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Fear Drives Global Decline in Stock Markets; Who Will Be the Next Treasury Secretary?; Students Face Confusing Election Rules in Virginia
Aired October 24, 2008 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
KYRA PHILLIPS, CNN ANCHOR (voice-over): Truth nothing, fear nothing. Stocks, oil, even gold on the skids around the world. Are there any safe havens in a global recession.
You can't kick a candidate's tires. You can't take him or her for a test drive, but you may choose a president the same way you choose a car. Miles O'Brien on voter mentality.
Swallow this bitter pill. Half of all doctors say they're deceiving you. What medication is your doc really prescribing you?
(END VIDEOTAPE)
PHILLIPS: Hello everyone. I'm Kyra Phillips live at the CNN world headquarters in Atlanta. You're live in the NEWSROOM.
We're going to get right to it right now. The worse things -- well, the worse things get, the plainer experts talk. That's for sure. That may or may not be strictly true, but if it is, you heard it here first.
Now, remember when it took an MBA to translate Fed speak or the jargon on Wall Street? Well, today we're hearing words like "bizarre," "chaotic," "global," "liquidation," even "panic."
It started overseas. Fear of a long, deep, worldwide recession sent stock markets plunging, first in Asia, then in Europe. Japan's Nikkei dropped more than nine and a half percent. The German, French and British markets followed right behind.
And oil's not doing any better. Now less than $65 a barrel, despite word that OPEC's cutting production. Oil hasn't been this cheap since March of last year.
And we do have one ray of hope, though, besides lower gas prices. Home sales jumped 5 percent in September, the biggest monthly increase in more than five years. And even so, prices kept falling, down 9 percent from a year ago.
Well, it's issue No. 1, and we're on it this hour with CNN's Carrie Lee on Wall Street; Gerri Willis in our studios in New York; and joining me right here at CNN Center, Richard Quest with an eye on Europe and beyond. Well, you've been watching those Dow numbers in the corner of your screen. Here's a little perspective. Trading limits kicked in even before the opening bell when futures sank more than 500 points. Regular trading is down, but not by nearly that much.
Let's get the latest from CNN's Carrie Lee. She's at the New York Stock Exchange.
Hey, Carrie.
CARRIE LEE, CNN CORRESPONDENT: Hey, Kyra.
Well, as you can see, the Dow down 320 points right now. Off of the lows. We were down just over 500 points. So we've come back. But as you know, a lot of action happens in the last hour of trading. So this doesn't necessarily mean we're going to end here.
You mentioned oil, and I'd like to pick up on that, because remember, a few months ago when oil was soaring, up $147 at the peak in July, oil stocks moving in opposite directions? Well, not anymore. The market's come down. Oil prices seemed to come down, to the $64-a- barrel range today. As you indicated, a 17-month low.
What happened? OPEC decided to cut output today by 1.5 million barrel a day. But it looks like some traders were looking for more than that. They were rather disappointed. So oil is trading lower right now, Kyra, by 4.5 percent.
Back to you.
PHILLIPS: All right, Carrie, we'll keep talking. Thanks.
And if the minute-by-minute ups and downs are making you a little woozy, well, let's back up a little bit. CNN's Gerri Willis joins me now with the big picture and the view ahead.
Hey, Gerri.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey there. Well, you know, look, you were saying before how scary this was when the markets opened. Well, guess what? Things are improving here. We don't know if we're going to close at these levels, but we're certainly off the 504-point loss that we started at today.
I just want to tell people, hey, look, you have to sit back and take a breath at this point. I know in the back of your head you're thinking, those professional traders and investors out there, they must be acting on information, on hard-core research, on details that I don't know. But the reality is, a lot of these folks are selling in a panic. You don't have to do that. You can take a breath.
Remember, your goals, your reasons for being in the market, why you're investing, and actually react logically and without a lot of emotion. That's what's going to save you here today.
I know you see big point swings and you just get worried, but at the end of the day, you've got to act in your own best interest. Take the emotion out of it. Do what you need to do.
Look, I know for people who are at or near retirement or in retirement, this is a very tough time. The best thing you can do right now is sit tight and try not to sell if you have a decent asset allocation. Try not to take money out of the market.
I know it's a tough tonic for a lot of people out there, but you know, we've known about this recession for some time. People have been talking about a downturn in the economy. So it's not new news here, Kyra. People are reacting on fear, even the most professional.
Look, one financial adviser who I respect a great deal who said, "You know, Gerri, there's not -- in a market like this, there's not a lot of difference between a hedge fund manager and a regular old 401(k) investor. They're both reacting on emotion. They're not using their heads here." So that's what we all need to do.
PHILLIPS: Gerri Willis, appreciate it. Dow Industrials down 322 points.
Well, fear, it's not just powerful; it's fast and furious. And Carrie's mentioned that, too. We're seeing just how quickly it can spread across the world market.
CNN's worldly Richard Quest joining us here, because we desperately needed his intake. It's like that cold that everyone catches.
RICHARD QUEST, CNN CORRESPONDENT: What, Richard Quest?
PHILLIPS: No. Yes, that, too. You are a bit contagious, my friend.
QUEST: Look, this -- I cannot agree more than what I've just heard with Gerri. She's right. Markets, forget the numbers. Forget the ratios, forget all that stuff. Markets are living organisms. They are -- they are the mass, if you like, of the humanity that creates them, that work in them. The panic, the fear, all those sort of greed, those are the emotions that are driving markets.
So that is why when you get a day like today, it moves in such massive movement, and it's a frightening thing to watch. But don't look -- I mean, what words do we use to describe markets? Sentiment. Fear.
PHILLIPS: Volatile.
QUEST: Volatile. All things a bit like humans.
PHILLIPS: Yes, that's true.
QUEST: Absolutely.
PHILLIPS: Marriage, love.
QUEST: Well, you do. You love it when it's going up, and you're fearful when it's going down. And you wish you'd stayed in bed on a day like today.
But the point I'm saying is, a market is a living organism, like an amoeba that moves and shifts, depending on what the people are doing.
PHILLIPS: OK. So but what do you do right now? Because so many analysts say buy overseas. Others say, no, invest in America right now. What do you think?
QUEST: Should you -- should you be invested overseas? Absolutely. Of course. You'd be a fool not to, because the best gains are in emerging markets. However, it is all about how you invest overseas.
PHILLIPS: OK. How do you invest overseas? What are you saying?
QUEST: We have one here we made earlier today. Come on, cough up.
PHILLIPS: I've got to give money?
QUEST: Come on, cough up.
PHILLIPS: Boy. Let me see what I've got here.
QUEST: If viewers are a little worried about the actual mathematics of this, they're not exact. I will not give you this rate of exchange if we were doing this at home.
PHILLIPS: How much do you want? I've 10 bucks on me.
QUEST: All right. Five will do.
PHILLIPS: Five will do? Five ones or a five?
QUEST: No, I was mistaken. Give me the lot. All right. Give me ten bucks. You take your $10 of greenback. I then -- and you buy basically -- let's just say, ten euros worth...
PHILLIPS: OK.
QUEST: ... of European stock.
PHILLIPS: OK. Why, thank you.
QUEST: All right.
PHILLIPS: OK.
QUEST: So far so good.
PHILLIPS: OK.
QUEST: She now owns European stock companies. But now you want to sell.
PHILLIPS: OK.
QUEST: So you sell.
PHILLIPS: Right. I got to give it back?
QUEST: Unfortunately...
PHILLIPS: I feel like I'm playing Monopoly.
QUEST: Unfortunately, in the meantime, the dollar has had a reversal of fortunes. How much did you give me?
PHILLIPS: I gave you ten.
QUEST: Two bucks.
PHILLIPS: I get two bucks back?
QUEST: Welcome to the world of investing overseas. Now, why...
PHILLIPS: What if I buy gold?
QUEST: Forget gold. Now you've lost a lot. The point I'm making here is, by all means, invest in overseas stocks, Kyra.
PHILLIPS: OK.
QUEST: But invest in mutual funds that invest overseas.
PHILLIPS: OK.
QUEST: Invest wisely and sort of so you're staying in dollar- denominated assets. What you don't want to be at risk of is a currency fluctuation. Because if you are at risk -- or at least you want to minimize it. Do not, do not, particularly since I've now got...
PHILLIPS: All my money.
QUEST: All the money.
PHILLIPS: There goes my lunch!
QUEST: Do not invest directly in the overseas, unless you know what you're doing. You will lose your shirt.
PHILLIPS: I've got to tell you, love having you here, Richard. You've changed the whole attitude around. No more fear around here. Thanks, Richard.
QUEST: Hey, and the Dow's coming back. Now, 303.
PHILLIPS: Look at that. Richard talks, it moves the markets. You've got love it.
Well, be honest. Had you ever heard the name Henry Paulson before this whole crisis hit? Well, coming up, how the position of Treasury secretary will be getting a lot more scrutiny, especially with a new one to be named right after the election.
And later, we're going to go live to Wall Street. Not the inside where the trading is going on but the outside where the reality sets in.
John McCain has the campaign spotlight all to himself with just 11 days left until Election Day. McCain is on the trail all day in Colorado. Barack Obama, as we've reported, is in Hawaii, visiting his 85-year-old grandmother, who's in failing health. Obama is expected back on the trail tomorrow, however, in Nevada.
Now, our latest nationwide poll of polls shows Obama has widened his lead over McCain. He's up by nine points, 51 percent to 42 percent.
And as we head -- or as we head, rather, into the home stretch, the campaigns are trying to make their final arguments to voters. John McCain's newest TV ad is a tough one, and it tries to refocus the debate on national security. It uses comments by Barack Obama's own running mate. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Listen to Joe Biden talking about what electing Barack Obama will mean.
SEN. JOE BIDEN (D-DE), VICE-PRESIDENTIAL NOMINEE: Mark my words. It will not be six months before the world tests Barack Obama. The world is looking. We're going to have an international crisis to test the mettle of this guy. I guarantee you it's going to happen.
UNIDENTIFIED MALE: It doesn't have to happen. Vote McCain.
(END VIDEO CLIP)
PHILLIPS: Barack Obama and his allies like to rail against McCain's negative ads. But Obama has run some negative spots of his own. We're going to look at those just a little bit later.
And as for his newest commercial, well, it sticks to the issues but highlights Obama's differences with McCain.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Not sure who to believe on taxes? Try this. Enter your income, marital status, number of kids, then click. A nurse earning 60 grand? You get 1,000 bucks under Obama. Under McCain, just $150.
The Independent Tax Policy Center says Obama offers middle-class tax cuts three times as big as McCain's. Even leading conservatives say Obama's plan is better for the middle class. One point five million have tried it. You should, too.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: I'm Barack Obama and I approve this message.
(END VIDEO CLIP)
PHILLIPS: All right. We want to hear from you. How do you define a negative ad, and does it change your vote? E-mail us, your thoughts, at CNNnewsroom@CNN.com. We'll read your comments next hour.
We're also going to talk about these ads with spokesmen from both campaigns. Tucker Bounds from the McCain team and Bill Burton from Obama's campaign will react to some of these commercials. Are they fair? Do they work? And why do they run them? You'll want to hear what they have to say.
Troubled times on Wall Street. Will the next Treasury secretary help turn things around? Who should John McCain or Barack Obama pick for that all-important job? There's such to be some heated debate when we check in with two investment gurus who have their picks.
And picking a presidential candidate to support, it's a lot like buying a car. We're going to find out why.
(COMMERCIAL BREAK)
PHILLIPS: Sure, we're electing a president, but the person with the real power in the next administration may be the Treasury secretary. He or she will oversee the banking bailout, the credit crisis, the market meltdown. You name it. So who might the 44th president turn to?
We turn to Peter Schiff, president and CEO of Euro Pacific Capital and author of two books on savvy investing. We also welcome Tim Hanson, senior analyst with the Motley Fool.
Hi, guys.
PETER SCHIFF, PRESIDENT/CEO, EURO PACIFIC CAPITAL: Hi.
TIM HANSON, SENIOR ANALYST, MOTLEY FOOL: Hi. How are you?
PHILLIPS: When was the last time we really talked a lot about a Treasury secretary. I mean, when was the last time we really talked a lot about a Treasury secretary? Probably goes back to the Great Depression and Herbert Hoover, right, Peter?
SCHIFF: Well, probably. You know, but back then Hoover, of course, didn't listen to his secretary of Treasury. It was Andrew Mellon.
PHILLIPS: That's true. He said to Mello, "Forget about it." Right.
SCHIFF: Well, Mellon is the one that was the sense of reason. He wanted the government to stay out of it and let the free market work. And Hoover wouldn't listen to Mellon, and of course, they ended up creating the Great Depression together with Roosevelt. But you know, I don't know -- I can't imagine a secretary being worse than Paulson. You know, they might as well nominate my 6-year- old to be Treasury secretary. At least -- I mean, at least he would play with his toys instead of screwing up the economy.
PHILLIPS: Tim Hanson, you've got to have a response there?
HANSON: I mean, those are harsh words. I don't think Hank Paulson's done such a bad job. I mean, he's been put in a very tough spot. I think there's probably going to be a change with the next administration, and the Treasury secretary is going to have a big job to do. You know, he's got a lot of responsibilities. There's a lot of calamity out there right now.
And I think the person who does get picked needs to be someone who has credibility, both with the financial community and with, you know, the Main Street community. Wall Street and Main Street, as we've heard so many times in this election.
PHILLIPS: Well, and let's name one name. Someone that Obama and McCain are both fond of: Warren Buffett. I mean, so many people have mentioned this, especially in the past four weeks. I've heard people everywhere from, you know, parties in the evening to P.R. functions to bank meetings. I mean, what do you guys think? Peter, is Warren Buffett the guy?
SCHIFF: No. All this is form over substance. What we need is a market-based solution. The government can't do anything. Just putting the right person in the head of the secretary, it's like it didn't matter who you put on the bridge of the Titanic. The ship was going to sink, because it was structurally damaged.
Our economy's in trouble. We have a phony economy. We have to allow it to collapse so we can rebuild a genuine one. The government is trying to prop up our consumer-based, borrow-and-spend economy, and they can't do that.
PHILLIPS: Tim, what do you think? I mean, the Treasury secretary has got to have some sort of power and influence to take hold of what's happening in our economy. Is it -- it's an important position?
HANSON: Right. I mean, I think Peter is overstating the case just a little bit. There are some real fundamental problems in the economy, but the Treasury secretary in the next administration, to the extent that he's able to sort of reinvigorate -- he or she is able to reinvigorate consumer confidence. You know, I think Warren Buffett would be a great choice, in the sense that he's widely admired across both party lines and across the business community and in the Main Street community. You know, but the thing is, you know, the thing is I don't think he's willing to do it. So it could be a tough choice.
PHILLIPS: Which is true. Well -- go ahead. Go ahead, Peter.
SCHIFF: Consumers don't need confidence. I mean, they're overconfident. We need consumers to stop spending. We need them to realize that they need to save their money.
PHILLIPS: Consumers are freaking out here. Come on now.
SCHIFF: The best that we -- look, we've got too much bravado. That's how we got into this mess. People taking their charge cards and buying things they couldn't afford, overpaying for houses. We need to dampen consumer spending. We need a dose of reality.
PHILLIPS: All right. Let me throw out -- let me just -- because I want to get you guys' reaction to these names, because now we're actually starting to hear about certain individuals.
OK. Apparently Barack Obama, there's two names that are being thrown out there: Robert Rubin and Lawrence Summers. OK. Robert Rubin, director of Citigroup, Treasury secretary for Bill Clinton. And Lawrence Summers, Treasury secretary for Bill Clinton and former president of Harvard University. Let's get your response. Tim, I mean, if Obama is elected president, do you think these are two good names? Do you like one better than another or no?
HANSON: Well, you know, I mean, from a qualifications perspective, I think they're both qualified to do the job. I mean, you know, politically, they would be -- obviously have different viewpoints than someone on the other side.
You know, but the point is, just to go back to Peter's point. You know, the thing about consumers and about investors is that we constantly go from overconfident to underconfident, back to overconfident, and we're never in the middle. So right now, you know, you're seeing in the market, people are lacking confidence. We're getting crushed.
And so I think, you know, to the extent someone can step in and give people reason to believe again, I think that is important.
PHILLIPS: Well, Peter, could a Robert Rubin or a Lawrence Summers do that if, indeed, Obama wins and one of these names being tossed around?
SCHIFF: No.
PHILLIPS: No?
SCHIFF: The question is which secretary will do the least amount of damage? You know, this is not a situation where we have nothing to fear but fear itself. There's a lot to be afraid of. This is a phony economy. It's coming to an end.
But you know, there are real solutions. Unfortunately, all of the market-based solutions involve a lot of short-term pain. And the politicians refuse to allow that medicine to be applied. And so instead they're making the patient sicker, and it's going to be a lot more painful.
PHILLIPS: All right. Let me get you back in the hospital room for a minute. OK, let's talk about John McCain. Two names. I just want to get your -- for sake of balance here. John McCain, two current or former CEOs being thrown out there: Meg Whitman, of course, you know, queen of eBay; and Carly Fiorina, Hewlett-Packard. What's you guys' reaction if, indeed, McCain wins, could one of these women be a player?
SCHIFF: I don't know. McCain has got about as much chance of winning as I do. And so, you know, I don't think his -- it's going to matter. Of course, again it doesn't matter who they appoint. They can't make the situation better. We've got to pay the piper here. We need a secretary of the Treasury who understands the real problem and is willing to let the market work. And unfortunately, nobody like that is under consideration from anybody.
PHILLIPS: Well, Tim, what do you think?
HANSON: I agree with that. I agree with that, that the great financial minds in the past 10, 15 years have all been tarred and feathered recently for good reason. And I agree with Peter's point; there's going to be a lot of short-term pain. And we're going to need to get through it.
But people need to remember, you know, this president is only going to be around for eight years. And when it comes to our economy and to investing, I think you should be thinking in terms of decades. There's going to be some short-term pain. We're going to have to deal with that.
But I would favor a choice, you know, like a Buffett, not that that may be possible or not. But someone who can actually inspire some confidence again, because I think that's important to get people investing in the economy and in new businesses. And that's ultimately going to get us out of this.
PHILLIPS: Tim Hanson, Peter Schiff. Thanks, guys.
HANSON: Thanks.
SCHIFF: Thank you.
PHILLIPS: Well, they've signed up to vote. Now college kids can't wait to mark their ballots. So why are some of them being threatened with losing their scholarships, insurance and their tax status? We're going to find out what's going on.
Is your doctor is trying to cure you or just humor you? New surprising numbers on the prevalence of placebos.
(COMMERCIAL BREAK)
PHILLIPS: So have you seen any negative political ads lately? Did any of them change your mind about a candidate? Why or why not? We want to hear from you. E-mail us your thoughts at CNNnewsroom@CNN.com. We'll read your comments next hour.
(COMMERCIAL BREAK) PHILLIPS: He long hinted that he supports Barack Obama. Now Scott McClellan is making it official. The former White House press secretary under President Bush endorsed Obama in an interview with new CNN host D.L. Hughley.
(BEGIN VIDEO CLIP)
D.L. HUGHLEY, HOST, "D.L. HUGHLEY": Well, you haven't endorsed anybody. You haven't endorsed anybody. And it's McCain and it's Obama. You know, and I'm on this show. And your endorsement would probably mean a lot. But don't look at the fact that I'm black. Nothing like -- no pressure. Endorse somebody, damn it. Endorse somebody.
SCOTT MCCLELLAN, FORMER WHITE HOUSE PRESS SECRETARY: From the very beginning, I've said that I'm going to support the 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)
PHILLIPS: You can catch the full interview with McClellan on CNN's "D.L. HUGHLEY BREAKS THE NEWS." It premieres Saturday night at 10 p.m. Eastern.
After rallies in Pittsburgh and Springfield, Missouri, today John McCain's running mate, Sarah Palin, will give a deposition to the Alaska personnel board. The testimony will be given in St. Louis. Palin's husband, Todd, will also give a deposition.
The board is investigating whether the Alaska governor unfairly fired the state's public safety commissioner. Critics say the commissioner was fired because he refused to dismiss a state trooper who was involved in a nasty divorce from Palin's sister.
Palin denies any wrongdoing, and earlier this month an Alaska legislative panel found that she had the right to dismiss the commissioner but had violated the state's ethics law.
On college campuses across the country, you can feel the excitement as America's youngest voters get ready to cast their ballots. But in some states, there's talk of voter intimidation as college kids sign up to vote.
CNN's Kate Bolduan reports.
(BEGIN VIDEOTAPE)
KATE BOLDUAN, CNN CORRESPONDENT (voice-over): It caused an uproar on the Virginia Tech campus: confusion over whether students who register in this swing state could suffer consequences. Whispers of voter intimidation.
At issue, a murky state law about voter residency. Students were warned by the Montgomery County, Virginia, registrar that could use insurance, scholarships and tax status, all because they're establishing independent residency from their parents in order to vote here.
LAUREN FIALKOW, VIRGINIA TECH STUDENT: So I don't have to switch my residency as a matter of if I'm depending on my parents.
MICHAEL O'BRIEN, VIRGINIA TECH STUDENT: A lot of students aren't sure about what's going on on campus, and there's a lot of questions arising about, you know, who's right and who's wrong.
BOLDUAN (on camera): Typical, in an election year?
RANDAL WERTZ, COUNTY VOTING REGISTRAR: Well, no. No.
BOLDUAN (voice-over): Randal Wertz, the county registrar, put out the warnings but says he was only trying to help. He's been arguing for years Virginia needs to clarify the rules.
WERTZ: These are issues that are actually mentioned in the code that have to be considered to determine residency, and so the registrars all across the state are having different interpretations of that.
BOLDUAN: The confusion isn't just in Virginia. According to the New Voters' Project, a non-partisan group tracking this issue, states like South Carolina, Tennessee, Arizona and Indiana have also faced problems with student voter registration.
Heather Smith is the executive director of Rock the Vote.
HEATHER SMITH, ROCK THE VOTE: The fact of the matter is we are confusing an already confusing process. We are making it harder for students to get registered and involved in the political campaign this fall.
BOLDUAN: Adding to the problem is the flood of new voter registration across the country.
WERTZ: This is -- all came in, in one day.
BOLDUAN: Randal Wertz says in his county alone, overall registration has jumped more than 20 percent since 2006.
(END VIDEOTAPE)
PHILLIPS: Well, there's now a new push under way for changes in election laws in Virginia and other states so college students don't face the same problems next time around.
Well, who needs Halloween when you've got a real horror show on Wall Street? We've headed there to see how real people are dealing with another day of bad news.
(COMMERCIAL BREAK)
PHILLIPS: 1:30 Eastern time. Here's some of the stories we're working on for you in the CNN NEWSROOM. All eyes on the big board after overseas markets tanked overnight. Down Industrial's down 312 points. The opening bell brought a drop of more than 500 points on the Dow.
And some other numbers to check out today. CNN's National Presidential Poll of Polls. Barack Obama gaining a percentage point on John McCain. Obama now leads 51 percent, to 42 percent for McCain.
And a temporary stay of execution for a Georgia prisoner due to die Monday. A federal appeals court handed down a 25-day delay so Troy Davis' lawyers can file a new brief, seeking a new trial. In 1991, David was convicted of murdering a police officer. But seven of the nine key witnesses have recanted their testimony.
Let's get back to Wall Street. Stocks now lower, but most agree it could have been a lot worse. Carrie Lee joins us live from the New York Stock Exchange.
Hey, Carrie.
LEE: Hey, Kyra.
Well, you know, I said the glass is kind of half empty, half full today. I mean, true. The Dow is down 331 points right now. But consider earlier this morning, we fell more than 500 points. We've retraced about half of those losses. You can see, some people may be sounding excited about that. Kind of good news/bad news today, though.
The bad news, companies like General Motors, down 14 percent. The worst performer -- one of the worst performers on the Dow after reading that U.S. demand for auto sales has hit the lowest point in 17 years. So you hear stories like that. And then Microsoft though, which is fluctuating in and out of positive territory. Not up by a lot.
But considering that Microsoft today, just like other companies, had profits and sales that beat expectations, gave a weak outlook. Those companies earlier in the week, names like Dupont, names like Apple, tanked. But the fact that Microsoft is holding steady, even gaining a little bit, shows that you know, maybe investors are getting used to this. Maybe investors taking it in stride a little bit more.
And I will leave you, Kyra, on a bright note, as well. Existing home sales in September rose 5 percent from August. So, at least we're getting some upbeat housing news. We'll see if it lasts or not. But we are, you know, seeing some bright spots today. Although right now the if the Industrials close where we are right now, that would mark a new closing low for the Dow -- Kyra.
PHILLIPS: All right. Carrie, thanks.
You know, Carrie mentions, we've seen what's going on inside Wall Street. Let's take you outside and take a look you know, where the rest of us live and work. Allan Chernoff's got the street covered for us.
Hey, Allan. ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Hi, Kyra. Well, certainly a lot of anxiety on Wall Street, as there is throughout the nation regarding the market. We've got a few investors with us.
First of all, Nick is joining me. Nick is a young, private investor. Nick, you have much money in the market?
NICK VOLTURO, INVESTOR: Not right now. I only have very little in the market. I pretty much took all my money out of the market once I transferred over jobs. But I have a little still invested in you know, --
CHERNOFF: You nervous right now?
VOLTURO: Yes, I'm a little nervous. I'm not going to lie. You know, it's a little scary out there. You know, things aren't what they used to be. You know, back in the day, everything was -- it was sky rocketing. Right now, we're back in a point where you've got to really worry. I mean, it's a tsunami. You know, we're just treading water.
CHERNOFF: OK. Well, Paul and I were investors back in the day.
Paul, tell me how you feel, and you have a little more of a historical perspective than Nick.
PAUL DECAPRIO, INVESTOR: Yes, I do. I mean, I've been around a little bit, since the '87 crash, I've been involved. And a little nervous, but I'm still riding it out. I think things will come back.
CHERNOFF: Not bailing out, here?
DECAPRIO: Not bailing out at this time. No. And in fact, maybe even look for things to purchase. So, I'm not totally out of it.
CHERNOFF: All right. That's what Wall Street likes to see. Courage.
And Kyra, of course, on Wall Street right now, it is, as I said, plenty of anxiety. But the fact that the U.S. markets are not getting hit as hard as the overseas market, that is cheering investors here at least a little bit. You know, you have to look for the positives in this type of environment -- Kyra.
PHILLIPS: Good point. And we do. We want that courage to trump the fear.
Allan Chernoff, thanks.
More reality now. You've got questions about what to do in this market, right? Well, personal finance editor Gerri Willis has some answers for us. She's been busy looking at your e-mails.
Gerri, let's get right to it. Why don't we start with Jason, from Maine. He asks, "In this market, what is the minimum cash asset that you recommend you have on hand? I'm operating on keeping three months' worth of salary and expenses in the bank. I'm an average American on an average salary, or above average salary, rather. Is this enough? Thanks for all the great advice in this time of financial turmoil."
WILLIS: Nice words from Jason. And I've got to say, good job with your cash cushion.
If you have dependents, you may consider increasing it though, to about three to six months' worth of savings on the sidelines in case you get in trouble. And you might also want to think about disability insurance. This is insurance that kicks in if you become injured or disabled and you can't make any money.
Think about it. Your number one asset at your age is probably your ability to bring in a salary. If you have some spare cash lying around, consider investing in the stock market. There is a stock sale going on right now. But this should definitely be money you can spare for the next three to five years. We of course, cannot predict when the stock market is going to turn around and head higher.
PHILLIPS: I know. And that's what so people are wondering. How many day, weeks, months, years do I have to wait?
Lynette from Michigan. She wants to know this. She says, "My 401(k) took a hit last month and is not looking good this month. I would rather stay even than lose. I'm 57 years old. I'm thinking of just putting it in my credit union. Yes or no?"
WILLIS: Well you know, Lynette, you're 57 but you're probably still a little ways from retirement.
Look, if you cash out now, there's little chance you're going to be able to recoup the losses. If you move it, you'll have to sell and you'll be on (ph) losing end. If you find that you're not sleeping at night, OK. Maybe you start slowly change your asset allocation. But the bottom line here, is that you still have a few more years until you need that money to draw it down. So, don't be making your investment decisions on emotion. That's what even some of the pros have been doing in the last few days. You don't follow that lead.
PHILLIPS: All right, Gerri. And this one coming to us from Rhonda, in Kentucky.
She asks, "We are at the point that we cannot make our monthly credit card minimum payments. What is the best approach to take? We have spoken with the companies and they are not offering a drop in our payment. We need help."
WILLIS: Oh Rhonda, that is a sad story. Well look, you need some professional help. Check out the National Foundation for Credit Counseling and get a credit counselor at nfcc.org. Look, they have counselors who will sit down to you. They'll talk to you one-on-one about your debt. Those counselors may also be able to negotiate with your creditors where you cannot. It's a good idea to you know, try to get help, instead of kind of ignoring the problem and letting it get bigger.
PHILLIPS: Are those credit counselors free or are they costly?
WILLIS: You know some charge a fee. You want to make sure you get a debt management plan that you can work with. NFCC has a great reputation for helping folks out there. But you've got to be careful who you choose. You're absolutely right, Kyra.
PHILLIPS: All right. Gerri Willis. Thanks so much
WILLIS: My pleasure.
PHILLIPS: Well, where be some changes in your tax bill under the next president? Exactly what did John McCain and Barack Obama have in mind? We're going to explain in. McCain would keep president Bush's for low and middle-income earners. He'd also keep those cuts for those who make a quarter of a million dollars and more. He'd phase out the Alternative Minimum tax and cut the corporate tax rate from 35 percent to 25 percent.
Now, Obama would keep the Bush tax cuts for low and middle income earners. But he would repeal the tax cuts for those making $250,000 and more. His plan also calls for no income tax for seniors earning less than $50,000.
10 issues in 10 days. We're counting down to Election Day, breaking down the issues you care about most and what the presidential candidates want to do about them.
The problems and the plans from education to health care and homeland security. We kick things off tomorrow with issue number one, the economy. 10 issues in 10 days, only on CNN.
Well, it's getting tough out there on the campaign trail, especially on the TV airwaves. But, are those negative ads really negative? Or is negative in the eye of the beholder? Spokesmen for Obama and McCain will join us to defend their commercials.
And giving placebos to patients. Bad medicine, or a good faith effort to help? A surprising member of doctors say, they do it.
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PHILLIPS: When you go to a doctor you always hope that he's got just the prescription for you, right? Who'd ever think that you might end up popping a placebo? Well, some surprises in a new study from the National Institutes of Health. Medical correspondent Elizabeth Cohen joins us with the details.
What's going on, here?
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Well, what's going on according to authors of this study, is that you show up at the doctor and you say, let's say, my head hurts. I have terrible headaches. And the doctor does tests and tries various things to help you. None of them work. And then at some point the doctor's going to go, take a vitamin. Yes, take a vitamin. Go to the store and buy a vitamin. Or, here's a prescription for something.
And the doctor doesn't really think you need it. He's just doing it because he wants to give you something. Because, well, maybe he's annoyed with you or just wants to make you happy and give you something.
So, let's take a look at what doctors are giving patients for really no reason. Vitamins, anti-inflammatory drugs like ibuprofen. Antibiotics even when people don't have infections. Saline, that would be I.V. And sugar pills. Sugar pills are just literally nothing. And obviously, this is of concern and you wouldn't even know it because the doctor doesn't say I'm just giving you something.
PHILLIPS: We also know the power of the mind. You know, someone thinks they're sick, something might be wrong.
COHEN: And the doctor's counting on the power of the mind.
PHILLIPS: Well, OK. Is it legal, is it ethical?
COHEN: It's legal to do. Doctors can prescribe anything they want for anything they want.
The American Medical Association said it's not ethical. You can't give someone a placebo without telling them this is a placebo. Of course it ruins it's whole thing if you tell them it's a placebo. But you know, some doctors do say, look -- that what you just said -- which is, hey, if it works, if it makes them think they're getting better --
PHILLIPS: Why not make it happen? Might save money in the long run.
COHEN: Let it happen. Right.
PHILLIPS: Might save them money in the long time, in the long run of stress.
OK. But, you may -- say they give you one of these. I mean, you're paying for it and you shouldn't have to pay for that.
COHEN: Right. And how would you even know whether they're giving it to you?
PHILLIPS: Right.
COHEN: Right, exactly. So, here's what you can do if you're concerned that you are paying is for something that really isn't going to do anything for you. You can say to your doctor, hmm, you're suggesting a take a vitamin for my stomach ache. Is there any proof that vitamins help stomach aches? Ask very specific questions about what they're prescribing to you to get at -- you know, if they're going to give you an antibiotic, say, well, do you really think I have an infection? That will help you find out if they're just kind of blowing you off.
PHILLIPS: All right. Good tips, thank you.
COHEN: OK. Thanks.
PHILLIPS: Well, honk if you're too busy for a flu shot. Sorry, guys. That excuse gone -- the way of the edsel (ph).
The hospital near Boston, one of many places doing drive-through flu shots these days. You just pull up, roll up your sleeve, probably should have ask them to super size it, though. Flu season usually peaks in January or February, so grab your keys, get going and pull on up to the window.
Well, pay before the pump. Don't top off your tank and tell the clerk if you want a receipt. Oh, yes. Put the nozzle back in before you drive off.
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PHILLIPS: Sir Richard Branson, forced today to abandon his effort to set a speed sailing record from New York to England. The British billionaire told CNN that his racing yacht Virgin Money, was hit from behind by 40-foot waves and his main sail was ripped. Branson set sail two days ago with members of Britain's America's Cup racing team and his son and daughter.
This video from Lynne in Massachusetts, pretty much speaks and sparks for itself. Customer gases up, takes off. Customer forgets nozzle is still in tank. Well, the whole pump came crashing down, followed by a fire and an explosion. Thank god nobody hurt. The driver says that he had no idea he forgot to return the nozzle to its upright position. He'll have to that he will to a judge. He's charged with leaving the scene of property damage.
T.G.I.F. Thank goodness it's fall. The cooler weather is putting gorgeous colors into the leaves. We know Chad's always into that and he's always -- actually you and Reynolds Wolf are totally into the foliage.
(LAUGHTER)
Say that six times really fast.
CHAD MYERS, CNN METEOROLOGIST: Actually, yankeefoliage.com is a great web site to go find what county really has a lot, some of the best color. But, we've had iReports and AP photos from all over the country.
Let's take you to Blowing Rock, here in North Carolina. Look at that spectacular color. I mean, you just -- you can stand back, wait for the morning to come so that the water's completely flat. You'd have a perfect mirror image there on that nice, flat water there. That's from AP.
And then obviously we're not the only ones that enjoy the fall colors. So do the animals. There's some -- a little white tails floating around, maybe eating some things before they get into their winter season, as well.
Now we'll get to (INAUDIBLE), from Wheeling, West Virginia. Now we'll get to a couple of other things. Here's from Belleville, up into Ontario. And our friends north of the border have very good at sending the color. The color here, really nice. Some maples, they're telling me are just spectacular today. And this year I think is probably because there's been so much rain all the way across the upper Midwest, all the way into upstate New York. Their colors around Rochester, have been fabulous as well.
And now we get into Lac-Brome, up in here into Quebec. I actually called Lac-Brome to make sure that I said it right. This is from John Consonbol (ph). He is up there. This is just one part of the lake he enjoys probably fishing on and look at colors there. Nice stuff.
So, if you have an iReport. If you'd like to take a picture up and send it to us, we're going to have this little contest for you over the weekend. And everybody -- because Reynolds works the weekend. So, he's going to do it probably for you, too. Send us your best color shots, in your yard, or where you're going this weekend. And send them to us. We'll get them on the air this weekend.
A lot of great color. A lot of good things to see. One thing I want to tell you about, the colors are always brightest when the leaves are wet. So, if you can go out there when it's raining, I know the sky isn't maybe the prettiest, but the colors are the brightest and most vivid when the leaves are damp -- Kyra.
PHILLIPS: Love the tips. All right, thanks, Chad.
MYERS: You're welcome.
PHILLIPS: While you don't kick the tires or take a test drive, deciding who gets your vote for president is a lot like buying a car. And voters fall into several categories. We will break them down for you.
But first, 11 days before the election, Barack Obama leads John McCain in our latest national poll of polls by 9 points. In today's Election Express, our Josh Rubin asks voters just how accurate those numbers really are?
(BEGIN VIDEOTAPE)
JOSH RUBIN, CNN PRODUCER: Is Barack Obama ahead in Ohio? Is John McCain ahead in West Virginia? That is what the polls are trying to tell us, but do you trust the poll numbers?
UNIDENTIFIED MALE: I believe the polls are pretty accurate right now.
UNIDENTIFIED FEMALE: I am not sure.
UNIDENTIFIED FEMALE: It may be a few points off, but for the most part I think they are pretty accurate. UNIDENTIFIED MALE: I think it is lopsided to one side.
UNIDENTIFIED MALE: I think there are a lot of ways you can manipulate the statistics right now, and I think a lot of people are giving opinions that are maybe unregistered voters.
UNIDENTIFIED MALE: I think they are pretty close. But I am really concerned about the so-called Bradley effect.
UNIDENTIFIED MALE: Many times the pollsters will focus on the large city, which will naturally give an advantage to the Democratic nominee.
UNIDENTIFIED MALE: Today's poll is not the poll that reflects what the election is going to be. We are not there yet.
UNIDENTIFIED MALE: Just talking to the people and talking to fellow teachers and stuff, I think the polls are pretty much right on.
UNIDENTIFIED MALE: You're really never going to know until Election Day and you're going to get the true results. Until then, there are a lot of dubious ways you can interpret it, and reality is reality on Election Day.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
PHILLIPS: What is happening to our money? What is happening to our economy? The Dow Industrials down 411 points. We've got a lot more coming up in the next hour. We've got Carrie Lee, she's at the New York Stock Exchange, Allan Chernoff, he is getting reaction from real people and investors on Wall Street and of course, our favorite, Richard Quest, has flown in from London just to sit right here on the set and talk to us about international markets.
Well if you still have not decided who gets your vote on Election Day, you've got 11 days to make up your mind. So how do to voters reason with that final decision? Actually, it's a lot like buying a car.
Here is CNN's Miles O'Brien.
(BEGIN VIDEOTAPE)
MILES O'BRIEN, CNN CHIEF TECHNOLOGY & ENVIRON. CORRESPONDENT: By now you have thought a lot about who to vote for. But have you ever considered how you make your decision?
Rick Lau has. And he says voters are conflicted with two competing goals.
RICHARD LAU, POLITICAL SCIENCE PROFESSOR: No. 1 is that they want the make a good decision. And No. 2 is that they want to make an easy decision. O'BRIEN: Lau is a political science professor who has written the book on this. He says the real problem is we are all drowning in a sea of information.
LAU: And so that means that people have to find shortcuts and have to find different ways of simplifying the choices for them.
O'BRIEN: Lau says there are four types of deciders. He calls them rational, confirmatory, fast and frugal, and intuitive. And we are not just talking about voting.
LAU: We do it when we are buying cars, we do it when we we're picking spouses.
O'BRIEN (on camera): So let's say for a moment I'm the rational guy and I need to buy a new car. Well, long before I ever got here to the car dealership, I spent days poring over research on the Internet, I looked at Edmunds, I got my consumer reports, I have a briefcase full of research on this whole thing. I am a regular car-buying smartie pants.
LAU: Almost no one was up to that ideal.
O'BRIEN: If I was a confirmatory decision maker, I would be at this dealership because I love jeeps. I don't know which model I want just yet, but I would never consider driving anything else.
LAU: This is someone who first and foremost is a party voter, who has strong party identification.
O'BRIEN: If I was fast and frugal, I would want this to be over with as quickly as possible. So I might latch on to just one criteria, say gas mileage.
LAU: They'll say, that is it, I have made my decision and now, let's go on with other things in life.
O'BRIEN: Now, let's say I'm an intuitive decision maker, I might have seen a Dodge like this in my neighbor's driveway and decided I need one, or read about a deal in the paper. Either way, I am easily influenced and impulsive.
(voice-over): So, now cow can decide how you decide. But before you start feeling guilty about being a slacker, consider this, Lau found those smartie pants, rational voters were only happy with their choice half of the time. For us shortcut lovers, he found 70 percent of us were content with our choice. Thank you very much.
(on camera): So, maybe we are wiser than we think, or maybe we are just not paying attention.
Miles O'Brien, CNN, East Brunswick, New Jersey.
(END VIDEOTAPE)
PHILLIPS: Well, from how we decide to the decider, he made a cameo appearance in the form of Will Ferrell on last night's "SNL" special. The purpose -- a VIP endorsement.
(BEGIN VIDEO CLIP)
WILL FERRELL, ACTOR PLAYING GEORGE W. BUSH, "SATURDAY NIGHT LIVE": A vote for John McCain is a vote for George W. Bush.
You're welcome.
I want to be there for you, John, for the next eight years.
TINA FEY, ACTOR PLAYING GOV. SARAH PALIN, "SATURDAY NIGHT LIVE": The next 16 years.
FERRELL: Let's get a safety. I think I blinked on that last shot. Thumbs up, everybody.
(END VIDEO CLIP)
PHILLIPS: Well, the fake Mr. Bush admitted he didn't realize that his approval rating was so low. Seems a few months ago he declared the Oval Office a bummer-free zone.
The next hour of CNN NEWSROOM starts right now.
