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Monitoring Foreclosure Filings & Unemployment Rates; Greenspan Testifies on Capitol Hill; Empowering the Youth Vote
Aired October 23, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: It's Thursday, October 23rd, I'm Heidi Collins. You're in the CNN NEWSROOM.
Your money. This hour it's on the Hill, under the microscope and on the move. Let's begin on Wall Street. A quick look at the big board shows Dow Jones industrial averages up by double digits there, about 44 points or so. Much better than yesterday's close, down about 515, so a long day ahead. We will watch those numbers.
Also watching Capitol Hill. Lawmakers in both the House and Senate are holding hearings on the financial crisis. They're going to be taking a closer look at the role of federal regulators. Are they watchdogs or lap dogs? Former Fed chairman Alan Greenspan is set to testify. We're going to be listening into that live just as soon as it happens.
Around the world, under the stress, stock markets overseas take a beating. In Asia, South Korea's market plunged more than seven percent. Japan's Nikkei index closed down 2.5 percent. Caution, also the watch word in Europe. Throughout the morning, England and Germany have seen their markets more than 4 percent off. Both have rebounded slightly in just recent hours. We're watching all of it for you.
In the U.S. more signs of the troubled economy. CNN's Christine Romans has the bad news unfortunately by the numbers.
Hi there, Christine.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi there, Heidi.
Well, you're right. I mean, the job situation is sort of really accelerating here in terms of the bad news on the job situation. Your money, your vote, your job. These are such important things when people head to the polls. What we know is the most recent week jobless benefits, 478,000 people lined up to get a jobless check, an unemployment check for the first time. Those are first-time claims for unemployment, 478,000. Pretty much anything above 400,000 is seen as a sign of a pretty weak economy. So we've been watching that every week.
We know that there have been layoffs announced this week from GM. Chrysler closing one plant and also ramping down significantly a shift on another plant. Merck, Goldman Sachs, Pepsi, National City. It's not just manufacturing. Its not just housing. It's banking. It's drug companies. It's manufacturing, housing, it's car dealers. It's a lot of different parts of the economy are starting to see job layoffs. And we know that mass layoffs were the highest they've been since September 2001. That means employers going out and just firing 500 people or more in one fell swoop.
Foreclosure filings are the other part of the story. We know that those are up pretty sharply, too. In the third quarter they jumped some 71 percent, I think, and for the last month, think of it this way. 2,710 people every day lost their homes. This isn't just falling in default or having the foreclosure process start. That's the end of the process where you actually lose the home. 2,710 every day. And a lot of those people who are suffering from jobs and from the foreclosure crisis live in some of these battleground states. That's why this is going to be so interesting in the next few days.
Look at this -- this is from moody's economy.com. The folks there put together what they see are the health of these different economies. They say these red states look they are in orange, I guess, are already in a recession. The yellow ones are at risk. There's actual economic expansion in the green ones. Of course moody's economy.com doesn't declare when a recession is started. This isn't the whole economy we're talking about. We're just talking about some parts of the country that look like they're already in trouble. And some of those are those battleground states, those swing states, Heidi.
And I should point out, just because we are 13 days or 12 days before the election, the chief economist at that firm that put all that data together is an unpaid adviser for the McCain campaign. Also for the full disclosure so close to the campaign but --
COLLINS: Sure.
ROMANS: The numbers speak for themselves, that it is tough in certain parts of the country right now and some of those are battleground states.
COLLINS: Yes. It's going to be a very interesting to see how people end up deciding and casting their vote.
ROMANS: That's absolutely right. 12 days away, you are right about that. Christine Romans, appreciate it. Thank you.
Presidential politics, it's 12 days till the election. And the candidates are hitting their last lap of the campaign trail. Right now Republican nominee John McCain is wrapping one up in Florida. He has another one there coming up tonight. Then he will travel to another battleground state, Colorado. His running mate Sarah Palin is in the all-important state of Ohio. She then travels on to Pennsylvania.
Democratic nominee Barack Obama also begins the day in the Midwest. He's in Indiana for a morning rally, and then he will head to Hawaii to be with his ailing grandmother. Obama's running mate Joe Biden in North Carolina today for a bus tour of that state.
Begin with Barack Obama's campaign detour. Later today he does leave the campaign trail and heads to the bedside of his ailing grandmother, as we said, in Hawaii. First a rally, that's coming up next hour in Indianapolis. CNN's Jessica Yellin is there.
Hi, Jessica.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Heidi.
Well, as you say, with the election just days away, Barack Obama is warning that there is nothing to be taken for granted. His campaign has said all along they expect this election to be close and wouldn't be surprised if polls tighten as we approach Election Day. So it's no surprise Barack Obama is hitting back aggressively against the mounting attacks he's facing from McCain's campaign, attacking both the charges that Obama is promoting socialism and this accusation that there are pro-American, anti-American parts of the country.
Obama is saying on the campaign trail now regularly that there is one America, and all parts are standing for the same values. He says that is a sort of divisive way of campaigning. He is also aggressively taking on the charge that he is spreading some sort -- spreading the wealth message and the Joe the plumber theme that John McCain has latched on to, Barack Obama is saying John McCain doesn't really stand for Joe the plumber. He stands for someone else. Let's listen.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I've got no problems with Joe the plumber. I think he's working hard. He wants to live out the American dream. All I want to do is give Joe a tax cut. That's all I want to do. So let's be clear about who John McCain is fighting for. He's not fighting for Joe the plumber. He's fighting for Joe the hedge fund manager. He's fighting for Joe the CEO.
(END VIDEO CLIP)
YELLIN: And you can expect to hear Barack Obama deliver a similar message here in Indianapolis, though he is polling behind John McCain in this state, he has made up some ground with his message on the economy. So expect him to hit that hard. Finally, Heidi, he's getting a little bit of help from a well-known voice, singer John Mellencamp has recorded some radio ads for Obama, again promoting the economic message and tying John McCain to George Bush's economic policies -- Heidi.
COLLINS: All right. We'll be listening for that. Jessica Yellin. Appreciate it.
John McCain in Florida this hour, reaching out to blue collars in a red state. His campaign calls it the Joe the plumber bus tour. The Ohio man has become McCain's symbol and scare tactic of everyday Americans facing the threat of higher taxes under Barack Obama.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Whether it's Joe the plumber in Ohio or Joe over here -- thank you Joe. Joe, thank you. There's Joes all over here, the small business owners I met with this morning here in Florida, we shouldn't be taxing our small businesses more as Senator Obama wants to do. We need to be helping them expand their businesses and create jobs. This week we learned that Senator Obama is concerned that his plan for wealth redistribution is seen as welfare. So he just added a work requirement. 12 days to go, 13 days to go in the election, he changed his tax plan because the American people had learned the truth about it, and they didn't like it.
(END VIDEO CLIP)
COLLINS: By the way, Joe the plumber is not accompanying John McCain on the tour.
Well, consider them students of democracy. Their enthusiasm could be a lesson for us all. There are some challenges and concerns on their campus crusade. We're going to be hearing about them in just a few minutes.
Look at this now, firefighters gaining ground on a wildfire in Los Angeles we've been telling you about. The fire closed down the San Diego freeway near Beverly Hills. That road now back open, the 405. But there is still fear the fire could flare-up again and people would have to get out and get out fast. On the other extreme, the first snow of the season in Lake Placid, New York. The light dusting, a preview of things to come.
Rob Marciano standing by now. That's true, definite extremes, different sides of the country too.
ROB MARCIANO, CNN, METEOROLOGIST: Yes. Had the Olympics up there in Lake Placid in 1980. Good to see the had the lady of the lake boat out of the lake because I think it's going to freeze up in a hurry.
All right. So you have winter across the northeast. Temperature is chilly there. Some of the coldest day of the season. And tomorrow there will be freeze warnings out for the suburbs of New York City. So take in the tender vegetation if you haven't done that already.
Look at this, cone shape in the radar scope with echoes all the way down to the Mississippi delta, almost to the Canadian border. This is a large system which will be migrating its way across the country pretty slowly. And as it does so, it will be affecting people in different ways. The back side of this has some snow. We have blizzard conditions in spots yesterday with winds gusting over 60 miles an hour. Just a little bit of snow. So it's not a whole lot sticking because the ground is still warm. But also heavy rains, pretty much dropping right over the Mississippi River. So all the way down to New Orleans where we're seeing some of that action.
Temperatures chilly again across the northeast, moderate across the central part of the country. 93 or better expected in L.A.. You know the fire is happening there. Let's take a live shot of LAX, pretty far away from the fires there. On the water, it will be cooler there, about 93. But inland, well certainly could easily touch 100 degrees. Critical fire danger there again today. Speaking of cold, reinforcing shots of it will be coming down across the Great Lakes over the weekend. Monday's high temperatures may very well only be in the 20s and 30s in spots.
Our first taste of winter I think as we get towards Halloween. Also seems to be as we get towards Halloween, the biggest challenges, Heidi, is how much layering do you layer up the kids -
COLLINS: That's right.
MARCIANO: -- underneath the costume. So we'll have of course that spooky forecast this time next week.
COLLINS: Good. And we're all dying to know what you're going to be, too.
MARCIANO: Oh, yes. It will be creative. Don't you worry your pretty little head.
COLLINS: I'm sure it will. All right. Rob, we'll check back later, thanks.
MARCIANO: Yes.
COLLINS: The search is back on this morning for two fishermen missing in the Bering Sea, off the Alaskan Coast. The Coast Guard recovered the bodies of five crew members. Four others were found alive floating in a raft. Their fish processing ship radioed for help saying they were taking on water.
Problems at the polls. Student voters facing challenges from fewer voting machines to mixed messages.
(COMMERCIAL BREAK)
COLLINS: Quickly, we want to take you to Washington now, Capitol Hill where we see former Federal Reserve chairman Alan Greenspan there on your far left. He has just taken the oath and he'll begin his testimony very shortly, testifying before the House Oversight and Reform Committee regarding the current credit crisis, the economic crisis and what is happening in this country with your money. Some very interesting comments that we anticipate he will be making. We want to go ahead and take a moment to listen in very shortly here.
(JOINED IN PROGRESS)
UNIDENTIFIED MALE: ... Dr. Greenspan, we want to start with you. There's a button on the base of the mike. You're not inexperienced in testifying before Congress. So I will recognized you to proceed as you see fit.
ALAN GREENSPAN, FMR. FEDERAL RESERVE CHAIRMAN: Thank you very much, Mr. Chairman.
UNIDENTIFIED MALE: Could you pull the microphone a little closer to you. GREENSPAN: Thank you very much, Mr. Chairman. I appreciate having an extra few minutes because I will run slightly over. I'll try to do it as expeditiously as possible. Mr. Chairman, ranking member Davis and members of the committee, thank you for this opportunity to -
UNIDENTIFIED MALE: Could you just put the mike a little closer, Mr. Greenspan?
GREENSPAN: I'm sorry.
UNIDENTIFIED MALE: Thank you. That will help.
GREENSPAN: All right. Thank you for this opportunity to testify before you this morning. We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures. You, importantly represent those on whose behalf economic policy is made. Those who are feeling the brunt of the crisis in their workplaces and homes, I hope to address their concerns today.
This morning I would like to provide my views on the sources of the crisis, what policies can best address the financial crisis going forward, and how I expect the economy to perform in the near and longer term. I also want to discuss how my thinking has evolved and what I've learned this past year. In 2005 I raised concerns that the protracted period of under pricing of risk if history was any guide, would have dire consequences. The crisis, however, has turned out to be much broader than anything I could have imagined. It has more from one grip by liquidity restraints to one in which fears of insolvency are now paramount.
Given the financial damage to date, I cannot see how we can avoid a significant rise in layoffs and unemployment. Fearful American households are attempting to adjust as best they can to a rapid contraction in credit availability. Threats to retirement funds and increased job insecurity. All of this implies a marked retrenchment of consumer spending as households try to divert an increasing part of their incomes to replenish depleted assets, not only in 401(k)s, but in the value of their homes as well.
Indeed a necessary condition for this crisis to end is the stabilization of home prices in the United States. They will stabilize and clarify the level of equity in U.S. homes, the ultimate collateral support for the value of much of the world's mortgage- backed securities. At a minimum, stabilization of home prices is still many months in the future. When it arrives, the market freeze should begin to measurably thaw and frightened investors will take tentative steps towards reengagement with risk. Broken market ties among banks, pension and hedge funds and all types of nonfinancial businesses will become reestablished, and our complex global economy will move forward.
Between then and now, however, to avoid severe retrenchment, banks and other financial intermediaries will need the support that only the substitution of sovereign credit for private credit can bestow. The $700 billion troubled assets relief program is adequate to serve that need. Indeed the impact is already being felt. Yield spreads are narrowing.
As I wrote last March, those of us who have looked to the self- interest of lending institutions to protect shareholders' equity, myself especially, are in a state of shocked disbelief. Such counter party surveillance is a central pillar of our financial market's state of balance. If it fails as occurred this year, market stability is undermined. What went wrong with global economic policies that had worked so effectively for nearly four decades, the breakdown has been most apparent in the securitization of home mortgages. The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations, undeniably the original source of the crisis would have been far smaller and defaults accordingly far fewer.
But subprime mortgages pooled and sold as securities became subject to explosive demand from investors around the world. These mortgage-backed securities being subprime were originally offered at what appeared to be exceptionally high risk-adjusted market interest rates. But with the U.S. home prices still rising, delinquency and foreclosure rates were deceptively modest. Losses were minimal. To the most sophisticated investors in the world, they were wrongly viewed as a steal.
The consequent surge in global demand for U.S. subprime securities by banks, hedge and pension funds, supported by unrealistically positive rating designations by credit agencies was, in my judgment, the core of the problem. Demand became so aggressive that too many securitizers and lenders believed they were able to create and sell mortgage-backed securities so quickly that they never put their shareholders' capital at risk and hence did not have the incentive to evaluate the credit quality of what they were selling.
Pressures on lenders to supply more paper collapsed subprime underwriting standards from 2005 forward. Uncritical acceptance of credit ratings by purchasers of these toxic assets has led to huge losses. It was the failure to properly price such risky assets that precipitated the crisis. In recent decades, a vast risk management and pricing system has evolved combining the best insights of mathematicians and finance experts supported by major advances in computer and communications technology.
A Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivatives markets. This modern risk management paradigm helped sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria. Had instead the models been fitted more appropriately to historic periods of stress, capital requirements would have been much higher and the financial world would be in far better shape today in my judgment.
When in August 2007 markets eventually trashed the credit agencies rosy ratings, a blanket of uncertainty descended on the investment community. Doubt was indiscriminately cast on the pricing of securities that had any taint of subprime backing. As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue. This will offset in part market deficiencies, stemming from the failures of counter party surveillance.
There are additional regulatory challenges at this breakdown of the central pillar of competitive markets requires in order to return to stability, particularly in the areas of fraud, settlement and securitization. It is important to remember, however, that whatever regulatory changes are made, they will pale in comparison to the change already evident in today's market. Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.
The financial landscape that will greet the end of the crisis will be far different from the one that entered it little more than a year ago. Investors chastened will be exceptionally cautious. Structured investment vehicles, alt a mortgages and a myriad of these exotic financial instruments are not now and are unlikely to ever find willing buyers. Regrettably also on that list are subprime mortgages, the market for which has virtually disappeared.
Home and small business ownership are vital commitments to a community. We should thus seek ways to re-establish a more sustainable subprime mortgage market. This crisis will pass and America will reemerge with a far sounder financial system. Thank you, Mr. Chairman.
COLLINS: The testimony of former Federal Reserve chairman Alan Greenspan there talking about a whole lot of issues. Fascinating the way that he breaks it all down. Obviously the main point that he says -- the main reason for all of this in the situation that we're in right now is the breakdown, most apparent in the securitization of home mortgages talking an awful lot about subprime mortgages there. I liked what he said at the end though saying the crisis will pass and America will emerge with a far sounder financial system. We will continue to watch more of those hearings taking place on Capitol Hill today with former Federal Reserve Chairman Alan Greenspan.
Problems at the polls. Student voters facing challenges from fewer voting machines and mixed messages.
(COMMERCIAL BREAK)
COLLINS: Students could make a huge difference by voting in this election, but they've got their own challenges and concerns at the voting booth. Matthew Segal is the founder and executive director of the Student Association for Voter Empowerment. He's joining us this morning from Washington.
Matthew, nice to see you.
MATTHEW SEGAL, STUDENT ASSOCIATION FOR VOTER EMPOWERMENT: Thanks for having me.
COLLINS: You bet. Why don't we start with this. Tell us what your organization is doing and what the main concerns are for students out there who want to be involved and want to vote in this election.
SEGAL: Sure. Well, we've seen all sorts of problems occur ranging from misinformation campaigns where students have received flyers that give incorrect information with regards to their ability to participate where they attend school. We've seen problems with voter I.D. restrictions. Amazingly 19 percent of all young people in this country don't have I.D. that reflects their current address.
COLLINS: you mean because they're living in dorm rooms?
SEGAL: Because they're living in dorm rooms or they're attending school in a different state than where they're from. And that creates a situation where they don't have the I.D. to vote on Election Day. And in states like Ohio and Indiana for instance where the alternatives are utility bills, oftentimes students don't have those. Because if you live in a dorm, your college pays your heating, your water and your electric. So what we're seeing here is the potential for literally tens of thousands of college students to have to vote provisionally which can create a big different and also damage new voter confidence.
COLLINS: So you're talking I assume mostly about students who go to school out of state. Can they not send absentee votes?
SEGAL: They can. In fact, all students have a choice. Your right to vote where you attend school or your right to vote where you are originally from are both protected under law. But many students choose to vote where they attend school and those students also have rights that need be protected.
COLLINS: Yes because we really are -- you're not the first interview that we've done about the younger voting population. And we have learned certainly that there are a whole lot of younger people who do want to be voting, and it's going to make up a large percentage.
In fact, you mentioned some of these misleading pamphlets. We want to go ahead and show a little bit of one that was found, according to your organization, at the University of Pennsylvania, is that correct?
SEGAL: That's right.
COLLINS: Let's go ahead and --
SEGAL: That's right, that and Drexel College. This flier was shown --
COLLINS: The same flier?
SEGAL: Yes.
COLLINS: OK. Let's go ahead put that on the screen for people at home. This one says that, " ... recently at school, an Obama supporter approached me during a rock the vote assembly. He informed me that on the day of the election there will be undercover officers to execute warrants on those who come to vote based on the anticipated turnout." It goes on to say, " ... they assume this to be an opportunity for those who normally go by fake names and addresses to give their real names and IDs."
Is this supposed to be like some sort of sting operation?
SEGAL: Well, look, these flyers particularly are egregious, and they're intended to deceive or misinform new voters who are unclear of the laws in their states. This one is ridiculous; it talks about how if you have any unpaid parking tickets, you might not be able to vote.
But we've also seen incidents where the very county clerks or county registrars in many of these areas, like Blacksburg, Virginia, or in El Paso County, Colorado, have told statements towards their student bodies that if you, for instance, vote where you attend school and you're from out of state, that you can lose your parents' ability to file you as a tax dependent on their forms. And that, of course, is also untrue.
And so some of these cases are purported from the very registrars or boards of election.
COLLINS: Well that would be my question then. Are you hearing word from any of the colleges, the University of Pennsylvania, for example, that are doing things to make sure that their students are protected and that their right to vote is protected?
SEGAL: Sure. Well many colleges are doing a great job in referring their students to the proper web resources or local boards of elections.
But my advice is to check, check, check. Don't necessarily believe what you hear from a friend. Check with people that you can hold accountable, like your board of elections office, your secretary of state, maybe your college professor.
COLLINS: Yes, never your college buddies, though. They never are dependable.
SEGAL: Well they are dependable of course, but not necessarily with regards to complex voting law that even county registrars have had difficulty interpreting.
COLLINS: Sure. Hey, Matthew, real quickly before we let you go --
SEGAL: Sure.
COLLINS: -- what is your organization -- this Student Association for Voter Empowerment -- what exactly are you guys doing to make sure that younger voters don't have a problem come November 4th?
SEGAL: Sure. We're a national non-profit organization. We have over 30 college chapters on universities across the country. Our main goal right now is to work on the access, accountability and transparency concerns with our election process. We're trying to make sure that young people can actually access the polls when they want to and be able to show up and vote on Election Day without a host of problems and concerns.
COLLINS: Yes, and quickly we're looking at a picture that kind of got you involved in this whole thing. Back in 2004 you went to Canyon College, you said the line was ridiculously long, like 10 1/2 hours it took you to vote or something like that.
SEGAL: Exactly.
COLLINS: Hopefully some of those things have changed as well.
Hey, Matthew, we should have you back after November 4th to find out --
SEGAL: I'd love to come back.
And I also should say that it's important we allocate enough voting machines and ballots to all the precincts where we're going to have a record in influx of student turnout.
COLLINS: All right. We sure do appreciate it.
SEGAL: Thank you.
COLLINS: Nice to talk with you. Matthew Segal of the Student Association for Voter Empowerment. Thanks again.
SEGAL: Thank you.
COLLINS: 81,000 homes lost to foreclosure in September. The latest sign of the economic crisis. Across the country, millions of people facing foreclosure are afraid now they may lose their voting rights.
So could they? Well CNN's Josh Levs is all over it this morning, he's joining me now with the very latest.
A lot of interesting stuff to talk about here.
JOSH LEVS, CNN CORRESPONDENT: There really are.
First of all, those numbers -- incredible. We keep hearing these foreclosure numbers.
COLLINS: I know.
LEVS: Every month they astound me. 81,000 in one month, unbelievable. And there were these rumors that that could happen in some states, that people might ultimately lose voting rights because of foreclosure.
There was this blog that started in Michigan. It's a liberal blog called "The Michigan Messenger." It said some Republican officials in Michigan were planning to challenge voter lists based on foreclosures. Republican officials denied this. But it got a lot of people wondering, is that even possible?
Now the first thing to know, I want to tell you this right now, losing a home to foreclosure does not ever mean you lose your right to vote. It can, however, create complexities. This is where we get into what's tricky here.
You need to be registered in the precinct where you live. And state laws vary as to when you need to register by. But I found a very helpful Web site. Let's zoom in on the board here -- leagueconsumer.com. And it is pretty much for people who are facing foreclosure. And what they do -- on this side it says election 2008 rights for Americans facing foreclosure. It talks about the date that you would need to register by. Because as a rule, if your home is foreclosesed after the registration date, then you still vote in the polling site for your foreclosed home. They talk you through just what to do.
I know it can be a hassle. But the key here, Heidi, for everyone to understand is you still have the right to vote. You might need to take care of getting signed up at the right precinct. But you absolutely have the right to vote.
COLLINS: OK, well that's very good to know. And there's so much going through people's minds when their home is foreclosed on.
In fact, what if you don't have a new address yet by this deadline? What if you're living with family? Or even for some people in a shelter?
LEVS: Right, again, it can be a headache.
You know it's interesting, I found this -- zoom in on the board one more time -- I found this Web site this morning, "L.A.'s Homeless Blog." And I highlighted a quote I want you to see. It says, "courts have ruled that you don't need a permanent address to vote, even a park bench can serve as your lawful" -- basically your address -- "for voter registration."
What you need to do, though, is you need to talk to the election board. And it also says that as a practical matter, sometimes holding on to documents can be tough. That's why if you have a question, we definitely encourage you to check with the election board.
And Heidi, as you know, CNN, we're covering this every step of the way, providing everyone all the information we can leading up to Election Day.
COLLINS: Very good.
All right, Josh Levs, thanks for that.
LEVS: Thanks.
COLLINS: And as you said, CNN is keeping them honest. If you have trouble at the polls, just call the CNN voter hotline. You can help us track the problems, and we will report the trouble in realtime. The number is at the bottom of your screen, 1-877-462-6608. We're keeping them honest all the way through the election and beyond.
(COMMERCIAL BREAK)
COLLINS: 12 days to go, and no rest for those running for the White House.
GOP presidential nominee John McCain began the day at a rally in Ormond Beach, Florida. His running mate, Sarah Palin, is heading to Troy, Ohio, for an early afternoon event there.
There on the Democratic side, Barack Obama in Indianapolis next hour. It will be his last campaign event before he heads to Hawaii to visit his ailing grandmother. Running mate, Joe Biden aboard the bus this afternoon for a tour of another battleground state, North Carolina.
Gas prices have been falling and oil prices plunged yesterday to a 16-month low. But the cartel that controls 40 percent of the world's crude meets tomorrow and its decision could reverse the downward trend. CNNMoney.com's Poppy Harlow joining us now with a live look at the oil trading floor in New York.
Hi there, Poppy.
Boy, I don't want this little chunk of good news to go away. People are really enjoying these lower gas prices.
POPPY HARLOW, CNNMONEY.COM: They're loving it. It's the silver lining in this whole economic mess that we're in.
But let's go to Ray Carbone. He's at the NyMex where all this oil is traded that we talk about everyday. He's a man that makes his money on oil.
Ray, thanks for being here.
RAY CARBONE, PRESIDENT, PARAMOUNT OPTIONS: My pleasure.
HARLOW: Let's get right to it. Oil down 50 percent from the summer. Have you ever seen anything like this? You've been in the business for a while. Could we go right back up to those highs?
CARBONE: Well it's going to be difficult to go right back up there. But we have seen these types of drops in the past, one of them being when the Persian Gulf War happened in 1991. Oil went up to around $40, quickly came back down to the $20 level and stayed there for quite a while. So we've seen that kind of volatility, but we've gone down from such a lofty, lofty price of roughly $147. So we have not really seen this type of volatility in the oil market. But we have never seen these prices either.
HARLOW: All right. Now we're below $70 a barrel. Can you call a bottom for oil? And why should all Americans care about that? Because what does this mean for their gas prices?
CARBONE: Well in the short term, this is going to be constructive for gasoline prices. I'm sure everyone has noticed how gasoline prices have been trending downward, and they should continue to trend downward, at least until there's some rebound in the oil price. But of course, there is OPEC meeting going on right now. They do control 40 percent of the world's oil supply. And they are worried about the oil price decline because that generates their expenditure and their income. And so they may try to cut production. In fact, the market is expecting the significant cut in production so that they can try to stop this slide from continuing and hopefully bring prices up for them so that their income flow comes back to where it was just only a month or two ago.
HARLOW: Yes, right, it's just been a precipitous decline here for oil.
Let's talk quickly about the nation's -- Iran would like to see a pretty big cut in oil, Saudi Arabia not saying either way, but they may not want to see a cut actually in terms of production.
How much do you think they will cut? What is that going to mean for our oil prices in the near term?
CARBONE: Well I think there's an internal debate going on within OPEC now, and it has to do with what can cut and who doesn't want to cut.
Saudi Arabia is the only one that could meaningfully cut to have any influence on the prices. The Iranians are already producing as much as possible. They don't want to cut. They need the income. They've been living on high oil prices for the last two years and their budgets are based on a higher oil price than Saudi Arabia. So when that debate is settled, we are going to hear what the results are.
I assume that there's going to be above a million, but I think it's going to take a bigger cut than that to stop this slide which is being prompted by recessionary fears and fears of lower demand for the foreseeable future.
HARLOW: All right. Ray, thank you. It's all about those fears about our economy and the economies around the world. Appreciate your time.
Heidi, throw it back to you now.
CARBONE: Thank you.
COLLINS: All right. Lots of information there.
Poppy Harlow, sure do appreciate that.
Firefighters now getting the upper hand on a dangerous brush fire that we've been telling you about right there in Los Angeles. It's just a few miles from the famous Getty Center museum, in fact. About 350 firefighters are battling that blaze with the help of nine helicopters. The major 405 freeway closed down overnight but did reopen just in time for rush hour. Fire officials warn the freeway could be shut down again if the fire flares up.
And yes, boy Rob, when you look at those flames, obviously very close to the road. It would not be good to be driving near that.
MARCIANO: And you know the Brentwood neighborhood there -- and when you hear things like, well, if you see the flames, get out. That's a pretty scary scenario.
High pressure cold air in the mountains, offshore Santa Ana winds, that's the drill this time of year. And we've seen it already a number of times. And we're just getting into the season. So today, critical fire danger because of this dry, hot, low levels of humidity and winds could gust at least through the canyons, 40, 50, 60 miles an hour. We should see less wind tomorrow and over the weekend, but it will remain pretty warm.
Quick shot of some of the action that is happening in Southern California. Los Angeles tower camera or -- and chopper shot? None of the above?
You get the idea. They're fighting that fire and they're doing the best they can.
All right. Back to the center part of the country.
(WEATHER REPORT)
COLLINS: Rob Marciano -- it's very hard to do.
All right, well we'll check back a little later on.
MARCIANO: See you, Heidi.
COLLINS: Hey, look at the Dow. I just want to notice that real quickly Dow Jones Industrial Averages looks like to the positive now about 209 points. Earlier in the day we had already seen to the negative by double digits. So again, another wild ride there.
We're watching another event coming our way about to begin in North Carolina. Joe Biden, vice presidential running mate to Barack Obama, will be addressing the crowd there. We will bring it to you when he gets to the podium.
(COMMERCIAL BREAK)
COLLINS: All right. We have our eyes on the last lap, if you will, one of them anyway, for Joe Biden. You see him there, vice presidential candidate is speaking in North Carolina. The crowd is roaring at the moment, attorney general of the state just introduced him. So we would like to take some of those comments.
In fact, I think he's going to give them right now. Let's listen.
(JOINED IN PROGRESS)
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: ... thank you for accommodating our visit here.
We're delighted to be here. My lord has this campus grown here over the last 35 -- I got down here -- you know, folks, I'm an old guy now. There's only four senators senior to me in United States Senate. That's awful, isn't it? Look at that lady over there going, oh, my lord, I can't believe that.
But one thing I want you to know, there's still 39 senators older than me in the United States Senate. That's the only thing I want you to know. And my lord, this university system is such a great, great system you have here in North Carolina. And so Chancellor and Mrs. Dubois (ph), thank you for your hospitality. I appreciate it very much.
And I also want to thank Roy Cooper, your attorney general. Roy and my son are friends.
Folks, some of you men or women in here that may be approaching my age will -- are probably getting used to what I've gotten used to. In Delaware, I'm no longer known as Senator Biden or Vice Presidential candidate, I'm known as Beau Biden, the attorney general's father. And my dad used to have a great expression. He said, you know you're a success when you turn and look at your kid and realize he or she has turned out better than you. Well, I'm a success.
Roy, thank you for that acknowledgment. I appreciate it.
(APPLAUSE)
But Beau is doing no more than thousands and thousands of Carolinians have done. And that is going to serve his country in a battle zone. And God willing, they'll all come home safely. I don't know that Kay (ph) is here yet, but I want to shout out to Kay Hagan, who I hope I'm going to be able to work with in the next United States Senator.
(APPLAUSE)
Kay you know -- see now, if I were going to be -- if we win this seat, excuse me, this election, I'll be vice president and I'll be president of the Senate. That's a big difference. President of the Senate means you only get to vote when there's a tie. When you're Chairman of the Foreign Relations Committee, they've got to listen to you. So I just want Kay to understand that I know vice presidents aren't much, Kay, but when I'm elected call Mel Watt and tell him. He'll tell you I'm a good guy.
Mel, where are you?
(APPLAUSE)
Is Mel Watt here? Hey, Mel, how are you? One of my great friends. Mel, tell her to be nice to me, OK? I know once you're a vice president, it's not much and your wife can tell her that. You know, just remember I used to work with you, you know in the Senate, all right? I also want to thank -- I think our next governor is here, Bev Purdue? Where -- is Bev here? I'm not sure if she's here. Well Bev, if you're not here, I just want to wish you the best of luck and hope all works out well.
And also I think U.S. congressional candidate Harry Taylor's here. Is Harry here?
(APPLAUSE)
There you go, Harry. Harry, if I had your hair, I'd be president. I wouldn't be vice president. And Larry Kissell is also running for -- I don't think Larry is here. But I want to give a shout out for Larry, as well.
(APPLAUSE)
And there's a friend I have with me who represents a whole lot of teachers in the United States of America. Randy Weingarten is here representing labor. Randy, you are here. There you go. Randy, welcome. Thank you for being with me.
(APPLAUSE)
Ladies and gentlemen, look. It's been a long campaign and now there are less than two weeks left. And our goal is the biggest voter turnout in North Carolina history. That's what we're shooting for.
(APPLAUSE)
And that turnout, as you all know, doesn't need to be on Election Day. You have until November 1st to vote early. So, even if you're not registered yet, during the one-stop early vote, you can register and vote all at the same time.
So ladies and gentlemen, there's no excuse, none. If you have any questions at all, please go to voteforchange.com and get all the information you need because there is no excuse. You know, we've got a lot of NASCAR tracks up in my state -- we've got a big NASCAR track at my state at Dover Downs. But here in Charlotte, you know racing better than anybody in the country. I know that.
So, I'll talk a little bit in terms of racing terms. Right now our campaigns are trading a little paint. And -- but what worries me most is the McCain campaign seems to have gotten a little loose. And I can tell you're not a lot of NASCAR fans in the here. But, up my way it's a big deal.
And the fact of the matter is, you know that term, getting a little loose, you know, when you're out there going 185 miles an hour, getting a little loose. Well, John's getting a little loose. He doesn't have much of a steady hand these days. And now is the time. Now is the time we most need a steady hand.
Ladies and gentlemen, we need leadership because the stakes for our country are so high. They have never, ever been higher. One thing I found as I go around the country. I just got back -- I just flew in from Pueblo, Colorado, been up in Montana, Washington state, New Hampshire, Florida, all over the country. This is the most unusual election in the sense that it's such a similar election.
Ladies and gentlemen, there are hardly any regional differences in this election. This is the most fundamentally sound. Questions are being asked by Americans all over the country. Whether you're sitting down at your table in San Francisco, or in Charlotte, or down in Miami. Or you're up in Bangor, Maine, people are asking the same questions at their kitchen tables this morning. Every single place in the country.
And the questions are as simple as they are profound. They're asking themselves, is my house worth what I paid for it? Is there any equity left in it? Do I owe more on my mortgage than my house is worth? Will I be able to retire? Is there going to be any prospect that our company is going to keep our health care? We hear the rumors. We hear the rumors they're going to cut. We hear the rumors. We hear the rumors that they're going to the ship our jobs overseas.
Are we going to be able to send your parents -- many of you unfortunately, if you're like the family I grew up in, your parents this very day because of the change in economic circumstances and all of you who have so many loans to get to and through college like my kids did. You're sitting down there asking yourself, what's it going to be next semester? I'm here this semester. I'm here this semester. Am I going to get back next semester? Is the money going to be there? And a lot of parents all over America are asking themselves the question, what am I going to say at Christmas time if we cannot get that second loan for the second semester?
Ladies and gentlemen, for too many people in America, this is literal. The American Dream is becoming a distant dream. And for some it's turned into a nightmare. They've seen everything they work for. They played by the rules. They've done it all right. And all of the sudden they see it just slipping through their hands.
Ladies and gentlemen, in the most recent debate and just about every day since John McCain has felt the need to declare -- and you heard it the debate. John McLean -- John McLean, excuse me. John McCain. John McCain. I don't recognize him anymore.
(APPLAUSE)
I used to know him well.
(APPLAUSE)
A bad joke. That's a bad joke. But ladies and gentlemen, John McCain felt literally -- as you recall, he felt the need to point out to Barack Obama and to the American public that he was not George Bush.
Well, ladies and gentlemen, have you ever heard that old expression, "He doth protest too much?" Look, folks, over the last three debates that you've seen, over the last 20 months of campaigning, eight years of failed economic policy, there is not one fundamental economic issue, not one fundamental economic issue on which John McCain has taken issue with George Bush, not one.
In fact, just yesterday Senator McCain once again defended Bush's policy of giving tax cuts to corporations that ship American jobs overseas. I'm not making this up. This was John's -- I won't go into the whole discourse John had and recorded in the press. But John was saying basically you we're going to go where the lower taxes are.
Well, ladies and gentlemen, why are we giving tax breaks to outsource North Carolina's jobs? Why are we giving tax breaks to outsource American jobs? Ladies and gentlemen, Barack Obama and I have a simple proposition. It's not revolutionary. Let's end these tax cuts -- by the way, it's about $15 billion a year. Let's end these tax cuts that ship our jobs overseas and give them to companies that hire people here in North Carolina.
(APPLAUSE)
COLLINS: A little bit of the rally taking place there in North Carolina, for Senator Joe Biden. Earlier in the show you heard from Senator John McCain as well, coming out of Florida. And a little bit later, not too far off now, in the 11:00 hour, also going to be hearing from Barack Obama, coming up. He will be in Indianapolis today.
So, a lot going on for that last lap with the candidates, that's for sure. 12 days to go now until November 4th Election Day. I'm Heidi Collins, join me again tomorrow morning beginning at 9:00 am Eastern.
For right now CNN NEWSROOM continues with Tony Harris.
