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How and When to Spend Second Half of $700 Billion Federal Bailout; Madoff Is Not Sent to Prison; 17th Deadly Day in Gaza; Leaders Meet For Peace

Aired January 12, 2009 - 12:00   ET


TONY HARRIS, CNN ANCHOR: And hello again, everyone. I'm Tony Harris in the CNN NEWSROOM.
And here are the headlines from CNN for this Monday, the 12th day of January, 2009.

The incoming and outgoing presidents working together on the nation's financial crisis. How and when to spend the second half of the $700 billion federal bailout.

Parts of the Plains and Midwest pounded by near-blizzard conditions. The eastern third of the country about to dial down. The temperature, too frigid.

A neighborly meeting. President-elect Obama holds lunchtime talks with the leader of Mexico this hour.

Let's start with the president-elect and the economy. Barack Obama today asking President Bush to ask Congress for the remaining $350 billion in the financial bailout fund.

White House Correspondent Suzanne Malveaux joining us live.

And Suzanne, that request coming from the president-elect shortly after the president's news conference this morning.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Right after the news conference, Tony. It was really quite fascinating to see, because during the news conference, President Bush said, well, if he asks me to request the money, then I'll go ahead and request it. But no such request has been made.

Well, then just moments later, this statement coming out: "This morning, President-elect Obama asked President Bush to formally notify Congress on his behalf of his intent to exercise the authority under the Emergency Economic Stabilization Act to access the last bit of the $350 billion in funding for Treasury program addressing the financial crisis. President Bush agreed to the president-elect's request. We will continue our consultation with the President-elect's transition team and with Congress in how to best proceed in accordance with the requirements of the statute."

Tony, basically, this means that these two gentlemen are on the same page when it comes to moving forward here. Barack Obama acknowledging he doesn't have the authority to necessarily make that request, so he says, please, President Bush, you do it now. Try to get money from Congress.

It will be in congress's hands, basically. If they reject this and say, no, we don't think this is a good idea, we don't know where the money is going, well, then it could be up to President Bush to veto, to override that, Congress's decision there, and say, well, I'm going to go for it anyway. That could happen.

It could also be in a situation where if Congress rejects it, Barack Obama might actually be in that situation in about eight or nine days or so, saying, look, we still need this money. So that is why you've seen in these very rare meetings Obama's financial team, Larry Summers, his top economic adviser, sitting down with those Senate Democrats on Sunday saying, look, we have got to get this money, here is why. We'll be accountable, but we need to move forward with this.

So obviously this statement shows that these two leaders at this moment see eye to eye when it comes to getting that money out of the Treasury and into the hands of the economy.

HARRIS: And so the preferred rollout obviously would be for the president to make the request, and the money would be there, available for the President-elect, when he becomes president the very next day, it seems.

MALVEAUX: And Congress has 15 days, essentially, to figure this all out, whether or not they want to approve it.


MALVEAUX: So, yes, that would be days after he's elected, he would have access to those funds.

HARRIS: Well, Suzanne, just an extraordinary news conference with the president this morning, his final news conference as president. And there were several really important issues taken up in that news conference, but of course we couldn't resist the moment when he had a little fun, a little sport at your expense.

Oh, listen. Let's roll the tape.



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Suzanne, I finally got your name right after, how many, six years?

MALVEAUX: Eight years.

BUSH: Eight years. You used to be known as Suzanne. Now you're Suzanne.

MALVEAUX: Suzanne, thank you.

(LAUGHTER) BUSH: I'm George.


HARRIS: Hey, Suzanne, has this been kind of a rolling thing between you and the president for all these years?

MALVEAUX: It has. I remember, the precise day that he first got my name right was at a press conference in India, when he called on me. And I practically, you know, fell out of my chair when he said "Suzanne."

But, no, no name change. It's been Suzanne all this time. And, you know, you're Antoine, and you know, he's now George.

HARRIS: Oh, that's terrific.

MALVEAUX: But yes, a nice little light moment there with the president.

HARRIS: Yes. And as we mentioned, there were plenty of other heavier topics discussed there, but -- and we'll talk about those a little later as well.

Suzanne, it is good to see you. Thank you for your time this morning.

MALVEAUX: Antoine, thank you.

HARRIS: Yes, absolutely.

MALVEAUX: Thanks, Tony.

HARRIS: Let's get to the New York Stock Exchange right now for a look at the Big Board.

As you can see, the Dow down triple digits so far on the day, the Dow down 101 points. We will check in with Susan Lisovicz for a complete market check in just a couple of minutes, right here in the CNN NEWSROOM.

A federal judge is expected to rule soon on whether disgraced money manager Bernard Madoff should have his bail revoked. Since he's been free on bail, and has sent more than $1 million worth of jewelry and gifts to family and friends.

Joining me now, CNN Senior Correspondent Allan Chernoff and CNN Senior Legal Analyst Jeffrey Toobin.

And Allan, let's start with you. Any idea as to when there might be a decision?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Tony, 12:00 was the time when Judge Ronald Ellis (ph) said he might actually issue an opinion. So we're waiting right now. It could possibly come out any minute. This is a federal judge who will decide whether or not Bernard Madoff can remain in his penthouse apartment here on the Upper East Side of Manhattan.

Now, Mr. Madoff has been there under 24-hour house arrest. He's wearing an electronic ankle bracelet. But prosecutors say that is not enough. They want him in jail. They say that he's violated the terms of his bail.

Number one, they say he's been trying to hide and also give away millions of dollars worth of assets. They found $173 million worth of checks, about 100 checks written out to friends, family and employees, all of that in his office desk.

Also, from this very apartment, the prosecutors say Mr. Madoff and his wife, Ruth, mailed out on Christmas Eve five packages. In those owe packages to their sons, the brother of Mr. Madoff, Peter, and also to the sister as well, the sister-in-law, and a very close couple who live in Florida, in those packages jewelry, very valuable jewelry -- a diamond necklace, diamond bracelet, a Cartier diamond watch, a Tiffany watch, on and on. The value well exceeding $1 million.

The prosecutors say that is clear intent to violate the terms of the bail. The defense attorney for Mr. Madoff says it was innocent, Mr. Madoff simply saw these as family heirlooms, he wanted to share them. He didn't realize, the attorney says, that this was a violation of the terms of the bail. And as soon as the lawyer told him it was, they got the items back, they did their best to get them. And most of those items now are in the hand of the government.

HARRIS: Well, that's interesting.

CHERNOFF: But again, Tony, we are waiting to hear from the judge as to whether or not Mr. Madoff will be allowed to stay here or whether he's going to have to go to jail.

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

You know, prosecutors have filed briefs arguing that Madoff should be detained for having violated the terms of his bail.

Let's take this up with our CNN senior legal analyst, Jeffrey Toobin.

Jeffrey, I know you're following this case. But wait a minute. Gifts and jewelry to friends? Does this sound to you like a clear violation of the terms of the bail?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: In a word, absolutely. The real mystery here is not whether Madoff is going to be remanded. The real mystery is, why is he out on bail in the first place?

You know, our jails are full of relatively minor drug offenders awaiting their trials. This guy is accused of leading the biggest fraud in the history of the world, and he's allowed to be out on bail with full access to the means of the crime -- computers, letters? And he's sending $1 million worth of jewelry around to his friends and family which he didn't realize could be seen as trying to spread out his criminal proceeds?

I mean, I find this a shocking story. But even more, that he got out in the first place than this issue right here.

HARRIS: Well, what is this then? What are we talking about? You know the question that's coming next. Is this special treatment for the rich and powerful?

TOOBIN: Another one word answer -- you bet. I mean -- oh, that's two words.

I think his lawyers made a plea that said, look, he is trying to cooperate with you. He is going to tell you where this money is. He's going to tell you how to recoup whatever he can. And the best way to do that is keep him out with full access to his materials.

That's not a totally implausible argument, and the U.S. attorney's office went along with it. But I think both the U.S. attorney and the judge misjudged the severity of the crime and how this would be perceived. You know, it's important in the criminal justice system not only that justice be done, but that justice perceived to be done.


TOOBIN: And I think the fact that Madoff is out on bail, and still out on bail, not withstanding the fact that he tried to ship all this jewelry to his friends and relatives, I think does not speak well of the judicial system. And my expectation is any minute, we'll get an order from the judge saying he'll be remanded, pending trial.


Jeffrey Toobin with us.

Jeffrey, appreciate it. Thank you.


HARRIS: Yes, I like those answers. Good stuff, Jeffrey. Thank you.

Sunny and dry weather is on the way for Washington State this week. And they deserve it.

Look. Heavy rain and melting snow caused widespread flooding across western Washington last week. The National weather Service plans to drop flood warnings for the Cedar and Chehalis rivers by this evening.

And cold, hard crash. Take a look at these pictures.

Fifty-nine vehicles go bumper to bumper on a snowy New Hampshire interstate. About a dozen people went to the hospital with broken bones. Nothing life-threatening.

Man. Look at this. One driver -- well, let's stop this.

Allan Chernoff has some additional information on this case.

Allan, what do you have? We can get to weather in a minute.

CHERNOFF: Tony, the decision has come out from the judge, and he has denied the request by the government to have Mr. Madoff sent down to jail. I'll just briefly read to you from the opinion of the judge, basically saying, "The court finds the government has failed to meet its burden. Accordingly, its motion is denied."

The judge saying the burden was on the government to prove by a preponderance of evidence that there was a risk of flight here, and also that Mr. Madoff presented a risk to the public. The judge, again, denying the government's request to have Bernard Madoff sent to jail.

As a result, he will remain here in his luxurious $7 million penthouse apartment on the Upper East Side, as we await to hear the next steps in this very, very big case. Bernard Madoff, of course, accused of running one of the biggest investment scandals in history -- Tony.

HARRIS: So he gets to stay in the penthouse suite, huh?

CHERNOFF: That's precisely true. That's right.

His defense attorneys seem to have done a very, very good job, in spite of what Jeff Toobin was just saying.


CHERNOFF: They're allowing him to stay. They say that he has made every effort to compensate for having mailed off those jewels. The defense attorney said it was an innocent step by Mr. Madoff and his wife, Ruth, to send off some family heirlooms. And he will be permitted to remain in his apartment under 24-hour surveillance, and wearing an ankle bracelet as well -- Tony.

HARRIS: Not deemed a risk of flight. All right.

Allan Chernoff for us.

Thank you for the update, Allan.


HARRIS: The United Nations holding a news conference this hour on humanitarian efforts in Gaza. We will get a live report from the U.N. on the latest in the fighting.


HARRIS: Israeli forces pushing ever closer to the center of heavily-populated Gaza City. Israeli paratroopers report homes and schools rigged with explosives. We'll take that up with our Paula Hancocks now, who is watching developments from the Israel/Gaza border.

And Paula, Israeli strikes were halted for humanitarian aid to get into Gaza again today. How did that go and how long was that aid window actually open?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Tony, the window was three hours. And it actually looked more like a lull today than it has since Israel has called these three-hour lulls to allow the humanitarian aid to be brought into Gaza and distributed.

There were a couple of explosions, there were a couple of rockets coming in the opposite direction, but nothing like we've seen in the past. In fact, today, up until now, has been a bit quieter, we have noticed.

There has still been Israeli airstrikes, there has still been shelling, and at least 15 rockets coming the other way, hitting southern Israel. But certainly not the sort of level of violence that we have seen over the past couple of weeks.

So the lull did work for the most part. And we understand about 160 trucks with humanitarian aid were allowed into Israel. But still, the aid agencies are saying three hours is not enough to be able to distribute that aid.

Certainly, it gives people in Gaza time to get out of wherever they're hiding from and try and find food and try and buy food and water, but aid agencies still say it is not long enough. If you can do three hours, why not 24?


Hey, Paula, if you would, give us an update on the death toll on either side of the fighting. And what else can you tell us about the reports of booby traps and homes rigged with explosives?

HANCOCKS: Well, certainly, we've had footage given to us by the Israeli Defense Forces, saying -- showing a booby-trapped house. And they say that this is a real problem, they're coming across it more and more often. As soon as a resident flees a house, they say that Hamas militants booby-trapped it to try and slow the Israeli military down.

But as for the death toll, it is, unfortunately, still rising horribly. At least 903 people have been killed in Gaza, and some estimates say at least half of those are civilians. This is according to Palestinian medical sources, and about 3,800 at least, according to those same sources, are injured. On the Israeli side, you know, 10 soldiers have been killed in the operations so far, and three civilians killed by rocket fire -- Tony.

HARRIS: CNN's Paula Hancocks for us along the Israel/Gaza border.

Paula, thank you.

Israel's prime minister says it's country is nearing the goals it set. The last hour we heard from Palestinian lawmaker Hanan Ashrawi, who does not support Hamas. She said the Israeli offensive is actually strengthening the militant group.

For a different perspective, our Fareed Zakaria took up the issue with Bret Stephens of "The Wall Street Journal."


FAREED ZAKARIA, "FAREED ZAKARIA GPS": Do you think there's a chance that it is backfiring in this sense, that it is actually strengthening the radicals and weakening the moderates?

BRET STEPHENS, "WALL STREET JOURNAL": One of the great differences between the conflict now and the conflict years ago -- well, there are two of them. One is that this conflict has become religious. Hamas is an Islamic fundamentalist movement; the conflict is no longer so much a territorial conflict as it was in the past, but a religious one.

And the other part of the equation is the influence of Iran in this conflict. I think this is something that has to be taken into account.

Like the war in 2006 in Lebanon, this war is largely a war between Israel and Iran's proxies. And making sure that those proxies don't come out victorious, aren't perceived to be victorious, don't gain prestige in the Arab world, I think is absolutely essential, which is why I think that Israel needs to pursue this part of the confrontation to some kind of successful conclusion.


HARRIS: And you can catch "FAREED ZAKARIA GPS" every Sunday at 1:00 p.m. Eastern, one of the smartest shows you'll find anywhere. And it's right here on CNN.

Just about everyone's retirement account is hurting right now, but there are ways you can protect your nest egg in these tough economic times.

Gerri Willis, my nest egg is a little bare, like the cupboard.

Gerri is up next right after the break.


HARRIS: New year, new 401(k). Well, today we are looking at ways to get your retirement savings back in some kind of shape here.

Personal Finance Editor Gerri Willis is here.

Boy, what a drumming a lot of folks took in 2008.

Gerri, but you tell us we have to move past the wreckage of last year. So you're telling us to look forward, huh?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, yes, it's definitely time not to look backwards.


WILLIS: Although, let me start there, because I know a lot of people are thinking about their 401(k)s right now.


WILLIS: The Dow Jones Industrial Average last year down almost 34 percent. The Nasdaq down 40 percent. You see these numbers, they're very disturbing.

Well, let me tell you, now is the time to stop focusing on your losses. Fifty-five percent of people just short of retirement polled by Consumer Reports lost 20 percent or more of their investments between November 2006 and November 2007. And if you're younger, your losses are probably higher, approaching the 38 percent downdraft in the market.

But obsessing over your losses, Tony, it's a loser's game. Instead, start planning ahead, thinking about your goal, how much money you'll need in retirement.

A great place to start is's Retirement Center or T. Rowe Price's Web site at

Look, by plugging in a few numbers, you'll start to get a sense of how much money you're going to need in retirement. Next, analyze what you own.

If your 401(k) is deeply in the red, it may be packed with loser mutual funds or maybe not. The best way to figure that out is to point your browser to and consider how your funds compare to rivals in their category. If their losses match the average for the industry, well, you've got a middle tier performer.

On the other hand, if your losses are much deeper than the category, now may be the time to start considering replacement funds. You should start selling your losers, putting that money into better- performing options in the same asset class.

And look, don't throw in the towel on stocks. It's tough to take these losses, but here's the cold, hard reality. You won't make it through retirement on the kinds of returns that less risky investments provide.

Consider this: 10-year treasury notes pay just 2.5 percent a year. At that rate, it will take you almost 30 years to double your money. Besides, moving out of stocks now will only lock in your losses.

If you want to take advantage of what's going on in the market, buy funds based on a broad market index, like the Wilshire 5000. That way, you're buying on the cheap instead of paying top dollar for your investments.

If you have any questions about your 401(k) or other retirement issues, e-mail me at -- Tony.

HARRIS: Boy, that's a comprehensive retirement makeover there, Gerri.


HARRIS: Good stuff. Thank you. Thank you.

WILLIS: My pleasure.

HARRIS: All right. Taxing issues. House Speaker Nancy Pelosi pushing for middle class tax relief as part of an economic stimulus plan.

Here's part of her interview with Wolf Blitzer on CNN's "LATE EDITION."


REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: We're saying this focus of the tax cuts should be on America's middle class, the backbone of our democracy, who have gotten really the royal shaft in the past eight years. Instead of catering to those in the high end, we should be focusing on the middle class.

WOLF BLITZER, CNN ANCHOR: But it would be a tax increase for those richer Americans.

PELOSI: It's not a tax increase. We're repealing something they should never have had in the first place.

BLITZER: Well, it would go up to 35 percent to 39 percent. That's a tax increase.

PELOSI: Well, you may call that a tax increase, but what we're saying is, for all Americans, we want a tax cut. And we do not want to do that in a way that increases the deficit. So let's have some fairness in our tax system.


HARRIS: President-elect Barack Obama's economic stimulus plan calls for about $300 billion in tax cuts.

President-elect Barack Obama's first meeting with a foreign leader, Felipe Calderon, happening right now. Why Mexico is important to our security and our economy.


HARRIS: Let's take you to these live pictures again of the inauguration stage in Washington, D.C. As you may know, rehearsals were held over the weekend for the big day, a week from tomorrow, January 20th.

President-elect Obama meeting this hour with Mexican President Felipe Calderon. It is the first face to face meeting for the president-elect and a foreign leader. Mexico's war against drug cartels and trade are topics they're expected to touch on. The incoming president has suggested he'd like to see American workers given more protection under the North American Free Trade Agreement. So let's see here, illegal drugs, trade, immigration, lots of issues the two leaders could chew on. CNN en Espanol correspondent Juan Carlos Lopez is in Washington.

Juan Carlos, great to see you.

What's your view of the top challenges Barack Obama faces with our southern neighbor.

JUAN CARLOS LOPEZ, CNN CORRESPONDENT: It's a very long border, Tony, and it's a border full of issues. So that's going to be probably for their first priority. There's a position that Mexicans bring, President Calderon meeting with President-elect Obama.

What they're saying is, there's joint responsibility on the drug on wars. There is a U.S. funded initiative going on now in Mexico saying they're not only interested in money, but in understanding that there is a drug war in Mexico, because there is a demand for drugs in the U.S. and they have to fight this together.

So that's probably going to be, the increasing violence in Mexico, over 5,000 people murdered last year related to the drug wars. It was double what the -- double the number of people murdered in 2007. So things over there are pretty difficult right now and that's probably what President Calderon is telling President-elect Obama.

HARRIS: Any other sort of geographical concerns you expect might come up?

LOPEZ: Well, yes. There's -- one of the main complaints the Mexicans have is that they say weapons are sold at an alarming rate at the U.S. border and the drug lords come from Mexico into the U.S., buy these weapons, take them back into Mexico and use them against the Mexican authorities. That's another concern. So there are many issues. Mexico is a -- the U.S. is Mexico's main trading partner. Both economies are linked through NAFTA. So it's a very, very close relationship and the problems are growing.

HARRIS: And Juan Carlos Lopez from our sister network, CNN en Espanol.

Juan Carlos, great to see you. Thank you.

LOPEZ: My pleasure.

HARRIS: You know, in his final news conference before leaving office, President Bush, today, reflected on a range of topics, including his successor. He says he wishes Barack Obama all the best and he doubts Obama will feel isolated once he's in office. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One reason he won't feel isolated is because he's got a fabulous family and he cares a lot about his family. That's evident from my discussions with him. He's a 45-second commute away from a great wife and two little girls that love him dearly.

I believe the phrase "burdens of the office" is overstated. You know it's kind of like, why me? All the burdens, you know. Why did the financial collapse have to happen on my watch? It's just pathetic, isn't it, self-pity. And I don't believe that President- elect Obama will be full of self-pity.


HARRIS: Well, the president says he was disappointed with the tone in Washington during his presidency and he tried to do his part to change the political environment for the better.

Ohio Senator George Voinovich announced today that he is retiring after two terms in office. He plans to serve out the rest of his term, which expires in 2010. In the past few weeks, fellow Republicans Kit Bond of Missouri, Florida's Mel Martinez and Sam Brownback of Kansas have also announced retirement plans.

One senator leaving, another hoping to get a seat. We could see action today on Roland Burris, the man named by Illinois's troubled governor to replace Barack Obama in the Senate.


SEN. DICK DURBIN, (D) ILLINOIS: I started off, obviously skeptical, as all of the Democratic members did. But as time has gone on, we've looked closely, we want to be fair to Roland Burris. If he has the proper certification and papers, then we're going to take one look at the process and move forward from there. But I won't presume what the Senate is going to finally decide. I will just tell you we'll do it fairly and we'll do it on a timely basis.


HARRIS: CNN congressional correspondent Brianna Keilar on Capitol Hill for us.

And, Brianna, does it appear now that Roland Burris will, in fact, be seated?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, what we do know, Tony, and according to at least a couple Democratic sources, they say that it is possible that Burris will be very happy with the news he hears today.

So what's going on today here on Capitol Hill? Well his lawyers, not Roland Burris himself, but his lawyers are going to be up here on Capitol Hill within a couple of hours. They're meeting with Senate officials. And even though, as I said, some Democratic sources say he'll probably be happy with the news, one source that I spoke with familiar with these discussions said, hold up. Even though Senate Democratic leaders, they want to seat Roland Burris, there's still a bit of an issue over the proper paperwork. You heard Dick Durbin, number two Democrat in the Senate refer to this.

So what is this paperwork? It's what we've been talking about now for a while. It is the certificate of appointment, which as we know, showed up here last week with Roland Burris, with one signature, from Governor Rod Blagojevich, and it had a blank line, missing the signature of the secretary of state, Jesse White.

Well, if you take a look here. This is one signature still. One signature still here. However, there's no blank line anymore, Tony. What we do have, though, is a separate second piece of paper, this from the secretary of state -- actually I'm getting myself confused here. This one here is the one with one signature from the governor. And this one here is a separate piece of paper from the secretary of state basically saying, yes, I've received it. Yes, this is accurate. This is the certificate. But at the same time, kind of getting over that point where Jesse White said he didn't want to certify anything that had been signed by Governor Rod Blagojevich.

So basically it's lawmakers making heads or tails of this. Is this enough to get over this Senate rule that requires both signatures. That's what this meeting is about, Tony, and we're hoping to find out here within a couple of hours, two to three hours, if this is a big hurdle that Roland Burris has been able to clear.

HARRIS: So we may learn something -- well, we'll learn something one way or the other later today?

KEILAR: Yes, later today.


KEILAR: Within two or tree hours. And, as I said, a lot of Democratic sources -- we've got at least a couple saying they think that Roland Burris will be happy with the outcome of this.

HARRIS: That can only mean that he'll be seated.

KEILAR: Exactly.

HARRIS: All right. Brianna Keilar on Capitol Hill for us.

Brianna, appreciate it. Thank you.

Let's take another look at the big board. About, oh, just past three hours into the trading day. OK. A bit of a rally going on here. Not reflecting triple-digit losses at this point. The Dow down 66 points. So a bit of a rally going on. We will follow the numbers and the markets for you throughout the day right here in the CNN NEWSROOM.

(COMMERCIAL BREAK) HARRIS: The United Nations, the world body holding a news conference on the humanitarian situation in Gaza. The U.S. Security Council, last week, voted for an end to the violence. Both Israel and Hamas ignoring that cease-fire resolution. Let's go live now to CNN's senior United Nation's correspondent Richard Roth.

And, Richard, if you would, tell us what came out of that news conference, that briefing on the humanitarian situation in Gaza.

RICHARD ROTH, CNN CORRESPONDENT: Well, the U.N.'s humanitarian chief says he hoped that when he said on Friday that he was hoping there would be a cease-fire by Monday, well, he says he's very wrong and that he's appalled by what's happening. Let's listen to John Holmes, the U.N. humanitarian boss.


JOHN HOLMES, U.N. HUMANITARIAN CHIEF: There have been exchanges of fire continuing during these lulls on occasion. So they've not been perfect by any means. We have said consistently that the only way we can work properly is with a full 24-hour cease-fire -- for permanently, I hope. But it will be also good if Israel was able to extend the timing of these lulls because three hours really is not sufficient by the time you get out, go somewhere and have to get back again.


ROTH: All right. That's John Holmes appealing for a longer cease-fire. More than the three-hour lulls that have happened. Earlier, Holmes said that he was appalled by the violence on both sides and horrified that the war continues to go on.


HARRIS: OK. CNN's Richard Roth with the latest for us.

Richard, appreciate it. Thank you.

President Bush, today, restated his position that a sustainable cease-fire in Gaza can only be accomplished when Hamas stops firing rockets into Israel.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think Israel has a right to defend herself. Obviously, in any of these kinds of situations, I would hope that she would continue to be mindful of innocent folks. And that they help, you know, expedite the delivery of humanitarian aid.


HARRIS: Well, the president says he backs Egyptian led cease-fire talks that would end the smuggling of weapons into Gaza. Rallies and protest over the violence in Gaza happening all across the United States. But a demonstration turned rowdy in New York City over the weekend. Several police officers were injured during scuffles and at least nine protesters were arrested a few block away. Thousands of pro-Israel demonstrators rallied outside the United Nations, declaring Israel has the right to protect its citizens.

Gas prices heading down again. But will it last? A prediction on which way the trend will go. That's next.


HARRIS: The financial industry may open 2009 with another big deal today. Reports say Citi is trying to sell its brokerage unit to Morgan Stanley. The price tag may run as high as $3 billion. Morgan Stanley became a bank last fall and tapped $10 billion of taxpayer bailout money. Citi has accepted $45 billion so far.

Well, gas prices are down slightly today, ending 12 straight days of increases. But the overall trend could be up. Stephanie Elam has our "Energy Fix" from New York.

Good to see you, Stephanie.

What is AAA -- the friends at AAA saying?

STEPHANIE ELAM, CNN CORRESPONDENT: Well, Tony, it's good to see you as well. AAA is saying that the national average for a gallon of regular is at $1.79 today. That is actually down $0.002 cent from yesterday.

But, according to the Lundberg survey, in the past three weeks, gas has jumped nearly 12 cents. The first increase in six months. It's back above $2 in three states in fact. Analysts say gas will likely head a bit higher in the next few months but they do not expect a return to last summer's record highs mainly because demand remains sluggish due to the weak economy.

Now I can't tell you exactly how much you'll be paying, but I can promise you this. Whatever the price is, it will have $0.009 cent tagged on. And if you've ever stopped and pondered that while you're pumping gas, I can tell you why.

We called the Petroleum Marketers Association to find out and they say fractional pricing started in the 1930s when the federal government began taxing gas in tenths of a penny. As time went on, the practice never changed, probably because it is pretty good marketing. If you think about it, Tony, you kind of go to the gas station, $1.799 sounds a little cheaper than $1.80, right? So it's all psychological.

I mean, think about it, retail stores do the same thing. You go to get that sweater for $39.99 instead of $40. We've all seen that too.

HARRIS: Don't play with my money. Don't play with my . . .

ELAM: I'm not playing with your money, but I might mess with you right now on television. There's a difference.

HARRIS: All right. So are gas stations, you know, actually ripping us off? I mean, do they round up that $0.009 cent on every gallon we buy?

ELAM: Yes, I don't really think you can say that they're ripping you off. I mean, I know it can sound like it. But industry experts insist it's really just not the case. The National Conference on Weights and Measures says gas pumps always round to the nearest whole cent. Sometimes that would be up, sometimes that's down. So, statistically, neither the seller nor the buyer should come out ahead. But -- so that one, just got to have faith, Tony. Have a little faith, faith, faith.

And, of course, if you need another energy fix, is the place to go.

HARRIS: Faith, not when it comes to my money. My money. Ali Velshi, "Gimme Back My Money."

ELAM: Next time I'll have him do the "Energy Fix" so you can . . .

HARRIS: No, no, no, it's all good. It's all good.

Thank you, Stephanie.

ELAM: OK. All right.

HARRIS: The Louisiana Philharmonic has been on the road too long. Not from an extended tour, but post Katrina rebuilding of its theater. Now the company is home again. Here's CNN's Sean Callebs.


SEAN CALLEBS, CNN CORRESPONDENT, (voice over): A shining moment for a city mired in a slow and painful recovery. Performing arts are back in New Orleans with the reopening of the Mahalia Jackson Theater. Shuttered in shale (ph) for three years after Katrina allowed 14 feet of water to swamp the great hall and helping usher in its rebirth, renowned violinist Itzhak Perlman.

ITZHAK PERLMAN, VIOLINIST: It's ended (ph) like this with Katrina. End with the economy that goes on these days. And then you have this opening. So it's like a ray of sunshine. It's wonderful. It's really great.

CALLEBS: It was costly. $22 million. And a long three years.

UNIDENTIFIED FEMALE: There were times when we were so tired that we wondered how we could do the next thing.

CALLEBS: Mayor Ray Nagin has been harshly criticized for the pace of rebuilding in New Orleans.

RAY NAGIN, NEW ORLEANS MAYOR: This is my old neighborhood, man. CALLEBS: Nagin says he'll take his lumps. Just remember how far the city has come since August of '05.

NAGIN: Back then, the rhythm of the city was changed. Had changed so dramatically. It was helicopters. It was troops. It was police sirens. And we had lost our cultural identity.

CALLEBS: And for a city that prides itself on tourism and throwing a good party.

NAGIN: The clubs are back. The live music is back. We have international performances here. So it feels closer to the New Orleans we had pre-Katrina.

CALLEBS: Mexico City native Carlos Miguel Prieto is the musical director for the Louisiana Philharmonic. He signed his contract just one week before Katrina hit. Basically the past three years have been a prolonged dress rehearsal.

CARLOS MIGUEL PRIETO, MUSIC DIR., LOUISIANA PHILHARMONIC ORCHESTRA: Those of us who love New Orleans felt an added commitment and an added love for the city with Katrina. And we are trying our best to make this one of the highlights of the city.

An orchestra is an essential part of any city.

CALLEBS: The Louisiana Philharmonic plays in 22 different venues last year. Now, it's home. And there is no question that this is a city starved for positive news.

PERLMAN: As far as I'm concerned, whenever something special happens in the arts, and I'm involved in it, then I feel I'm helping a little bit. So that's always nice to know that you're helping.

CALLEBS: Sean Callebs, CNN, New Orleans.


HARRIS: Pretty good, huh?

All right. Here's a question for you. Are consumer products taking a cue from politics? How some major brands are looking very Obama-esque these days.


HARRIS: Pretty good, huh? Practicing for the big day. Rehearsals for the inauguration of Barack Obama. One week from tomorrow. Something like 3,000 military members took part in yesterday's rehearsals. There were even stand-ins for the incoming president and his two daughters. Live pictures now of the inaugural stage. The big day next Tuesday.


DAVID WHITE, I-REPORTER: The stage is set. And those are the 30,000 seats, the rest of them have yet to be put up, of the 240,000 tickets that have been disseminated. Take a good look.


HARRIS: (INAUDIBLE) superstar i-Reporter David J. White at the U.S. Capitol. This is the front of the Capitol where the incoming president will take the oath of office. His hand resting on the same Bible used to swear in Abraham Lincoln. Members of Congress were given their ticket allotments today. David White says he will be out next Tuesday recording some of the sights and the sounds from this historic day.

You know, by all accounts, President-elect Obama ran a successful campaign on the promise of hope. So maybe it is not so surprising that companies like Pepsi would want to jump on the bandwagon and use the same message in their campaigns. But will it work? CNN's Alina Cho is following the story for us.


You know, we're not talking about t-shirt's, mugs and pens. Products that showcase the likeness of Barack Obama. We're talking about subliminal advertising. Or maybe it's not so subliminal. Think about it. Obama is a winning product and he won on the promise of hope. So it may not be so surprising that companies like Pepsi now want to use the same message in their campaigns. But will it work?


CHO, (voice over): Commercial or campaign message?

UNIDENTIFIED FEMALE, ADVERTISEMENT: And though the world is made of energy.

CHO: It's all about optimism, with a logo that's all too familiar. But this has nothing to do with Barack Obama. It's an ad for Pepsi.

LINDA KAPLAN THALER, CEO, THE KAPLAN THALER GROUP: I think it's different because there's such enormous hope and optimism in this country now for Obama. And I think people can't help by trying to sell their product in the same voice.

CHO: It's called the Pepsi Optimism Project, or POP. And just like Obama's campaign, change is the message from Ikea. Starting Monday, it's showcasing a replica of the Oval Office, using Ikea furniture. Both Pepsi and Ikea tell CNN, there's nothing political about their ads. But the Pepsi and Obama logos are strikingly similar. Both use swirls of red, white and blue. So can you sell a product in the same way you sell a presidential candidate?

BARBARA LIPPERT, ART CRITIC, "ADWEEK": You wouldn't buy anything unless you had some hope. And they're not going to show a guy saying, my car is under water and my house, you know, mortgage is falling apart, but I want to have a Pepsi. Unfortunately, a soda can really can change your life, or give you hope.

CHO: One area where Madison Avenue has learned from Pennsylvania Avenue is how to target an audience.

THALER: Obama's campaign did something absolutely brilliant and almost impossible. He captured the youth market. He went to the people who don't vote.

CHO: And you say that goes against everything that advertising is about.

THALER: It goes against advertising 101.

CHO: Like trying to sell a cookie to a person who's never tried one. It's just not done. But maybe change is coming.

If we're talking about a country that is half Democrat and half Republican.

THALER: Oh, you know what? We're all behind the president. And on the day of the inauguration, everybody in this country is going to be rooting for this man.


CHO: Well, if you're dreading the thought of four more years of ads about hope and change, don't worry, it won't last. Branding experts say, we, as consumers, have a very short attention span. Something else will come along and advertisers will start parroting that. Also, remember, it's not such a stretch to advertise on the message of hope. Think about it, Tony. If you're buying a product, you are hopeful that it will change your life in one way or another.


HARRIS: Good stuff. OK. We are one week, one day out from Inauguration Day. Look at that scene.

Kyra, can you imagine Washington, D.C.?

KYRA PHILLIPS, CNN ANCHOR: I'll tell you what. I mean, even though I'm not working that day.

HARRIS: Right. I know you're going to be there, right?

PHILLIPS: I am going to be there. I do not want to miss this moment in history. That's what it is. I mean, when's the last time we remember this kind of buzz over a president?

HARRIS: Oh, please, please.

PHILLIPS: Really. It's absolutely remarkable. Whether you're pro-Obama or not, it's an amazing moment in history.

HARRIS: It really is. And will you send us back some -- maybe do a little live blogging and some . . .

PHILLIPS: I'll try to do some. I'm going to find you the cheesiest little trinket possible. HARRIS: Will you, please. That's nice.

PHILLIPS: Yes. I'm going to get you an Obama something.

HARRIS: That's nice.

All right. CNN NEWSROOM continues right now with this lady, Kyra Phillips. Have a great show.

PHILLIPS: You got the job, made the move, time to meet the neighbors. It's a pre-inauguration tradition. A president-to-be meets the president of Mexico. A search for common ground on a troubled border.