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Georgian Man on Death Row Granted Stay of Execution; Oil Cuts Production, Will Prices Remain Low? Stocks Continue to Sell Off; Election 11 Days Away with Ads & Interviews Fast & Furious
Aired October 24, 2008 - 14:00 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): How far and how fast can fear itself travel? How about around the globe in a heartbeat? Oil, gold, consumer confidence all thrown under the fear bus.
UNIDENTIFIED MALE: Listen to Joe Biden talking about what electing Barack Obama will mean.
SEN. JOE BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: Mark my words, it will not be six months before the world tests Barack Obama.
PHILLIPS: Eleven days left, 9 points down. Did you really expect John McCain to pull any punches? The latest message he approved turns Joe Biden's own words against his running mate.
And sixth graders in trouble after school officials find out about their "Slap a Jew Day."
(END VIDEOTAPE)
Hello, everyone, I'm Kyra Phillips, live in the CNN world headquarters in Atlanta, and you are live in the CNN NEWSROOM.
Well, if you cannot trust oil and gold, what can you trust? Those used to be safe havens in troubled times, but that was so three weeks ago. Now they are both on the skids just like the stocks that were dumped by the truckload today in Asia and then in Europe, now here in Latin America.
Recession fears sent Japan's Nikkei down more than 9.5 percent. Oil slipped below $65 a barrel despite word that OPEC is cutting production. It has not been this cheap since March of last year. Gold fell below $700 an ounce for a while today, two weeks ago it topped 900.
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 from 9 percent a year ago.
Well, we are triple teaming "ISSUE #1." Carrie Lee is watching Wall Street for us. Allan Chernoff is on Wall Street. And Gerri Willis looks at how far Wall Street is from easy street. It's kind of hard to see it from there, that's for sure. Let's go ahead and start on Wall Street where selling has started to pick back up as we near the end of trading. Carrie Lee at the New York Stock Exchange with the latest.
Hey, Carrie.
CARRIE LEE, CNN CORRESPONDENT: Hey, Kyra. Well, yes, you are right. We have been in the red all day and now picking up the selling a bit as the afternoon wears on. The industrials down 437 points right now. Still haven't retouched the low of the session, we were down below 500 points early this morning.
But as you know, the last couple of hours can be very important not only on a trading day, but especially on a Friday with so much volatility, so much happening globally, people are very reluctant to hold shares over a weekend. So we are in the red for stocks.
Oil prices are coming down a lot as well. As you mentioned, down 4.5 percent right now to $64 a barrel and change. OPEC did cut production, the idea to boost prices, but they have not cut enough for some people, 1.5 million barrels a day. Some people were looking for 2 million, and that is why oil is continuing to decline. And some people saying that if oil hits $50 a barrel, then OPEC will be forced to cut once again.
One thing that has lead the global selloff today, Great Britain and Europe, GDP, gross domestic product, all of the goods and services produced in the recent quarter were negative. And you know the textbook definition, back-to-back two quarters of a decline mark a recession, shows that, you know, this really is not just the U.S., but global economies not only dealing with the credit crisis, but also now perhaps more fundamentally economically slowdown as well.
So that is the latest from here -- Kyra.
PHILLIPS: All right. Carrie, thanks so much.
And many people think that sheer emotion is driving the selloffs, and the emotion is fear. But you don't have far to look very deeply to find the reasons behind it. Our Gerri Willis has her eye on the big picture. It is not really a pretty sight -- Gerri.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: No, here you've got that right. You know, we are seeing a lot of panic selling today. And I think the big surprise for small investors out there is that a lot of the panic sellers, they are professionals. They're not individuals. They are unloading stocks, as we've seen, and that selling gaining momentum this afternoon after we got a little reprieve earlier in the day.
We are down 436 points, but as long as we are talking about this, let's talk about bear markets. What we are in right now, Kyra, is a conventional bear market. A good old-fashioned selloff that can last a number of months and typically takes the market down between 35 and 40 percent. And that is what we are seeing right now.
Pros who have been around the market for a very long time, they know how this works, they have been through it before. And they don't panic at these times. I have to tell you, I am getting calls from my financial adviser friends, they are trying to talk people back from the precipice, selling everything.
I just want to remind folks, if you sell now, if you unload your stocks now, and you have got years and years to retirement, you are locking in these lows. You are locking in this loss, and of course, that is not a good thing -- Kyra.
PHILLIPS: All right. Gerri Willis, we will keep talking throughout the day. Thanks.
We know it is not pretty on the inside, we've seen that, how does it look outside? Allan Chernoff joins us now from Wall Street, the actual Street, to show us how people are dealing with all of this. And I know they have been talking about it -- Allan.
ALLAN CHERNOFF, CNN SR. BUSINESS CORRESPONDENT: Kyra, there are a lot of people here who have been saying to me, you know, what can you do? I mean, yes, there are some people who are panicking, bailing out, selling, and as Gerri just said, most financial advisers advise against doing that.
They say, hey, take your time, do not do anything rash. But there are other people who get out of the market because of circumstances. We have one example. Justin is with us and Justin Blair.
And, Justin, you actually sold, you said, back in May, a lot of your stocks?
JUSTIN BLAIR, OWNER, CHURCH STREET GYM: Yes, back in May we pretty much sold most of what we owned to get into a house. We are a young family and we felt that that was the time to get into a house, so.
CHERNOFF: So timing seemed to be pretty good for you?
BLAIR: Yes, we were down a bit in May and I think if we were still there, we wouldn't be really be able to have made the move that we did now. So I mean, it is an unfortunate circumstance for everybody.
CHERNOFF: But you still do have some retirement money in the stock market, so how are you feeling about that?
BLAIR: I think you have just got to be patient. And you know, we are young and you have just got to go make more money. That is all you can do.
CHERNOFF: Think long term. Kyra, that is exactly what a lot of people I have been talking to this afternoon are saying. They are just putting it aside, some not even opening those statements from their brokers, those 401(k) statements, not even looking online, closing their eyes and just hoping in six months, in a year, it will be OK. Kyra, back to you.
PHILLIPS: We can only hope. Thanks, Allan.
And our world traveler Richard Quest will be here in just a few minutes as well. He is going to bring us up to speed on how the wealth of investor fears has spread across the globe.
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 have reported, is in Hawaii visiting his 85-year-old grandmother who is in failing health. Obama is expected back on the trail tomorrow in Nevada.
And checking the big picture, our latest nationwide poll of polls shows Obama has widened his lead over McCain. Obama now leads by 9 points, 51 percent to 42 percent.
And for John McCain's running mate, Sarah Palin, a quick break from campaigning to take care of some legal business after holding rallies in Pittsburgh and Springfield, Missouri, earlier today. Palin is to give a deposition in St. Louis to the Alaskan Personnel Board.
Palin's husband, Todd, will also give a deposition. The board is investigating whether the Alaskan governor unfairly fired the state's public safety commissioner. Critics say that he was fired because he refused to dismiss a state trooper involved in a nasty divorce from Palin's sister. Palin denies any wrongdoing.
Now 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.
High stakes and hard-hitting TV ads. Do negative ads really work? And who decides what's negative anyway? We're going to clear the air with spokesman from both campaigns.
(COMMERCIAL BREAK)
PHILLIPS: Breaking down the races in the race for president, a new CNN/Opinion Research poll shows 45 percent of whites say they will vote for Barack Obama, 52 percent for John McCain and 97 percent of blacks for Obama, 3 percent for McCain. And 69 percent of Hispanics voting for Obama, 25 percent for McCain.
Here is a look at the racial breakdown in the last presidential election: 41 percent of whites for John Kerry, 58 percent for President Bush, 88 percent of blacks voted for Kerry compared to 11 percent who voted for President Bush, and Kerry got 53 percent of the Hispanic vote to the president's 44 percent.
John McCain and Barack Obama don't talk much about race, at least not in so many words, but some say that the race card is being played in more subtle ways.
CNN national correspondent Jason Carroll reports. (BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Let's leave Barack Hussein Obama wondering what happened.
(CHEERING AND APPLAUSE)
JASON CARROLL, CNN NATIONAL CORRESPONDENT: The goal, energize the Republican base. But some critics see a subliminal message.
JIM VANDEHEI, POLITICO.COM: When the you have people introducing the vice presidential nominee or the presidential nominee and talking about Barack Hussein Obama, that is not an accident.
CARROLL: Some critics say it is a code.
BIDEN: When you hear these kind of phrases, you know where it is going.
PROF. CHARLTON MCILWAIN, NEW YORK UNIVERSITY: There are a lot of -- a whole stable full of race-coded language that they use in their stump speeches and it is a way of tapping into unconscious racial attitudes.
CARROLL: Republican Don Scoggins say while racism in politics exists, it does not mean it is always there.
DON SCOGGINS, REPUBLICANS FOR BLACK EMPOWERMENT: Quite frankly, I do not think that it is specifically coded language. I think that just like anything else, you can always apply meaning to something that is said by someone.
CARROLL: Critics are not just targeting the McCain camp for using coded language. Remember this comment?
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: So the only way they figure they're going to win this election is if they make you scared of me. You cannot risk electing Obama. You know, he is new, he doesn't look like the other presidents on the currency.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: He brought up the issue of race, I responded to it, because I am disappointed and I don't want that issue to be part of this campaign.
UNIDENTIFIED MALE: I am begging you, take it to him.
CARROLL: Following a town hall meeting, one voter urged Senator John McCain to get tougher on Obama.
MCCAIN: Yes, I will do that, but I also, my friends, want to address the greatest financial challenge of our lifetime with a positive plan for action.
CARROLL: Most political observers agree both McCain and Obama will be cautious in how they criticize each other. MARK HALPERIN, TIME: Politicians stay away from the unpredictable, from something that can blow back in their face. Race is such a potentially explosive issue that no one has wanted to engage on it.
(END VIDEOTAPE)
PHILLIPS: Well, the McCain campaign has repudiated supporters such as the sheriff in Jason Carroll's report who used Obama's full name as a way to denigrate him.
Well, as Election Day gets closer, it's almost impossible to avoid them, campaign ads where the candidates talk more about their opponents than themselves, and to put it mildly, not a favorable light. Negative political ads have a long history. Remember the infamous "Daisy" ad from 1964? Lyndon Johnson's campaign portrayed Republican Barry Goldwater as a nuclear threat. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: One, two, three, four, five, seven, six, six, eight, nine, nine...
UNIDENTIFIED MALE: Nine, eight, seven, six, five, four, three, two, one, zero.
(NUCLEAR EXPLOSION)
(END VIDEO CLIP)
PHILLIPS: Now fast forward to 1988, remember Willie Horton? An outside group backing George Bush hammered Democrat Mike Dukakis with this one.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: This man is governor of Massachusetts. This man was convicted of murder and sentenced to life in a Massachusetts prison. Then this man let him out of prison on a weekend furlough. While on furlough, this man ran away to Maryland, twice raped a woman and tortured her husband. Now, this man is running for president. President? Michael Dukakis, Ted Kennedy's governor.
(END VIDEO CLIP)
PHILLIPS: Well, those ads are obviously what you would call negative, but it is not always so obvious. The whole negative ad debate actually got us talking at our morning meeting today, voters always claim they don't like these types of ads, but strategists keep using them because they say negative ads work.
But there is another question. Who decides if a political ad is really negative? What if the claim in the ad is technically true? Let's bring in two people who will no doubt tell us they know a negative ad when they see one. Tucker Bounds is a spokesman for the McCain campaign, Stephanie Cutter is a senior adviser with the Obama campaign.
Thank you to both of you for being with us. And you guys, I am not kidding, this morning I think it literally took us four hours for us to try and figure out how to do this segment, because nobody could really define, OK, what is a negative ad and who gives the right to judge it that way.
So, Tucker, let's start with you. One line or two, how would you define a negative ad?
TUCKER BOUNDS, MCCAIN CAMPAIGN SPOKESMAN: Sponsored by Barack Obama's campaign.
(LAUGHTER)
BOUNDS: I kid. Honestly, I think that if it is misleading and it uses untruthful terms, but also drawing negative contrast is part of campaigning, you need to talk about your opponent's record, you need to talk about what your opponent brings to this campaign, because I think if it were left and if we're -- you know, we are seeing in the campaign today, if it were left exclusively to a candidate to describe his own record and describe own proposals, there just wouldn't be too -- would be much scrutiny and wouldn't be much criticism.
PHILLIPS: OK. Stephanie, how would you define a negative ad?
STEPHANIE CUTTER, OBAMA CAMPAIGN SR. ADVISER: Well, I think you have to look at the voters' reactions and how they view these ads. And if you look at where we are in the race today, two-thirds of the American people believe that John McCain is running a negative campaign.
And I think that is, you know, partly due or in large part due because of the ads he is running. He is running only negative ads at this point.
BOUNDS: Well, I would argue there is a media narrative there that plays into it as well. Our campaign has proven that we are running a more positive campaign than the Obama campaign.
CUTTER: Well, you are absolutely right, Tucker, you are doing it on the stump, too.
PHILLIPS: But you know what, Stephanie, you bring up a great point, because I have e-mails I'm going to read here in a minute. Viewers are going to ask you guys some questions about this and tell you how they feel. But let's go ahead, let's just roll the latest ads and I want you guys to tell me, is this negative or not. Let's go ahead and roll the latest Obama ad.
(BEGIN VIDEO CLIP)
OBAMA: I'm Barack Obama, and I approve this message.
UNIDENTIFIED MALE: Senator McCain and Governor Palin talk about experience, a steady hand, but in this economic crisis, it is McCain who has careened from stance to stance, been erratic, poured gasoline on the economic mess, all while promising more failed policies that give tax breaks to big corporations, but almost nothing to the middle class. Yes, McCain has been erratic, what he has not been is on your side.
(END VIDEO CLIP)
PHILLIPS: Tucker is this negative?
BOUNDS: It is an incredibly negative ad, and the part that is most disturbing about it is it is not true. John McCain has a plan for the middle-class that includes doubling the tax credit, that includes a $5,000 health credit so that people can buy insurance and have a greater access to health care. Not to mention he has a jobs for small business plans that's going to get America moving right on Main Street.
So for this ad to say that he has more for big corporations than he does middle class is preposterous and I know that Stephanie is going to cite a liberal nonpartisan -- well, I should not say nonpartisan, a liberal think tank to try and refute those charges, but the facts are clear.
If you lower the corporate tax rate, business tax rate for small businesses and all incorporated businesses, they become more competitive globally and jobs stay here in America. Most economists across this country completely believe in that tenet. So the ad is misleading and I don't think it's fair.
PHILLIPS: Stephanie, is it misleading, is it negative?
CUTTER: I think it is pretty factual. And you know, Tucker, you can join in my arguments with me, but John McCain has been erratic in this economic crisis...
(CROSSTALK)
BOUNDS: That is a code word. It is a code word and it is completely negative.
CUTTER: He said the economic -- the fundamentals of the economy...
BOUNDS: I mean, you cannot answer a question about negative campaign with negative talking.
CUTTER: Do I get to answer this?
PHILLIPS: Stephanie, go ahead, make your point, Stephanie, we've got to get moving.
CUTTER: Thank you. "The fundamentals of the economy are strong." Then he was against the bailout, then he was for it, then he suspended his campaign to fly to Washington, but it took him 26 hours to come to Washington. That is erratic. You know, he couldn't figure out where he stood on this thing, and in a crisis, I think the American people expect more and they did expect more and they didn't get it from John McCain. He showed erratic leadership.
And you know, don't just believe me. Look at where the American people stand right now in terms of who they trust more on the economy. They trust Barack Obama. You know, that doesn't just happen out of nowhere, that happens...
(CROSSTALK)
BOUNDS: They don't know anything about Barack Obama. If they knew that he was going to increase the taxes on the middle class, I think they would have a far different feeling.
PHILLIPS: OK. Guys, let's...
(CROSSTALK)
CUTTER: Well, I am glad you brought up taxes, because they also trust him more on taxes.
PHILLIPS: Let's go ahead and listen to the latest McCain ad, guys. Here is the McCain ad.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Joe Biden, talking about what electing Barack Obama will mean.
BIDEN: Mark my words, it will not be six months before the world tests Barack Obama. The world is looking. We are 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: Stephanie, is that negative?
CUTTER: Well, you know, that is just another McCain ad. That is no different than anything else they are running. What they didn't tell you in there is that Joe Biden said that Barack Obama had a spine of steel.
And you know, they've made it clear that this is the only place left they have to go, by stoking fear in the American people. They do it on the stump, they do it in their ads, they have forecasted this to the press and everybody else that they are going to run the last week of this campaign on character and try to strike fear in the American people.
I don't think this ad will work. I think that Barack Obama has more than surpassed the commander-in-chief threshold. They trust his judgment and leadership. Colin Powell endorsed him on Sunday, citing his judgment and leadership. These endorsements are happening every single day.
So, you know, I think that it is just more of the same from the McCain campaign, and we are going to continue doing what we are doing and start -- and continue talking to him about what we are for and not just what negative ads like McCain is running. And Barack Obama is out there on the stump every day making a case for himself, not a case against somebody else.
PHILLIPS: Tucker, let me ask you about that ad, because I am sitting here looking at the entire speech that Joe Biden did give and it was interesting that in the commercial there was a line picked and then another line picked and another line picked, and it didn't really give the proper context to how the entire speech laid out. So how was the decision made to do that ad, and do you see it as negative? Do you see it as misleading?
BOUNDS: Well, if we were as well-financed as the Obama campaign, we would have been able to buy a minute-and-a-half to put his whole remarks out there, which actually are very revealing.
CUTTER: You could do better ads...
(CROSSTALK)
BOUNDS: I think that it is shocking that Stephanie Cutter is accusing us of striking fear in the...
CUTTER: You should tell you ad guys that.
BOUNDS: Hold on, hold on, hold on. I think it is absurd for Stephanie Cutter to sit there and say that we are striking fear in the hearts of Americans, when we are using the words of their own candidate. It is what he said. And what we left out was what he said was, "I guarantee it," "as I stand here today, I guarantee a generated crisis," internationally for the American people to test the mettle of this guy.
It is an unbelievably revealing statement, all we had to do was it on the TV. Let the American people decide. All of the footage in the background was from previous international crises and concerns. This was a factual ad. And if it strikes fear in the American people, maybe it should.
PHILLIPS: All right. Let me get right to the...
(CROSSTALK)
CUTTER: Oh, well, that is interesting that Tucker just said that they were purposefully trying to strike fear in the American people. Tucker, even your boss, John McCain, said to an audience member that Barack Obama would be a good president and the American people would be safe.
(CROSSTALK) CUTTER: ... was that disagreeing with your own candidate on this?
(CROSSTALK)
BOUNDS: ... which is that your candidate is trying to strike fear in the America people. I'm saying these are the words of your candidate...
(CROSSTALK)
CUTTER: Joe Biden -- either of these candidates, whoever is president is going to be tested. Joe Biden believes that Barack Obama...
BOUNDS: That is not what he said, Stephanie.
CUTTER: ... has a spine of steel, that is what he said.
(CROSSTALK)
PHILLIPS: Hey, hey, Tucker and Stephanie, hold on. Let me get to some e-mails. Let me just read these real quickly. Gus writes in, because we ask the question, do you think negative ads work? Do you pay attention to them? Do they change your vote?
Gus writes: "Negative ads tend to be dishonest instead of stating truth. Ads that keep using fear to motivate voters are simply disgusting. Fear has created much of the mess that we are in now."
Then Patti (ph) writes: "When all I hear are personal attacks, I become very frustrated. I am from Arizona and I have always respected Senator McCain, but that has dropped. He has taken the low road in this election."
Melanie says: "Negative ads do not decide my vote, but they do give me more insight into the candidate. Many of McCain's ads use negative scare tactics, i.e., linking Obama with terrorists. Obama's negative ads are at least substantive, example, McCain already has seven houses and you don't want him in the White House.
Then Andresa says: "Negative campaigning is advertising that continuously attacks the candidate's character, there is a difference between attacking a policy stand and tearing someone down like the ads McCain is doing on Obama."
What is interesting is we have got hundreds of e-mails and nobody straightforwardly has said these ads work. Yes, go for it, be negative, it is empowering my vote.
BOUNDS: Well, it does work, though, is the difference. Is that it works to be able to explain a candidate's record in truthful terms, which is what we are attempting to do to Barack Obama because he misrepresents what he stands for. He misrepresents what his record actually is. So it is incumbent on us, we are not getting very complicit activity with the mainstream media, Stephanie gets to enjoy that, but we have to face that every day, that we have to take the message right to the American people about who Barack Obama is and what he stands for. I think we are doing it fairly and I think we are doing it honestly.
PHILLIPS: Stephanie, final thought?
CUTTER: You know, negative ads can absolutely work, but they can also against you. And I think that is what is happening with the McCain campaign, when the people don't trust what you are saying, you have no credibility left in terms of what you are putting on the air, it really works against you, which is the state that the McCain campaign is right now with more than two-thirds of the American people thinking that they are running only a negative campaign.
BOUNDS: How is that not credible to put Joe Biden's own words on TV?
PHILLIPS: Stephanie Cutter, Tuckers Bounds...
CUTTER: Well, you admitted it...
(CROSSTALK)
PHILLIPS: ... speak back on cnn.com. Thanks, guys. Whew! I am pooped.
Well, it started with a "Hug from a Friend Day" and ended up with a "Hit a Jew Day." Not kidding here. Sixth graders have a lot of explaining to do about their unofficial spirit.
(COMMERCIAL BREAK)
PHILLIPS: Well, in Washington, Senator Ted Stevens' corruption trial is on hold while one of the jurors deals with an emergency. Deliberations, which got under way two days ago, were halted this morning when a juror had to go home to California to deal with the death of her father. The judge plans to speak with the juror by phone Sunday, to see when she will be able to return. Stevens is accused of failing to report more than a $250,000 in gifts from an oil services contractor in his home state of Alaska.
The unofficial sixth grade spirit week started innocently enough with a "Hug a Friend Day." Then on "High Five Day," so how did things evolve into "Hit a Jew Day"? A middle school near St. Louis has just suspended five students over the incident. School officials say that the kids' actions were unacceptable and don't think that they were out of hatred, still, administrators are talking about implementing some diversity training.
Well, it is not a good way to end the week on Wall Street. We are going to go live to New York for the latest on today's big selloff.
(COMMERCIAL BREAK)
PHILLIPS: Hello everyone, I'm Kyra Phillips at the CNN World Headquarters in Atlanta, and you're live in the CNN NEWSROOM.
2:32 Eastern time right now. And here are some of the stories we are working on in the CNN NEWSROOM.
A Georgia prisoner who faced execution next Monday has gotten a temporary stay. Troy Davis' lawyers now have a little less than a month to file a new brief seeking a new trial. Davis was convicted in 1991 of murdering a police officer, but seven of nine key witnesses have recanted their testimony.
Governor Sarah Palin is campaigning in Pittsburgh today. The Republican vice presidential candidate spoke at a children's hospital and talked about the GOP ticket's commitment to children with special needs. CNN's latest poll of polls in Pennsylvania shows her running mate, John McCain, running 10 points behind Barack Obama.
And take a quick look at the markets right now. Looks like Dow Industrials are down 321 points. We continue to keep an eye on Wall Street. Stocks are lower, but maybe not as low as we had thought.
And we continue to keep an eye on Wall Street. Stocks are lower, but maybe not as low as they could have been. Carrie Lee has the latest now from the New York Stock Exchange.
Hey, Carrie.
CARRIE LEE, CNN CORRESPONDENT: Hey, Kyra.
Well, the early morning action when the stock trading -- basically stocks were not allowed to trade because they had fallen so much in the premarket -- seems like a relief that things are not worse right now. Because we have been negative all day, the Dow did touch down more than 500 points. But right now down 313 points with about an hour and a half to go. That is a loss of 3.5 percent.
So I think people are somewhat breathing a sigh of relief that things didn't absolutely fall off of the cliff today. The question, though, that everyone is wondering, when are we going to hit bottom? Perhaps more -- before that -- when is this volatility going to end?
And, you know, we might see this going on for a while. The "Financial Times," among other things said today that the hedge fund industry could be shrinking over one-third over the next couple of few months. Hedge funds don't have a luxury of time, right. When investors want to pull their money out, they have the right to get it, usually they do -- in theory they do. And when that happens, these funds are forced to sell. So that is one thing that could continue the selling.
That said, the Dow, the lowest close so far on the Dow has been 8,451 and right now we are at 8,428. So if we stay at this level, we will still, Kyra, see the lowest close on the Dow in this recent downturn. But there is an hour and a half to go, and as you know, a lot can happen between now and then.
PHILLIPS: Oh yes we do know that.
Thank you, Carrie.
Well if good news travels fast, bad news travels at quantum speed. Speaking of moving in a very fast pace, Richard Quest here to talk about how market fears have spread around the globe faster than you can say hang seeing (ph).
(CROSSTALK)
PHILLIPS: Say that six times.
RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Look, it is Friday afternoon --
PHILLIPS: Right.
QUEST: -- we have been talking about the markets for -- all week. It is your chance now, Kyra, to ask me, what is it you are desperately wanting to know about this market graph?
PHILLIPS: OK, for weeks and weeks and weeks, I come into work and I hear the same thing. Everyone is freaking out, look at the numbers, look at the markets. What do we do? How long do we wait?
I want to know, do I need to wait -- be patient for seven days, seven weeks, seven months, seven years before I know --
QUEST: What you really are asking me -- what you're asking me, Kyra, is when are you going to get your money back?
PHILLIPS: Right.
QUEST: Pass me that cash over that. You've got some money over there.
PHILLIPS: Yes, I do.
QUEST: All right, just pass it to me.
PHILLIPS: This is Tenisha's lunch money, so don't go spending this.
QUEST: Right. Now what has effectively happened -- this is really -- this is what this is all about. When all is said and done, I don't care how you dress it up, as interest rates, swapped currencies, fluctuations, at the end of the day, we started with $4 --
PHILLIPS: OK.
QUEST: -- we then lost $1 --
PHILLIPS: Right.
QUEST: -- we then lost another.
PHILLIPS: Right. But then they started to slowly come back.
QUEST: Not -- I'm talking about in this whole crisis.
PHILLIPS: Oh, OK, OK.
QUEST: In this crisis. And that --
PHILLIPS: We are still down.
QUEST: -- and that really is what it is all about. And what everybody wants to know is, when does the money get added back up again?
PHILLIPS: Right.
QUEST: I don't care how you dress it up. That is what people want to know.
PHILLIPS: That's true.
QUEST: But no one can tell you that. I am sorry to put it in the bluntest of -- anyone out there who says they know when the money returns, go and buy London Bridge from them. Do not buy a used car from them. Do not buy any fruit and veg from them, because no one can tell you when this comes back.
PHILLIPS: OK. So, what do we do? How do we plan? How do we organize? How do we know how much to take out or not take out?
QUEST: You take -- you do as little as possible without causing damage. You are now in maximum damage limitation mode. What you don't want to do, unless you have to, is to sell into this market. You just wait. If -- but let's not forget one other very important thing, there are a lot of people out there in work with savings who are wondering when do they actually go into the market?
PHILLIPS: Well?
QUEST: I am not going the answer that.
But what I'm saying -- you know, many years ago, many years ago when I was a trainee financial journalist, I was always taught never say bad trade numbers, bad deficit numbers, interest rates going down is bad or good, because there is always somebody else on the other side of that.
PHILLIPS: So for you that has always been -- you have covered financial news for --
QUEST: '87. I saw the stock market crash in 1987 --
PHILLIPS: And what did you do?
QUEST: 23 percent -- PHILLIPS: And what did you do about your money? What did you do? Did you ride it out? Did you wait?
QUEST: I was still young then.
PHILLIPS: You weren't making any money yet.
QUEST: Right.
PHILLIPS: So what would you do now?
QUEST: What would I do now? I would cut back spending dramatically, I would conserve whatever cash I've got, I would make plans to keep things as simple for as long as possible.
I would renovate an apartment or a home rather than sell or buy. Do nothing unless you have to.
PHILLIPS: I'm taking Tenisha's lunch money back.
Thank you, pal.
QUEST: And now -- the best lesson of all, one for you, two for me. Economics 101. It works every time.
PHILLIPS: Richard, great to see you.
Well, he has long hinted that he supports Barack Obama, now Scott McClellan is actually 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, COMEDIAN, HOST, "BREAKING THE NEWS WITH D.L. HUGHLEY": But you haven't endorsed anybody. You haven't endorsed anybody. And it is McCain and it's Obama. You know, and I've got a new show and your endorsement would probably mean a lot. And don't look at the fact that I am 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 have said I'm going to support the candidate who has the best way of changing the way Washington works and getting things done. I will be voting for Barack Obama.
(END VIDEO CLIP)
PHILLIPS: Well, from Pittsburgh, we're getting word now that a bizarre attack tied to politics was not what it seemed. A 20-year-old Texas woman had told police that she was mugged at an ATM, then brutalized when her mugger spotted a John McCain sticker on her car. The alleged victim, a McCain campaign volunteer, said that her attacker carved the letter B in her face. Well police got suspicious when the woman's story changed the more that she told it. Finally, they gave her a polygraph and now TV station, KDKA, is reporting that the woman confessed to making the whole thing up.
Police say she will face charges. We are monitoring a live news conference that is taking place right now. We're going to bring you more information as we get it from this.
Now, just when oil prices start falling, OPEC makes a countermove. Does that mean that we will soon be paying more for gas? We're going to check in with CNNMoney.com's Poppy Harlow for some answers.
(COMMERCIAL BREAK)
PHILLIPS: Well, you could say a driver in Lynn, Massachusetts, just didn't have a handle on the situation. He needs to get a grip, literally. He filled his tank, drove off and left the crucial step of putting the nozzle back into the pump and that is sort of important. Here is another angle, the whole pump comes out, fire breaks out and customers just can't get out of the store fast enough. No one was hurt. The driver says he had no idea what he had done. He is charged, by the way, with leaving the scene of property damage.
Well, a silver lining in this global economic slowdown has been the slide in the energy prices. But overnight OPEC slashed oil production and does that mean higher prices are on the horizon? Sure hope not. CNNMoney.com's Poppy Harlow has our "Energy Fix" from New York.
Hey, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey, Kyra.
Well I'm glad I didn't bet on this because I was 100 percent wrong in thinking that a cut would mean higher prices. Because we are seeing the opposite of really the fundamentals at work today. OPEC decided to cut production by 1.5 million barrels. That is important because the cartel controls 40 percent of the world's crude. But this time prices went down. The cut is going to take effect next week. And oil ministers say they are trying to do it to keep the price of oil between $70 and $90 a barrel. They say that the recent collapse in oil has been -- quote -- "unprecedented in speed and in magnitude."
Keep in mind that it was just three months ago, Kyra, where we saw crude trading about $150 a barrel. One man that runs an energy fund I talked to today said it is apocalyptic psychology that is currently pervading the markets. It is really unbelievable what you are seeing, but for now it does not mean higher gas prices for everyone out there.
PHILLIPS: Well, if OPEC cut production then why aren't prices going down?
HARLOW: They are not going down because it is the global economy at play here, it is the demand factor in there. They're just so concerned about the state of the economies around the world. Today, we have seen nearly a $4 decline in crude. It just proves that global economic slowdown that is the overriding concern. OPEC says demand will continue to fall despite those production cuts. Even though we are getting closer to winter and people use that home heating oil, some analysts are saying we could see oil at 50 bucks. One trader today even said $37 a barrel. I don't know if he is right, that would be pretty unbelievable.
PHILLIPS: All right. Well, Poppy, that sounds pretty good, well I guess it sounds like a good thing, but wouldn't it be cheaper energy? I mean, that is what we want, right?
HARLOW: Yes, you want cheaper energy. But you also want the economy to really be in shape. It is a ray of sunshine, I guess, but analysts say it is a symptom of the global recession rather than a sign of hope. It could also be a sign of deflation.
That is really important. That's when prices on a variety of goods start to go down. The worry is -- what if those prices fall below what it costs to make the product. If we see oil at $37, that is below about the $40 range it takes to pump that oil out of a lot of those OPEC nations. That could mean shrinking profits, that could mean layoffs. It is a vicious cycle, it is complicated one.
But today we're going into the weekend with oil around $64 a barrel -- Kyra.
PHILLIPS: So Poppy, who do you think that President Bush voted for?
HARLOW: Who do I think President Bush voted for? I am going to plead the fifth on that one.
PHILLIPS: You're going to plead the fifth. All right.
Well, I'll tell you what, our Kathleen Koch is telling us from the White House. Apparently Bush has voted for John McCain. Imagine that. This is what Kathleen Koch is just now telling us -- it is coming across our wires -- that President Bush has cast his ballot in the 2008 election. His spokeswoman, Dana Perino, came out and said he voted for John McCain. So there you go. Today, the president and Mrs. Bush casting their ballots in the 2008 election during the early voting process by the way. The ballots will be mailed back to Texas today.
Well, they are stopping shoppers in their tracks on the streets of Manhattan. America's first ladies and two wannabes now on display at a world famous department store.
(COMMERCIAL BREAK)
PHILLIPS: Barneys in New York. If you do some window shopping there, well, you will find some familiar faces and some not so familiar ones staring right back at you. America's first ladies on display at the famous store.
Here is CNN's Lola Ogunnaike.
(BEGIN VIDEOTAPE)
LAURIE MUNN, FIRST LADIES PORTRAIT ARTIST: Jackie just painted herself. It was so cool. It went -- and it was Jackie.
LOLA OGUNNAIKE, CNN CORRESPONDENT: Nearly everyone is featured, from Martha Washington to Laura Bush, even those still in the running gets a window treatment.
(on camera): She is very reserved, but here she just looks very full of life and very vibrant.
MUNN: Well I wanted to do that. I wanted to give her a little pep.
OGUNNAIKE: Obviously, you had to use a different palette to paint her than any of the other first ladies.
MUNN: Yes, did. And --
OGUNNAIKE: You had to pull out a few brown colors?
MUNN: It -- but it was so fun.
SIMON DOONAN, CREATIVE DIRECTORY, BARNEYS: A lot of these women have been Barneys customers in the past for their husbands, for themselves. I have seen Laura Bush in the shoe department. Oh yes.
OGUNNAIKE (voice-over): The ladies are stopping traffic.
UNIDENTIFIED FEMALE: Most of them -- you have to remember I'm for style -- so I am not surprised they're in a window.
OGUNNAIKE: The series is a history of hairstyles and fashion. And some ladies worked it better than others.
MUNN: For quirky Betsy Johnson, I would go with Mary.
OGUNNAIKE (on camera): Mary Todd Lincoln.
MUNN: Yes.
OGUNNAIKE (voice-over): Mrs. Lincoln also kept a few shopping secrets from her husband, Honest Abe.
MUNN: She spent $3,000 on little white knitted gloves and hid them in the White House so Abraham Lincoln wouldn't find them.
OGUNNAIKE (on camera): Yes, I would hide $3,000 gloves from my husband, too.
If you could have a dinner party and invite say five first ladies, who would be at your dinner party?
MUNN: Eleanor Roosevelt. I would like Betty Ford. I think I would invite Pat, Mamie Eisenhower, because she was the symbol of America for me.
UNIDENTIFIED MALE (singing): Once in love with Mamie, always in love with Mamie.
OGUNNAIKE: So Mamie Eisenhower, that is your girl?
UNIDENTIFIED MALE: No, my girl is Lola.
OGUNNAIKE: What happens November 5th? Do you come in here and take down one of these photos? Or do you leave them both up?
MUNN: Well, I don't know. I asked Barneys what will happen, and they said, well, we'll come in and draw a great big red circle and put a line through it.
OGUNNAIKE: Lola Ogunnaike, CNN, New York.
(END VIDEOTAPE)
PHILLIPS: Someone has been reading the "Scarlet Letter," except I think she forgot to put it on her forehead.
RICK SANCHEZ, CNN ANCHOR: I'll tell you, it is amazing to think we knew about the story yesterday. We here at CNN made a decision, a conscious decision, that if anything it might be an isolated case and more importantly the facts of the case still needed to be checked out before we aired the story.
Unfortunately, many, many, many media outlets --
PHILLIPS: Jumped on it.
SANCHEZ: -- jumped on it and have been reporting this. Talk radio, of course, went nuts with this story and have been talking about it for the last 24 hours. And now it turns out that really anybody who mentioned this story, at least in that sense, has a lot of egg on their face.
PHILLIPS: Do we know anything about her? Do we know anything about her?
SANCHEZ: She's a campaign worker, grew up in Texas, went to Pennsylvania, was there for the last couple of weeks, had been working on the campaign --
PHILLIPS: Do we know if she did this to herself?
SANCHEZ: It certainly looks that way.
As a matter of fact, we've got a news conference coming in from police in just a couple of moments.
PHILLIPS: OK.
SANCHEZ: She's telling police -- originally she told them that she was robbed. For those that don't know what we are talking about, a campaign worker for John McCain goes to Pittsburgh, PA, tells police that while she was at an ATM she was robbed, and then when the person who robbed her saw that she had a McCain bumper sticker on her car -- he went after her and held her to the ground, attacked her and even put that B on her cheek that you see right there.
PHILLIPS: Bottom line, all a hoax.
SANCHEZ: All a hoax.
PHILLIPS: And you'll be talking about it more.
SANCHEZ: A lot more.
PHILLIPS: It's sad if anything. It is really sad.
SANCHEZ: Yes, because this is the kind of thing that a lot of people will be talking about even more now that it is a hoax than they were before.
PHILLIPS: Rick, thanks.
SANCHEZ: Sure.
PHILLIPS: Well, we've been using it throughout the campaigns, and now our little magic wall has hit the big time. The guys over at "SNL" had a good time with this one.
(COMMERCIAL BREAK)
PHILLIPS: Eleven days to go until the election. New polls and numbers are other numbers are constantly coming in. So how do you keep track of it all? John Roberts to the rescue with his favorite gadget, the magic wall.
(BEGIN VIDEOTAPE)
JOHN ROBERTS, CNN ANCHOR: Kyra, I've got some new polls to tell you about today and how they may shape the race for the White House.
First of all, in state of Ohio, let's take a look at our latest CNN poll of polls. Senator Obama now out to a seven-point lead ahead of John McCain. Those numbers were four. So Ohio getting more and more difficult for John McCain.
Here in the state of Virginia, though, in the commonwealth, our latest CNN poll of polls shows Barack Obama now with an eight-point lead. That was 10, so perhaps things may be tightening up there a little bit. And John McCain getting a wee bit of an advantage.
And then here in the keystone state of Pennsylvania, our latest CNN polls show 10 points between Obama and McCain. That number was 13 points just a couple of days ago, which is why Senator McCain is taking aim here at the state of Pennsylvania.
Let's go to our electoral college map to remind you of where we are -- 277 projected electoral college votes for Barack Obama compared to 174 for John McCain. Let's just do the math now, based on our latest calculations. If these were all to go blue, for Senator Obama, if these polls were to hold the way they are, and Senator Obama was to win the states in which he leading, here is how it would go -- this area going to John McCain -- would be 353 to 185, that would be an enormous blowout.
But let's reset the map, put it back here and let's say, just for instance, John McCain manages to hang on to the states that went red for George Bush in 2004, that's all the states that are in play by the way, he gets 261 electoral college votes; he still needs nine more. So that is why he is playing heavily here in Pennsylvania, banking that maybe the polls for Obama are a little bit soft.
If he were to turn Pennsylvania red, 282 electoral college votes, that would put that in his win column. Down here in the commonwealth of Virginia, if he were to get back those 13 electoral votes, that would put him in the win column. If he couldn't turn those states, but he did manage to turn New Mexico back to red, that gets him to 266. And then if he managed to turn New Hampshire here, he could get that to 270, which is the required number of electoral college votes to win.
It is a very difficult calculation for Senator McCain. Right now the board is stacked overwhelmingly in Barack Obama's favor, Kyra. But 11 days to go, a lot could change depending on where he puts the money, how much he can manage to build up his support in those traditionally Republican areas, he might be able to give Obama a run for his money. Right now, though, the path to the White House for John McCain -- very difficult -- Kyra.
(END VIDEOTAPE)
PHILLIPS: Our John Roberts. You saw him there at the magic wall and well it is such a great tool for this election stuff, no matter what "Saturday Night Live" says.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: ... let's put it right over Virginia. Minnesota is very heavy, imagine the sheer weight of it. Here is New York right there. New York was there in 2004 as well. And you can shake it around like that.
UNIDENTIFIED FEMALE: Hey, don't do that.
UNIDENTIFIED MALE: Put those states back where they belong.
UNIDENTIFIED MALE: Check out Michigan -- I can make it bounce.
(END VIDEO CLIP)
PHILLIPS: Rick Sanchez is going to make the ratings bounce right now.
Take it away.
