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Wall Street Markets Reacting to Fears of Global Recession; Financial Crisis & You

Aired October 24, 2008 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: Hello everyone. It is Friday, October 24th. Eleven days until Election Day.
We are watching Wall Street markets reacting to fears of a global recession. We have got the CNN money team all over the story.

Plus, the role of race in the race for president, not as simple as black and white.

And back from battle, now facing a war within. The tough fight for U.S. veterans.

Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.

Let's tell it as it is. Wall Street down sharply this morning following the lead of overseas markets.

Take a look at the Dow, down 325 points, but off of session lows on the morning. Even before the opening bell, Dow futures were looking bleak, down 550 points.

It was so bad, market rules triggered a circuit breaker. Traders call it a limit down, halting declines on future trading. Fears of a global recession apparently driving this sell-off.

Let's get you right to the nation's financial center. Our personal finance editor Gerri Willis joins us now.

Gerri, if you would, talk us through what is causing this market action today.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: It's panic and fear. It's as simple as that, Tony.

You know, look, I think a lot of regular investors out there today, they're looking at what's going on in the market, and they assume that the professionals are reacting on the basis of facts, figures, data, research they've done. I don't believe that's the case today.

I think they're operating on fear and panic, and that's absolutely the wrong thing to do, and I'll tell you why. Because you throw discipline, market investing discipline, out the window. You're just operating on what your gut tells you to do. And I think that's a recipe for disaster, whether you're managing a 401(k) or you're managing a hedge fund.

You know, one of my sources this morning, a fellow who runs a lot of money on his own, he's a financial adviser for lots of folks, he said there's no real difference today between a hedge fund manager and a 401(k) owner. They're operating on the basis of the same issue, and that is fear -- Tony.

HARRIS: All right. So it's hard to stand pat, I've got to tell you, Gerri, when you look at these numbers. But what should we do?

WILLIS: Well, look, if you want to be in the market today, you should be in the market as a buyer, not a seller. We don't know where this is going. You're selling into the teeth of decline. And if you're an individual investor, you have very little control over exactly when your trade is going to be made. OK?

So, in reality, what you want to do is think about what are the opportunities out there, and there are a lot of them right now. Typically, the market trades on corporate earnings. That's what it typically looks at, and that's the health of the U.S. economy.

Today it's trading as if earnings were to be down 20 percent next year. And I don't think that's the forecast for many analysts out there. So the reality is you need to think about what you're doing here, not operate on fear.

Feel the fear. I mean, everybody's got it. I'm worried about this market. I'll admit it.

HARRIS: Sure. Sure.

WILLIS: But don't operate, don't act on that fear. You've got to think through things first.

Look, it's natural as a human being in any situation where you feel threatened to get upset and to get anxious. But you've got to work through that and do the smart thing and think through what you're doing before you're doing it.

HARRIS: Got you.

WILLIS: For most folks out there, most of them, the right action right now is nothing. If you're in retirement, you need to make sure you've got the right asset allocation. A lot of people this year will be selling because they'll want the tax break, they'll want to write off those losses against gains. That's a smart thing to do.

Now is the time to convert a Roth -- convert your regular IRA into a Roth. That would be a good move to do now. But the advantage goes to buyers, not to sellers in this market.

HARRIS: I absolutely understand and get that. I don't want to start pulling my money out of everything and locking in these lows and these losses. But I've got to tell you, I need a lot more information right now than maybe I even feel like I'm getting as to where this market is going. Gerri, good to talk to you. I know we'll talk to you again a little later in the hour.

Let's get you now to the epicenter of all of this turmoil, Wall Street, and our Carrie Lee.

Carrie, I imagine the mood there -- well, I'll let you describe it.

CARRIE LEE, CNN BUSINESS CORRESPONDENT: Well, you know, everyone is looking for the bottom, Tony. You just mentioned that, right, wondering, is this it? But the problem is we haven't had much continuity.

We've had volatile point swings, day after day, and that's what we're continuing to see right now. So what we're seeing right now is selling.

The Dow is down 333 points. We're at 8,358. If we stay where we are right now, this would mark a new closing low for the Dow. Of course, a lot can happen as the day goes on, but that would mark a new low point. The problem is we haven't seen much continuity day to day in terms of, say, a couple of days of gains to start to show that investors are shoring up confidence.

Now, in terms of economic reports today, I'm going to give you a bright note. OK? They're rare here, so I'll give them when I can.

Sales of existing homes rose in September, sales up 5 percent from August. So that shows that there are some people coming into the housing market.

However, what we did see in southern California, and I don't know if this is the case across the board, but in southern California, half of the homes being bought were homes that were foreclosed. So, you know, glass half empty, half full, Tony, depending on how you look at it.

HARRIS: OK, Carrie, appreciate it. Thank you.

Let's head overseas now. Reports that Britain's economy shrank for the first time since 1991. With me now to talk about that and talk about the U.S. markets as well, Richard Quest.

Richard, good to see you.

You know...

RICHARD QUEST, CNN CORRESPONDENT: There's a lot to get to.

HARRIS: Yes. Are you ready?

QUEST: Come along. Come along.

HARRIS: All right. Let's get to it. You know, we thought that the U.S. markets would be sharply lower than even where we are now. We saw the Dow futures trading at 550, and negative territory. You know, there was a time when would be down 320 points and we would be in rolling coverage here. It seems like a sign of the times now, but...

QUEST: Because we are at the bottom.

HARRIS: Oh, come on.

QUEST: No, come on now. No, no.

HARRIS: There is no indication to suggest that we're at the bottom of anything right now, Richard.

QUEST: I said -- listen, we are bouncing along the bottom. And in this environment, some days you may go up 300 points, other days you may go down 300 points. But people like you...

HARRIS: That is not the kind of language that gives you any kind of confidence in the markets at all. And folks...

(CROSSTALK)

QUEST: Well, why should you have confidence in the markets?

HARRIS: Well, because we have got our money in the markets, Richard. What should we do? What should we do?

QUEST: You do nothing at the moment.

HARRIS: Oh, come on.

QUEST: People like you have studiously ignored people like Ali Velshi and myself, who have been talking about volatility for...

HARRIS: Are you kidding me? I've put you on this show to try to get some clarity on this.

QUEST: Well, I did listen. You'll hear the clarity that's coming...

HARRIS: All right.

QUEST: The clarity is really simple. You do nothing unless you have to.

This is not a market for naives and for fools. This is for the professionals just to watch and wait. If you can ride this out, then you will be in a much stronger position.

HARRIS: We're talking about redemptions. We're at the end of the day. Folks are asking their financial planners to pull their money out of mutual -- because they have no confidence and they're watching their liquidity go down the drain. QUEST: Right. So what do you do in that case? You either pour more down the drain by selling into this market, or you just wait and see. But I tell you something else...

HARRIS: Which is what we're doing with this bailout.

QUEST: No, let me tell you something else that's a story that's not being reported.

HARRIS: Good money chasing bad. Go ahead, Richard.

QUEST: I guarantee you, if I turned around in this room right now and asked how many people in this room were thinking of buying into the market...

HARRIS: Yes.

QUEST: ... were looking for opportunities, people who are in work, who still have jobs, who still have incomes, who still believe that they will have a job, there are a lot of people out there waiting for that right moment to buy into the market. They are the ones that are propping it up at the moment. And when you see the price of Ford -- Ford, you remember?

HARRIS: Yes. Yes.

QUEST: When you see the price of Ford is basically the same price as a tall latte, then you start to realize that there are opportunities out there in the market. General Motors -- look, I don't know whether General Motors is going to go Chapter 11 or not.

HARRIS: Well, they can't even get the money to do the deal with Chrysler. Come on, because this credit market is so seized up.

QUEST: Exactly. But as long as there are some people out there who still have got some money, they're waiting for opportunities. In the U.K. market, Barclays, three weeks ago I was thinking of buying a few shares in Barclays Bank, 330 pence a share. It's now a hundred and something a share.

So we wait. We wait. We wait.

HARRIS: We wait. Don't go anywhere. You wait. Don't go anywhere, because...

QUEST: You're a very angry man today. You're very angry.

HARRIS: Well...

QUEST: It's not good for...

HARRIS: Oh, quiet back there. Pipe down, room.

I'm not the only one. Take a look at this.

More than three-quarters of Americans, 76 percent, now believe, Richard, the U.S. is in a recession. Twenty-three percent -- we need to turn the air on a little bit here. I'm hot and sweaty and everything else. Twenty-three percent don't think so.

The numbers from the latest CNN/Opinion Research poll.

When asked if another depression, Richard, is likely within the next year, 59 percent said no, 41 percent said yes, a depression is likely. Now, that's a big number.

The poll was taken October 17th through 19th, and has a sampling error of plus or minus three points.

As the most serious credit crisis in decades rocks your finances, CNNMoney.com has some advice and some answers. Just check out our special report, "America's Money Crisis." That's at CNNMoney.com.

In the middle of a financial crisis and the nearing presidential election, it may be a little easy to overlook the war on terror. Some can't forget.

(COMMERCIAL BREAK)

HARRIS: As you can see, the Dow down 363 points. Economists report even commodities are being sold. We're talking about gold, copper, oil. Markets in Asia, Europe also down sharply. Japan's market, the world's second largest, down almost 10 percent today. And the British economy shrank for the first time since 1991.

America's financial crisis, it is no longer someone else's problem, is it? Nest eggs are shrinking, jobs are disappearing, and fear is climbing. What now?

Here with some expert insights, a nationally known expert on personal finance, Terry Savage is with us. She writes a syndicated personal finance column for "The Chicago Sun-Times."

Terry, good to see you.

And from Washington, Eamon Javers, a reporter for Politico and former Washington correspondent for "BusinessWeek Magazine."

Terry, talk me off the ledge here. I don't know if you heard our last segment with Richard Quest.

TERRY SAVAGE, PERSONAL FINANCE EXPERT: I did. Richard is a brave man.

HARRIS: Yes.

SAVAGE: OK.

HARRIS: Help me make sense of what's happening here, because I just feel like I need a lot more information to feel -- I want to feel some kind of confidence about the direction of these markets. I've got this 401(k) statement coming in. I don't even want to open it.

Help me here.

SAVAGE: All right. First of all, you have to understand what's going on around the world.

What's going on around the world is forced selling, selling on the part of hedge funds who now have liquidation requests. It's not so much mutual funds anymore. Two weeks ago, $14 billion in stock mutual funds was liquidated. Last week, $6 billion.

Now we have the pros who are not only panicked but forced to sell -- margin calls, redemption requests. It's like deciding you're a good driver and maybe you should get out on the Indy 500 just to try it out. Stay off the roads right now.

And today is a little bit of a strange day because the futures said we were going to have a really horrible opening, down at least 550, maybe more, talking about circuit breakers of a thousand points. We didn't get there.

HARRIS: That was crazy, yes. Yes.

SAVAGE: All right. But to look ahead for the rest of the day, this is a Friday. And the last hour is always critical. It's going to be even more critical today, to see whether there is that last burst of selling that will make people nervous over the weekend and portend a bad Monday. Or maybe the buyers will step in.

We will see in the last hour. That's something to watch.

HARRIS: All right. Here is what I'd like to do.

And Eamon, I want you to take a stab at this. And then I want to sit back here, as folks at home are doing, and I want to listen to the two professionals talk about this. And give us some real information based on your knowledge of these markets, where we've been, and where we're going.

OK. So, Eamon, first of all, take a stab at where we are with these markets, and then talk amongst yourselves here.

EAMON JAVERS, POLITICO: Yes. Well, look, I think the point about hedge fund professionals is interesting. I mean, a lot of the top hedge fund guys have said they're taking their money out of the markets now and putting it into cash. I mean, they're not even reinvesting it into other investments.

Folks like John Paulson, who famously made something on the order of $15 billion last year by betting against the housing market, has said they're taking a big piece of their holdings and converting them to cash right now. That's a little bit scary, when the smart money is doing that, and that indicates that we could be in for a really long slump here in the stock market, maybe as long as a full year from now before the markets start coming back to the levels where they were just in August or September.

So I'd fasten my seatbelt here for a long and bumpy right, because the markets need some good news here in order to star to begin a comeback. And there hasn't been much good news on the horizon.

One big question will be whether or not the election will actually start to provide a boost of wind at the become of the markets, as people say, well, now we've got some clarity in Washington, we know who is going to be in charge, whoever it is, and we can begin to move forward. That might be a piece of good news depending on how it turns out. But we'll just have to wait and see. Not a lot of good news on the horizon here.

HARRIS: Terry, jump in. Any other thoughts on this?

SAVAGE: Well, I don't want to outbear Eamon. The fact is that markets can go down and stay down longer than we expect. In the '70s, the Dow went from over 1,000 to under 700 and stayed down around that level until 1982, when this big bull market took off.

So we're talking about two separate things -- the stock market, where if you're younger and you're contributing to your 401(k) plan, you know, you have no choice but to keep contributing. You're not going to use that money. If you're older, we've been talking about diversifying, about chicken money, money to live on. It's a little bit late, even for the pros that are selling now.

I hope it's a little bit late. I hope we'll look back and say some of the smart money sold out at the bottom. Surely there's a lot of money being exchanged now. And remember, for every share of stock that's sold today, someone is out there buying. They may not be talking about it today, but you don't get a seller without a buyer.

HARRIS: Yes.

SAVAGE: Something to keep in mind.

JAVERS: And I've always wondered -- and this is something I just don't understand about economics. When you see these huge slides in the Dow, and it's going straight down on a day like today, earlier this morning, you wonder, who are the buyers? Because every time they are selling, somebody is buying. So somebody out there has got confidence, and that may be the silver lining here.

HARRIS: All right. Let's leave it there.

Terry, great to see you.

SAVAGE: Thanks.

HARRIS: Eamon, as always, good to see you.

JAVERS: Thanks.

HARRIS: And thanks for the analysis.

You have questions, our CNN money team has answers. That's next.

(COMMERCIAL BREAK) HARRIS: All right. We're going to get to Gerri in just a moment. We want to take a look at the New York Stock Exchange right now and the Big Board.

And we are certainly off session lows. We are down, still in negative territory, but 246 points now. And believe it or not, that is pretty good news.

The S&P 500 has dropped 38 percent year to date, with declines getting steeper over the last month. Since mid-September, the S&P 500 has plunged almost 25 percent.

You know, for a lot of people watching Wall Street these past few weeks, it has been white-knuckle time, to be sure. Your investments, what do you do? Do you hold them, fold them?

CNN Personal Finance Editor Gerri Willis is back with us.

And Gerri, we've got e-mails. Do you want to dive right in here?

WILLIS: Yes. Let's go, Tony.

HARRIS: OK. We've got an e-mail from Jack, who writes, "My wife and I are both retired and we depend on our private pension and other small investments for our income. We are both very concerned and afraid that within the next six months there will be nothing left."

Any advice, Gerri?

WILLIS: Well, Jack, I'm glad you asked this question, because there's something going on in Washington today that I want you to know about.

The Pension Benefit Guarantee Corporation -- this is the governmental agency that steps in to protect your pension if your company can't provide it -- it's in front of Congress today. They're defending themselves. At issue is a $3 billion investment loss.

Now, here is what you need to know. OK?

Don't overreact to this information, because the PBGC has $68 billion in assets. Companies that sponsor pensions, they pay a premium to the PBGC. It works like the FDIC. There's insurance behind the pensions. That, in part, is where the money comes from.

So, Jack, there's really little cause for alarm here. The reality is, even though Congress is pointing out its problems in investing, the reality is its performance is better than private money managers, who lost on average over 6 percent in this kind of market.

So there's no reason to think your pension won't be there when you need it. There is a government agency standing behind it. They have a plan for funding that pension, especially if it is a private pension from a private company.

And guess what? There are about 30,000 of those. HARRIS: OK. We hope that provides a little relief, a little comfort for you there, Jack.

WILLIS: Right.

HARRIS: And we've got this second e-mail from Garland, Texas. "What is better to help your credit score, Gerri, have a payment to make on your credit cards each month to show activity, or have no payment at all?"

WILLIS: Well, look, Garland, it doesn't matter to your score if you make no payment or if you have activity on your card, as long as you pay off what balances are due by the due date in full. What you want to do is avoid having your credit card canceled because of inactivity.

Look, if that happens, that can really hurt your score because it reduces the amount of available credit that you have. Make sure you spread your balances out between a few cards so that you keep the cards activated. But, you know, managing that credit score right now is critical because of what's going on in the economy.

HARRIS: What do you need now, 750 or above now?

WILLIS: It's 750, 780 to get the best rate on the mortgage. You know, it's tough. You want to get that score as high as you can.

HARRIS: Yes. Yes.

We've got one more. You got time for one more, Gerri?

WILLIS: Absolutely. Let's go.

HARRIS: OK. Jerilyn from Wisconsin writes, "Could you please let me know the Web site addresses of the places where people can try to find health insurance?"

WILLIS: OK. Another concern. I'll give these two you quickly.

Forty-five million folks are uninsured. This is a big problem.

To find coverage, visit covertheuninsured.com and healthinsuranceinfonet.com. Two great Web sites. You'll get a state- by-state breakout of programs available to the uninsured, and discount drug programs.

If you don't qualify for state programs, there are other places to go. EHealthInsurance.com, for example, will give you quotes from private insurers. Obviously you're going to have to pay out of pocket for the coverage.

If you have questions, you should send them to us at toptips@cnn.com. We love to hear from you. We answer those questions right here every Friday.

HARRIS: All right, Gerri. Hang on. Let's get to the weekend. OK? Thanks a lot.

WILLIS: Absolutely. I'm looking forward to it. I know you are, too.

HARRIS: Yes. All right, Gerri. Thank you.

And again, as the most serious credit crisis in decades rocks your finances, CNNMoney.com has some advice and answers. Check out our special report, "America's Money Crisis." Again, that's at CNNMoney.com.

You know, earlier this month we revealed CNN's top 10 heroes of 2008. And you can go online right now to choose which of them you want to be the hero of the year.

Now, while the votes are streaming in, we've asked some very familiar faces to share the spotlight introducing us to their heroes. Today, Emmy winner Dana Delaney tells us about a little known disease and one man's fight against it.

(BEGIN VIDEOTAPE)

DANA DELANEY, ACTRESS, "FOR HOPE": Look how I've changed.

I did this television movie called "For Hope" based on a little known disease, Scleroderma. It's an autoimmune disease where your body can overproduce collagen. Rather than making your skin softer, it makes it harder. So many people are so disfigured, they don't want to go out in public and they don't want to talk about it.

I'm Dana Delaney. And my hero is helping to fund groundbreaking research to find a cure for Scleroderma.

UNIDENTIFIED MALE: I'm committed partly because I am a patient. I was diagnosed with Scleroderma in 1998. I don't look sick, and most of the time I don't feel sick. I decided to go make a difference for other Scleroderma patients who aren't so lucky.

It can affect almost all of the organ systems. We still don't know why someone gets Scleroderma, and today it doesn't have a cure.

So I wanted to spend a couple of minutes and see if we can get caught up a little bit.

The scientists do feel like there's someone looking over their shoulder. I think that does drive them to put everything they can into it. It's hard to call Scleroderma anything but a curse. The patients out there that I feel are counting on me, I wanted to work (ph) for them.

DELANEY: He just does it. And that to me is a hero. Just don't talk about it. Do it.

(END VIDEOTAPE)

HARRIS: And again, you can go to CNN.com/heroes right now to vote for the hero that inspires you the most. They'll be honored at an all-star tribute hosted by Anderson Cooper on Thanksgiving night, right here on CNN.

Overseas markets are turbulent as well, showing that everyone is having a difficult time right now.

(COMMERCIAL BREAK)

HARRIS: A rock and a hard place, huh? Yes. Take a look at the markets right now. The Dow down 229 points.

Look, I've got to tell you again, that represents a bit of good news here. Out of the gate we were down better than 500 points. So this represents a rally. But there's no doubt about it we're talking about anxiety about the worldwide recession. Are we in one right now? It certainly feels that way to many of us.

And credit markets still pretty tight. Banks and companies are hanging on to their cash right now. Rather than risk lending the money out. Investors pouring funds into U.S. Treasuries. The yield on 30-year bonds sank to its lowest level in its 31 year trading history, 3.87 percent. What does all of that mean? Well, perhaps our money team can put all of this in perspective. Ali Velshi, Christine Romans joining us now from New York.

I've got to tell you, we've been asking questions it seems for a while now, about the bottom. Have we reached the bottoms? Is this the bottom? Is this the bottom? You know what, I don't know that that's even the right question anymore. It just seems to me that until all this bad stuff, these illiquid assets work their way through the system, we can't even have a conversation about the bottom.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Right. Right. The bottom is something you always know about after. And sometimes well after it's happened.

I think it's probably fair to say there is an intrinsic value to many of the companies in the stock market. And at some point they start to look like bargains. There are some professional investors who started to see those bargains in stock markets. By the way, some of those professional investors are people who buy the stocks or manage your 401(k) mutual fund. So they might be you who's actually buying stocks.

And there's some people who say there's a lot more danger in this market to come, not interested. And there are yet others who say a bottom isn't necessarily a flat thing, or a V. Sometimes it's very rocky and there are some people who say I can continue to buy stocks on days when the market is down, like today. And I can continue to sell on days that are higher.

So you're absolutely right. For the average person watching this, if you're not a professional, does the bottom really matter to you? And I think not.

ROMANS: No. And Tony, for 15 years of watching markets, anybody who calls the bottom is either a liar or a fool. Because you just don't know until it's already over. As Ali and I always say, you can break a lot of bones even long after a bottom has been put in the market. I mean, that's irrelevant.

What's important is your job and your money and your retirement savings. And if you're the kind of person who's out there sitting there trying to find the bottom in the market, well, I mean, you're either going to be broke or you're going to be out on a private island somewhere.

VELSHI: Why don't we just broaden this out a little bit for a second, Tony. Because we've got a bunch of experts sitting with us. Let's run it by them.

Watch Lakshman on the right of your screen. He's with the Economic Cycle Research Institute. Gary Ambrose, is a senior financial consultant from Personal Capital Management; and Greg Olson is a partner at the wealth management firm Lenox Advisers.

Greg, I'm just going to start with you. Because you've been hearing Christine and I sort of carry on about this a little bit, about what the importance is of these market gyrations to the average person.

To the average person, what are they?

GREG OLSEN, LENOX ADVISERS: What I don't understand is that if you have 20 years until you retire, what does it matter if the market bottom was a couple weeks ago, it's today. You'd be a long-term investor. There's no reason to watch it every day and say oh my gosh, what am I going to do? You have 20 years until you're going to touch your money.

VELSHI: And the market shows that that's what happens. Gary, the market does behave this way over time.

GARY AMBROSE, PERSONAL CAPITAL MANAGEMENT: It does. The problem is where I'm starting to see a much stronger level of anxiety is what if somebody is not 50 or 40 or 30, but is 60 or 70.

(CROSSTALK)

ROMANS: What if you're close to retirement, or you're just retired. What does this mean?

AMBROSE: Well, one this is, people think you know, as soon as they're going to retire they're going to die. It doesn't work that way. Even somebody who's retiring now, 60 or 70, they still have 20, 30, 40 years of life expectancy and have to invest that way. So, they too, need to ride this out.

VELSHI: Yes. And we're going to get some specifics on what you do.

Lakshman, I want to ask you one thing. Tony, Lakshman Achuthan is with the Economic Cycle Research institute. For a living, this is what they do. They look at these business cycles.

Lakshman, I have to tell you, when I read articles and hear it said that it is recession fears that is causing this market and global markets to go down, if anybody woke up today or yesterday with recession fears, then they've clearly been on the moon for a couple of months.

LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INST.: Yes, but it's amazing. Some people are still trying to say that there's not a recession.

I think what's happened right -- two things have happened. One is a recognition of a global recession. Before it was U.S. recession. Now it's gone worldwide. That's number one. And number two is that this financial panic over the last month or so, has taken what has been so far a mild U.S. recession and made it much more severe.

We have a weekly leading index which already has this financial panic data in it and it tells you how the panic has affected the forward business cycle. And it's plunged to its weakest readings since the mid '70s. Now that was a nastier recession. But, it wasn't a depression, wasn't the end of the world.

VELSHI: Are we right in saying fundamentally, more than markets it's about jobs right now. That's the thing. If our viewers need to be concerned about something, it's that.

ACHUTHAN: Yes. There's a huge difference between the markets and the economy. Now, OK. These are two separate things. And the economy is very much about jobs, it's defined by jobs. And what we've been struggling through is a weak job market. It's going to get weaker. You're seeing some headlines, you're seeing some small businesses under pressure because they don't have the staying power credit wise. And that's a negative on the job market.

The positive for small businesses, is they're much more nimble. They can go to a value proposition and actually thrive in this environment.

ROMANS: Now, we're going to have all three of "Your Money" program that airs on --

VELSHI: Saturday at 1:00 and Sunday at 3:00 --

ROMANS: -- Eastern time.

But, let me quickly ask you, Greg, one piece of advice for people who are watching the markets and trying to figure out about their financial future.

What are you telling people?

OLSEN: There are people that need to deleverage right now because of the amount of borrowing that they did. But, for those people that don't, a lot of them are panic selling with that. So, if you don't need to sell, don't sell. Take a long-term view. ROMANS: Gary.

AMBROSE: I agree with one caveat. Sometimes individuals are so overexposed in the market, that even though now they know now is not the time to sell, they just can't sleep at night and they're going to end up doing something very stupid, like sell out entirely. People like that, we need to modify them today. Maybe take 25 percent -- I hate to use a gambling term, but take 25 percent off the table and go with the rest.

ROMANS: All right. Gary Ambrose, Greg Olsen, Lakshman Achuthan --Tony?

HARRIS: That is -- I like that. Who's that last guy?

VELSHI: Gary, Gary Ambrose.

HARRIS: That was good.

ROMANS: He does this for a living, you know this?

HARRIS: You are good. You are good.

All right. Thank you all. That was tremendous, tremendous panel.

(BUSINESS REPORT)

HARRIS: You know this ugly market is global. Leaders from several Asian nations are attending a two-day economic summit in Beijing.

CNN's Emily Chang is in the Chinese capital.

(BEGIN VIDEOTAPE)

EMILY CHANG, CNN CORRESPONDENT (on camera): Leaders from 43 different countries around the world have gathered here in Beijing, for the 7th Asia/Europe meeting. It's the largest summit ever with six new countries including India and Pakistan. At the top of the agenda, the global financial crisis. Officials are hoping to increase international cooperation to stablilze world markets.

East Asian leaders have already agreed to create an $80 billion fund to combat the crisis. And increasingly, they're looking to China to take a leading role.

China is sitting on the largest stash of foreign reserves in the world, more than $1.9 trillion. The Chinese Remen B (ph) is strong and the Chinese economy is still is growing, albeit more slowly than it has in the past few years. So there's hope that greater access to the Chinese domestic market could help pull the world through the downturn.

But China has warned there could be a chill in China-Europe relations. The European Parliament awarded its top human rights prize to Hu Jia, a jailed Chinese dissident, for his work to help AIDS and HIV victims in China. One Chinese official called Hu a criminal and the award a gross interference in Chinese domestic affairs. But he did indicate it wouldn't do anything to hamper attempts to hammer out an agreement on the economy here in Beijing.

President Hu Jintao said that in opening statements that China must first and foremost run its own affairs well but vowed to work more closely with the international community to stabilize the global economy.

Emily Chang, CNN, Beijing.

(END VIDEOTAPE)

HARRIS: And as the most serious credit crisis in decades rocks your finances, CNNMoney.com has advice, answers for you. Check out our special report, "America's Money Crisis." Again, that's at CNNMoney.com. Let's check in with Rob Marciano in the CNN weather center.

Rob, I've been cranking on this Dow story, the financial story. I haven't paid attention at all to what you're watching.

So fill me in here, doctor.

(WEATHER REPORT)

HARRIS: Wrap up.

ROB MARCIANO, AMS METEOROLOGIST: All, Tony.

HARRIS: Yes, all right. Thanks, Rob.

MARCIANO: See you, buddy.

Richard Branson trying and failing to set a speed sailing record from New York to England. The British billionaire told CNN his racing yacht, Virgin Money, was hit from behind by 40-foot waves and that his main sail was ripped. That forced him to call off the record attempt. Branson set sail two days ago, you'll remember, with members of Britain's America's Cup racing team and his son and daughter.

Eleven days and counting. Candidates and surrogates on the campaign trail.

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HARRIS: Back to the New York Stock Exchange right now for a look at the big board. A couple of hours into the trading day right now and the Dow is down 232 points. But I've got to tell you something, this is a really nice rally. It's hard to say that when you're still down in negative territory over 200 points. But this is a really nice rally the market is putting together right now. Out of the gate this morning down better than 500 points. We'll continue to watch the Dow, the markets, throughout the morning, throughout the day, actually, right here in the CNN NEWSROOM. Well issue #1 is the economy. And for many voters, the Iraq War is another hot topic. And recent CNN Opinion Research poll voters have traded views about John McCain and Barack Obama on who will handle the war better once in office.

One week you're hunting for snipers, the next for a parking space. It can be a difficult adjustment for Iraq and Afghanistan veterans. CNN and MTV have teamed up to shine a light on the issues facing our war heroes.

Here is MTV correspondent, Sway.

(BEGIN VIDEOTAPE)

SWAY CALLOWAY, MTV CORRESPONDENT: Recently, John Bennett started noticing more young veterans at his job, and that's not a good thing.

JOHN BENNETT, USMC VETERAN: I work for the Sequoyah County Sheriff's Department. In working here I've run into a few veterans that were in here, they were -- come across and they were using drugs or using alcohol. Nine times out of 10 it leads to some sort of criminal activity. And that criminal activity will land them here in the jail.

CALLOWAY: As a former Marine who served in Iraq and Afghanistan, John recognized that some of these young vets were suffering from post-traumatic stress disorder.

BENNETT: So a lot of them are doing what I call self-medicating. They come back from a combat zone and they're not sure how to handle their feelings or what they're going through. A lot of them -- well they'll get into drugs because they need something to numb the feelings. They'll get into drugs or they get into drinking alcohol really heavily.

CALLOWAY: And locking them up just didn't feel right.

BENNETT: In the Marine Corps, as a gunnery sergeant, I took care of my men at all costs and tried whatever I could to bring them all home alive. So when I got back in here and saw what I went through and then what all these young men and women were going through, I felt I had to do something.

CALLOWAY: One in three Iraq vets will deal with a serious psychological injury, like PTSD. If untreated, those problems can keep piling up with more issues like substance abuse and a trip here.

John decided to use his knowledge of the justice system to help out his fellow vets. He's working with the county of Tulsa to set up a court specifically for veterans.

MATT STINER, VETS LIAISON, CITY OF TULSA: It makes absolutely no sense to send them to jail when they're suffering from issues that happened in combat. Instead of going to jail where they're going to not receive help, but now they are a record, take them to further sentence and get them help through the VA. CALLOWAY: Everyone who goes through the court will get hooked up with another vet as a mentor.

STINER: Someone like myself, a former Marine, did a tour in Iraq, I'm much more likely to talk to somebody who served in Iraq as well. And that person, that mentor, will serve as somebody, like a sponsor, in essence, to make sure they're making their appointments, but also to be kind of there as a crutch.

CALLOWAY: The process will operate like a regular drug court with veterans sentenced to treatment for both their substance abuse problems and their mental health conditions.

Isn't that preferential treatment?

BENNETT: These men and women have volunteered to go to war, pick up a weapon, and actually in some cases kill another human being for their country. We should at least provide them an opportunity in this veterans court to fix themselves and give them more chances than someone that has never really contributed to society in the first place.

CALLOWAY: Vet's Court will meet the first time in mid November, but that doesn't mean the work is done for these two.

STINER: Hopefully every city in this nation will have one. It's a moral obligation that we take care of those who go fight for us.

(END VIDEOTAPE)

HARRIS: And tonight an all-star MTV concert, "A Night for Vets" airs at 8:00 eastern this weekend. Watch "Back from the the Battle Launch" for stories only today's young vets can tell. That is Saturday and Sunday night at 8:00 p.m. Eastern right here on CNN.

Awaiting Michelle Obama in the battleground state of Ohio. When Michelle Obama takes the stage, we will take you to Columbus, Ohio, live.

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HARRIS: Just going to give you a look at the numbers again. Boy -- the watch pot analogy here. But as you can see, the Dow is down 283 points again. Some perspective here. That's a bit of a rally from where we were earlier in the day. So we will continue to follow these numbers for you and put them into their proper perspective right here throughout the day in the CNN NEWSROOM.

Eleven days until the election and Sarah Palin and her husband, Todd, giving depositions today. It is part of a second investigation into her firing of Alaska's public safety director. A bipartisan legislative panel ruled earlier that Palin did have the right to dismiss the Walter Monegan, but concluded that she abused her power by pressuring him to fire her former brother in law and Alaska state trooper. Palin denies any wrongdoing. She requested this second investigation by Alaska's personnel board which is under her control. Next hour, John McCain rallies in the battleground state of Colorado. You can catch the Denver event live right here in the CNN NEWSROOM.

Barack Obama is off the campaign trail today. He's in Hawaii visiting the grandmother who helped raise him. Madelyn Dunham is said to be gravely ill. Obama will be with her most of today. He will resume campaigning tomorrow in Nevada.

First Colin Powell, now another former member of President Bush's team is endorsing Barack Obama. Scott McClellan, who served as White House press secretary and then wrote a tell-all book, broke the news to CNN during a taping of comedian D.L. Hughley's new talk show.

(BEGIN VIDEO CLIP)

D.L. HUGHLEY, COMEDIAN: You haven't endorsed anybody. You haven't endorsed anybody. And it's McCain and it's Obama. You know and I'm -- I have a new show, and your endorsement would probably mean a lot. And don't let the fact that I'm black or -- nothing like that, no pressure.

Endorse somebody, damn it. Endorse somebody.

SCOTT MCCLELLAN, FMR. WHITE HOUSE PRESS SECRETARY: From the very beginning I've said I'm going to support candidate that has the best chance of changing the way Washington works and getting things done. I will be voting for Barack Obama.

(END VIDEO CLIP)

HARRIS: And you can watch the entire interview on the premiere of CNN's new show, "D.L. Hughley Breaks the News." It comes your way Saturday night at 10:00 p.m. Eastern right here on CNN.

Let's show everyone that live shot from Columbus, Ohio right now. We are waiting for Michelle Obama to begin a rally there. When she does we will take to you there to Columbus live.

CNN is keeping them honest. If you have trouble at the polls call the CNN voter hotline, help us track the problems and we will report the trouble in real-time. Here is the number -- 1-877-462- 6608. We are keeping them honest all the way through the election and beyond.

He was in charge of a nation's money for nearly two decades. So what role did Alan Greenspan play in today's financial situation?

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