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Pakistan Under Attack; Scrutinizing Wall Street Pay; Dow at 10,000; Swine Flu Questions

Aired October 16, 2009 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: We're five days away from "LATINO IN AMERICA," a comprehensive look at how Latinos are changing America. CNN's two-night event takes place Wednesday and Thursday 9:00 p.m. Eastern, and it also be simulcast. It will be in Spanish on CNN Espanol.

Four U.S. service members are dead, victims of an insurgent roadside bomb attack in southern Afghanistan. That raises the death toll for U.S. troops in Afghanistan to 25 this month.

Just across the border in Pakistan, militants have struck again in their campaign to try to destabilize the government friendly with the United States. 13 are dead in today's attack. It's just the latest we've seen in the past two weeks leaving more than 150 people dead. CNN's Reza Sayah joining us now live from Islamabad, Pakistan, with more. Reza, good morning to you once again.

REZA SAYAH, CNN CORRESPONDENT: Good morning, Heidi. No end to the violence here in Pakistan. Another suicide attack today. This time in Peshawar, the capital on the northwest frontier province. Officials say a suicide car bomber tried to race through the gates of a police station in Peshawar. Security personnel opened fire.

Moments later the explosion. Thirteen people killed. Among them three police officials and once again you had a child as part of the fatalities. Local residents there are frustrated and on edge looking for their government to somehow put an end to these attacks. Here's what one witness had to say.

Apparently we don't have that sound from that witness but what we can tell you is this attack today coming 24 hours after five separate attacks killed more than 30 people across Pakistan. The Pakistani government is once again pointing the finger at the Taliban in south Waziristan. They say they will not back down and they will continue with a much talked about, much hyped ground offensive targeting south Waziristan, and the Taliban.

And we can tell you about three hours ago CNN has confirmed that Pakistan's prime minister has called for the army chief to brief all political leaders on the security situation. We spoke to the prime minister's office. They said they are discussing the ground offensive in south Waziristan but they have yet to reveal a date when it will be launched. Heidi.

COLLINS: All right. Understood. Reza Sayah for us live from Islamabad, Pakistan. Thanks, Reza. And the United States is pledging $7.5 billion in new aid for Pakistan over five years. President Obama signed the legislation yesterday. A statement from the White House says the money is meant to improve living conditions, promote democracy and combat extremism that threatens both Pakistan and the U.S.

In Washington, Pakistan's foreign minister said the aid package was an important step forward in the relationship between the countries but some politicians in Pakistan believe the U.S. is trying to manipulate the country's civilian and military affairs.

The rising death toll in the political crisis brought on by the rising death tolls and political crisis also brought on by a fraud plagued election. That's the backdrop as President Obama reviews his Afghanistan war strategy and considers whether to send more troops. Last hour I talked with former joint chiefs chairman, General Richard Myers.

(BEGIN VIDEO CLIP)

GEN. RICHARD MYERS (RET.), FMR. CHMN., JOINT CHIEFS OF STAFF: It's really important to think about stability and a stable democratic government in Pakistan given that they have a fairly good nuclear arsenal and a lot of extremists that have been in Pakistan that stayed in the shadows primarily but recently have taken on government forces and they have been fairly close to Islamabad within 70 miles.

People can go back to the early part of this decade when a lot of the Al Qaeda leadership was found in the Pakistani cities with the help of Pakistani officials. So there's always that threat to the Pakistani leadership from these violent extremists. And I think it's something that needs to be addressed and hopefully the aid will help them address that.

(END VIDEO CLIP)

COLLINS: It's just one of the issues that President Obama likely will be talking about when he holds his sixth meeting next week with his national security team and considers a new Afghanistan strategy.

Well, we always say what a difference a day makes. We are looking at an open here -- the stock market down by triple digits now almost 120. 120 off the mark there. Dow Jones industrial average now resting below that 10,000 mark that we've been having so much fun with. 9,941. We'll continue to watch those numbers.

At the same time, Bank of America CEO Ken Lewis will not get any pay this year but he's an exception to the rule. This week some financial firms are reporting billion dollar profits and that could mean fat paychecks on Wall Street. CNNMoney.com Poppy Harlow is in New York now with more on this. So Poppy, what are you hearing?

POPPY HARLOW, CNNMONEY.COM: The headlines really coming out last night. Ken Lewis agreeing to pay back all of his earnings this year. That's over $1 million. That as this morning his bank, Bank of America, reports a $2.2 billion quarterly loss but Bank of America has to pay back millions in TARP money still.

So Ken Lewis' compensation and that at the bank is subject to the oversight of President Obama's pay czar. But when you look at the number of its competitors Morgan Stanley, Goldman Sachs, JPMorgan Chase, they have all paid back their TARP money. So the compensation for their employees is not subject to any restrictions. So I sat down with some key CEOs this week of those banks asking them what do you have to say about compensation? How much is fair?

Take a look at this. One man I talked to, John Mack, the head of Morgan Stanley, said, "Listen, we made mistakes in the past. Namely that our compensation was too short-term. It wasn't forward looking. It wasn't long-term enough. We are changing that. We are initiating claw backs where if too much risk is taken, down the road up to three years, we can take some of that employee compensation back."

So, Heidi, things are changing on Wall Street. But just this morning I asked Lloyd Blankfein, the CEO of Goldman Sachs. That firm has been under a lot of scrutiny on the public relations front in terms of its compensation, what he has to say about compensation, what's fair, what really matters. Here's how he answered that question.

(BEGIN VIDEO CLIP)

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS: We're going to have to get at the compensation system more aligned and, of course, whatever system we had in place which I thought was pretty good, we're going to tighten up. So, if you ask me if I'm going to change it, would I have changed it earlier? Had I had this kind of wisdom that I have now, of course, I would have.

So the answer is there's always room for -- there's obviously room for changes. But again, I think this focus on compensation, look the incentive system matters. I can insent you to walk from that side of the room to this side of the room. I can insent you to do something you otherwise wouldn't do if I applied enough pressure on it and made the incentive stronger, stronger, stronger.

But I can't through the use of well applied incentives make a person smarter. I can't do that. At the end of the day, the failure here, the key failure, and not the only one but if I had to focus on a key failure, it was the failure of risk management.

(END VIDEO CLIP)

HARLOW: That's a very good point. A lack of risk management leading to this crisis, Heidi. We'll see how it is managed moving forward. But very interesting to hear from the men that are finally speaking at the helms of these banks about pay on Wall Street.

COLLINS: Yes. Really interesting. Obviously, it's been a very tough issue because how do you attract the talent and then if you're not compensating well and also the beginning of all of this a lot of the reasons why some of these banks didn't want the governments to get involved is because then they would be in charge of that compensation so, so many issues.

HARLOW: Yes.

COLLINS: What are they talking about now as far as compensation this year?

HARLOW: Sure, you make a great point. Jamie Dimon, the head of JPMorgan Chase told me yesterday, listen, we still have to attract top talent to make money for this firm, to benefit our shareholders and do business with the American public where a lot of people bank with JP Morgan Chase.

However, you've got an issue with the numbers, Heidi. The "Wall Street Journal" coming out this week reporting major financial firms on Wall Street that almost collapsed a year ago were on track to pay employees, a record $140 billion. By the calculation done by "The Wall Street Journal," Goldman Sachs compensation may, may I should say, double this year to $21.8 billion for all of its employees in total.

To be fair here, Heidi, this firm reported a multibillion dollar profit this week. They are benefiting their shareholders. They play a key role in the U.S. financial system. A lot of people don't understand what Goldman Sachs does as Lloyd Blankfein, the head said today. They do play a key role in the system. So to be fair we should say that. We'll be watching these numbers, Heidi. But people speaking out on this finally.

COLLINS: Yes. Absolutely. All right. Very interesting. Poppy Harlow, thank you.

HARLOW: You're welcome.

COLLINS: And we are talking about the markets on the blog this morning. Not compensation but the markets. We want to know if you are jumping back into play now or if you're still staying on the sidelines. Go to cnn.com/heidi and let us know.

Rob Marciano standing by in the severe weather center. Today we're talking snow, cold, all kinds of stuff out there.

ROB MARCIANO, AMS METEOROLOGIST: Yes, it's nasty...

COLLINS: I couldn't think of the meteorological term.

MARCIANO: No, you know, there are so many disgusting descriptions for the weather that's happening really across much of the East Coast. It's hard to put into words.

Actually, here's a live shot for you of Boston. WCVB. You're seeing some rain right now. It will taper off. You got some wind. Then it will all come back. Kind of a one, two punch. We'll explain that in just a second. But Boston will see a fair amount of it. But check out some of the snowfall. This is in upstate New York, south of Buffalo. You know, three years ago, they had a nasty snowstorm in October and the problem with October snowstorms is that it accumulates on the trees which have leaves on them. That weighs even more and will take down some tree limbs which will take down the power lines. Already we've seen three to six inches of snowfall in some spots. Stormstown (ph), Pennsylvania, that's near State College, they had received six inches of snow so far and it seems to want to keep coming down.

The coastal section now, the rain and/or snow is beginning to come to an end. But again, we're going to be looking at a scenario where it's a one storm that's coming now, kind of exiting. It's going to move out and then the next piece of energy kind of comes in and that will create some wind and some coastal flooding for the Jersey coastline, the Delmarva, parts of Long Island and also Cape Cod.

And again, four to 12 inches of snow potentially before this is all done around about tomorrow morning in through tomorrow afternoon and that's when we're going to start to see some relief. If that makes you cold, just remember it's still hurricane season. And we had this little guy pop up here in the last day and a half. 65 miles an hour is this puppy.

There's the center of the low right there. And it's starting to get a little bit more organized heading up toward the northwest at about nine miles an hour. It will become a hurricane. Its name is Rick. We have a very colorful storm like personality among the anchor ranks here at CNN named Rick as you know, Heidi.

COLLINS: We do?

MARCIANO: And this forecast is to be a major storm and potentially hit the Baja of California, that will be Mexico by next week. We'll keep an eye on that plus this coastal storm which is more winter like than tropic across the northeast.

COLLINS: Certainly a lot going on. That's why there's no meteorological term for all of it combined.

MARCIANO: It's just lots of stuff.

COLLINS: Glad to know. All right. Rob, thank you.

MARCIANO: You bet.

COLLINS: So what's behind the Dow's drive back to 10,000 territory? It's not where it is today, of course, but there is a hint. Experts say it's not you.

(COMMERCIAL BREAK)

COLLINS: Individual investors may be feeling pretty good about the Dow's rise back to 10,000 yesterday and the day before but are they feeling secure enough to help the rally keep going? As you can see right there, the Dow Jones industrial average is down by 108 points right now. Only been trading for about 45 minutes or so. So who knows how it's going to close but certainly off the mark at the open any way.

And joining us now, the bow tie brain of all money matters. Peter Morici from the university of Maryland this morning. I do think this is really interesting, Peter, to talk about who is actually getting in on the action. Again, you know, we're not at 10,000 now. Does that have anything to do with the fact that it's really not the individual investors out there? They haven't bought in just yet?

PETER MORICI, UNIVERSITY OF MARYLAND: Well, individual investors have been quite frightened to buy in and they missed out on quite a bit. I mean, we've gained back about half of what we've lost during the recession. But it's all been institutional investors. It hasn't been individual investors.

So I think individual investors have to ask themselves or ask us, you know, what would it take to get it back all the way to 14,000 again? And the answer is we have to have a sustained economic recovery. One that lasts into 2011 and beyond and not a double dip.

COLLINS: OK. So how do you get that? I mean, obviously as you mentioned and it's worth talking about the markets since March have gone up like 54 percent but when we look at where we were before as you say, we've only gained half. So why does it matter who is actually making those numbers move?

MORICI: Well, I think we don't want individual investors to miss out. Because of their (INAUDIBLE). A lot of them took big hits in those accounts and then they shifted into fix income vehicles where they get, you know, three percent, four percent, five percent, depending on the vintage of the purchases and they're missing out on the opportunity to get all back what they lost.

A lot of folks their (INAUDIBLE) are worth less than what they originally contributed. So it is really unfortunate that people engaged in market timing and lost faith. My feeling is now the best thing to do is to dollar cost average back in. Put some in each month. I mean, I'm a regular guy. I'm a professor with a little bit of income and that's what I do. I buy a certain amount each month whether the Dow is up or down, standing still or standing on its head.

COLLINS: Yes, are people just scared? I mean, when is it? Is there a certain time that they can look at these markets and they can look at the percentages and the increases or the decreases because obviously you can invest when it's down, too. When they should say, OK, now it's safe. Do they need to see the numbers on a rise for a certain amount of weeks or what's the key to that?

MORICI: Oh, I don't know anybody who can time the market. I don't know anybody who knows anybody who can time the market. Warren Buffett can't even time the market. He makes very good choices in terms of companies to buy and circumstances.

Now the best thing to do is to buy in on a regular basis. Just decide how much you're going to put in over what period of time and put a certain amount in on the 20th of the month or the 15th of the month or what have you. That's the best thing to do. And I would recommend for regular investors that they just get a widely diversified portfolio.

You know, get one of the funds from somebody like Vanguard or Fidelity or Schwab (ph), you know, get an index fund. USAA (ph) has got a very good index fund that has low fees and they just buy in a little bit each month. And I think over a 10 to 20-year period which is what they should be thinking about, you know, it's a retirement account, they'll do just fine.

COLLINS: Yes. It's not like Vegas going there and hitting big, you know, in one night.

MORICI: That's right.

COLLINS: All right. Not that I know anything about that. Peter Morici, thanks so much, from the University of Maryland, talking about the numbers today. In fact, we are also talking about the markets on the blog this morning. We actually asked whether you're ready to jump back into the markets or whether you are still staying on the sidelines and being cautious.

I want to read what some of you had to say. Cnn.com/heidi is the blog site. Let's go over here and take a look at what you had to say. First, from Will -- "I am. From 6500 all the way back to 10,000 -- I think we're gearing up for one the biggest bull market rallies in history and I am not going to miss out."

And next from Mitch "I lost so much of my savings that were in supposedly "safe" blue chip stocks when the market went bust that I will be keeping all of my life savings in bank CDs until I see for at least two full years that the stock market is in very good shape on a consistent basis.

All right. Some good thoughts from everybody. Cnn.com/heidi. We will continue to look at those comments.

And new developments in the deaths of two people at an Arizona retreat. Was it a tragic accident or homicide? We'll tell you what investigators are doing this morning.

(COMMERCIAL BREAK)

COLLINS: A check of our top stories now. Defense attorneys for Casey Anthony are back in court this morning. They want murder charges against the young mother dismissed. She's accused of killing her two-year-old daughter, Caylee. Anthony has pleaded not guilty saying a baby sitter kidnapped the child.

The deaths of two people in an Arizona sweat lodge are being investigated as homicides now. The sheriff says there are indications the deaths of Kirby Brown and James Shore were not accidents. Investigators are looking at the way the sweat lodge was built, the fact that people had gotten sick there before, and the medical care on site. The retreat near Sedona is owned by self-help expert James Arthur Ray.

A test vote set for next week on a bill which could be linked to health care reform. The measure would prevent a 21 percent cut in Medicare fees paid to doctors. That comes to about $247 billion. The Senate Republican leader Mitch McConnell says it's a way to conceal costs by taking all that money out of the larger health care bill.

More questions and concerns about the swine flu and the vaccine. We're answering your e-mails in a moment.

(COMMERCIAL BREAK)

COLLINS: The FDA is warning against buying H1N1 flu drugs online. They say the online drugs they tested aren't approved for sale in the U.S and may not be safe. The FDA also says the drugs probably wouldn't arrive in time to help people who are already exposed to the virus.

Well, many of you still have questions and concerns about swine flu even as the H1N1 vaccine makes its way to doctor's offices across the country and since it is "Empower me Friday," CNN's senior medical correspondent Elizabeth Cohen is joining us now to take some of our e-mails, clear up some of the confusion and she is here now. Good morning to you.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Good morning.

COLLINS: Let's go ahead and look at this first one from Alan and put it on the screen. He says, "I keep hearing statistics on how many children have died this year from the H1N1 fly, are these statistics any worse that death from seasonal flu?"

Great question.

COHEN: It is a great question. So we did some research in order to get to that answer. And let's take a look at these numbers. So far since April, which is when swine flu first appeared, there have been 71 children dying from H1N1 flu.

I'm sorry. I did that backwards. 81 children have died from H1N1 flu. If you look at seasonal flu, which if you look at the average over the three recent flu seasons, there's been 71 deaths per season. So as you can see, we've already had more deaths from H1N1 flu and we haven't really begun the flu season yet. So as you can see, it does appear to be more deadly.

COLLINS: Yes, I mean...

COHEN: Well the flu season hasn't even started yet.

COLLINS: Right.

COHEN: That's the thing. It's only October. So, it will be interesting to see what those numbers are as the season progresses.

COLLINS: Yes, definitely. I want to get to this other question too from the Pena family "My sons are ages 17, 20 and 23. They are healthy and have never received any flu shots, should they get vaccinated with H1N1 or will the regular flu shot be enough?"

COHEN: Well, the Centers for Disease Control is very clear about this. Those children or those young people should indeed get vaccinated for swine flu. They fall into what's considered the high- risk category.

COLLINS: Right.

COHEN: The seasonal flu shot is going to do nothing against H1N1 flu. Nothing. It's not the right strain. Let's take a look at everyone while we're talking about people who ought to get the shot or the vaccine.

Let's take a look at the group. Pregnant women are recommended to get the H1N1 flu vaccine, also anyone ages six months to 24 years old which is where these three young people fall. Caretakers of babies under the age of six months are also supposed to get a vaccine. Health care workers and anyone ages 25 to 64 that has an underlying health problem.

COLLINS: OK. So the next one is interesting too from Jason. He wants to know this -- "Can a patient get both flu vaccines? Meaning the seasonal flu and the H1N1 at the same time or is there a need to stagger those vaccines?"

COHEN: This is a great question. Because I'm getting this from a lot of my friends. And here's the answer. It's very simple. If you're getting shots, actual injections, you can get them at the same time. That's fine. If you're getting the nasal spray, it's a live vaccine. Stagger it. Don't get them at the same time. Leave a gap.

COLLINS: Doesn't it decrease the strength somehow of the other vaccine?

COHEN: I think the fear is that there may be some complications because it's different. It's not an attenuated, it's not a killed virus. It's a live virus. So you're best off spacing those out.

COLLINS: And is that why some people get sick when they get these flu vaccines that have the live bacteria in them? Because sometimes, you know, people are reporting I don't want to get it because it makes me get sick.

COHEN: Right. I mean, the side effects that have been reported are pretty mild.

COLLINS: Sure.

COHEN: Things like maybe you get a little bit of headache or a little bit of a fever. Now, was it from the vaccine? Who knows. Maybe you were about to get sick any how. It's really hard to pinpoint when you get sick whether it was because of that vaccine you just got or you were going to get sick anyhow.

COLLINS: Yes, exactly. All right. Still a lot of questions out there. COHEN: That's right.

COLLINS: Where do people send them again?

COHEN: Well, actually, where you want to find the answers and then we'll talk about questions. If you want to find answers go to cnn.com/empoweredpatient. We have our top ten questions on H1N1. So, obviously there's way more than, Heidi and I just did. And if you have questions, you can send them to empoweredpatient@cnn.com.

COLLINS: All right. Very good. Thanks, Elizabeth.

COHEN: Thank you.

COLLINS: Appreciate that.

Family project. Dig out of a $123,000 debt. You'll see how they did it in a moment.

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.

COLLINS: On Wall Street, the Dow has closed above the 10,000 mark for two days in a row, but a three-peat looks, at least right now, anyway, like it is in jeopardy. That is because there is new evidence people are having problems paying their bills. One of the reasons, anyway.

Susan Lisovicz at the New York Stock Exchange with more details on this. Hi there, Susan. There's a reason I didn't bring that hat today.

LISOVICZ: Yes. Not looking good. Not looking good in the first hour of trading. Good reason why.

The market is very short0focused at this time when you get earnings. It sort of got the attention span of a four-year-old, OK? Doesn't look at anything but what's before it, and what's before it are a couple big disappointments.

Understandably. Bank of America lost more than $2 billion in three months. A year ago at this time, B of A was making money. What happened? Quite simply, $10 billion in loan losses. Most of it is in mortgages, credit card units and very telling, B of A boosted its loan loss reserves to $12 billion in a sign that expects people to keep missing payments.

So. that's a problem. Also, GE, which is often considered a good bellwether for the overall U.S. economy, its quarterly profit fell nearly 45 percent. GE -- a lot of people don't realize this -- has a huge exposure to finances with mortgages, credit cards, because it has GE capital.

A combination of those two stocks are each down at least 4 percent, and you're seeing a big, broad-based sell-off today. No Dow, not 10,000 right now.

COLLINS: No. We have some time, but when it starts like that, you have to wonder right away. All right. Susan Lisovicz, we'll talk later. Thank you.

LISOVICZ: You're welcome.

COLLINS: As you probably know, getting into debt is not hard to do, but digging yourself out of $123,000 worth of debt in less than five years, that can't be done. Right? Well, wrong. One family in Wisconsin proved it can be done. And CNN personal finace editor Gerri Willis is here now with their story.

Gerri, good morning to you. Tell us how they did it. Where did they start?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, I have to tell you, the Hildebrandts wracked up this debt over 16 years. But instead of declaring bankruptcy, the family decided to pay it off and it meant buying everything generic. They didn't even have lettuce for a year. The said a carb diet is cheaper.

Here's what else they did. The Hildebrandts saved 70 bucks a month by doing their own car repairs. Two hundred and fifty by stretching leftovers and eating dehydrated hash browns. They saved $150 a month by buying at thrift stores. Two hundred by cutting their own hair. They stopped CD and DVD purchases. It was just the basics for them, plus Russ Hildebrandt got a second job working overnight in addition to his full-time day job as a chemist.

Kandy (ph) said she had to help her husband keep on going.

(BEGIN VIDEO CLIP)

KANDY HILDEBRANDT, PAID OF $123,000 IN DEBT: There were times when he was so tired that, you know, there were many nights before he would go to that grocery store that I would have to rub his legs 15, 20 minutes. And he'll say that that's what got him through. It was just enough to rejuvenate him because I know there were nights he said he was so tired he literally had to will one foot in front of the other at the grocery store because he was so exhausted.

(END VIDEO CLIP)

WILLIS: But they made it, Heidi. And now they even own their own home. The lesson here is you can pay down even large amounts of personal debt. If you need help, do what the Hildebrandts did. Contact the National Foundation for Credit Counselors at nfcc.org or call 1-800-388-2227.

COLLINS: Gerri, the story is a very good one. But there will be people who ask why didn't they just declare bankruptcy? The word is very, very scary, but it's not the end of the world when do you that.

WILLIS: No, it's not. You know what they told me, Heidi? They said it would be a bad example for their kids. They have twin daughters and a little boy, and they said they just take the wrong message out of that and couldn't bring themselves to file bankruptcy. I'll have the whole story for you tomorrow at 9:30 a.m. "ON YOUR BOTTOM LINE." Join us then.

COLLINS: OK. Very good. We will. Gerri Willis, thank you.

WILLIS: My pleasure.

COLLINS: There is word this morning of more U.S. troop deaths in Afghanistan. The military says four Americans are dead after a roadside bombing in southern Afghanistan yesterday. Two were killed in the attack and two died later from their wounds.

Afghan voters will soon find out if they'll be heading back to the polls for a runoff election. A U.N.-backed panel investigating fraud charges in the country's presidential election is wrapping up its work now. Afghanistan's ambassador to the U.S. said it's likely officials will throw out enough disputed votes to force Hamid Karzai into a runoff. An announcement could come as early as tonight.

Thirteen people are dead in Afghanistan in another militant suicide attack. This one targeted a police station in the volatile northwest frontier. The bombing is just one of several we've seen this month, many targeting the Pakistani government. More than 150,000 people are dead. Meanwhile, the Pakistani military stepping up its own bombings in Taliban strong holds near the border with Afghanistan.

The White House watching the moves by Pakistan's government very closely. Their battle against the Taliban and other militant fighters could have an important affect on U.S. operations across the border in Afghanistan. CNN Pentagon correspondent Barbara Starr with the story.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): The nearly daily chaos is raising more questions about the ability of Pakistan's security forces to maintain control.

The last two weeks of attacks are largely the work of an increasingly powerful Taliban organization. It's all impacting the White House discussion about how to proceed with the war.

BRUCE RIDEL, BROOKINGS INSTITUTION: One should have no doubt about the relationship between al Qaeda and the Pakistani Taliban.

STARR: Experts say as the White House struggles to decide whether the priority is fighting al Qaeda or the Taliban, it must first understand it's facing a web of interconnected networks in Pakistan.

JOHN NAGL, CENTER FOR A NEW AMERICAN SECURITY: It's impossible, I think, to separate the Taliban in Afghanistan from the Taliban in Pakistan. They're both gaining strength and they present a real threat to the security of this entire region, this nuclear armed region. So it's enormously worrying. STARR: Remember Mullah Omar? The one-eyed Taliban leader who fled the U.S. invasion of Afghanistan for Pakistan? He's back, big time.

RIDEL: Mullah Omar has presided over one of the most remarkable military recoveries in our time. An organization which was thoroughly defeated and discredited at the end of 2001 is now, in its mind, on the eve of victory.

STARR: Another Taliban faction known as the TTP also growing in strength. One senior U.S. official says recent intelligence suggests the group aims to launch attacks beyond Pakistan. Perhaps even sending suicide bombers abroad.

The Taliban factions are benefiting from al Qaeda's inability to launch significant attacks. Financial backers are seeing a surging Taliban and an al Qaeda on the run.

RIDEL: Donors, particularly those rich donors in the Persian Gulf states, have been sending their money to those who have been successful in the business of terrorism.

STARR: U.S. officials believe the latest wave of violence is continuing for two reasons. The Taliban want to challenge the Pakistani military's offensive into South Wisterizan (ph), an insurgent stronghold, and their ultimate goal? To destabilize the government of Pakistan.

Barbara Starr, CNN, Washington.

(END VIDEOTAPE)

COLLINS: Also want to let you know, many of these topics will be discussed in an interview. Our Jill Dougherty will talk with Secretary of State Hillary Clinton. That will come your way today at 6:00 p.m. in "THE SITUATION ROOM."

Some nasty weather to watch out for. Our Rob Marciano keeping an eye on the worsening conditions. What's going on, Rob?

ROB MARCIANO, AMS METEOROLOGIST: We've already had half a foot of snow in some parts of Pennsylvania. Record breaking snowstorm. In this time of year, that can be dangerous because there are still leaves on the trees, and plus we got a bit of wind. We'll talk about that in just a few minutes. Stay with us.

(COMMERCIAL BREAK)

COLLINS: Checking our top stories now. A Colorado family is speaking out this morning about the story of that runaway balloon. It really caught everybody's attention. This is home video now as the helium balloon somehow first got free of its tether and then began to drift away.

The anxious parents soon suspected their six-year-old son was inside. The balloon floated thousands of feet above ground, all the while playing out on national TV for more than two hours. Finally, the balloon landed softly in an open field. It turns out the boy, Falcon Heene, was at home all along hiding in the rafters of his family's garage. The parents talked to John Roberts on CNN's "AMERICAN MORNING."

(BEGIN VIDEO CLIP)

JOHN ROBERTS, CNN ANCHOR: When you got the word that wasn't inside, what went through your mind?

RICHARD HEENE, FT. COLLINS, COLORADO: It was the worst thing I ever heard in my life because all that I could think of was that perhaps he had fallen out.

ROBERTS: Right.

HEENE: And somebody that was here suggested maybe he jumped out. So, we were kind of hopeful maybe that might have occurred...

ROBERTS: I mean, I can imagine as a parent myself, you fear for your child's safety and then he's not there and he's not there, and it's like, "Oh my God, what happened?". And then where is he? And you said that you were sitting around, you told our Wolf Blitzer last night you were sitting around on the couch, obviously trying to figure out where he might be, and suddenly he came walking in, Mayumi?

MAYUMI HEENE, FT. COLLINS, COLORADO: Yes. He walked in by himself. It felt like from nowhere. When I first saw him, I couldn't even believe -- I couldn't comprehend right away. And next moment, I just jumped and called his name and screamed and cry, and I just enjoyed that moment to see him again.

(END VIDEO CLIP)

COLLINS: There has been talk this story was all created by the family, but Colorado sheriff's investigators don't think so. Still, they are considering interviewing the family again.

Coast Guard crews are searching for a missing Air Force fighter pilot off the coast near Charleston, South Carolina. Two F-16s collided late last night during a training exercise. The other pilot managed to land his jet safely. The planes are based at Shaw Air Force base.

Buildings swayed and people ran into the streets as yet another earthquake hit Indonesia. So far, no injuries and only minor damage reported. It had a magnitude of 6.1 and was centered west of the island of Java. Now, that's the same general area of the quake that hit September 30th. One day after that, a less damaging quake hit. It's believed more than 1,000 people were killed in both of those quakes on Sumatra Island.

Rob Marciano now in the Severe Weather Center. Boy, not the best travel day, huh, if you're going on an airplane anywhere?

(WEATHER REPORT) COLLINS: I'm getting a view from where I sit at the anchor desk right at the people who are -- I'm not sure what they're doing. They're all fine and laughing.

(WEATHER REPORT)

COLLINS: Yes. (INAUDIBLE) I can't get the reporter to tell me. There's a lot of them over there. They won't tell me what's happening. Everybody is fine. Rob, thank you.

MARCIANO: See you in a bit.

COLLINS: School, work and care giving, all on the plate of one Latina teenager. Her struggle to do it all and not become a statistic.

(COMMERCIAL BREAK)

COLLINS: Latinos in America, a growing population with a growing influence on American life. CNN's Soledad O'Brien takes an in-depth look at their diverse experiences, including this profile of a young Latina in Los Angeles who is determined to succeed where others have not.

(BEGIN VIDEOTAPE)

SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT (voice-over): Cindy Garcia's a senior at Fremont High School in South L.A. It's severely overcrowded, almost entirely Latino, and 70 percent of its students don't graduate on time.

CINDY GARCIA, HIGH SCHOOL SENIOR: I don't want to fall into the 70 percent. No. I know I deserve better than that.

O'BRIEN: It's not going to be easy. Cindy is more than a semester behind. And there's just three months until graduation.

(on camera): What happened your ninth grade year?

GARCIA: I guess I didn't find it important. Like, I didn't even care and...

O'BRIEN: Did you go?

GARCIA: To school?

O'BRIEN: Yes.

GARCIA: No, I went -- I would go...

O'BRIEN: You cut every day?

GARCIA: Yes.

O'BRIEN: Every day?

GARCIA: Kind of, yes.

O'BRIEN (voice-over): Now, she's trying to make up for lost time, but family often trumps school. Cindy lives in this three- bedroom house with her mother, two sisters, baby brother and a 2 1/2- year-old niece.

GARCIA: Close your eyes.

O'BRIEN: She's constantly pulled out of school to take care of the kids and help out at the family store, which barely makes ends meet.

GARCIA: I'll check if there's some more in the back, because I don't think so.

O'BRIEN: Cindy also acts as a translator for her mother, Onelia, who speaks no English. She's been sick and eats needs help navigating doctors' appointments.

(on camera): Do you ever want to say to her, I need to be in school?

GARCIA: Yes, I do.

O'BRIEN: And do you say that?

GARCIA: No.

O'BRIEN: No. Why not?

GARCIA: Because I'm the only one that can help her sometimes, you know? So, I can't -- I mean, if it was something else, like, go to the store with me, then OK. But, like, if this is very important so, I kind of have to be there.

O'BRIEN: It's a lot of responsibility. You're 17.

GARCIA: I guess, yes.

(END VIDEOTAPE)

COLLINS: Next week only on CNN, "LATINO IN AMERICA," a comprehensive look at how Latinos are changing America, reshaping politics, business, schools, churches, and neighborhoods. "LATINO IN AMERICA." See it here on CNN.

(COMMERCIAL BREAK)

COLLINS: A new strategy for Afghanistan. Secretary of State Hillary Clinton is talking about it. She actually sat down with our foreign affairs correspondent, Jill Dougherty, an exclusive interview. Jill is joining us now from the State Department. Good morning to you, Jill. What did the secretary have to say?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Heidi, one of the things that I wanted to get from her was some description of what's going on behind the scenes in those deliberations. What is President Obama doing? How is he questioning people? How is it all going? Because apparently, she hasn't really made her final case. Has she made up her mind?

So, here's some of what she said about those backroom discussions.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: This is the way government should work. But given, you know, the political and media environment in which we live, it's understandable people want us to walk out of a meeting where we may have focused on the military side or we may have focused on the governmental side and say, "OK, fine, what have you guys decided?".

And I just think that it's to the president's credit that he has had patience and persistence to force the process without responding prematurely.

(END VIDEO CLIP)

DOUGHERTY: But of course, you know, the reports even today that four more American troops died, so the pressure is on, Heidi, definitely.

COLLINS: (OFF-MIKE) ... we spoke with the former joint chiefs chairman, General Richard Myers about the situation of this possible runoff election in Afghanistan and how important that would be to training up forces in Afghanistan -- Afghan forces who would at some point hopefully feel a loyalty, if you would, to their government. What are chances or did she mention this possible runoff election?

DOUGHERTY: Certainly. I asked her about that because after all, the electoral commission is just about to come out with its report, and it's expected, according to the ambassador to the United States from Afghanistan, to order a runoff.

She said that if there's a runoff, Karzai -- President Hamid Karzai -- is likely to win. She said that the elections could be carried out in a matter of weeks. And that's important, because some people were saying, "What if it slips? What if it slips until the spring? What happens?"

But she says it could be over in the next few weeks. And then, finally, on Hamid Karzai himself, there are a lot of allegations about corruption, fraud during this election. And she said that he hasn't delivered for eight years, going back even to the Bush administration and they have to set higher standards for him. Heidi?

COLLINS: All right. We'll have more of the interview with Secretary of State Hillary Clinton coming up, 6:00 p.m. "THE SITUATION ROOM." Jill Dougherty, thanks so much. Live from the State Department today.

Meanwhile, have a great weekend, everybody. I'm Heidi Collins. CNN NEWSROOM continues now with Tony Harris.