan would have been to talk, compare notes and exchange views. But given the extent of the crisis, they have to do more than that. I hope that they come up with some mechanisms for better policy coordination and especially helping Asia not to spiral downward as the United States goes into recession because if Asia can keep growing, that can also help Europe and the United States. So we need to get some balance in the world economy so that not all major parts of the economy are going down simultaneously.
CHETRY: However, we saw Tokyo's index down 10 percent. I mean, nearly 10 percent yesterday. And, again, another hit from earlier in the week. Not necessarily because Tokyo's markets are unhealthy but because of what's been going on in the United States. How do you stop that sort of cyclical continuing to spiral downward?
SACHS: What they're seeing is that the U.S. and Europe are going into recession, and they export a lot to the U.S. and Europe. So they're saying, well, we're sitting ducks. We're falling.
What they have to do is to create an alternative stimulus domestic demand, spending in China, spending in Japan. That means fiscal policy that they haven't yet undertaken. That means building more public roads, construction.
China is urbanizing at an unbelievable rate and if they spend a bit more with those $2 trillion of reserves that they have, they could bolster their economy more than just sitting there and saying oh, my God, look what's happening in the U.S. And that I think is really key.
ROBERTS: Jeff, the other day when we had you on, you seemed to think that the $700 billion bailout plan that Congress just recently passed was already obsolete. That it had been overtaken by events.
We talked with the president's economic adviser, Ed Lazear, yesterday. They're still not sure exactly what to do with the $700 billion. And there's some thought now rather than buying up all these toxic securities, should they take that money and use it to recapitalize the banks?
SACHS: They're going to have to go in that direction. Remember when we talked, I said there was no real plan. They were trying to come up with something but they're scrambling so fast they never really had a plan that made much sense. It didn't address the bank capital. It didn't address the liquidity problems. It didn't address the mortgage foreclosure problems at the household level.
We're truly -- I think it's important to say we're going have to wait for the next government because while they can do certain things right now to put, perhaps, some floor, we need a government that functions and that has popular support and that has a medium-term perspective, and that is waiting for our elections and for January 20th.
ROBERTS: Right. You know, Robert Solo, Nobel Prize winner in Economics in 1987, took a look at this and he said, "I don't really have any explanation for what's going on. How are you feeling about all that?
CHETRY: You know, we're thinking he's a Nobel Prize winner on the economy, he's dropping his head this morning.
SACHS: And he's a pretty -- he's a very smart guy.
CHETRY: Where do we go from there?
SACHS: One can see the end of the housing bubble. One can see the banking crisis. One can see the mistake of how Lehman was allowed to go under, and how that created panic in the short term around world markets. That was a very big mistake.
What is true, however, like Franklin Roosevelt so famously said, sometimes what you really have to fear is fear itself. And that's what we have right now. We need political leadership to put a floor under this because we don't have to go into collapse. We will go into a downturn, but we don't need a collapse and leadership can help stop us from going into collapse.
ROMANS: You know, FDR also said that he was going to fix the crisis in 1932 by bold persistent experimentation. Today, that would be called flip-flopping. But, do we need that? Do we need policymakers to say, OK, that didn't work? Now, we're going to completely switch gears and we're going to try this. Are we in -- is this the economic triage of the financial system?
SACHS: We're going to need a different kind of economic philosophy from the one that we've had for many, many years. The idea of no government and deregulation, that is passe. We're going to need an active government that's addressing core challenges of energy, of infrastructure, of help that is addressing these financial problems as well. It's a new economic age. It's a new economic philosophy. The old one is out the door.
ROMANS: Is American capitalism humbled? We've been trying to spread this around the world. Are we humbled here?
SACHS: Well, we've been on a model that didn't really make too much sense. It was an extreme form. All markets no government responsibility. Now we're going to have to get back to an activist government.
CHETRY: All right.
ROBERTS: Jeff, we know you got to go. You got to head down to Washington.
Good luck at those meetings. Hope you come up with some ideas. (CROSSTALK)
SACHS: Let's hope that somebody does.
CHETRY: He needed to be heading to the plane by 7:10. You're two seconds late.
Thanks for joining us this morning, Jeff.
SACHS: Great. Good to see you.
ROBERTS: Appreciate it, Jeff. Thank you so much.
CHETRY: Well, as the markets plunge again -- he literally got up and left. This is how fast things are going today.
Well, we're looking closer at what John McCain and Barack Obama would do about the economy. We're going to take a quick break. We'll be right back.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most News in the Morning." We have breaking news on this Friday.
The Dow futures are in the red after a really tough day yesterday, another day of a big selloff. Stocks down 680 points. Right now, the Dow futures down nearly 200.
Asian markets also saw huge selloffs with Tokyo's Nikkei down around 10 percent. Markets in Europe followed Asia's lead plunging at the opening bell. They're now down between eight and 10 percent.
And issue number one continues to dominate the talk on the campaign trail as well. John McCain and Barack Obama now trading shots over how to handle the housing and mortgage crisis. McCain took his plan to voters yesterday in Wisconsin.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: We must stabilize housing values in America. They've got to stop plummeting. And until they do, we're not going to see this economy turn around.
So, Senator Obama was happy to bailout Bear Stearns, AIG, Fannie Mae, Freddie Mac. His pals there and the Democrats in Congress that refused to reform Freddie Mac and enact legislation to stop this crisis, but he's opposed to us helping the homeowners of America. Do you want to help the homeowners of America or do you want to help Wall Street? That's the question here.
(END VIDEO CLIP)
ROBERTS: McCain on the campaign trail. And Barack Obama is returning the fire focusing on housing and the economy as he pushes through Ohio, a crucial battleground state. And in our latest CNN poll of polls from Ohio, Obama has a slim four-point lead over John McCain, 50 to 46 percent with four percent of voters still undecided.
CNN's Suzanne Malveaux is with the Democratic campaign. She's live for us this morning in Chillicothe, Ohio.
Good morning, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, John. Well, he's actually here because this is a bellwether town. What the voters do here is likely going to indicate what Ohio voters are going to do in general in about four weeks or so. The last two elections they went for Bush, so Barack Obama does have his work cut out for him. But he believes that he can pick up some of those social conservatives, the independents, by focusing on the economy.
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): Barack Obama in overdrive, kicking off his five-city Ohio tour kissing babies and keeping on message.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Well, I've got news for John McCain. This isn't about losing a campaign. This is about Americans here in Dayton who are losing their jobs and losing their homes and losing their life savings.
MALVEAUX: The economy is center stage in the make or break state of Ohio, where unemployment is 7.4 percent, the sixth highest in the nation. Dayton's mayor says 33,000 have lost jobs in her area over the last seven years. Obama promised that if he was president, he'd put them back to work.
OBAMA: To create five billion new green jobs over the next decade.
MALVEAUX: No Republican has won the White House without winning Ohio, so Obama is here to make sure he holds on to his slight lead. He believes focusing on the economy will get him to the finish. Obama slammed McCain's latest proposal for the government to buy bad mortgages back at full value saying it would end up costing taxpayers billions and reward lenders bad behavior.
OBAMA: Taxpayers shouldn't be asked to pick up the tab for the very folks who helped create this crisis.
MALVEAUX: The campaign released a new ad on cable TV to emphasize the point.
(BEGIN VIDEO CLIP, CAMPAIGN COMMERCIAL, OBAMA FOR PRESIDENT)
NARRATOR: Putting bad actors ahead of taxpayers? We can't afford more of the same.
(END VIDEO CLIP)
MALVEAUX: McCain defended his plan as a costly but necessary fix.
OBAMA: Don't be hoodwinked by his ads. Don't fall for the old (INAUDIBLE). MALVEAUX: But Obama is increasingly portraying McCain as deceptive, out of touch and out of control.
OBAMA: It's called the old bait and switch. What he gives with one hand he'll take away with another. He thinks we won't notice. Well, I've got news for John McCain. We do notice, we know better, we're not going to let him get away with it.
(END VIDEOTAPE)
MALVEAUX: And, John, obviously a lot of people paying attention to what these candidates say. In Ross County, the unemployment rate is 8.6 percent. A lot of people here in this town really feeling the economic crisis. And I should let you know that really the kind of the tone and the language at these rallies, Obama has really changed. It is somewhat serious. It is determined and he is going after McCain on his honesty, whether or not he's really going to be able to help the American people.
ROBERTS: Certainly, Suzanne, there are some serious problems in this country right now.
Suzanne Malveaux for us in Chillicothe, Ohio. Suzanne, thanks so much.
CHETRY: So the market is tumbling, but who is really to blame if anyone? A new theory says that it could be you. And get this, you can't help it. It's the so-called behavior economics. We're going to explain it.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Well, as Americans watch their 401(k)s shrink and stocks on Wall Street tank, many are still trying to figure out how we got into this mess in the first place. CNN's Miles O'Brien explains that it could be just that we have some bad financial habits.
(BEGIN VIDEOTAPE)
MILES O'BRIEN, CNN TECHNOLOGY AND ENVIRONMENTAL CORRESPONDENT (voice- over): Feel a little like a lemon these days? Well, you're not alone. Listen up fellow lemons. The free fall isn't 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 bath water.
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 mixed stuff.
RICHARD THALER, BEHAVIORAL ECONOMIST: That's risky and it can be fun while it lasts, but it's a pretty hard fall. O'BRIEN: No kidding. That's behavioral economist Richard Thaler, who spends a lot of time trying to get inside 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 are doing, and we apply it even when the herd we're following is jumping off a cliff.
O'BRIEN (on camera): But the herd mentality isn't 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? 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 Caesar Salad. I'm trying to watch the calorie intake a little bit. Economists call that a cold state decision -- cold and calculated. But when you get it here, wish you could take a whiff. It smells great. 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 the meal on 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're making financial decisions that way, you're 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're running toward the cliff. But here's something you may not know. Lemons don't really do this. It's a myth made popular by this Disney documentary. Too bad we can't say the same about us.
(END VIDEOTAPE)
O'BRIEN: So what's going to be done about all this? The economist, Richard Thaler, doesn't suggest a whole pile of new government regulations. He says things like a little more transparency in the system would help.
For example, making those mortgage forms, those disclosure forms a lot more simple so when you're at closing and you're about to buy a house and about to sign on the dotted line, you understand a little better what you're getting into -- Kiran and John.
ROBERTS: Miles O'Brien reporting for us this morning. Miles, thanks so much. Twenty-four and a half minutes after the hour now. The plummeting stock market, the crippled economy, which presidential candidate really could fix this mess? Our experts analyze the plans.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Coming up at 27 minutes after the hour. We're back with the "Most Politics in the Morning."
The race for the White House has opened back up a little bit. In our latest CNN poll of polls, Barack Obama is leading John McCain nationally by six points now, 49 to 43 percent. Eight percent of the electorate say they are still undecided. And all the signs show that the candidate who will win the election is the candidate who wins more of the Americans trust on the economy.
Joining me now live from Washington, Democratic strategist and CBS political analyst Joe Trippi.
Joe, as we said, you're a Democratic analyst. Let's see if you take the partisan hat off here for a couple of minutes. What we're seeing in the economy, what we're seeing in these markets, what we're expecting from the Dow today, Wall Street when it opens, what kind of effect is this having on the political campaign and on the American psyche when it comes to this election?
JOE TRIPPI, DEMOCRATIC STRATEGIST: Well, I mean, I think the problem is that neither of these candidates can affect any of this right now. So, actually, they're sort of falling off the scope. The economic crisis is what's first and foremost in America's minds and so -- and, frankly, that the two candidates have two different position on this stuff. It probably isn't good for the markets either because, you know, they don't know which way, which policies are going to be in place, whether this McCain mortgage buy is going to be it or the Obama mix.
So, right now, I think they're just adding to the uncertainty and frankly, I think, what's happening is obviously the crisis. Usually an economic crisis moves the Democrats which is why you're seeing this opening spread between Obama and McCain in the polls.
ROBERTS: Right. And also, historically, the party in power bad economic times, voters like to punish them at the polls as well.
TRIPPI: Right. Exactly.
ROBERTS: You know, what we've seen over the last week or so with the McCain campaign going after Barack Obama for his association with William Ayers, the Obama campaign going after John McCain for his past as a member of the Keating Five, does any of that matter to voters out there?
TRIPPI: Well, again, I think they're tuning it out given the economic problems that they're facing, you know. And I think at this point, really the campaign that takes the high road might actually start to move something here.
You know, people want to know what's going to happen. They don't want to hear about this garbage, personal attacks between both campaigns.
ROBERTS: Now, should these presidential candidates, Joe, be taking a more active role in the discussions regarding what to do about the economy, how to stop the stock market slide, how to open the credit markets back up again, how to talk about, you know, keeping these banks solvent, or should they just leave that to the administration and the people who are in charge right now?
TRIPPI: I think they should leave it to the people who are in charge right now. I mean, frankly, they can't do anything except sort of confuse the issue. I mean, you had McCain talking about how the economy was fundamentally sound just weeks ago and then you got into sort of the political football of it's your party's fault, no it's your party's fault.
I don't think any of that is helping right now. And frankly, I think both campaigns, like I said earlier, the one I think that takes the high road and just gets back to what they propose to do once they are in office is the one that will have the leg up. Otherwise, you're going to have the economic crisis again, as we said, that will cruise the Democrats, also cruise against the incumbent party, which is the GOP. So, again, if this continues and they're just sort of fighting it out on personal attacks, Obama is going to, you know, win this thing.
ROBERTS: Joe Trippi joining us this morning from Washington. Joe, it's good to see you. Thanks for coming in today.
ROBERTS: Joe Trippi joining us this morning from Washington. Joe, it's good to see you. Thanks for coming in today.
TRIPPI: Thanks, John.
ROBERTS: Appreciate it.
TRIPPI: Good to be with you.
CHETRY: 7:30 here in New York. A look at the top stories this morning. The global markets hemorrhaging losses overnight. Japan's Nikkei closed down nearly 10 percent. Hong Kong's Hang Seng also fell more than seven percent. In Europe, markets in London following suit. Paris off nearly eight percent. Dow futures also showing a sharp drop. Actually at one point about an hour ago Dow futures down 300. Right now I don't know whether this is considered a bright spot or not, down 168 this morning.
Well, President Bush will address public at 10:25 Eastern this morning. The White House said he probably won't make any new policy announcements but will try to reassure Americans that the government is working to stabilize the economy.
And as this storm shows no signs of slowing there's another storm brewing. It's Hurricane Norbert taking aim at Mexico's Baja Peninsula. The storm has now been downgraded to a category 1. Norbert briefly hit category 4 status Wednesday night.
And more of this morning's breaking news. Fear and panic gripping the global financial markets as we've been saying this morning. Asian stocks taking a tumble overnight. In Japan, the Nikkei index closed down 9.6 percent nearing crash territory. Hong Kong's Hang Seng index closed off more than seven percent. And in Europe the markets are off again around eight percent. Trading suspended by the way in Thailand as well as in Vienna after stocks fell 10 percent at the opening bell and also the Dow falling to a five-year low, down nearly 680 points and, again, futures down 168 points this morning.
For more perspective we turn now to Andy Serwer. He is the managing editor of "Fortune" magazine. He's at the New York Stock Exchange where it looks another bad day ahead. Is there any reasoning behind why we're continuing to see the markets down?
ANDY SERWER, MANAGING EDITOR, "FORTUNE MAGAZINE": Well, you know, fear is the order of the day, Kiran, right now. As you said, we saw it spread to Europe. It's in from Asia to Europe. It's going to be here at least at the open. You never know how things are going to go. At some point this is going to run its course. You know we are starting to see, you know, large scale selling like this which is sort of seems almost panic induced which seems to may be be a crescendo which is often very useful in terms of establishing a bottom as they say on Wall Street, which means sort of a final blow off of selling. I mean, no guarantee that we're getting to that point but some are suggesting we may be getting there.
CHETRY: What's the advice this morning for people that are waking up, afraid to look at their 401(k)s, wondering what they should do in this time of turmoil?
SERWER: Well, you know, it's really a difficult question because stocks are way down. You say well maybe now if you have some nerve this would be a good time to get in the stock market. Very difficult to do that. On the other hand, telling people to sell is tough too because, you know, they may be selling at a bottom. I think it's true that you really should look at your portfolio, understand what's in it. A lot of the bad financial institutions really don't exist any more so there's not a whole lot of toxic stocks probably in your portfolio.
If you own stocks like Microsoft, Proctor and Gamble and those kinds of things, you know, sure they are down, Exxon-Mobil. Those stocks are down but they're not going to disappear. I mean, these are companies that make oil and gas and they make soap and they make software. They are going to be around for a long, long time. So that's something you can ride out. If you need some cash, you know, to go on a retirement cruise next month and you know, you really need it, you might want to get that cash out right now. So it depends where you are in your life, how old you are, what your goals are and what kind of stuff you own in your portfolio.
CHETRY: President Bush tomorrow is going to be meeting with finance ministers of Britain, Italy, Germany, France, Canada, Japan. This is a back and forth that's been going on through phone calls and letters over the past few weeks. What together I guess can these nations solve that we can't really do alone?
SERWER: Well, I think, you know one thing that's very important here, Kiran, is you know a lot of what has gone on now from Washington from regulators both here in the United States and in Europe has been reactive. And that's understandable because you know we're in unknown territory here. So something will happen and they will try a measure.
And quite frankly not a whole lot of stuff has worked. I mean, we tried bailouts. We tried infusions in to the commercial paper market. We tried cutting interest rates. What these finance ministers need to do is get ahead of the game and show the world, show investors that they have a plan. You know, something that's going to change the psychology here. Perhaps if these people get together on a coordinated global basis and say here's our plan, here's what we're going to do and the big thing that they need to do is tackle fear, just maybe they can pull it off.
CHETRY: All right. The hard thing, as we know. Andy Serwer, great to have your insight for us this morning. Thanks.
SERWER: Thanks. Thanks, Kiran.
ROBERTS: 35 minutes after the hour. The wrath at the angry McCain supporter. Why suddenly his base is up in arms and certainly not afraid to show it.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm mad. I'm really mad. It's time that you two are representing us and we are mad. So go get them.
(END VIDEO CLIP)
ROBERTS: And what is Obama saying about fear and panic in the market right now? You're watching "the most news in the morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. America's economic crisis is the main issue out on the campaign trail. Barack Obama took his message to voters in the battleground state of Ohio.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: While we face this very serious challenge. It's also critical to realize that now is not the time for fear or panic. Now is the time for resolve and now is the time for leadership. Now is the time to come together with a determination that we can steer ourselves out of this crisis and restore confidence in the American economy. Now it's not going to be easy. This is a crisis that's been years in the making. The final verdict on eight years of failed economic policies. The result of greed and irresponsibility that stretched from Wall Street to Washington. So it's going take us more than a few days to repair the damage. The next president will have to manage this recovery. And the question that you have to ask is will that president be looking out for you?
(END VIDEO CLIP)
CHETRY: Obama is also using his rallies to discredit John McCain's plan to deal with the mortgage crisis. Obama's running mate Joe Biden campaigned in the battleground state of Missouri also using those same talking points. John.
ROBERTS: And as Obama's lead holds in national polls, more and more John McCain is facing one emotion among his supporters. Anger. Our Ed Henry has got more and joins us from our Chicago bureau. Those events yesterday the crowd was very worked up at.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John, Republican voters are fired up. They're fed up with the state of this presidential race and they're not shy about telling John McCain all about it.
(BEGIN VIDEOTAPE)
HENRY (voice-over): It's an emotion now on display at more and more McCain-Palin events. Rage.
UNIDENTIFIED MALE: I'm mad! I'm really mad! And what's going to surprise you is not the economy, it's the socialists taking over our country!
HENRY: Republicans this time in Wisconsin venting frustration over Barack Obama's rise in the polls.
UNIDENTIFIED MALE: When you have an Obama, Pelosi and the rest of the hooligans up there going run this country, we got to have our head examined. It's time that you two are representing us and we are mad! So go get them!
HENRY: Almost a cry for help. The party faithful amazed McCain could possibly be losing.
UNIDENTIFIED MALE: And we're all wondering why that Obama is where he's at. How he got here. I mean everybody in this room is stunned that we're in this position.
HENRY: And enraged the media is allegedly giving Obama a pass on his ties to former 1960s radical William Ayres.
UNIDENTIFIED MALE: We are all a product of our association. Is there not a way to get around this media and line up.
HENRY: But some anger is directed at McCain himself.
UNIDENTIFIED MALE: We have a good Reverend Wright, we have all of these shady characters that surrounded him. We have corruption here in Wisconsin and voting across the nation I am begging you, sir. I am begging you take a stand.
HENRY: McCain seems torn. On one hand he is going negative on the Ayres controversy.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The point is Senator Obama said he was just a guy in the neighborhood. We know that's not true. We need to know the full extent of the relationship because of whether Senator Obama is telling the truth to the American people or not.
HENRY: But he ducked the demand he bring up the Reverend Wright flap, instead veering back to the economy.
MCCAIN: But I also, my friends, want to address the greatest financial challenge of our lifetime with a positive plan for action.
(END VIDEOTAPE)
HENRY: New this morning the McCain campaign has a TV ad out now, going out after Obama on the Ayres question saying this raises questions about his judgment. Meanwhile, the RNC, the Republican National Committee, has a TV ad of its own going after the Ayres controversy, also bringing up Tony Rezko and basically saying that Barack Obama is not a candidate of change but he's from the machine, the political machine here in Chicago.
This is going to be strategy from here until November, go after Obama hard but it carries some risk, obviously. It could backfire with independent voters. John.
ROBERTS: You know, Ed, I've gone to an awful lot of campaign events in my day and I've never seen anything like that before.
HENRY: I tell you there were some people also coming after us. One guy was shouting at me saying something like he wanted to see me outside because he was upset at the media's coverage of John McCain and of Barack Obama. People are very, very fired up. John.
ROBERTS: So did you talk to him outside afterwards or just want to see you.
HENRY: I didn't chicken out. You didn't want you to think I chickened out but I had a lot of work to do, John. I had to file that piece for you.
ROBERTS: Maybe he wanted a discussion with you and perhaps not. Ed Henry this morning.
HENRY: Yes, he went home and I went to work.
ROBERTS: All right. Ed, thanks so much for that.
CHETRY: Ed Henry jumped on the Election Express and he was of out there. He can't anymore chances. Got 20 odd days of coverage.
Well, the economy in crisis and the candidates both have their plans. But what does Mr. Independent think about it all. We have Lou Dobbs. He's going to be joining us ahead on "the most news in the morning."
(COMMERCIAL BREAK)
CHETRY: We're following breaking news this Friday morning. Certainly a crisis of confidence today as the global markets take a dive. This morning Dow futures are in the red. Right now to be exact we have the Dow futures down 174 points. Huge losses overnight across the globe. Asian markets saw huge sell offs with Tokyo's Nikkei down around 10 percent. Markets in Europe also following Asia's lead, plunging at the opening bell. Main indices there down between seven and 10 percent this morning.
ROBERTS: And at 46 minutes after the hour. Joining us now with his own independent perspective, CNN's Lou Dobbs is on the line. Lou, what do you make of what's happening with these global markets. Every time the Treasury Department or the administration tries to throw something at this crisis to try to stem the bleeding, it seems to be a little bit of a Band-Aid but then the bleeding starts all over again.
VOICE OF LOU DOBBS, CNN HOST: John, as you know, I've been saying for a while the best thing that this administration right now whether President Bush who is going to speak this morning as you know or whether it will be Treasury Secretary Paulson who spoke yesterday, the best thing that they can do is to just shut up for right now. They keep trotting these people out who don't really have anything to say other than be brave or, you know, we're working on it.
They need to be very quiet until they are actually doing something. One thing that's happening in this crisis is the era of talk is over and if you're not prepared to walk the walk, you really should get out of the way. All elected officials right now in this country are driving markets down. They have been talking the markets down for 2 1/2, three weeks now and the economy down and this is what they've gotten. We need some wise men and women, not any more of these partisan hacks in elected office trying to tell everybody to be calm. It's an absurdity.
ROBERTS: You know, yesterday, Lou, we had Ed Lazear who is the president's chief economic adviser on the "Situation Room." Here's what he told me in regards to the $700 billion bailout and when all of this is going to happen and it may have some effect on the markets, both the stock market and the credit markets. He said "we're in a situation right now where we will need to act quickly but also need to get things right. It took us a while to get here. It's going to take us time to get us out of this thing. We're not talking months but days to weeks and certainly a very short period of time. Do we have days to weeks here, Lou? I mean, where are these markets going to be in days ahead?
(CROSSTALK)
DOBBS: ... and the democratic leadership of Congress have had 14 months to deal with the reality that has been deteriorating throughout. We have been in this mess for over a year. It's accelerating right now without question. And again, with all deference to Mr. Lazear they don't have the time to be playing these silly games. It is time to take action and that action has been laid out. I've been recommending it now for some time. Follow the plan of former FDIC Chairman Bill Isaac, start moving U.S money, federal money into capital position and ailing banks which will expand their capacity to loan and let's get this, this bailout underway. Not a bailout of Hank Paulson's friends on Wall Street but a bailout of the system that's in severe stress and we need to move ahead with leadership that is both positive and absolutely committed to action. That means that Pelosi and Reid and Bush and Paulson need to shut up and get to work.
ROBERTS: So then, Lou, in terms of the $700 billion bailout plan, the plans of which have not been finalized, are you suggesting that they should abandon this idea of buying up these toxic securities and instead -
DOBBS: Absolutely.
ROBERTS: ... take this ownership position in these banks, recapitalize the banking system?
DOBBS: Absolutely. John, we've had people on, we've been watching people on certain cable news networks across - we've been watching people on radio, listening to people on radio and reading these columnists and some of the finest news organizations around the country. They have been absolute toadies for this bailout plan and not one of them understood what was going happen because Hank Paulson didn't know what he was doing. They were just looking for an emergency authority and yet journalists after journalists are supporting it. It's unconsciousable. This government right now does not know what it's doing. It is time to focus and to strengthen those capital positions of the American banks who are struggling. In many cases, near failure and it has to happen now.
ROBERTS: Lou, you are going to have a lot to talk about tonight. Looks like the Dow futures are down some 200 points. Thanks for being with us this morning. We'll see you tonight at 7:00.
DOBBS: I'll say - may I say one last thing, John?
ROBERTS: Yes. Go ahead quickly.
DOBBS: There's not going to be a depression. We need to hear those words from every one of the people I just mentioned.
ROBERTS: All right even though you say they should shut up, right though?
DOBBS: I'm sorry.
ROBERTS: Even though you said they should shut up.
DOBBS: They should shut up about what they're going to do and get it done.
ROBERTS: All right. Lou, thanks. We'll see you tonight. Appreciate it.
Ten minutes now to the top of the hour. (BEGIN VIDEOTAPE)
ROBERTS (voice-over): Satire overload.
UNIDENTIFIED MALE: One thing I absolutely promise -
CHRIS PARNELL AS TOM BROKAW: Times up.
ROBERTS: "Saturday Night Live" adds a weeknight performance to its line up in anticipation of election day.
UNIDENTIFIED MALE: ... election. Got to make the right selection.
ROBERTS: Alina Cho takes us behind the scenes at "SNL." You're watching "the most news in the morning."
(END VIDEOTAPE)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: I was just trying to keep Tina Fey in business, just giving her more information.
Job security for "SNL" characters.
(END VIDEO CLIP)
CHETRY: Well, that's Sarah Palin joking about the "Saturday Night Live" spoofs that have been such a hit for the show. It's such a hit that it seems that "Saturday Night Live" is not just for Saturday anymore. Alina Cho joins us now. You got a chance to go back stage and talk to a lot of these people about what they're doing. And now they need another night.
ALINA CHO, CNN, CORRESPONDENT: They do. Thursday nights, for two more Thursdays. Kiran, good morning. And good morning everybody. You know what "Saturday Night Live" does that nobody else can imitate are those pitch perfect impersonations of the candidates. This year, they hit the comedy jackpot with Tina Fey and Sarah Palin. Who hasn't seen that?
Now less than a month from the election, there is so much material, it's not enough just to do one "SNL" a week. NBC added another night, and "Weekend Update Thursday" debuted last night.
(BEGIN VIDEOTAPE)
CHRIS PARNELL AS TOM BROKAW: Good evening, and welcome.
CHO: With Chris Parnell, returning as moderator Tom Brokaw, Fred Armisen as Barack Obama, and Darrell Hammond as John McCain, the stage is set.
Remember those pesky time limits during the real presidential debate? Here's "SNL's" take.
FRED ARMISEN AS SEN. BARACK OBAMA: One thing I absolutely promised --
PARNELL AS BROKAW: Time's up.
DARRELL HAMMOND AS SEN. JOHN MCCAIN: My friends...
PARNELL AS BROKAW: Senator McCain, your time is up.
CHO: How about this moment from the real debate?
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: You know who voted for it. You might never know. That one.
CHO: Hammonds' John McCain, well he sees it this way.
HAMMOND as MCCAIN: I will continue what I'd done for 25 years which is to reach across party lines, something that pee pants over here would never even consider.
CHO: In its 34th season, "Saturday Night Live" is hotter than ever. Ratings are up 50 percent this season. The show's premiere, its highest rated since 2001.
TINA FEY AS GOV. SARAH PALIN: And Hillary Clinton, who came so close to the White House, and me, Sarah Palin, who is even closer.
CHO: And in the age of youtube, this fake Sarah Palin-Katie Couric interview got more views than the real thing. More than 10 million to date. This election is very, very good for "Saturday Night Live." Just ask Seth Meyers, "Weekend Update" anchor and "SNL's" head writer.
SETH MEYERS, "SNL" HEAD WRITER: When do you stuff about politics it helps everybody's paying attention, and this is a special election.
CHO: Not unlike 2000. The historic presidential recount was rich with material. And this election -
Was that like a gift for the humor gods to have Sarah Palin?
MEYERS: It took an hour for everybody to realize I think for everybody to sort of find out who she was, what she was and obviously we had this gift of casting Tina.
CHO: Tina is Tina Fey, of course.
FEY AS PALIN: Can I call you Joe?
CHO: Her already iconic portrayal of Palin.
FEY AS PALIN: Are we not doing the talent portion?
CHO: Has as one writer put it, all but defined the candidate. Executive producer Lorne Michaels says he's proud to be part of the process and maintains the show is not partisan. LORNE MICHAELS, EXEC. PRODUCER, "SNL": You're not putting on anything because you have a serious point to make, you might have a serious point to make, but first and foremost it has to be funny.
(MUSIC PLAYING)
UNIDENTIFIED MALE: What I want, you've got a choice in this election. Got to make the right selection. Obama or McCain. Yeah, yeah.
(END VIDEOTAPE)
CHO: Will Forte and Fred Armisen as Hall and Oates. You can't beat that. you know, no Tina Fey-Sarah Palin impersonation last night. We should tell you but of course the big question going forward is will the real Sarah Palin pay a visit to "SNL"? Well, the McCain campaign is reportedly in talks with the show right now.
And executive producer Lorne Michaels, who is usually very cagey, has been quoted as saying, Kiran, all in good time. Can you imagine the real Sarah Palin next to the fake Sarah Palin, it probably would and their ratings are already up 50 percent.
CHETRY: I love it.
CHO: Election year is very good.
CHETRY: They had to bring back some of those alum to play some of those iconic characters.
CHO: They did. Bill Murray being one of them.
CHETRY: All right. Alina, good stuff. Thanks.
CHO: You bet.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): The record-setting stock plunge. When will the free-fall end? Plus, why are thousands of dead people registering to vote?
UNIDENTIFIED MALE: So roughly half of them are bad, registered to a dead person?
ROBERTS: CNN's special investigations unit is on the case. You're watching "the most news in the morning."
(COMMERCIAL BREAK)
