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AMERICAN MORNING

California Christmas Eve Shooting Kills Eight; Holiday Sales Slide; Arming Afghanistan to Fight the Taliban; How the Recession Stole Christmas; Rise in Elderly Shoplifting in Japan

Aired December 26, 2008 - 07:00   ET

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


JOE JOHNS, CNN ANCHOR: It is the top of the hour right now. Here are this morning's top stories.
Eight bodies have been recovered and another person is still missing in the wake of a Christmas Eve rampage in Covina, California. Police say the gunman, Bruce Pardo, was apparently bent on revenge. He crashed a party dressed as Santa, opened fire and then burned down the house. Pardo then committed suicide and last night a pipe bomb also exploded in the rental car he drove.

Eartha Kitt has died. The singer, dancer and actress became an international symbol of sensuality, famous for cat-like purr. And that song you've been hearing for weeks "Santa Baby." She died after a long battle with colon cancer. Eartha Kitt was 81 years old.

It's been an all too white Christmas out west. Parts of Washington State are coping with record snowfall that topped holiday travelers dead in their tracks. Winter storm and blizzard warnings are out in Colorado where up to 20 inches of snow is forecast with 80 mile-an-hour wind gusts.

Reynolds Wolf is tracking the extreme weather at CNN weather center in Atlanta.

Reynolds, good morning.

REYNOLDS WOLF, AMS METEOROLOGIST: Good morning.

I tell you what, I wish I could say it's going to be a great morning for people across the nation trying to go out there and just make their way back home from the holidays or maybe going to return those presents, or enjoy the sales. It's going to be a rough time in many spots.

Let's begin first with some video that we have from the Pacific Northwest showing some video out of Spokane. The heavy snowfall and you see there the snow blower. I don't know if that was a Christmas gift. If so, boy, talk about perfect timing.

They're going to be seeing this storm system march its way across the northern part of the U.S., eventually moving into the Great Lakes. And as you come back to the weather computer with that storm system, what you can anticipate will be some delays in places like Chicago and Detroit. Right now, we're forecasting possibly now or maybe even a bit more due to freezing rain and I would also throw in that chance of snowfall. For Atlanta and Charlotte, delays mainly due to low clouds and rain. Memphis and Houston, same story.

Dallas and Denver and Phoenix and even San Francisco, mainly a wind event. Some places out to the west especially in Utah have wind gust yesterday perching 90 miles an hour. So just brutal times to say the least.

First off, let's start in parts of the Great Lakes. I mentioned this is the storm system that's going to cause so many travel delays. And speaking of travel delays locally in parts of say, Chicago, a lot of roadways there you're having some serious issues with icing on the roads. Later on today in parts of the central and southern plains, this storm system could bring you some strong thunderstorms, maybe some tornadoes into the late afternoon. Windy conditions, I mention out to the west.

A fire risk, very dry conditions for extreme western Texas. In terms of daytime highs, Kansas City 60 degrees is your high. Chicago 45. Boston, New York mainly into the upper to low 30s.

Miami 77. You lucky devils. 76 in Houston. And for Los Angeles, the basin (ph) of that, 56 degrees will be your expected high.

That's the latest in the forecast. Let's send it back to you in New York.

JOHNS: All right. Reynolds, thanks for that -- Carol.

COSTELLO: Eight bodies have been recovered now and another person is still missing in the wake of a Christmas Eve shooting rampage in Covina, California. Police say the gunman crashed the party dressed up as Santa Claus. He opened fire and then he burned down the house.

Chris Lawrence is following the story for us.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Just minutes before midnight on Christmas Eve, a visitor came to this home intending to burn it down.

KIM RANEY, COVINA POLICE CHIEF: There was a knock at the front door, and the gentleman dressed as Santa Claus was at the door carrying a large wrapped package.

LAWRENCE: He carried no gifts. Just two guns and a homemade flame thrower.

RANEY: An 8-year-old girl at the party ran to the front door, opened the door. LAWRENCE: And he immediately shot her in the face. Police say the fake Santa stepped inside and shot anyone he saw. The family ran screaming from anywhere they could.

LT. PAT BUCHANAN, COVINA POLICE: Through windows, through doors, through windows upstairs off the roof, we talked to almost everyone and any place that they could escape. They were throwing furniture out the windows as we understand.

LAWRENCE: Police say this man set the house on fire, changed out of his Santa suit then drove to his brother's home and killed himself.

ROSA ORDAZ, FAMILY FRIEND: It's almost like he planned it, you know, for him to come and do this on such a special night.

LAWRENCE: Investigators say he did. They think Bruce Pardo was upset over his recent divorce. This home was owned by his ex-wife's parents, and friends say it was well known the family would be having their traditional Christmas party that night.

(on camera): And it was tradition that may have made that little girl open the door in the first place. Every year for this party, a neighbor dresses up as Santa and comes over to help get the kids in the holiday spirit.

Chris Lawrence, CNN, Los Angeles.

(END VIDEOTAPE)

COSTELLO: Other stories new this morning. Fourteen people including six children were hurt when a car crashed into a Hanukkah party taking place on Long Island. Police say the elderly driver lost control of the car. It plowed through the building through plateglass windows. One hundred fifty people were inside at the time.

So much for a white Christmas, how about a dark Christmas? The lights are back on this morning for thousands in New Hampshire who spent Christmas morning in the dark. Wind gusts being blamed for the power outages was in around 5,000 people.

And it wasn't a very merry Christmas for retailers. Early figures show holiday sales are down at least 5.5 percent from 2007. And that dropped all the way down to eight percent. Today is usually another big shopping day.

Allan Chernoff is hitting the mall in Garden City, New York. So is it busy, Allan?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Good morning, Carol. A little late, actually. You

know, we opened here at JCPenney at 5:30 in the morning and yes, there were some people over here. Why? Well, have a look at the sales. Sixty percent off. That's what they're talking about. 60 percent off. Then you can add in another 10 bucks off and 15 bucks off with these coupons. The door buster sales are major here. That's the positive side to an absolutely lousy holiday season. We've got a few shoppers. Evidence that people have been in there.

Ma'am, I see you're packed here.

UNIDENTIFIED FEMALE: Yes.

CHERNOFF: What did you get?

UNIDENTIFIED FEMALE: Well, I got some after Christmas gifts for my grandchildren.

CHERNOFF: And pretty good deals, I would imagine?

UNIDENTIFIED FEMALE: Absolutely.

CHERNOFF: Fifty percent off.

UNIDENTIFIED FEMALE: Oh, some 60 percent off.

CHERNOFF: Not bad.

UNIDENTIFIED FEMALE: Great sales people here early in the morning.

CHERNOFF: Yes. Lots of service at this hour of the morning. And we have a couple over here. They didn't even go to sleep. They were out partying.

Tell me the story. You were at a diner?

UNIDENTIFIED MALE: At a diner eating. This thing came up on the television at the diner, so we decided to run over here. Of course, it's 5:00. We got here at 5:30. Got some pretty good deals.

CHERNOFF: And your shopping has just began.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED MALE: It's her birthday today so, you know, we're going around trying to get some good deals.

CHERNOFF: That's it. Carol, you know, go out party, go the diner and hit the door busters. At least people are getting fantastic bargains.

Carol, back to you.

COSTELLO: I admire their stamina. Thank you.

Allan Chernoff live in New Jersey this morning.

JOHNS: What are we doing here? We should be out shopping.

COSTELLO: I know. JOHNS: Our CNN i-Reporters are sharing their own Christmas stories with us. Mikayla (ph) Forrest didn't have a family in town for Christmas. So using Craigslist she got volunteers together to cook a hot meal for the homeless. She says the response was huge and completely exceeded her expectations.

And people in one town pulled together even with the economy in recession to help out Saint Nick. Lenore Wilson and her husband had to adopt all their nieces and nephews. And thanks to their neighbors, all 13 kids had a great Christmas.

And do you have your own heartwarming story to share for Christmas? We want to hear about it. Just go to CNN.com/am and click on the iReport.

COSTELLO: And with Christmas over, it's time to start making your New Year's resolutions. Talk about ways to keep your wallet fat in these lean economic times. Gerri Willis is the woman with all the answers. She has great tips for you just ahead.

It's eight minutes past the hour.

(COMMERCIAL BREAK)

JOHNS: They got me on camera dancing yesterday. I didn't like it very well.

COSTELLO: I'm smarter than you.

JOHNS: Yes. I can see.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: It's enough for the (INAUDIBLE).

JOHNS: Absolutely.

COSTELLO: Ever notice Beyonce does that one dance.

JOHNS: Yes, it's the same dance all the time. No, no.

All right. Welcome back to the Most News in the Morning.

When it comes to making your New Year's resolutions, don't forget about your wallet and just hope it's not empty after something.

WILLIS: You know, we are finding some people who are actually finding jobs in this economy and I think that is fantastic.

The first question is from Joseph and he asks, "Santa came early last week. I have a new job after being out of work for several months. My credit is destroyed. Where do I start to rebuild?"

Great question from Joseph. I want to talk a little bit about debt here. You know, if you are in a situation where you're trying to rebuild, the first thing to do is start going after that debt. I know Joseph is a little worried about having to file for bankruptcy. You want to avoid that at any cost if you can and just really focus in on the debt, even forget about the 401(k) for a while. Just make sure you're getting rid of the debt because you know, you get jobs, you lose jobs, anything can happen.

JOHNS: Just pay it down.

WILLIS: You want to make sure that you are in a good position going forward.

The next question is from Jay. He asks, "It looks like I may actually get a job offer starting in January. This will be my first permanent job in more than a year. Not only is my credit shot, but I also used my 401(k) to support myself. The job that I hope to get doesn't pay very much. Should I try to avoid filing bankruptcy?" This is the bankruptcy question. "Or should I try to fund a 401(k) or use all of my salary to pay down debt?"

It's all about the debt. As I told the previous viewer, Joseph, you really want to think about how do I get that paid down. Maybe even taking a second job. Maybe even doing some extra work on the side.

A lot of people are in this situation now. They're trying to keep all the balls up in the air, and it can be really, really tough. You want to make sure that you're satisfying that debt if you can because look, at the end of the day, it's going to come down to your credit score and you know that your credit score can impact your employment prospects. A lot of employers look at that credit score out there and it's one of the things that they use to decide who gets jobs.

JOHNS: And you're stuck with it for a long time once it gets terrible.

WILLIS: You've got to work to repair it. It takes a lot of time. And, of course, there's a lot of mistakes on credit reports too that you have to repair as well.

The next question is coming from Jim who asked, "My plan for retirement income is to put all the money into municipal mutual funds. These are muni bonds and live off the interest. Do you find fault with this plan?"

Well, OK, muni bonds are IOUs from local governments. They've generally considered -- been considered very, very safe. Very conservative investment that a lot of retirees use. But here's the problem right now.

We're in a great, big old recession. And then there's the possibility that some local governments could actually default on their debt. It's not a high possibility but it could happen. I think the big problem for Jim is putting all his eggs in one basket. Doesn't matter what that basket is. What we found out in this latest selloff is that nothing is safe. Stocks didn't do well. Bonds didn't do well. It was hard to find a place to turn for real safety. The only way to feel secure is make sure you have your money in lots of different baskets.

So I would advise putting money in stocks and bonds. And, you know, municipal bond funds are fine but at the end of the day you don't want all your money in one place.

COSTELLO: But that's tough, though, because when you're at or near retirement age, what do you invest in now? What is safe? I mean, what is it?

WILLIS: There is no safety net. And realize that if you're just entering retirement right now, you may be 62 or 65. You may live another 15 to 20 years. You need something to take you through that period of time.

It's not enough just to put all your money in CDs necessarily right now. And I know folks out there are really scared and it's concerning what you see going on in the stock market, even what you've seen happen with bonds. But the reality is that you have to do what you can to ensure your future and that means having some diversity.

Of course, you're not going to have 100 percent of your portfolio in stocks if you're near retirement or in retirement.

JOHNS: Yes.

WILLIS: But you probably need a little bit to make sure that if you're living into 85 or 90, you know, Carol, you and I are going to live for a long time being women, right? So we real have to plan for the long haul.

JOHNS: Like it says stop being smug.

(LAUGHTER)

Do you have a financial question for Gerri? She's blogging all morning. Just go to CNN.com/am and click on the link to Gerri's blog.

COSTELLO: The U.S. military is looking at a new strategy to fight al-Qaeda and other terrorists in Afghanistan, give locals the ability to fight back for themselves.

CNN Pentagon correspondent Barbara Starr is looking at the pros and cons of that plan.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): It works in Iraq, arming and paying tens of thousands of former Sunni insurgents to fight al-Qaeda. The tactic was a major reason for the drop in violence. But will the same idea work in Afghanistan?

The U.S. military now plans to help the Afghan government arm local Afghans to fight the resurgent Taliban. U.S. military official say it will begin early next year in Wardak province, an area in central Afghanistan where insurgents have found a safe haven.

It's all part of a new U.S. counterinsurgency strategy commanders are presenting to the incoming Obama team. It's an open admission even the plan to potentially double the U.S. force with up to 30,000 additional troops won't be enough.

MAJ. GEN. MICHAEL TUCKER, DEPUTY CMDR, FOR U.S. OPERATIONS, AFGHANISTAN: There's a big push for us to reach down in cooperation with the Afghan government to touch people in their villages. As you well know, the center of gravity in a counterinsurgency fight is the population. And so we need more forces.

STARR: But there are worries including more weapons in the hands of local communities could lead to tribes fighting each other instead of the Taliban. U.S. troops could get caught in the middle. And President Hamid Karzai's weak government in Kabul would bear the major responsibility for ensuring this new local security force remains loyal.

(END VIDEOTAPE)

STARR: Now, Carol, U.S. commanders warn if you thought Iraq was tough, Afghanistan is getting tougher. Iraq has two major groups, Sunni and Shia. Afghanistan, the U.S. calculates, has hundreds of separate tribes that could be wind up being part of this new fighting force -- Carol.

COSTELLO: You know, going back to the plan, I mean, didn't they try this once before, Barbara?

STARR: Well, you know, that's right. A lot of people may remember the last time the U.S. armed irregulars, if you will, in Afghanistan, it was the era when the U.S. backed the Mujahideen against the Soviet force in Afghanistan. That scenario that went wrong very badly, a lot of people though that all gave rise to the Taliban and even Osama bin Laden's power base in Afghanistan -- Carol.

COSTELLO: Barbara Starr live from Washington this morning. Thanks, Barbara.

STARR: Sure.

JOHNS: Expectations are high for the administration coming in. But in the first 100 days a president's agenda can get seriously derailed. How can he keep from losing focus on the economy?

And as the shopping season winds down, we're looking at the bottom line. After all the slashed prices and extended hours, were retailers able to recover this year?

It's 19 minutes past the hour.

(COMMERCIAL BREAK) JOHNS: Any chance for a happy ending? Retailers slashed prices, extended hours. They tried everything to get out of the red this holiday season, but it wasn't the grinch who stole Christmas this year, it was the recession. Retail sales analyst Eric Beder joins me now to take a look once again at the numbers.

You know, when you come past Christmas, a lot of retailers have always almost traditionally sort of depended on gift card to try to boost sales. What about this year?

ERIC BEDER, RETAIL SALES ANALYST: This year I think we're going to see gift cards decline probably for the first time in four or five years. It was just so much easier with things on sale, 50 to 60 percent off, just buy it than giving away gift cards this year and realizing it's a microcosm of the whole economy. People are just not giving many as much, and gift cards are going to feel that effect too.

JOHNS: But if you did give a gift card and give it to somebody, the next question is, with some of these retailers who are actually in trouble as we talked about in the earlier segment, what happens if a retailer goes down? Are you just sort of stuck with that gift card? You're not going to get your money back?

BEDER: It depends. If the retailer goes Chapter 11 and still operates their stores like Circuit City right now, you're going to get your gift card back. But if it's a liquidation like KB Toys or some of the -- or Sharper Image, in general you don't get your gift card. You actually become a debitor (ph) to the bankruptcy court. And most people aren't going to go to -- if you're a lawyer trying to get their gift cards back. So really, it's kind of where you are in the bankruptcy process.

JOHNS: Right. One thing we haven't talked about also is the issue of online sales right now. I do know that online sales apparently went down as well. But are you better in looking for deals online or actually in the store?

BEDER: Actually at this time, I think, it's probably looking better at the store because simply because retailers don't want to keep products in the stores right now. The week after Christmas is usually where you clear out, get ready and clean for January and February, which really are extremely slow periods. So actually, I think you'll do a little better right now in the stores, but you're going to do pretty well probably online also right now.

JOHNS: How important, really, is it for the stores to actually clear out all the old inventory? Is it really that critical?

BEDER: It's very important. I mean, really, right now, retailers aren't trying to make money this week. They're just trying to get clean because the thing is, you're going to January and February which traditionally are your slowest months.

I think the other piece here is that that's also the end of the year. So for investors, you don't want to start the New Year or a new fashion season which is spring with a lot of product. And I think this year retailers are just 100 percent focused on getting rid of the product when you talk to them. They want to end the season clean not having to deal with extra product.

JOHNS: OK. So you're ready to shop until you drop right now.

BEDER: Right time.

JOHNS: OK. The question is where do you go? I mean, is there -- are there certain areas where you can find a good bargain somehow this weekend?

BEDER: Historically, I'll tell you, this year you can go anywhere from high end to the low end. Everything was down. You know, the retailers cut as much as they could but it just wasn't enough. So, I mean, you can pick your spots. Pick whatever your temptation is and probably satisfy it pretty well today.

JOHNS: Right. And the other thing that I sort of wondered is, we do know that the sales went down from last year, but there are some items that were still pretty hot sellers. What were they?

BEDER: We had a few. Yes, you always have one or two things. This year you had just had a few. One of the things we saw was very strong still is things. Even the print in the denim category. Denim did extremely well.

JOHNS: Denim? You mean like jeans?

BEDER: Jeans.

JOHNS: Really?

BEDER: What happened was we saw a season where dresses and really conspicuous consumption disappear. And so where people still want to spend money. So what do they do? They bought denim. They spent $200 for a pair of denim as opposed to $800 for a dress.

And when you look at that, you see a denim category still doing well even in stores like Nordstrom. In Neiman Marcus, they're showing double digit declines in sales on our service, (INAUDIBLE) people. That department still held its own. And so, there were some winners here but definitely lot less winners than they were last year.

JOHNS: What about like electronics? Are we even doing really good on electronics?

BEDER: Electronics did OK. They declined double digits. The key here is that you had no huge innovation. HD TVs, it's, you know, people have their HD TVs.

The blue ray systems didn't really work. When you look at it, it was a good season but they felt the economy just like everything else. Electronics had actually held up better in the last two or three years.

JOHNS: But video games were smoking. BEDER: Oh, people always need video games right now.

JOHNS: That's right.

BEDER: You got Christmas break you got to get some video games.

JOHNS: Yes, I got my son -- that's the way it goes.

All right. Great. Thanks so much for coming in, Eric.

BEDER: Thank you.

JOHNS: Carol, to you.

COSTELLO: You know, when times get tough people do some pretty desperate things. And there's another new disturbing trend in Japan, older people shoplifting.

CNN's Kyung Lah reports.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): To the sounds of holiday cheer, this shopper weaves in and out of grocery aisles and she stops, leans down and slides something into her purse. She leaves without paying for the stashed items.

This woman is 69 years old, stopped by private undercover security guards. Increasingly, she is one of a new generation of Japan's shoplifters, those over the age of 65.

(on camera): With the cooperation of the grocery store and the security company, we placed cameras up above the aisles and hid them in our shopping carts and we quickly learn how big a problem shoplifting among the elderly is for this store.

(voice-over): The court officer watches this 80-year-old man. He pays for some items but not everything. "I'm so sorry," he tells them. "I live alone. My wife is in the hospital."

This man has stolen medicine for an upset stomach. And remember the 69-year-old woman? She stole some food for dinner.

"I feel sorry for them," says security officer Takayuki Fujisawa.

TAKAYUKI FUJISAWA, SPUJ SECURITY OFFICER: When I talk to them they don't have enough money for food.

LAH: Japan slipped into recession this winter. As the global financial crisis collides with rapidly aging Japan, the trend of elderly thieves is alarming the government. Japan's government reports the number of people over the age of 65 has doubled in 20 years, yet crimes committee by that group has increased at a much higher rate five times. In northern Japan, police say the total arrests of the elderly exceeded arrests of teenagers.

Morio Mochizuki runs private security for thousands of stores across Japan. He says the average shoplifter is now elderly.

They're spending Christmas and New Year's alone, says Mochizuki. "Not only are they alone, they're also living longer than ever," says Kazuo Kawakami, a former federal prosecutor. He calls the new crime trend a result of pressures on an aging population.

KAZUO KAWAKAMI, RETIRED FEDERAL PROSECUTOR: The main reason they shoplift is poverty and loneliness. The traditional Japanese family is gone and now our elderly live alone.

LAH: Police usually issue warnings to elderly shoplifters like this woman. But in most cases, the stores don't even report the petty crime. In a service oriented culture that respects its elderly yet deeply frowns on crime, it's a clash of ideals.

The 80-year-old man is helped to his bicycle by the store's security. The officer vows in respect hoping the elderly man has learned his lesson and will return as a good customer tomorrow.

Kyung Lah, CNN, Tokyo.

(END VIDEOTAPE)

COSTELLO: It breaks your heart, doesn't it? Shoplifting up here in the United States too.

It's 30 minutes past the hour. Here are this morning's top stories.

More wicked winter weather across the western part of the country. In California's Sierra Nevada, heavy snow and whiteout conditions shut down an 80-mile stretch of Interstate 80.

Near Olympia, Washington, the wait of all of the snow and ice caused a roof to collapse at a high school. With classes out for Christmas break, no one was hurt. There are also winter weather and blizzard warnings much of Colorado.

Solemn remembrances and ceremonies from India to Indonesia today. Exactly four years ago, an earthquake off Indonesia triggered a massive tsunami which killed more than 200,000 in Southeast Asia. Some communities are still rebuilding after the devastating loss.

The Obama family still enjoying their vacation in a rented Honolulu vacation house today. On Christmas, the president-elect visited and ate with marines and their families in a military base in Oahu. Obama's Saturday radio address reported earlier this week gave special thanks to Americans serving in uniform across the globe.

Today is the first day of Kwanzaa, the seven day non-religious festival celebrates African cultures and traditions. President Bush has released his formal Kwanzaa message to the nation, marking it a time to celebrate the many contributions of our African-American citizens.

And we mentioned it before, it looks like it almost made the intrepid travel today. CNN's meteorologist Reynolds Wolf is tracking expected airport delays.

Any yet, Reynolds?

WOLF: You know, we don't really have any widespread delays just yet. But there are many, many around the country that we really think are going to be a big issue later today. Chicago, Detroit, freezing rain, sleet, snow could be a real problem. Atlanta, Charlotte the issues mainly going to be low clouds and rainfall back into Memphis and Houston. You can have some issues with the low clouds about 30 minutes if not up to an hour. Same story for you in Dallas, Denver, back into Phoenix and even to San Francisco.

Yesterday we had all kinds of issues in parts of the Pacific Northwest. Spokane, for example, that rings a bell, take a look at this video. You're going to see some widespread snow there. Some of this was quite deep. We are expecting the same storm system that brought a lot of this snowfall to really ramp up in parts of the central Rockies. Some places in Colorado could see up to four feet of snow. Some drifts maybe as high as eight feet. They will probably going to need a little bit more help than just a snow blower like the one you're seeing there on the screen.

Let's go back to the weather computer and show you some other issues that we're going to be dealing with in parts of Michigan and western half of the Great Lakes all due to this storm system bringing that rain, sleet and snow. But later on today, it's going to be parts of the central and southern plains where we have a lot of moisture coming in from the gulf. It's going to interact with low level jet stream and this area of low pressure all coming together to give you a pretty good chance of some strong thunderstorms, maybe some tornadoes into the afternoon.

So certainly something to be advised and certainly would expect you might have some delays in places like Dallas and back to Austin and maybe even as far south as Houston and San Antonio.

That's a look at your forecast. Let's send it right back to you in New York.

COSTELLO: All right. Thanks, Reynolds.

JOHNS: Barack Obama will come to the White House with a laundry list of challenges and campaign promises. But before he can move on to health care, education or anything else he's going to have to bolster America's economy, already steeped in recession.

White House correspondent Elaine Quijano has today's "Memo to the President."

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Mr. President, Americans want the broken economy fixed first. Maybe a good time for that promised tax cut. If that goes well, experts say, keeping other promises on energy alternatives and getting health care for millions more will be easier. UNIDENTIFIED MALE: In Washington, winning leads to winning and losing leads to losing.

QUIJANO: But setting priorities means navigating treacherous waters.

STUART ROTHENBERG, THE ROTHERBERG POLITICAL REPORT: Between now and inauguration, every group in the country is going to lay down their marker at what they think should be done, what they need, what they want, and how they got him elected.

QUIJANO: And in the first 100 days a president's agenda can easily get derailed especially if he or she provokes a fight with Congress.

WILLIAM JEFFERSON CLINTON, FMR. PRESIDENT OF THE UNITED STATES: This compromise is not everything I would have hoped for.

QUIJANO: In 1993 Bill Clinton set out to end the ban on gays in the military.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Bill Clinton as talented as he was, he was enormously talented, came in with some uncertainty about where to go each week, each month. And there was a certain amount of flailing. It's really important to hit the ground running as president if you want to accomplish a lot.

QUIJANO: Democratic expectations are running high.

ROTHENBERG: They don't think he's going to be president. They think he's been elected to save the earth.

GERGEN: Barack Obama has to avoid the pitfalls of dilly dallying, of not being certain of where he's going to go. I must say about Barack Obama is one of the most strategic and disciplined political leaders we've had in a long time.

(END VIDEOTAPE)

QUIJANO: Foreign policy crises have a way of knocking presidential plans off track. On the domestic front analysts say even as this honeymoon phase continues the expectations and list of demands are soaring -- Joe, Carol.

JOHNS: And we want to hear from you. Send us your "Memo to the President." Go to cnn.com/am and click on the i-Report link. Give the president-elect a piece of your mind.

COSTELLO: Our special series "Baby Quest" continues. While so many people yearn for a child of their own, so many big kids are left waiting. Today we'll take a look at the hard to adopt older children. Available for parents but forgotten.

And the sheriff who is enticing suspects to get arrested on television. The TV sting that some say is unfair and over the top. It's 35 minutes past the hour. (COMMERCIAL BREAK)

JOHNS: Welcome back to AMERICAN MORNING.

For many people starting a family is life's biggest blessing. But infertility affects for than seven million couples here in the U.S. Our "Baby Quest" series continues now.

COSTELLO: Yet today we're asking with thousands of children in foster care, how hard is it to adopt? Superstars like Angelina Jolie and Madonna make it look easy. Jason Carroll goes inside one adoption agency to find out.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT (voice-over): To those who know him, Jahmon is an ideal teenager. He works hard at school. Writes poetry.

JAHMON, TEEN FOSTER CHILD: Only one person was left and that was me. And to this day I'm still holding (INAUDIBLE).

CARROLL: He also plays a winning game of ping pong. A parent's dream. But for Jahmon, finding new parents is still his dream.

What is the most difficult part of not having an adopted mother or father?

JAHMON: I believe that is the support and comfort.

CARROLL: That's what you miss the most?

JAHMON: Yes.

CARROLL: Jahmon is 16. At the age of 8 he was removed from his mother's home and put in foster care. He has spent years living in group homes waiting for adoption.

What is the waiting like? What has it been like?

JAHMON: The waiting is like very, sometimes very depressing.

CARROLL: Jahmon has never given up. He's attended meet and greets with prospective parents only to see younger children get more attention.

JAHMON: You're calling out for a family. So it's very heartbreaking when you don't hear no response.

CARROLL: Jahmon is one of 30,000 teenagers nationwide waiting for adoption. New York state officials say he'll likely age out of their system because most parents are reluctant to adopt older children. But one government survey says for every teen in foster care there are six families willing to adopt them. So why are older children still waiting for families? One adoption advocate blames a bureaucratic system that focuses more on screening out bad parents than recruiting good ones.

JEFF KATZ, ADOPTION ADVOCATE: The culture is they tend to treat everyone with suspicion.

CARROLL: The head of New York's child welfare agency says the state's first priority is keeping children safe.

GLADYS CARRIOR, NY OFFICE OF CHILD AND FAMILY SERVICES: We've heard horrors of children being adopted by you know inappropriate people.

CARROLL: While Jahmon waits, poetry helps him escape. He's written a book of poetry and competes in local competition.

JAHMON: It's love that makes me love you.

I like to write about my life. It can be about anything (inaudible).

CARROLL: And he still likes to dream about the family he wishes he had.

JAHMON: I'm just looking for a decent family that can show love, caring and help me with my dreams.

CARROLL: Jason Carroll, CNN, Dobbs Ferry, New York.

(END VIDEOTAPE)

JOHNS: With thousands of children in foster care right now hoping to be adopted, some agencies are turning to the web to help find families for kids including the New York state adoption service. They post videos of kids ready for a new family.

Here's 16-year-old Amanda from New York telling her own story.

(BEGIN VIDEO CLIP)

AMANDA, 16-YEARS-OLD: My idea of a family would be pets and other kids.

UNIDENTIFIED FEMALE: If you had a magic fairy with a magic wand that could give you three wishes that you wanted, what would your three wishes be?

AMANDA: To be adopted. To have a pet. And to have fun.

(END VIDEO CLIP)

JOHNS: If you're interested in adopting Amanda go to the New York state adoption service Web site. You can find the link at cnn.com/am.

COSTELLO: Where have all the great movies gone? Are they coming soon? We'll show you the new movie debuts with the most promise. And a controversial sheriff's new reality show. It's like the show "Punk" but with handcuffs. Smile, you're under arrest.

It's 43 minutes past.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SHERIFF JOE ARPAIO, MARICOPA COUNTY, ARIZONA: I want to thank all the actors for joining forces to help law enforcement get these guys in jail where they belong. All I want is to take these fugitives off the streets.

UNIDENTIFIED MALE: So we've set up a fake promotional company and we sent out mailers to specific fugitives that we targeted around Arizona. In that mailer, we've explained that they won $300 and all they have to do is come down to our event and pick it up. When they arrive at the event -

UNIDENTIFIED FEMALE: This guy has to believe this is the best day of his life.

UNIDENTIFIED MALE: We're making it better and better and better until we put them in handcuffs.

(END VIDEO CLIP)

JOHNS: Hollywood-style sting. From the headlines to primetime. One Arizona A sheriff known for his controversial tactic is now getting his own reality show.

And it's not just inmates who are unhappy about it. Entertainment correspondent Brooke Anderson has the story -- Brooke.

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT: Joe and Carol, he calls himself America's toughest sheriff, his critics claim he's unethical and out of control. Now Sheriff Joe Arpaio is unapologetically going Hollywood in a new reality show.

(BEGIN VIDEOTAPE)

ARPAIO: This is a very dangerous assignment to go after fugitives. You never know what's going to happen when these guys are wanted.

ANDERSON: Joe Arpaio of Maricopa County, Arizona, one of the most controversial sheriffs in the country.

ARPAIO: I'm not going to brag but there isn't anybody in the world that doesn't know who this sheriff is.

ANDERSON: His inmates live outdoors in tents regardless of extreme temperatures. And they are forced to wear pink underwear.

ARPAIO: They were stealing the white underwear, smuggling the underwear out of the jail. So, you know what? Give them pink. The other reason is they hate pink. Why would you give 10,000 inmates a color they like?

UNIDENTIFIED MALE: The deputy is at the front door. He's coming your way. Stand by.

ANDERSON: Now Arpaio and his officers are taking their unusual tactics to television for the new reality series, "Smile, you're under arrest." The team works with actors staging elaborate scenarios to entice wanted criminals out of hiding. Now I want you to model my jail outfit. But promises of modeling and acting opportunities, unsuspecting felons with outstanding warrants including DUIs, drug charges and missed court dates show up only to be arrested.

UNIDENTIFIED MALE: I got a little bit of a surprise.

ARPAIO: Kind of fun to show how stupid they are, and as I say, the looks on their face.

ANDERSON: But not everyone agrees the show or Arpaio's participation is fun.

UNIDENTIFIED FEMALE: This is so wrong.

PACO FABIAN, COMMUNICATIONS DIRECTOR "AMERICAN VOICE": I will celebrate a sheriff that is scaring this community. A sheriff that has seen violent crime increase significantly in this county. A sheriff that is racially profiling the Latino community and I doubt that the sheriff is going to reflect that.

Paco Fabian of pro-immigrant organization "America's Voice, asserts Arpaio leads unfair immigration sweeps. An allegation Arpaio flatly denies.

ARPAIO: We're the only ones cracking down on the state's human smuggling law.

ANDERSON: Arpaio is proud of his efforts off and on screen stating his team made hundreds of arrests as a result of these reality show stings.

UNIDENTIFIED MALE: You're under arrest, for real.

(END VIDEOTAPE)

ANDERSON: Fabian of "America's Voice" told me his organization is considering putting some pressure on the advertisers of this new reality show. "Smile You're Under Arrest" premiers on the Fox reality channel this weekend -- Joe, Carol.

JOHNS: Who wants a Wii in a war. Wii-motes in combat.

The company tells me you can get the prototype into a working unit within a year. The video game goes to the warzone.

Plus you knew it already. Now there's proof on the job, men are like monkeys.

And wait until you see what that means for your career.

You're watching the Most News in the Morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: How are we going to pick one. Girls are 300. Boys are 275 except for that little guy there. Maybe you can have him for 200 even.

This one.

UNIDENTIFIED FEMALE: You're so sweet. You're like a little clearance puppy.

Hello, puppy.

UNIDENTIFIED MALE: This one likes you. Clearance puppy likes you.

UNIDENTIFIED FEMALE: Well, that's your guy.

UNIDENTIFIED FEMALE: I was going to pick you anyway. Don't tell the others.

(END VIDEO CLIP)

COSTELLO: Dogs are big. They're always a hit. That's the number one movie from Christmas Day, "Marley and Me." The holiday has become a great day to go to the movies. And this year you had a slew of choices. So what's actually worth seeing. What's actually worth your money. Joining me now, Tom O'Neil, senior editor for "In Touch Weekly."

Good morning.

TOM O'NEIL "IN TOUCH WEEKLY": Good morning. How are you? It's been a long time since I've seen you, Carol.

COSTELLO: I know. We've reconnected and it feels good.

O'NEIL: It really does.

COSTELLO: We've got to talk about "Marley and Me." It was number one at the box office on Christmas Day. Is it really worth seeing though? It looks kinds of silly.

O'NEIL: It is but it's good silly. It's fun. Poor Jennifer Aniston, ever since she left "Friends," she's been trying to re- establish herself as a viable movie star and it's nice at least that it has commercial success to validate her because she's a great talent but it's not a great movie. It's kind of just sweet and -- but it's a good family film and a good date theme.

What's odd about the movie is it starts off for the first half as light and fluffy and then it gets a little dark in the last half?

COSTELLO: Oh, yes because the end -- I shouldn't give away the ending but parts of the movie are very sad. It brings you to tears.

O'NEIL: I know. But it's very charming because the set up of the story of course is that they're a young married couple. They moved to Florida and the husband says I'll get her a dog so she doesn't want any kids, that will work. Well, the dog of course turned out to be a hellcat.

COSTELLO: OK. We won't go on because we don't want to spoil the movie for people. The "Curious Case of Benjamin Button." I mean I've heard great reviews for this movie and I've heard really bad reviews for it.

O'NEIL: It's a great, great movie. I think the bad reviews are people -- it's a long movie, Carol. It goes on to almost three hours and of course, it's Brad Pitt. So look at what we have got at the box office, this dynamic of Jennifer Aniston trying to establish herself as a successful star. Here's Brad who is box office already. Now he's going after Oscars and he plays a character who's born at the age of 80 and then becomes younger. This is an old classic F. Scott Fitzgerald story adapted to the screen. This is going to be one of the two movies up for Best Picture at the Oscars that could win.

COSTELLO: OK but is it worth three hours. I mean --

O'NEIL: It is.

COSTELLO: Great acting is one thing. It is -- OK.

O'NEIL: It's a wonderful movie.

COSTELLO: OK. Let's talk about "Valkyrie." Here's another movie that either critics have love or they really hate. I heard some critics say that "Valkyrie" -- I mean you want to root for Hitler, it's so bad.

O'NEIL: Well you know what's weird about this movie is Tom Cruise is playing this German who tries to topple Hitler and instead of even attempting a German accent, you hear his New Jersey. So it's kind of preposterous the whole thing. However, it's actually quite a good thriller. The sad thing about this is this is Tom Cruise's first big lead role since he had all those troubles. We have seen him in minor roles in movies like "Tropic Thunder" and "Lion's for Lambs."

This was supposed to be his big roaring come back. It's not bad as a movie, but it's not a big come back.

COSTELLO: Well I have heard other actors in the movie kind of overshadow him with their performances.

O'NEIL: Yes. Because it's an ensemble thriller. He's placed the lead character. And what was interesting, what does work about the movie is that it's from the German perspective. And it's real history, it's fascinating. Had they only succeeded, those generals, in bringing down Hitler, we would have a different world today.

COSTELLO: Yes. Do you ever think Tom Cruise will get over the bad publicity that he had a couple of years ago. Because that's what people really think about when they think about Tom Cruise now.

O'NEIL: I don't -- it's a really great question, because he was king of the box office forever. I think even though he's done really, quite a good job of building up his PR again.

Carol, he's no longer a heroic character to us. We've seen him look ridiculous. And I don't think he'll ever get that back again. What do you think?

COSTELLO: Well, whenever I saw him in an eye patch, you know, in the promos for his movie, I could only think of his bizarre behavior and I connected the two and it kind of blew the movie for me.

O'NEIL: I know.

COSTELLO: It's kind of a sad thing. Let's talk about "Slumdog Millionaire" because the people who have seen this movie rave about it.

O'NEIL: It's the best movie of the year. This is the movie that you must see, if you think oh, "Slumdog"? I don't want to see a movie with that title. Well, I mentioned earlier that "Benjamin Button" was one of the two movies that is going to ball it out for best picture. This is the movie that's going to beat it for Best Picture at the Oscars and you heard it here first. This is the story of an Indian boy who plays that nation's equivalent of "Who Wants to be a Millionaire?" the TV show. And he doesn't do it for money, he does it for love because he was separated at a young age from a little orphan girl who he's trying to find now and he knows that she watches the show.

Carol, this movie is so romantic. It's so wonderful. It is -- the audiences leave the theater on cloud of air. I cannot recommend this movie high enough.

COSTELLO: Oh, my goodness. I'm going -- and there are no stars in that movie but that's the one you're recommending.

O'NEIL: Oh, it's fantastic. Really and what's going to be so great about the Oscars this year is we'll have the big studio picture, the big epic Brad Pitt "Benjamin Button," and that little sly dog movie called "Slumdog" in this case that's going to topple Goliath.

COSTELLO: Oh, that's awesome. Tom O'Neil, thanks. We appreciate it.

O'NEIL: Thanks, Carol.

COSTELLO: Nice to see you again.

O'NEIL: Same here.

COSTELLO: Joe.

JOHNS: Carol, "Slumdog" has such buzz right now.

It is 59 minutes past the hour, here are the morning's top stories.

Right now we have a winter storm and blizzard warning in Colorado. We're up to 20 inches of snow as forecast, 80-mile-an-hour gusts winds. Reynolds Wolf is tracking the extreme weather at the CNN Weather Center in Atlanta. He'll join us in a few minutes with the latest.

It's been a rough holiday season for the nation's retailers. Preliminary figures confirmed what we suspected that holiday sales were a bust, retail sales were off as much as eight percent from last year. Retailers have one more chance to salvage something from the season, day after Christmas shopping, is today the day shoppers will be well armed with returns today and many stores are offering big markdowns, extended hours and online deals.

And get them while you can. The 2009 Sarah Palin calendar is moving up the charts. It's now number two on amazon.com. The 13 month calendar features family photos and snapshots from the campaign trail. The cover shows the former Republican vice-presidential candidate with a gun slung over her shoulder in front of an American flag.

That's just amazing, isn't it?

COSTELLO: I guess a local photographer in Alaska took the pictures and she assembled this calendar. And it's doing quite well. She's going to make money off of this.

JOHNS: This thing is going way beyond politics, isn't it?

(CROSSTALK)

JOHNS: Folk hero, maybe. I don't know. Interesting.