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AMERICAN MORNING

Homes Burn in Santa Barbara; White House to Release Fly-Over Pictures; Lawmakers Wants Erectile Dysfunction Ads Banned; John Edwards' Scandal Aftermath; Pakistan-Taliban Peace Deal Collapses; Man Wins Island Caretaker Job

Aired May 7, 2009 - 08:00   ET

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


CAROL COSTELLO, CNN ANCHOR: It is Thursday, May 7th. Good morning, everyone.

I'm Carol Costello in for John Roberts this morning.

KIRAN CHETRY, CNN ANCHOR: Good to see you, Carol.

And I'm Kiran Chetry. We have a lot going on this morning. Here are the stories topping our agenda. We're going to be breaking them down for you in the next 15 minutes.

There is a firestorm swallowing homes in Santa Barbara. Wind- driven flames overwhelming firefighters and homeowners. Thousands have been forced to evacuate the area. They have a state of emergency now in effect. They are telling people to get out. We're live on the ground in the fire zone.

General Motors reporting $6 billion in losses in the first quarter. The struggling auto giant sales down 21 percent for the first three months of the year. But the losses are actually less than expected. GM spent $10.2 billion more than it took in for the quarter.

In just a few hours, the government will tell us just how stressed 19 of the country's largest banks really are. In a moment, we're going to be breaking down which banks may need more money, how much and if it impacts Wall Street, which kicks off the trading day at a four-month high.

And the White House doing an about-face on last week's controversial flyover photo op near Lower Manhattan. The administration originally said that they would not be releasing those photos. We're going to hear what the White House is saying now.

But we are following breaking news first from Santa Barbara, California, where it's a perfect storm for disaster. The dry brush, powerful winds, the heat and the fire. The wildfire still burning out of control. Homes destroyed and thousands of people forced to flee. The fire has doubled in size over the past day. And the forecast is calling for more strong winds today.

CNN's Kara Finnstrom is live in Santa Barbara.

Tell us how they are trying to tackle this, Kara? KARA FINNSTROM, CNN CORRESPONDENT: Well, Kiran, they are putting out a lot of efforts today. During the last hour since we spoke with you, the roof of this home behind us has completely caved in. If you take a look through this door here on the bottom level, you can see that it's now on the floor just burning there. Firefighters tell us that this wildfire moved through neighborhoods so swiftly, that they actually had to triage the burning houses. That is quickly assess them and decide which houses they could safely save and which they would just have to let burn.

Now if we take a look down at the other end of this house. That has been collapsing as well. And we've been watching embers fly off of that house into the house as wind gusts pick up. And that is one of the big concerns out here. Winds forecast once again today to reach speeds of up to 65 miles per hour. That means that those embers can quickly spread and spread this fire.

So, Kiran, they will be up with choppers again this morning, with tankers, dropping water. They do expect 16 more aircraft to be coming in. And we did hear those aircraft up overnight.

They had to bring in specially-trained pilots who actually wore night vision goggles and wanted to get a head start on trying to douse some of these areas.

CHETRY: Kara Finnstrom for us. Stay safe out there.

Thank you.

COSTELLO: And some better news about your money. In just about 90 minutes, Wall Street kicks off the trading day at a four-month high. Yesterday, the Dow rose more than 100 points to close above 8500. And stocks rallied has investors speculated the government's banks' stress test will show they don't need as much capital as had been projected.

So will this rally last after the official results come out later today?

Christine Romans joins us now with some answers. She's "Minding Your Business" from Washington this morning. So, let's talk about the stress tests, and if Wall Street will say yea.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, Wall Street has been saying yea and hasn't been released yet, Carol. I mean, these come out officially this afternoon here in Washington. The banks have been told by regulators earlier this week how much money they'll need to raise. And there have been leaks and speculation rampant here. So let me tell you what it looks like here. Which banks, banks you may bank -- have your banking, will need to raise more money.

Bank of America tops this list. A lot of folks are expecting maybe $34 billion Bank of America is going to have to raise in new capital. Wells Fargo, GMAC, Citigroup, Morgan Stanley, Regions Financial Corp and State Street. But there are some banks that are expected to get a clean bill of health. Federal regulators expected to say they don't need any more capital. They have adequate capital to withstand worsening conditions in the economy. Those will be JPMorgan Chase, Goldman Sachs, MetLife, American Express, Bank of New York Mellon and Capital One financial.

Look, we've been talking for some time about who is going to need more money. The stock market has been rallying throughout the whole time. There's a feeling that whether this was stage managed or all of these leaks were pretty choreographed, you know, I'm not going to be a judge of that, Carol. But there's a feeling that Wall Street is pretty ready to handle whatever these results show.

COSTELLO: Thanks, Christine Romans from Washington this morning.

ROMANS: Sure.

CHETRY: All right. Five minutes past the hour. We check the morning's "Political Ticker." The White House about to release details of President Obama's 2010 budget. He's promising $17 billion in cuts across 121 different programs. It's about one-half of one percent, though, of the $3.4 trillion budget. At 10:35 a.m. Eastern, the president will deliver remarks about the fiscal spending plan from the White House.

The Fed's terminating a pilot program that was designed to detect a biological attack in New York City subways. "The Washington Post" reporting that the sensors had technical problems. They were installed back in 2007 to check the air hourly for harmful bacteria and viruses. Officials, though, say that in the past three or four months, they started to malfunction. An alternative system was expected to be put into place by next year. That has now been delayed until 2012.

And Condoleezza Rice said she's glad to be out of the political spotlight. In an interview with "U.S.A. Today," the former secretary of state said she loved serving the nation, but eight years was a long time. She also said, quote, "It's nice not to have a knot in your stomach when you walk out of the front door." Rice is now back at Stanford University where she teaches political science.

Also this morning, an about-face by the White House over the frightening flyover incident last week in New York City involving one of the president's planes. Originally, the White House said it had no plans to release the pictures that sparked that panic in Manhattan. You see some of it captured here on a cell phone camera. Now, though, we may be seeing at least one of those pictures after all.

CNN's Alina Cho is following this for us.

I mean, boy, what a difference a day makes. Yesterday, you were out you were saying...

ALINA CHO, CNN CORRESPONDENT: Exactly what I was saying.

CHETRY: Well, it could happen.

CHO: Well, yes. And a lot of people were mad about it.

But, Kiran, Carol, good morning.

Good morning, everybody.

You know, we do have an update to that nearly $329,000 photo op. Who could forget that terrifying video from last week? You just saw it. Flashbacks of 9/11. Sheer panic in Lower Manhattan. Buildings were emptied.

Take a look.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Run! Run!

UNIDENTIFIED FEMALE: Oh my God!

(END VIDEO CLIP)

CHO: Now we all know what caused that. The president's plane, you can see it there, flying at a low altitude near ground zero and the Statue of Liberty. All for new promotional photos of Air Force One. And few people were notified about it, including New York's mayor.

On Tuesday, our own Ed Henry asked White House Press Secretary Robert Gibbs if the public would ever get to see the photos we paid for with our tax dollars.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We anticipate the review will be done this week. I watched CNN. I didn't notice a lack of archival material from that flight. I don't...

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Inside the plane -- the photos they took, we haven't seen those.

GIBBS: I don't know where those are.

(END VIDEO CLIP)

CHO: Good job, Ed. Fast forward just one day and Gibbs, well, he now has a different answer.

(BEGIN VIDEO CLIP)

GIBBS: The report, I believe, will be concluded at some point this week. We'll release its findings and release the photo.

(END VIDEO CLIP)

CHO: So, why the change of heart for the White House? Well, some say it was pressure for President Obama to uphold his vow of a new era of government transparency. The infamous Manhattan flyover has you, our viewers, upset, too. Here's what some of you are saying on our show hotline -- 877-MY- AMFIX.

Take a listen.

(BEGIN VIDEO CLIP)

CALLER: I feel like the man responsible for allowing this to happen should have to pay for that $300,000 boo-boo.

CALLER: I think we should pick those photos from that $390,000 flyover, put them on some T-shirts, sell them. Let the proceeds pay for some drones to help fight that war in Pakistan and Afghanistan.

(END VIDEO CLIP)

CHO: There you have it.

Now, Gibbs says the review -- they are reviewing this incident. It's due out this week. It will focus on why the flyover decision was made, and to ensure that it never happens again.

Of course, the president was said to be furious about it. He promises it will never happen again.

But a lot of people are wondering. You know, I talked to New York City Councilman Peter Vallone who said, listen, it will take about 30 seconds for the president to realize what happened. This man who runs the White House military office made a bad decision. Perhaps he shouldn't be in the job.

And then, of course, there are scores of people who say we paid $329,000 for this flyover with our tax money. We should be able to see at least one of the photos. And so now the White House says we may be able to see at least one of them.

CHETRY: All right. Alina, thanks.

CHO: You bet.

COSTELLO: If you're feeling a bit odd today, there maybe a reason. Number lovers have declared today odd day. That's because if you take a look at the calendar, it's 05/07/09.

Did you guys realize that?

CHETRY: I did now.

COSTELLO: Wow. It's just...

CHETRY: I didn't realize how rare it was, though.

COSTELLO: It is. It's just one of six this century that feature three consecutive odd digits. And at least one teacher in California wants you to celebrate. He's offering $579 to those with the biggest odd celebrations.

CHETRY: That's kind of risky, isn't it?

COSTELLO: I know, give that is.

(CROSSTALK)

CHETRY: Start daring people to be odd.

CHO: I didn't realize it was such a big deal.

CHETRY: Yes. For numerologists and for people that like that stuff.

COSTELLO: Play the lotto today.

CHO: Yes, good idea.

COSTELLO: Elizabeth Edwards put her husband's infidelity back on the table for discussion. Is he politically ruined? See what insiders say about the spin he put on the scandal and if he can ever recover.

Ads for Viagra. You see them all the time on television. Well, one lawmaker wants to ban the ads. You will hear from both sides of the debate.

It's 10 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Shot this morning, courtesy of KTLA in Los Angeles, where it's clear right now. 67 degrees. Still 5:13 in the morning there and it's going to be sunny and 85 a little later today.

New this morning -- another racy photo has emerged of Miss California after she told pageant officials that there was only one. Pageant spokesman says beauty queen Carrie Prejean breached her contract by keeping the seminude photos a secret and as a result she may lose her crown. The Web site that posted the first photo also posted the second one and says there are more risque photos of her. Miss California defended what she's done saying at the time she was a teenager and she trying to be a Victoria's Secret model.

Well, a fashion designer says Kiefer Sutherland head butted him in a New York nightclub. Police say that designer Jack McCullough told them that the star of the TV show "24" attacked him after an argument.

There you...

COSTELLO: I know. I love Kiefer Sutherland. I'm sorry he head- butted someone, but...

CHETRY: I'm sure he's sorry, too. COSTELLO: I'm sure he is now that the guy has pressed charges. But I think he was under the influence of chemical weapons and that's probably why...

CHETRY: So is this from -- is this from the reality show? I mean, is this from the show "24" or is this real?

COSTELLO: This is from the show "24."

CHETRY: OK.

COSTELLO: But I'm sure there was blood involved in the (INAUDIBLE). The guy broke his nose. He broke his nose.

CHETRY: I know, I know. Well, the -- actually, well...

COSTELLO: What?

CHETRY: Nothing. I know you love him.

COSTELLO: I know, but it was wrong. And people say he was drunk. But apparently he was upset that this guy was invading Brooke Shields' space, so he head-butted the guy.

CHETRY: Because "Excuse me, could you back up?" would have been...

COSTELLO: It might have been more polite.

CHETRY: OK.

Well, if you ever catch yourself humming that "Viva Viagra" theme. If you feel that you can't escape from these TV ads for erectile dysfunction all the time, you're not alone.

COSTELLO: No. Virginia Congressman Jim Moran hates them. He really does. And, you know, he's the first to say, you know, this isn't the most important issue right now. He is working on economic issues, but these sexually explicit commercials, I mean, he's had it up to here. He wants them banned between the hours of 6:00 a.m. and 10:00 p.m. because he says they're affecting children.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Surely, you've seen them.

UNIDENTIFIED FEMALE: Levitra works fast. And it gives him the quality response that he wants.

COSTELLO: The sultry commercials that regaled viewers with a satisfying end to erectile dysfunction.

UNIDENTIFIED MALE: Yeah, that guy, he is back.

COSTELLO: The ads run so often between 6:00 a.m. and 10:00 p.m., Virginia Congressman Jim Moran has had it up to here. REP. JIM MORAN (D), VIRGINIA: Especially a sporting event, if you're sitting down with your kids and your grand kids, invariably they're going to ask you, you know, what is ED, why do you have to go to the doctor if you last longer than four hours.

UNIDENTIFIED MALE: In the rare case an erection lasts for more than four hours, seek immediate medical attention.

COSTELLO: Frustrated, Moran has introduced House Bill 2175. If passed, it would ban any commercial mentioning of erectile dysfunction from being broadcast on any day between 6:00 a.m. and 10:00 p.m.

Some people are all for it.

UNIDENTIFIED MALE: These ads should be banned.

UNIDENTIFIED FEMALE: I think that's a great idea.

COSTELLO: And some, not so much.

UNIDENTIFIED MALE: I think it's clearly unconstitutional.

UNIDENTIFIED MALE: My opinion is you ought to be able to run them 24 hours a day.

COSTELLO: It's not like E.D. has never been mentioned on television before. Remember Senator Bob Dole?

UNIDENTIFIED MALE: Like erectile dysfunction, E.D.

COSTELLO: That ran back in 1999. But Moran says E.D. commercials have gotten much more sexually explicit. In fact, he says, other commercials that run during prime time are inappropriate, too.

MORAN: I don't want to censor the airways. I just want to work with these folks and ask them to look at the impact upon young kids especially if it was their child or grandchild.

(END VIDEOTAPE)

COSTELLO: I did call the FCC and people do complain about commercials. And the FCC has the power already to fine networks for broadcasting indecent content, even if it's contained in a commercial. But nobody I spoke with at the FCC can remember instituting any fines for something like that.

As for what Pfizer says about its Cialis and Viagra commercials, here you go.

"In line with our policies and the policies of the industry, Viagra advertising is aired in shows most likely to be -- to reach men suffering from erectile dysfunction. E.D. can be a signal for other serious medical issues, including high blood pressure, diabetes and cardiovascular disease."

So that's why you see them in sporting events because men watch them and the message is getting to them.

CHETRY: Right. And you know what else? I mean, in the tough ad times right now, you'd think they want every commercial dollar they can get, you know, so...

COSTELLO: True. But, you know, Congressman Moran is just saying, you know, just don't show them between 10:00 a.m. and 6:00 p.m. so I don't have to explain to my grandkid what erectile dysfunction is.

CHETRY: Right.

All right. Well, right now, as many as 500,000 residents are on the run in Pakistan. The Taliban tightening its grip. The government telling people to get out. We've an inside look. The worldwide resources of CNN in action.

And after Elizabeth Edwards brought her husband's infidelity back into the headlines, can he ever recover? Fallout from a political crisis.

It's 18 minutes past the hour.

(COMMERCIAL BREAK)

COSTELLO: Welcome back to the Most News in the Morning.

Elizabeth Edwards explosive interview on "Oprah" has put her husband's affair back in the headlines. And now John Edwards is going to be on "Oprah" this afternoon, and hopefully, we'll get a sense of how he's publicly handling this scandal.

Jason Carroll joins us now, because this scandal has done nothing for his political career.

JASON CARROLL, CNN NATIONAL CORRESPONDENT: I think nothing. I think it has hurt even more his political career. I don't even know if he has a political career after this one.

You know, crisis management experts say what we are seeing today with Edwards is the direct result of him mishandling the situation when it first happened.

(BEGIN VIDEOTAPE)

OPRAH WINFREY, HOST, "THE OPRAH WINFREY SHOW": You asked your husband for just one gift when you got married.

What was that?

ELIZABETH EDWARDS, WIFE OF FORMER PRESIDENTIAL CANDIDATE JOHN EDWARDS: I wanted him to be faithful to me.

CARROLL (voice-over): Elizabeth Edwards may have forgiven her husband, but some Democratic strategists say John Edwards's conduct in the wake of this scandal has been unforgivable in its own right. ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I think it's gone from being mad to being disgusted, to just not wanting to think about it.

CARROLL: Crisis management experts say Elizabeth Edwards' tell- all book about her husband's affair is more fallout from a story Edwards should have taken more responsibility for from the beginning.

MARIAN SALZMAN, PORTER NOVELLI: He left a dot, dot, dot. And with that dot, dot, dot, the story wasn't over. And effectively by her writing this book, I mean, she's really reopened this can of worms.

CARROLL: Political insiders questioned why Edwards didn't come clean early and withdraw from the presidential race. Instead, he kept up the image of family man, devoted husband to a wife diagnosed with cancer.

When Edwards did finally admit to the affair with Rielle Hunter, he issued a statement.

"It is inadequate to say to the people who believed in me that I am sorry."

Which left some wondering, where was Edwards's public mea culpa like some noted ones now part of political history.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I am profoundly sorry.

ELIOT SPITZER, FORMER GOVERNOR, NEW YORK: I apologize to the public.

JIM MCGREEVEY, GOVERNOR, NEW JERSEY: So, my truth is that I am a gay American.

CARROLL: Edwards told ABC News last August that being a young senator, running for president, made him feel invincible.

JOHN EDWARDS, FORMER PRESIDENTIAL CANDIDATE: All of which fed a self-focus, an egotism, a narcissism that leads you to believe that you can do whatever you want.

CARROLL: Some strategists and crisis management specialists say that explanation not enough.

ERIC DEZENHALL, CRISIS MANAGEMENT SPECIALIST: By explaining it and saying that he was arrogant and narcissistic, that's all well and good. But it doesn't neutralize the original sin.

ZIMMERMAN: John Edwards has demonstrated the lack of personal grace, a lack of dignity, a lack of true sense of remorse.

(END VIDEOTAPE)

CARROLL: Edward has denied he's the father of Rielle Hunter's 1- year-old daughter. Elizabeth Edwards told Oprah she's not sure. And on a separate issue, Edwards has acknowledged federal authorities are investigating whether payments made to Hunter's production company were improper. Edwards says he is confident no funds from his campaign were used improperly.

One more point on that whole Hunter issue, you know, "The National Enquirer," which initially broke this story is now reporting that she's seeking an attorney looking for a paternity test to prove what the real answer is here.

COSTELLO: So, the mistress wants a paternity test. John Edwards is going to be on "Oprah" this afternoon.

So, what's my first question to him? Is it your baby?

CARROLL: Right. But, you know, we don't know what the "Enquirer" is reporting is true. But one thing is clear, you know, this story is not going away for him.

COSTELLO: It's become a smackdown.

CARROLL: Yes, a public smackdown.

CHETRY: All right. Thanks, Jason.

Well, this morning, as many as 500,000 Pakistanis could be on the move. The government is telling them to get away from an area occupied by extremists. We're live in Islamabad.

Also we're checking up on some of Obama's promises.

Bill Adair is here with the Truth-O-Meter.

It's 24 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to Most News in the Morning.

The Senate is getting ready to hold confirmation hearings for another administration post. President Obama wants Harvard law professor Cass Sunstein to be the White House top regulatory cop. There are, though, some interesting rumors circulating about Sunstein, and where he stands on certain issues.

We turn to Bill Adair, who's back with his Truth-O-Meter this morning.

Good to see you this morning, Bill.

BILL ADAIR, EDITOR, POLITIFACT.COM: Good morning.

CHETRY: All right. So, first of all, you dedicated two truth-o- meter items to this new regulatory czar. Actually, I looked twice when I saw this. Cass Sunstein.

So, before we get to them, first of all, why should we care about this position? What is so important about it?

ADAIR: Well, it's much more important than a lot of people realize. He would oversee all federal regulations, which is really an important part of presidential muscle. And he's a really interesting guy with a lot of provocative ideas. So his confirmation hearing is one worth keeping an eye on.

CHETRY: All right. So let's go to the Truth-O-Meter. One conservative group or many of them, actually, are portraying him, Sunstein, as a radical on animal rights. Someone who called for banning hunting, right? And Internet free speech.

Wayne LaPierre, the executive vice president of the National Rifle Association, recently stated that Sunstein, quote, "Wants to give legal standing to animals so they can sue you for eating meat."

How did the Truth-O-Meter rate that one?

ADAIR: This one gets a half true on the Truth-O-Meter. LaPierre is correct that Sunstein has, indeed, supported the idea of allowing suits on animals' behalf. But it's important to understand the context. Sunstein's point was that many animal cruelty laws are not enforced by the agencies that are supposed to enforce them. So he would allow people to bring a suit on an animal's behalf. So that one gets a half truth.

CHETRY: All right. Quite interesting.

Now here's another one that there's a chain e-mail that's circulating around, stating Barack Obama's nominee for regulatory czar has advocated a fairness doctrine for the Internet that would require links to opposing opinions. How would that work?

ADAIR: That one -- the rule would require that if you had -- if you put an opinion on the Internet you needed links to an opposing idea.

CHETRY: Right.

ADAIR: It's true that Sunstein once floated that idea in a book, but he has since said that's a bad idea and he opposes it. So that's why we gave it a half true on our Truth-O-Meter.

CHETRY: All right. Now let's go to the Obameter.

There are two some items that you've checked up on that are causing some tension between the president and conservatives. One of them, the hate crimes bill that passed in the House. It's still under consideration right now in the Senate. As a candidate, this is what Barack Obama promised to do.

Push for enactment of the Matthew Shepard Act, which expands hate crime law to include sexual orientation and other factors.

So, where does he stand on that promise? ADAIR: We rated that one a promise kept on our Obameter on Politifact.com. And it has to do with the wording of a promise. He said he would support it. He has. He has issued a strong statement of support for it. The bill has passed the House. It's now pending in the Senate. So a promise kept on that one.

CHETRY: All right.

Let's go to another controversial one. And this is a statement that he made as a candidate saying, "Throughout my career, I've been a consistent and strong supporter of reproductive justice and have consistently had a 100 percent pro-choice rating with Planned Parenthood and NARAL. I will continue to defend this right by passing the Freedom of Choice Act as president."

So where does he stand on that promise?

ADAIR: We rated that one stalled on our Obameter. And the reason is, he really acknowledge at a news conference last week. This is not his highest legislative priority, he said. And even more than that, as NARAL Pro-Choice America told us, they just don't have the votes to pass this one.

So, that one gets a stalled and I think it sort of illustrates the challenge that Obama is facing that he's got a lot of things he wants to do. And particularly on some of the social issues where they -- he may not have the votes. It's a lot harder to make some ground.

CHETRY: Right. All right. Well, thanks for keeping them honest. Bill Adair. People can check these out at politifact.com. Thanks so much.

ADAIR: Thanks for having me.

COSTELLO: Breaking news right now. Pakistani military sources telling CNN that a major offensive is happening against the Taliban in Pakistan's Swat Valley. As many as 500,000 Pakistanis could be on the run there right now.

CNN's Ivan Watson is live in Islamabad. And the Pakistani government had this peace deal with the Taliban so they could occupy a certain region within the country. Now that peace deal has completely gone bye-bye?

IVAN WATSON, CNN CORRESPONDENT: Well, Carol, that peace deal has practically been in tatters for the past two weeks ever since the Taliban made a land grab into territories that were only just a few hours drive from where I'm standing right now. And there's been fierce fighting already going on in several parts of northwest Pakistan.

Now what we've had for the past two days is some fierce clashes in the Swat Valley. That's a key Taliban stronghold where Taliban insurgents have been attacking police stations, military barracks, taking over buildings, government buildings, in the district center there. Today, the Pakistani military announced for the first time that it used war planes to carry out sorties, to carry out bombing runs, against Taliban targets in the Swat Valley. On top of that, we're hearing some pretty scary situations on the ground for the civilians there.

We spoke with a hospital superintendent who described receiving some 15 to 20 civilians who had been hit by Pakistani military helicopter air strikes over the course of the day in the Swat Valley. But he then went on to say that many of the wounded can't make it to his hospital in that region because the roads are blocked by Taliban militants. Carol?

COSTELLO: Well, I'm just wondering what Americans should make of this. Does that mean the Pakistani government has turned completely against the Taliban and will become very aggressive beyond this military offensive?

WATSON: That's what they are indicating. And for the past two weeks we really have seen a push in two areas against Taliban fighters. And now we're expecting to hear some kind of an announcement, official announcement of the launch of this operation from the Pakistani government. That's according to a senior Pakistani military source who spoke to CNN that this operation will, in fact, begin.

We do see a crackdown, but it's always possible and the military sources do tell us that if the Taliban laid down their arms if they agree to come back to the negotiating table, that it is possible to once again hammer out some kind of a deal. But they have to lay down their arms first. And we have seen time and time again that the Taliban has broken its agreements in the past -- Carol.

COSTELLO: Well, you know many Americans equate the Taliban with Al Qaeda and Osama Bin Laden. Might this be a sign that the Pakistani government is going to actively go after and try to find and ferret out Osama Bin Laden?

WATSON: Well, the Pakistani government says they've been hunting for Osama Bin Laden, that they've been hunting for al Qaeda leaders, and they've actually been handing them over, over the course of the last several years. The Taliban is a different group, though.

The Taliban is a homegrown Pakistani group. It consists largely of ethnic Pashtuns from the northwest of the country. And it does have support among the population. Part of the problem has been that many Pakistanis have been divided. They haven't known whether to side with the Taliban or side with the Pakistani government which many Pakistanis accused of being a puppet of the U.S. government.

Now, given the behavior we've seen from the Taliban over the past month, many Pakistanis have gone off the fence, Carol, and seem to be lining up behind this Pakistani military operation.

COSTELLO: We'll see and we'll await the government's official announcement later today. Ivan Watson, live from Islamabad, thanks. CHETRY: And we are just getting in some developing news right now that jobless claims, new first-time jobless claims actually unexpectedly dropped to their lowest level this year. What does that mean in the big picture? Christine Romans is going to be here to break it down for us. Also some news on productivity as well.

And it was billed as the world's best job. You get to hang out on a tropical island for six months. Coming up, we'll talk to the lucky man who beat out 34,000 applicants. It's 35 minutes past the hour.

(COMMERCIAL BREAK)

CHETRY: Thirty-eight minutes past the hour. We just got new jobless numbers minutes ago. And Christine Romans joins us now with more. So it's a bright spot. It's a bright spot, right?

ROMANS: It is. We've had a few different reports that have showed job losses are slowing. Let me be very clear. There are still a lot of jobs being lost in this economy. But those jobs lost are slowing. 601,000 jobs lost in the most recent week. Those are people filing for unemployment benefits. 601,000 people lining up for the first time for unemployment benefits.

But that is a little bit better or less worse than people were expecting. And in fact, it's the smallest number for weekly jobless claims since sometime in January. Here's the other side of that. When you look at continuing claims, the number of people, Kiran, who are continuing to get unemployment benefits, it's a record again. 6.3 million people.

So, these numbers are still showing a job situation, still very painful for an awful lot of Americans. But what we're looking for here are any signs that there's a sense that this pace of a decline is slowing down and that's what these numbers say -- Kiran.

CHETRY: All right. We're going to hold on to that. Because you know, we've wanted to see these signs as you call them the green shoots that things may be getting better.

Well, people are losing their jobs. They're seeing their savings disappear. Some of them though are fighting back by starting a new business. And next Thursday night, you can join Anderson Cooper and Ali Velshi for real solutions for people surviving tough times. It's a "CNN MONEY SUMMIT" prime-time special next Thursday night, 8:00 p.m. Eastern.

Well, it's the best thing the first lady says she's done so far since living in the White House. It's not inauguration day. It wasn't meeting the queen. It was getting to hang out with Elmo. Here's Michelle Obama on "Sesame Street" telling kids the importance of eating right and exercising.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: Hi, everyone. ELMO: Look, Mrs. Obama, what do you today on "Sesame Street"?

OBAMA: Well, first, I want to get some exercise. So, I'm going to take a walk around "Sesame Street."

ELMO: Mrs. Obama exercises, Elmo wants to exercise, too. Yes, exercise.

OBAMA: If you want your child to have healthy habits, practice healthy habits, too. Because you are your child's best role model.

ELMO: Come on, Mrs. Obama.

OBAMA: All right.

ANNOUNCER: For more information on how to encourage healthy habits in your child, visit sesamestreet.org.

(END VIDEO CLIP)

CHETRY: So, cute, meeting Elmo actually was one of our highlights of our time here as well. He has dropped by the AMERICAN...

COSTELLO: You've met Elmo. Can I touch you?

CHETRY: I didn't wash this arm since. Well, he is so adorable. He came and visited us here as well. And every time I come home from work now, my daughter goes, were you with Elmo, mommy? I said, yes.

COSTELLO: And then you have to say, no...

CHETRY: I was with John Roberts and Carol. Not impressed, the three year old. No, the funny part is, the guy that plays Elmo, he's big and...

COSTELLO: Really?

CHETRY: And you wouldn't think that voice -- yes, he's like a muscle man.

COSTELLO: We're supposed to keep that part a secret.

CHETRY: Oh, I mean, the guy who travels with Elmo, who travels around with Elmo. Elmo is Elmo.

COSTELLO: I understand.

With all the worry about flu viruses, many people are relying on hand sanitizers. But how useful are they, really? Do they really kill the virus? Dr. Sanjay Gupta will be live with us with the answer.

And life is a beach for one lucky man. We'll meet the guy who just scored the best job in the world. Caretaker of an Australian island. It's 41 minutes past. (COMMERCIAL BREAK)

(MUSIC PLAYING)

CHETRY: Forty-four minutes past the hour. Our Rob Marciano is keeping track of the weather for us. All eyes are going to be on what's going on out in California. Because they are really dealing with a mess out there with the wildfires and they need some wetter conditions. Doesn't look like they're going to get those though.

ROB MARCIANO, AMS METEOROLOGIST: Yes. It's the time of the year they get into the dry season, Kiran. So, yes, that's not going to happen. Now, we've got hot air basically in control across the west. And on top of that, the flow is such to where winds are going to be kind of offshore and then northerly and even northwesterly which for Santa Barbara, that's favored for hot, dry conditions.

So, we're going to see temperatures that could approach with 84 (ph) yesterday, which was 100 degrees. That blew out a record. We'll probably be in the upper 90s today. Relative humidity at 15 percent. Gusty winds at 35 miles an hour. And they've got this ongoing drought. So those are the issues that the firefighters are up against.

I don't suspect this pattern to change all that much. Some severe weather across parts of Alabama this morning. A couple of tornado warnings out just south and east of Montgomery. And then some showers and thunderstorms across parts of the Carolinas and some showers also again across the northeast. They'll dry out at some point, Kiran, but I'm making no promises.

CHETRY: All right. Rob, you are just the messenger. Thanks.

MARCIANO: Yes.

COSTELLO: Welcome back to AMERICAN MORNING. I'm still getting over Elmo.

CHETRY: The guy who travels with Elmo.

COSTELLO: Right.

CHETRY: Elmo's Elmo.

COSTELLO: The big guy with the high voice, who travels with Elmo.

CHETRY: Who travels with Elmo, his handler.

COSTELLO: Yes.

Are you tired of your day job?

CHETRY: Yes. Love it, please.

COSTELLO: How about living in an island off Australia? CHETRY: That wouldn't be bad either.

COSTELLO: Getting the run of a three-bedroom house with your very own pool and getting paid to do it, how about $100,000 for six months? All you have to do is blog about it and feed the fish. Not bad work if you can get it. And our next guest did. Winning a contest for the best job in the world. Ben Southall is on Hamilton Island in the Great Barrier Reef, right off the coast of California (sic), soon to be his new home. And welcome to AMERICAN MORNING.

BEN SOUTHALL, WINNER, "BEST JOB IN THE WORLD" (via telephone): Thank you very much. How are you?

COSTELLO: I'm great. You must be greater than I am.

SOUTHALL: I'm just ecstatic at the moment. It's been a very, very long time since I put in an initial application video back in January. To have the announcement made yesterday and to find out as the island caretaker is one of the best thing that ever happened to me.

COSTELLO: I just can't even imagine. You know, I want to show people a little bit about why you won. So we're going to take a look at some of your application videos. So roll it.

(LAUGHTER)

(BEGIN VIDEO CLIP)

SOUTHALL: Hi. I'm Ben, otherwise known as the adventurous, crazy, energetic one. And there's only 55 seconds left to tell you why. I love discovering new places. Last year I drove all around Africa. I crossed deserts, climbed mountains, run marathons, bungee jumped, mountain biked, scuba dive and snorkel everywhere because -- I'm practically a fish myself.

(END VIDEO CLIP)

COSTELLO: I kind of see how you won. Your enthusiasm is like astounding.

SOUTHALL: Overwhelming in that video, isn't it?

COSTELLO: It really is but you know, so many people entered videos. I mean, how did you feel when your name was chosen?

SOUTHALL: I was really quite blown away by it. There were two other really good candidates in the final 16. A guy from Korea called Ju-han (ph) and a lady from America called Callie (ph). And they were both really, really stiff competition in my mind. So, when the premier of Queensland, Anna Bligh, actually made the announcement yesterday, I was totally blown away by it and very excited for the potential it's going to offer for the next six months, really.

COSTELLO: You know, your job description -- the job description is feed the fish, clean the pool and collect the mail. And you are supposed to blog about these experiences. What in the world can you put inside of a blog about a beautiful island and those chores that you have to do?

SOUTHALL: Well, I mean, that really is the loosest sense of the world about island caretaking and what it's got to offer. It's about the 600 islands of the Great Barrier Reef. It's not just about this one Hamilton Island. This is actually a very luxury five-star resort where I'm staying at the moment. Luckily enough.

But there are other islands out there. There are backpacking resorts, there are desert islands, there are lots of coral caves out there and there's 2,900 miles of barrier reef to explore. So it's not going to be as simple as feeding fish or delivering mail. There's plenty of other things to try out there. And then every day when I get home from all the experiences, I'm going to sit down. I'm going to critically analyze what I've done and I'm going to try to sell it to the world through the power of the Internet. And that's really what my job as ambassador for Queensland is going to be.

SOUTHALL: Well, good luck to you. I'm sure you'll have great -- I'm sure you'll have great fun and of course, we'll be reading your blogs. Ben Southall, thanks for joining us.

SOUTHALL: Good to speak to you.

SOUTHALL: Say, lucky guy.

CHETRY: All right. Well, it's 49 minutes past the hour. We'll take a quick break and when we come back, Sanjay opens up his mail bag.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

CHETRY: How about that one, huh? Spring break is here and with it comes spring break. Well, this woman definitely feeling it too.

COSTELLO: I know.

CHETRY: I mean, look. Go for it, right. Shake your booty.

COSTELLO: That's right.

CHETRY: What your mama gave you. There you go. It's in the offbeat section, by the way, of cnn.com. Although I think she's pretty on beat.

Also, almost the one that got away. Bucky Dennis of Port Charlotte, Florida, didn't give up after a two-hour fight. He reeled in a 13-foot hammerhead shark. It's going to be a lot of eating of shark this summer for them. It could be a world record. The shark weighs in at 1,060 pounds.

All right. Well, it's Thursday and it means Dr. Sanjay Gupta opens up the mail bag to answer your questions. The doctor is always in. So Sanjay joins us this morning. Hey there, Sanjay.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Hey, good morning.

CHETRY: All right. Well, our first question comes from a New Yorker. Tina writes, "I recently added two tablespoons of ground flax seeds, organic ones, to my yogurt every morning. Am I wasting my time grounding flaxseed?"

GUPTA: Well, flaxseed has a lot of good properties. Ever have it, Kiran? Ever used flaxseed?

CHETRY: Yes, I used to throw the flax into my yogurt as well. It doesn't taste that great...

GUPTA: Yes, it doesn't taste too bad.

CHETRY: But it's supposed to be good for you.

GUPTA: You said bad, I said not that bad.

CHETRY: Sorry.

GUPTA: You know, the interesting thing is that you don't have to ground it yourself, Tina. Probably go one shelf over, one shelf down, is my guess, in your grocery store, that's where it is in mine. And you'll find ground flaxseed as opposed to having to grind it yourself. And most doctors will suggest that actually the ground flaxseed is better. So you are getting the good stuff.

What's so beneficial about it, it seems to be better at lowering the bad levels of cholesterol, the HDL, which is so hard to do. And also these have omega three fatty acids, which we talked so much about here on AMERICAN MORNING. Those anti-oxidants that are so good for you. Also, you may remember that when there was the all talked about hormone replacement therapy, a lot of women wrote into us saying flaxseed and flaxseed oil even was good at preventing hot flashes.

That's a little nugget to tuck away as well. So, overall, very good, about a tablespoon of ground flax seed. Again, Tina, you don't need to waste your time grounding it. You can buy it that way at your grocery store.

CHETRY: All right. Well, the next question comes from Dick. He writes, "Hand sanitizer has been recommended but the bottles say it's effective against bacteria, no mention of viruses, so what gives?"

GUPTA: Yes. You know, it's interesting, we thought about this a lot obviously -- we were down in Mexico City because we wanted -- we were trying to protect ourselves against these viruses. There's isn't a lot of data on how good hand sanitizers are against viruses. They're often alcohol-based. So, in essence if you use them a lot, they really make your hands inhospitable, if you will, to virus.

The viruses just don't want to cling to your hands. But your best bet in terms of overall data is still soap and water. I carry it around and wash my hands every time I think about it just so they stay clean.

CHETRY: All right. Sanjay, always great to see you. People should write in if they have a question because you always know the answer. Thanks for being with us this morning.

GUPTA: Right.

COSTELLO: He does.

He is one cool cat making old Internet clips new again. We'll show you how a cat on the keyboard...

We'll be back.

(COMMERCIAL BREAK)

(MUSIC PLAYING)

COSTELLO: Welcome back to the Most News in the Morning. A feline tickles the ivories, not to mention funny bones. And in the process, this feline has become quite the Internet sensation. Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): This kind of keyboard meets this kind of keyboard. That produced the latest web sensation. The keyboard cat has become a recurring theme.

UNIDENTIFIED MALE: Join us live.

MOOS: Tagged on to the end of some of the Web's classic videos.

UNIDENTIFIED MALE: The thing sucks.

MOOS: Be it Bill O'Reilly's rant or a break dancer kicks the kid. Or the TV salesman whose ladder collapses.

UNIDENTIFIED MALE: So, really, we think...

UNIDENTIFIED FEMALE: Oh, god. Harold, are you OK?

MOOS: The videos tend to be captioned. Play him off, keyboard cat.

MOOS (on camera): How is the cat?

UNIDENTIFIED MALE: The cat actually, unfortunately is dead.

MOOS (voice-over): Charlie Schmidt is an artist and inventor from Spokane, Washington, who videotaped his cat, Fatso, 20 years ago. Suddenly, people are taking his cat video and adding it to other videos.

UNIDENTIFIED MALE: Yes.

MOOS: Tagging videos with a keyboard cat somehow highlights their absurdity.

UNIDENTIFIED MALE: You want to sit down.

MOOS: For instance, a guest fainting on the air.

UNIDENTIFIED MALE: We'll be back in just a second.

MOOS: Charlie thinks the keyboard cat works especially well with news videos.

UNIDENTIFIED MALE: That's what the news is - it's sort of a frame for weird behavior.

MOOS: Like a car chase.

UNIDENTIFIED FEMALE: (INAUDIBLE) oh, my goodness.

MOOS: Keyboard cat could replace news anchors.

UNIDENTIFIED MALE: We don't need these guys necessarily. Don't tell Wolf I said that, though.

MOOS: We added a cat to this one ourselves.

MOOS (on camera): In case you're wondering how we did it. Charlie dressed his cat, Fatso, in an infant T-shirt and manipulated the cat's paws with his own hands under the T-shirt.

MOOS (voice-over): Actually, there's a cat that really does play the piano, sort of. But the keyboard cat isn't really playing. Who says cats and dogs don't get along?

It's easy to make CNN keyboard cat moments.

UNIDENTIFIED FEMALE: Nice melons, behind you there.

MOOS: We asked Charlie for his favorite keyboard cat video.

UNIDENTIFIED FEMALE: South Africa and Iraq, everywhere like, such as.

MOOS: Sometimes a cat should get your tongue.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

COSTELLO: Love that cat.

CHETRY: That's a very appropriate way for us to end today. We'll be right back here tomorrow. We hope you will be, too. Thanks so much for watching.

COSTELLO: Here's Don Lemon. Take it away.

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