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American Morning

Update on Chaos in Egypt; 30 Second Ad Sell on Super Bowl; Inside the Financial Crisis; Traces of Rocket Fuel Found in Tap Water

Aired February 03, 2011 - 07:00   ET

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

KIRAN CHETRY, CNN ANCHOR: And good morning to you. Once again, thanks for being with us on this Thursday, it's February 3rd, on this AMERICAN MORNING. I'm Kiran Chetry.

T.J. HOLMES, CNN ANCHOR: And hello to you all. I'm T.J. Holmes. Things changed in Egypt yesterday. History continues to unfold after a night when, quote, "all hell broke loose." That is the report we were getting from many people on the ground. This is a live picture of what's happening today. You see a bit of barricade there on the ground. You still have pro-Mubarak and anti-Mubarak forces collected in Tahrir Square with a night of violence. Will this be another day of violence, some are asking?

CHETRY: And also, it was -- as T.J. said, a night of violence that began around 10:15 Eastern last night when the sounds of gunfire filled the air again in Tahrir Square. There were reports of shootings, people throwing Molotov cocktails, all of this unrest taking place throughout the night.

HOLMES: And 45 minutes after that, at 11:00 eastern time, a sobering assessment of President Obama's national security officials, saying the situation in Egypt could turn, quote, "really ugly, and the next 24 to 48 hours will be critical."

CHETRY: And then at 12:20 a.m. eastern time, Egyptian television began reporting on deaths, that five people were killed and another 829 hurt in yesterday's clashes between pro and anti-government demonstrators. More than 200 of those injuries occurred in just one hour of fighting.

And then just about three hours ago, 4:03 a.m. eastern time, armed Egyptian soldiers began forming a line between the two sides in an apparent attempt to keep the peace.

Let's talk to Frederik Pleitgen who is live from Cairo.

Hello to you. The soldiers are trying to keep the peace. Are they doing so far today?

FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: All right, T.J. But it seemed for a short while that they might be able to do that. Right now, what I'm seeing from my vantage point, apparently, the two sides are sort of pelting rocks at each other ago. It actually seemed a while ago that people from both sides seemed to be talking to each other. All of a sudden, a scuffle erupted and now they're back entrenched in their lines. There are soldiers that seem to go in between this. And that seemed to work for a while. However, right now, it appears that both sides, as I say again, throwing rocks at each other and the lines are entrenched as they ever were.

And I was actually, T.J., just inside of Tahrir Square. It's an amazing scene that people are down there. There are so many people wounded in there. There are makeshift clinics that people are being treated. A lot of them from head wounds from getting rocks against their heads.

One doctor that I spoke to, T.J., he told me during the night they were treating a lot of people for gunshot wounds as well. They were saying pro-Mubarak protesters were shooting at people inside the square. Of course, we can't verify that, but we did see people who are apparently treated for gunshot wounds.

HOLMES: Frederik, one more thing, can you help us as we look at this pictures for our viewers, did you get any understanding of what objectives are? Their fortifying positions like traditional old- school warfare and they're battling over a piece of land. What are the hoping to do by fortifying their positions?

PLEITGEN: Well, I mean, it's a very important piece of land, of course, especially for the anti-Mubarak protesters because this is basically the focal point and has been. It seems like they felt like the pro-Mubarak protesters were trying to drag them out of there and they say they're defending their land. So that's an important place.

Now the pro-Mubarak protesters, it's hard to gauge what their objectives are, although it is announced on state TV, which is calling them pro-stability protesters. And apparently their objective is to say that Hosni Mubarak should stay in office until the end of his term and not step down immediately. So that's apparently what they're protesting for.

Right now obviously you these sides are entrenched. I have to say, from talking to guys on the front lines, that scaffolding that you see right there, that's where I was, the morale is pretty high on that side of the square.

HOLMES: Frederik Pleitgen for us in Cairo. We'll check in again, Frederik.

CHETRY: No one is safe on the streets of Cairo right now, not even journal efforts trying to tell the story not be a part of it. Many of them attacked by pro-government demonstrators, as they described it, in Cairo. Our own Anderson Cooper was among them. Here's a look.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, CNN HOST, "ANDERSON COOPER 360": I was shooting this video on my flip camera so as not to attract too much attention. Suddenly, a man jumped out of the crowd and tried to grab Neil's camera. That's when all hell broke loose. We only had about another block to go when a guy jumped out and punched me in the head.

COOPER (on camera): I've been hit now like ten times.

UNIDENTIFIED MALE: Are you all right?

COOPER: Yep. The Egyptian soldiers -- the Egyptian soldiers are doing nothing.

(END VIDEOTAPE)

CHETRY: Eventually, Anderson and his crew got out safely. But there were also frightening moments yesterday for CNN reporter Hala Gorani. She was pinned against a wall and nearly got trampled, ended up a protester actually came to her rescue, pulling her out of harm's way as well.

So the State Department is now warning Americans to get out of Egypt as soon as you can. It was a tweet sent out overnight. "U.S. citizens wishing to depart on a government flight should proceed to the airport as soon as possible after the morning curfew ends." Again, this coming out from a tweet at the State Department.

Our Jill Dougherty is live there today. What the plan and have they had success in rounding up the Americans who want to come back home?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: Well the most important thing is they want people to still respect the curfew. Now at that curfew is up, they want people ASAP to head to the airport who do want to get out. Now there are about 3,000 people, American citizens, who have asked to get out, about 1,900 are out. So they have about another 1,000 or so to go.

They've been putting on flights daily, usually about four charter flights, taking people out of Cairo and going on to the European locations. And the new wrinkle on this is that they are allowing an American who might have a passport that expired even up to ten years ago to come to the airport even with an expired passport, and the consular officials will help them and they can get out.

So there really is a sense of urgency here. There are 50,000 Americans, but certainly, as you can tell, not all of them want to get out. And a lot of them live there and intend are staying.

And also an important thing, Kiran, is that they have commercial flights getting out of Cairo. So there are people who can simply fly out. It's not as if they can't get out if they can pay for it. But some people may not be able to do that and do need help and they can contact the embassy or simply go to the airport and get some help.

CHETRY: And, Jill, what is the assessment from the state about how dangerous it is to be in Egypt in other parts, not obviously in Tahrir Square, in Cairo, where we're seeing a lot of these pictures?

DOUGHERTY: It seems to be concentrated in Cairo. That's the main problem. In Alexandria, you can get -- there have been demonstrations. But that said they really want anyone who fears for any type of security issue to make their way to the airport, should they want to get out of the country. That's what they are there for.

CHETRY: All right, Jill Dougherty for us at the State Department today, thanks so much.

HOLMES: We have seen anti-government demonstrators in of course Egypt, Tunisia, Jordan, and Yemen as well. Take a look at the capital Sana'a there. They call this a "day of rage" against the government. The president there has tried to head off some of this unrest by doing the same thing the Egyptian president did, which was to say he's not going to seek re-election after more than three decades in power.

But many demonstrators don't believe him. He's backed out of such pledges in the past. Our international correspondent Mohammed Jamjoom is there. We'll have a live report from him at the bottom of the hour.

CHETRY: And back in this country, slipping and sliding, trying to dig out and hope that your flight takes off in you're in Chicago and many other places, but this monster storm crippling almost two-thirds of the country and the effects still being felt.

We have some incredible video to show you. This is a roof on a building outside of Boston just simply buckling under the tons of soggy, heavy snow. The building had been evacuated just in time, by the way. Massachusetts one of the 30 states covered in historic as of snow, sleet, and ice.

HOLMES: A state of emergency declared for Oklahoma as well, a personal state of emergency for some drivers out there on the roads. The temperatures have dropped to three degrees, wind chill of 18 below. Oklahoma City shattered its snowfall record by almost a foot.

CHETRY: And the layers of heavy snow and layers of ice equaling blackouts in many cases. The storm left hundreds of thousands of people in the dark and in the cold across the country. Ohio, alone, 200,000 homes and businesses without power. They're still working to get that back on around the clock.

These trees were weighed down. They snapped and ripped down power lines. And some cases the ice on the power lines doing the same thing. Tens of thousands still have no power in Chicago. The Red Cross says it's open to 70 shelters across the Midwest.

HOLMES: And nobody appears to be driving on Lakeshore Drive these days. It's a bit of a parking lot right now. A lot of people had to abandon their vehicles. Those ended up buried in a lot of the snow. Hurricane-force winds being felt in Chicago. On the lake, Lake Michigan there, would you believe, 25-foot waves are being registered and they are breaking snowfall records in Chicago.

(WEATHER BREAK)

CHETRY: It's 24 degrees was it today in Dallas for a high? That's what the Super bowl is going to be Sunday. They wanted it in a warm weather state.

HOLMES: It will be better by game time.

CHETRY: Hopefully.

They're also breathing a sigh of relief down under after the most powerful storm in a century hit in Australia. Cyclone Yasi came ashore in Queensland, 180-mile-an-hour winds, bringing down trees and power lines but the damage could have been much worse. The region has been hit as we've seen from the pictures with flooding the past month.

Anna Coren joins us on the phone from Queensland. What is it like there today, Anna?

ANNA COREN, JOURNALIST (via telephone): Kiran, we're trying to get to the disaster south. But there is huge flooding taking place all around here. And the east end of the damage is quite extraordinary. We're talking about thousands of homes have been devastated. Tens of thousands have been damaged you've got trees that are down. Power lines are down.

So this storm has certainly taken the people of Queensland, not by surprise, but its ferocity has caught people certainly off guard. Thankfully, there were warnings, some four days ago that cyclone Yasi was training towards north Queensland. People evacuated, they heeded the warnings and that is why, Kiran, there have been no fatalities, which is quite remarkable.

CHETRY: What about the assessments of when people can get back? Have they been given the all-clear?

COREN: There were some 10,000 people that went through about 20 evacuations. Many of those people have been told they cannot go home. If their homes are standing, otherwise, they have to wait for the evacuation unless other arrangements have been made.

We've are standing on the side of a major highway, literally in the middle of nowhere, we are here, I should say, with hundreds of other people who are just trying to get north, trying to get home to make sure that their houses are still standing.

So this is a pretty tough time for people who know what has happened. They've seen it on television. They've heard the reports on the radio. They just want to go home and make sure their house is in one piece.

Kiran, I might add that we spoke to a resident in one of the hardest hit areas, and she said the most terrifying moments of her life and that the sound of the cyclone was like a train heading towards her. Just imagine what she and so many other people went through.

CHETRY: It's been an extraordinarily difficult year weather-wise in Australia. Anna Coren for us on the phone this morning.

Still ahead on "AMERICAN MORNING," the Super Bowl, we were just talking about it. It's not just a battle between Green Bay and the Pittsburgh Steelers, it's also a battle for your money. We're going to show you how much companies are willing to spend for 30 seconds of your time?

HOLMES: Also the feds are taking a step to limit a chemical in our drinking water, a chemical also found in rocket fuel. That's a good idea. Dr. Sanjay Gupta will be along just ahead. It's 15 minutes past the hour.

(COMMERCIAL BREAK)

HOLMES: Hello. It's 17 minutes past the hour now. We saw things change in Egypt yesterday. Egyptian versus Egyptian in the streets. And today, we're seeing something happen that a lot of people are wondering why isn't this happening during the violence?

You're seeing there a line of soldiers now. The army stepping in to try to keep the pro and anti-government demonstrators apart. It was a remarkable 24 hours. The reports say at least 800 people were killed in clashes there. And at least five people killed, according to some of the reports out there.

Joining me now to talk what about we've been seeing, a remarkable past 24 hours, columnist Mona Eltahawy. She was born in Cairo, spent a lot of years there back and forth. Still have family members there, as well. She joins me here in New York. Thank you. And also from Boston, Ambassador Nicholas Burns, former undersecretary of state, now a professor of diplomacy and international politics at Harvard Kennedy School.

Thank you both for being here. Ambassador Burns, let me just start with you. And this might be a tough question to answer here. It's hard for us to relate to. Sometimes, is democracy and change just ugly?

NICHOLAS BURNS, PROFESSOR, HARVARD KENNEDY SCHOOL: Well, a really complex situation got a lot more difficult and dangerous yesterday in Cairo when the pro-Mubarak demonstrators moved in and attacked the peaceful protesters. And I think for the United States, there's a lot that President Obama needs to focus on right now. As Secretary Clinton said, it's uncharted territory because we've got to stand up as the president is doing for reform and democracy and the people want a peaceful change. We've got to secondly, use our influence behind the scenes. We've got a lot of influence there with President Mubarak to move him towards a fast transition. And frankly, I think President Mubarak needs to leave office and hand over affairs to a caretaker government. At the same time, we've got a lot at stake there. It's the most important country to us in the Middle East. It's peace with Israeli. It helps us with -- against Al Qaeda. It keeps the Suez Canal open and helps us to block Iran. We've got to preserve those very real American interests. This is about as difficult a challenge diplomatically as I think we've seen in many years.

HOLMES: Ambassador Burns, does the president though need to be as direct and blunt as you were just then and say it publicly and say behind the scenes, Mr. Mubarak, you need to go, right now?

BURNS: I think President Obama has done the right thing here. He's obviously said that, his emissaries have said that privately. But he's got to be very careful not to inject the United States into the middle of this debate publicly because that may rebound against us. So I actually think the president is following the right course here.

HOLMES: All right. Let me join -- bring Mona into this conversation here now. How difficult is it for you to watch what you've been watching on the streets of your home?

MONA ELTAHAWY, COLUMNIST: It's absolutely heart wrenching. Tahrir Square is next to the university I went to. I have friends in Tahrir Square who spent the night there yesterday who have been tweeting things like, I have 25 stitches in my head. I can barely see from my left eye, but I'm going back if they went home.

Others are spending the night there and they're saying, stop telling me to leave, I'm not leaving. I'm fighting for Egypt's freedom. So it's people I know and they're all very young. Most of them are 25 or younger. And they recognize that this is a struggle for Egypt's future. And they are Egypt's future which is why President Obama must step forward and say Mubarak, you are 82 years old, you've strangled Egypt for 30 years. It's time for Egypt's future, the young.

HOLMES: It sounds like you're not buying and many diplomats are saying and Ambassador Burns just said there. You have to walk a fine line diplomatically. This was the president -- President Obama, he has to be very careful. You wish he wouldn't be and he would come out directly and say go now?

ELTAHAWY: Yes, because I'm wondering, you know, in the words of a young woman, also called Mona, Mona Safe (ph), who gave a very emotional and moving interview to Al-Jazeera English yesterday. She said, you know, what would it take for the world to say go now? This is called Liberation Square. It's turning into massacre square. So I think the time for diplomacy is over because President Obama and this administration have tried to find diplomacy. And every time Mubarak seems to give a speech that seems to have concessions, the very next day he unleashes thugs that are killing young people, unarmed pro- democracy supporters.

HOLMES: Ambassador Burns, is there a risk that even if Mubarak goes right now today, and we get stability on the streets of Cairo and around the country, do we risk an instability in the country down the road? Because sometimes diplomacy takes time and maybe we're not ready, the rest of the world, and Egypt itself not ready for an overnight switch like that. You need time to get things in place.

BURNS: I think there is that risk, T.J. You know, even if President Mubarak leaves as you said, this situation could go a number of different directions. You might get really lucky and a caretaker government may be able to lead the situation to normalcy and perhaps even a democracy. But then, again, radicals could take over. This could go in a different direction against Egyptians, I think, and U.S. interests. So that's why I think, President Obama, if he uses his influence behind the scenes in a very careful way, I think we're likely to be much more effective than if we make ourselves the center of this conflict. I see a danger in that for the United States. HOLMES: All right. Mona, last thing to you here. You have been keeping up very closely with what's happening there. You're certainly tapped in. You have people there. You've been reading a lot of tweets and messages. And people talk of bringing in reinforcements to the area.

ELTAHAWY: Yes.

HOLMES: Now, what did you make of that type of language? It almost seems like people are really digging in for some kind of battle?

ELTAHAWY: Oh, absolutely. The young protesters because they're mostly young people in Tahrir Square. There's some older ones, of course, but everyone in Tahrir Square recognizes this is a battle for Egypt's future and they've been taking shifts. My sister-in-law's brother, my sister-in-law is in Ohio. Her brother was in Tahrir Square yesterday. He was sending text messages saying this is a virtual war zone. And he was trapped in the Cairo museum and only left when he heard that pro-democracy supporters were coming in to take their place. So people are not going anywhere. They're preparing for a huge demonstration on Friday, because they clearly see that Mubarak does not mean any of his concessions. They believe he's lying. They believe it's time to go now and they want the moral support of the international community.

Here in the U.S., you can talk to lobbyists who represent the Mubarak regime. Tell them to stop. Cut the aid to Egypt.

HOLMES: Well, Mona Eltahawy, we appreciate you. We certainly are going to be hoping to talk to you much more later.

Ambassador Burns, we certainly be checking in with you again. It doesn't seem like this situation is going to get resolved anytime soon. But thank you to you both this morning.

BURNS: Thank you.

CHETRY: We're talking about the situation in Egypt. Meanwhile, Tunisia, Jordan dealing in similar situations. And now Yemen. Coming up, a wave of unrest spreading yet again. We're going to get a live report on Yemen's own day of rage taking place now.

Meantime, thousands of flights cancelled because of the winter storm. Now there's more bad news for passengers at Continental hub in Houston. We'll update you for travel forecast when AMERICAN MORNING comes right back.

(COMMERCIAL BREAK)

HOLMES: All right. Twenty-five minutes past the hour. These are new pictures we are getting in from Tahrir Square which has been the focal point of so many demonstrations in Egypt over the past week or so. But yesterday, certainly things changed when we saw pro-Mubarak and anti-Mubarak forces clash. People pelting each other with rocks, attacking each other. And you can see that happening once again. People throwing things down here. After a night of violence of fires in the square, gunfire as well, reports of 800 injured. Five at least killed. It looks like things are flaring up again. We did see today, though, on Thursday, something we didn't see during most of the violence yesterday, which was the army getting involved. We did see earlier pictures of the army. Some soldiers trying to align the streets and keep the two sides apart. But it appears some people are defying the presence at least of the army and still going at each other. We will continue to monitor what's happening again on one more day of demonstrations and outbreaks of violence in Cairo.

CHETRY: And as we just heard from Mona who has been tweeting with relatives there, she says it's going to continue that they truly fear that Mubarak is not going to keep his word to leave and that they need to get the attention of the international community. Calling on the president, our president actually for some stronger words as well.

Well, we'll keep you posted on the situation there. Meantime, here at home, we're all gearing up for Super Bowl Sunday. Just three days away. And for some people, it's not about the game but the commercials. Christine Romans, author of "Smart is the New Rich" joins us now.

You know, we always associate Budweiser, Doritos, some of these big names.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right.

CHETRY: But now there are some smaller companies getting into the action.

ROMANS: About 20 percent of the ads are going to be companies that are smaller companies. Many have never advertised before, because this is a chance to get 100 million eyeballs. Well, I guess 200 million eyeballs, 100 million potential consumers to look at you for 30 seconds and it's become kind of a media frenzy and advertising frenzy.

This year, we're expecting Groupon. This is the big, you know, online advertising company. Angry Birds Rio, it's a game application. That apparently is going to be a movie. $3 million for a 30-second ad is what they're saying they're expecting. GM, Budweiser, Career Builder for seven years in a row now. Career Builder, 15 million out of work in this country. Six million have been out of work for six months or longer. I say that all the time. That's a perfect thing for something like --

You would think that Career Builder would be dead. Career Builder wants those eyeballs. They have now Facebook and Twitter campaigns that go around the whole thing. And then, of course, a clever ad can live forever on YouTube.

So you have maybe in the mid-80s, $500,000 is what you would see spent for 30 seconds of your valuable time. On the weekend, now it's, you know, reportedly about $3 million. Now this brings me to a very important point and the "Smart is the New Rich" tie (ph). And that is, look, consumer spending is up, savings is down a little bit. People have frugal fatigue, according to the National Federation for Credit Council. People are tired of being sick and tired about the economy. They're starting to spend their money again. And these advertisers want you to reach into your pocket to spend your money.

A few things. We still have a tough job situation. You have rising energy costs. If you don't need it, don't buy it. Try to negotiate as much as you can. Always save first. Come on, always save first. You do not want to get yourself in a situation where we were the last couple of years. At the same time, though, before you call me a scrooge, don't deny yourself because this isn't the Great Depression. We don't have to live like it is. But very important to keep in mind as the advertisers are really going after your dollar and trying to get you to loosen your purse strings, that you need to be smart about it.

Quickly, a morning market check for you because the market opens in about two hours. The Dow yesterday was up a couple of points, still holding above 12,000. Among the reasons because consumer spending has been a little bit better. The Nasdaq and the S&P 500 were down. You know, we are still watching what's happening in Egypt, concern about commodities prices, concern about oil prices. There you go.

CHETRY: Quickly, what? Fifty-seven million people watch the AFC game. So, I mean, this is money well spent. $3 million for your 30- second ad. A lot of people are watching.

ROMANS: There's no other thing that you can get 100 million people, consumers sitting there, watching what you're saying, talking directly. And Facebook and Twitter and all that YouTube, just rounds it out now as an even better picture for trying to sell you stuff.

HOLMES: All right. Not just watching, they're actually paying attention to commercials.

ROMANS: Oh, yes.

HOLMES: We look forward to these.

ROMANS: Yes.

HOLMES: Christine, we appreciate you, as always. Thanks so much.

HOLMES: Coming up next on this AMERICAN MORNING, we told you about Chicago. Record snowfall there. Late Shore Drive was a parking lot. We heard from Rob Marciano. It is just now reopening. We'll give you an update on the situation next.

CHETRY: Also, he's one of the most distinguished non-fiction authors, Michael Lewis, his latest book, he breaks down what caused the financial crisis. Are we still vulnerable and why are we still talking about record profits on Wall Street just a mere two-plus years after the financial meltdown. He's going to be joining us. Talking about "The Big Short," coming up.

(COMMERCIAL BREAK)

CHETRY: Welcome back to "American Morning" on this Thursday, February 3rd. We want to give you another live look at Egypt. This is Cairo's Tahrir Square, we're continuing to monitor the clashes which have picked up again today throughout the morning. We'll bring you any of the developments that happened as the unrest continues in Egypt.

Good morning, I'm Kiran Chetry. Thanks so much for being with us.

HOLMES: Hello to you all, I'm T.J. Holmes. We'll keep an eye on that situation closely. Also, keeping a close eye on the weather that's still affecting so many here. The snow and ice stopped for the most part in many places but it's still having an impact, especially on air travel after thousands and thousands of flights were canceled.

Continental Airlines now suspending operations at Houston International Airport from 3:00 today through midday tomorrow because of some snow and icy conditions that are forecast.

CHETRY: And Chicago's signature roadway, Lakeshore Drive finally reopening today. It was literally a parking lot yesterday. Many people trapped in their cars for hours as the windy city was buried under nearly two feet of snow. A lot of people just said "the heck with it," left their cars abandoned and buried in the snow. City officials came under fire for not closing Lakeshore Drive earlier yesterday as the snow piled up and plows simply could not keep up.

HOLMES: And Mark Kelly will be at the White House today. And he'll be speaking on his wife's behalf. He, of course, the husband of Gabrielle Giffords who is still recovering. She's in rehab after being shot in Tucson last month. Going through a rehab in Houston but he is going to be making an appearance and making a closing prayer today on her behalf.

CHETRY: And demonstrations on the streets. The president promising to step aside but just not right away and we're not talking about Egypt this time. We're talking about Yemen. Here's a look today where thousands of protesters in a so-called day of rage, taking to the streets. A separate pro-government rally taking place as well. International correspondent Mohammed Jamjoom is there. You told us last hour that it's been largely peaceful. Has that continued to be the case, Mohammed?

MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Kiran, it has. We've seen statements now issued by the government of Yemen that there were peaceful demonstrations today both on the pro-government side and the opposition side. We're not hearing reports of injuries that happened.

And from what we saw, even though there were thousands, tens of thousands of people, on the street today, coming out very early on both sides of this issue, it did remain peaceful. We did not see clashes with the police. We didn't even really see much of a police presence. And as of last night, I was being told by many people in the region that they were concerned that this could get quite ugly today. The reason that is so concerning, not just for the people of Yemen. Also for allies of Yemen, especially the U.S.. The U.S. has been concerned if this movement really gained momentum, especially the anti- government movement here that could cause a real problem because President Ali Abdullah Saleh is a key ally of the U.S. in the fight against Al Qaeda.

The U.S. has been trying to help the government here in fighting Al Qaeda, Al Qaeda in the Arabian Peninsula operates effectively out of Yemen. They tried to launch attacks against the U.S. out of Yemen in the last year, the last two years.

And the U.S. wants to make sure that the government here is secure. What I saw the anti-government demonstrations. A lot of younger protesters saying that they want economic opportunities. They want jobs. They want to be able to feed their families. And they want to be able to get a good education. And they want the rights that they feel have been promised that haven't been delivered. On the pro- government side, people holding up banners and pictures of President Saleh, expressing their love and admiration for him. They really don't want him to (INAUDIBLE) but they understand that that's his decision but they'd be happy if he would be president indefinitely.

Also on the pro-government side, many of them said that the opposition leaders that were calling for these demonstrations were destabilizing the country and they thought really people should return to dialogue and not protest in the streets. Kiran.

CHETRY: Mohammed Jamjoom for us this morning in Yemen, at least the good news for now is that these demonstrations have been largely peaceful, despite people on both sides with different opinions about what's going on there. Thank you.

HOLMES: Also ahead on this "American Morning" Thursday, how about drinking a little something that you find in rocket fuel? Don't have to go far, folks. It's in your drinking water. Our Sanjay Gupta will be along with the new EPA decision that could set limit on the chemicals in your water.

CHETRY: Best-selling author Michael Lewis takes you inside the financial collapse in his latest book, "The Big Short." We're going to talk to him live and find out why he warns the crisis may not be over.

(COMMERCIAL BREAK)

CHETRY: Well, a man-made money machine. It's what nearly brought the world to the brink of financial collapse. And in his latest book, best-selling author Michael Lewis who has written on a number of things (INAUDIBLE) like "The Blind Side," walks the reader through the inner workings of Wall Street.

Joining us right now is Michael Lewis, a former investment banker whose latest book "The Big Short" is now out on paperback. It's interesting because you also wrote an addendum sort of what happened, an epilogues in the wake of our financial crisis in 2008. Thanks so much for being with us this morning.

MICHAEL LEWIS, AUTHOR "THE BIG SHORT": Thanks for having me.

CHETRY: I just want to ask you as we're watching all of these developments unfold in Egypt right now. And Dow futures are up today, they held a little bit. But how - what type of ripple or impact, if any, does unrest on yet another country in the Middle East have on our financial markets?

LEWIS: You know, not great. This sort of connection is made between the images on the screen and this movements in the markets. Wall Street is always looking to blame everything on the markets in something - you need an explanation because the markets go up and they go down.

I think, you know, it's very hard to say right now that what's going on is having a direct effect on the market.

CHETRY: Long term now. I mean, it was heralded that Egypt has this peace agreement with Israel, really pay them a lot of money. In fact we give them the second largest amount of aid besides Israel because we have this huge interest in keeping the peace there. What happens if this unravels?

LEWIS: Well we have great political interests.

CHETRY: Right.

LEWIS: But that's a different thing from (INAUDIBLE) the markets. Markets don't like uncertainty. It's true that when it's uncertainty you kind of get surprise in the markets. But this is - what's going on there right now. It's unclear you might end up with less uncertainty in the Middle East at the end of it, right?

And what happens is generally in the markets is - I mean when this goes away, (INAUDIBLE). And the market is still going up and down, like they're going up and down. People will (INAUDIBLE).

CHETRY: Right.

LEWIS: Now China, if nothing's going on, it's what the Chinese must have done. I just, you know, I take with a grain of salt that people are making direct links between protests in the street in Cairo and movements in the stock markets.

CHETRY: I want to ask you about your book. You really broke down just for a lay person to understand, because it all seems so secretive and difficult to understand exactly how things work in the world of Wall Street, investment banking et cetera. But it sounded like a multi-billion dollar casino basically in the financial world. When the dust settled we saw corporate profits up again and this is not even three years when everybody said the oxygen was sucked out of the room and we were at the brink of financial collapse. So has anything really changed or is it just business as usual again? LEWIS: Well, the disturbing thing is that the structure of the financial system, not only to the extent it's changed, it's gotten worse. I mean, you've got a handful of very, very big - too big to fail, financial institutions on Wall Street. Who are basically guaranteed by the taxpayer.

And the Dodd-Frank regulation that was passed does a couple things that's useful. It does require more capital so they can speculate less. And it does - it may put limits on the kind of speculation that can take place in these places.

But the lesson of the crisis is that these firms can't be trusted even to take care of themselves. I mean, they would all be failed institutions. They were all going to go down, but for the intervention of the government. Now we have essentially, I mean, it's weird to say but socialism for capitalism is capitalism for everybody else. We have a state-sponsored financial sector that's doing very well but we've lots of subsidies and a kind of anemic rest of the economy.

CHETRY: And you know, when people sit at home, they scratch their heads. I mean, we have the Dow now over 12,000 for the first time since the summer of 2008. I remember it being at 6,500. And you know, people who were coming to retirement or had retired, living on a fixed income it's been a nightmare. I mean, all of their wealth is just gone or a good portion of it.

And then, you still have high unemployment. And yet over on Wall Street, you're still, you know, talking about things going well. You're hearing about individual investment bankers who are bringing home $5 billion. And people on main street are saying how is this. I thought the whole reason we sat back and supported the bailout and everything else was so that this wouldn't happen again and it had to come with strings attached.

LEWIS: Well, I'll tell you how it is, it's not that complicated, once the decision was taken to prop up these institutions that they were too important to let them fail and they were restored to strength, they proceeded to undermine reform. They spent vast sums of money and influence pressuring the legislators not to make the dramatic reforms that needed to be made.

CHETRY: So are you saying we're back to square one? Or this could happen again.

LEWIS: Not quite back to square one because a few things did happen. But the radical form did not happen. So, we are - yes, we took a step backwards, after the crisis. And it's such a shame because - there was an opportunity, really, to fix the system, at the bottom of all of the problems, it's not like evil bankers. It's an evil system. It's a system with very bad incentives in it for people to do things that really aren't in the interest of the rest of society. There was a chance to fix that. That has passed. I suspect it's coming around again. But the incentives all still being in place, they will lead to equally bad outcomes. It may just take a while.

CHETRY: That's a sad commentary to think that we have to go through this all of this again.

(CROSSTALK)

LEWIS: Well, really, democracy is a nasty business. And sometimes if you look at the depression, it took four years after the crash of 1929 before serious financial reform happened. So I think these things just do take time sometimes.

CHETRY: Well, the book is call "The Big Short" and you really break down for people to understand exactly what went on and what we may or may not have learned from it. And an interesting epilogue too, after that. Michael Lewis great to talk to you. Thanks so much for joining us.

LEWIS: Thanks for having me.

CHETRY: Sure. T.J.

HOLMES: Well, Kiran, we want to turn back to the live pictures of Tahrir Square, which has been the epicenter for many of the demonstrations and much of the violence we have been seeing over the week. And certainly what we've seen overnight where pro-Mubarak and anti-government protesters clashed, hurling rocks at each other. Gunshots were heard. Fires broke out. Hundreds injured. Reports of at least five killed.

And now, as I bring in Frederik Pleitgen, who is there in Cairo for us, Frederik, we're hearing reports now that there is gunfire being heard in the square, as well.

Give us the very latest on what's happening there.

PLEITGEN: Yes, T.J., that gunfire was actually soldiers of the Egyptian military firing in the air, trying to keep these two sides apart.

I don't know what your vantage point is, but from my point I can say an armored personnel carrier is actually now making its way towards this group of protestors with one soldier on top of it, actually aiming at the crowd.

I do have to say, they were shooting into the air, not at any of the protesters, because what happened, T.J., that the anti-Mubarak protesters started a charge forward and the sort of pro-Mubarak crowd just ran away. But there were rocks being pelted in both directions. And the soldiers were doing that to keep these two sides apart. And they did, to a certain extent, actually manage to do that.

Right now you there is still a melee going on right in the middle of square here, sort of outside of Tahrir Square, actually, where the pro-Mubarak and anti-Mubarak sides are throwing rocks at each other and the soldiers are trying to keep those two sides apart.

There's another armored personnel carrier that seems to be moving into position now. It's going towards this crowd and it looks as though they're going to and get in between these two sides to stop them from throwing rocks at each other. Because, of course, T.J., the two sides that both of these -- the one institution, I should say, that both these sides don't want to have against them is the Egyptian military. And so they're trying to position themselves in a way so that this does not get out of hand which, of course, this has been the case over the better part of the night and earlier this morning.

Here comes another armored personnel carrier now charging towards the crowd -- T.J.

HOLMES: And Frederik, yesterday we saw just massive numbers, just throngs of people down there in Tahrir Square, really from both sides.

Can you give us some kind of an idea how the numbers are right now, today, on both sides, compared to the numbers of people we saw yesterday collected there?

PLEITGEN: Well, on the side of the pro-Mubarak crowd, the number is very -- is much less. There's much fewer of these pro-Mubarak people than were out here yesterday. The anti-Mubarak protesters I would say have actually grown somewhat in size. They're the ones trying to hold the ground here in Tahrir Square.

And the pro-Mubarak side really started -- their numbers started dwindling into last night. However, those battles, of course, in the streets, they continued with people, lobbing Molotov cocktails at each other. And then the military also stepping in and firing rounds into the air then, as well.

But right now, it's hard to say because there are some people who are just sort of bystanders. But I would say it's maybe 200, 200 or 300 pro-Mubarak demonstrators. And easily 3,000, 4,000, maybe 5,000 anti- Mubarak protesters. However, most of those are actually inside the square peacefully demonstrating. And then you have this sort of front line of people who are carrying out these street battles that you're probably seeing on your screen right now, T.J.

HOLMES: Yes. We are watching these pictures along with our viewers now. Frederik, we appreciate you certainly always being available to be able to hop on the line and give us an update about what you're seeing as this situation continues to change literally minute by minute.

We'll continue to check in with Frederik. As we're hearing now, more gunshot firing in Tahrir Square for the military stepping in, trying to keep the two sides apart.

Also coming up this morning, Captain Mark Kelly, the husband of Congresswoman Gabrielle Giffords in Washington this morning and will be there with President Obama. We'll tell what you he's doing there.

CHETRY: Well, priceless treasures, people come from across the world to see them smashed and stolen during yesterday's chaos in Cairo. Is this irreplaceable or can they fix some of this and prevent more damage? We'll check in. Forty-nine minutes past the hour.

(COMMERCIAL BREAK) CHETRY: Well, the EPA says it's going to start regulating a toxic rocket fuel component, as well as other toxic contaminants that are found in our drinking water.

HOLMES: Our Dr. Sanjay Gupta interviews EPA administrator Lisa Jackson before she testified on this issue to Congress.

He joins us now live from Atlanta. Dr. Gup (ph), good to see you, as always, kind sir.

We hear this rocket fuel component is in our drinking water. We're not necessarily drinking straight out rocket fuel, however, right?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: No. But, you know, this is quite a tale. I mean, you have these various sites around the country. Many of them are associated with producing various components for rockets or fuel and things like that.

And what the people found is you test the water in this area, water that becomes drinking water and you find that this substance known as perchlorate was actually showing up. And it was showing up in many, many different sites around the country.

So what it is, as you mentioned, is a chemical that's commonly associated with rocket fuel. But what was amazing is that when they started testing it, they found in the people they tested, 100 percent of them actually tested positive for it. They were getting it via drinking water, as mentioned. But also, the same water was contaminating food. They were getting it that way, as well. They were finding it in breast milk. And at least 150 public water systems were affected by this.

So, you know, this is a pretty big deal. And people are paying attention, how dangerous is this chemical and should it be cleaned up? There was no regulation in place, essentially.

CHETRY: You know, that's mind-boggling. How could it not be? We know about this chemical. Do we know what regulations the EPA will put in place now? I mean, can it be removed or at least diluted in drinking water?

GUPTA: Right. Well, you know, that's exactly why I talked to the Administrator Jackson about yesterday. And she pointed out a couple of things.

First of all, you know, there had been no regulation ever for this, which, as you say, mind-boggling to some extent. And there'd been decisions made not to regulate it at the federal level. Some states had done it on their own. What she told me yesterday was, look, we are making plans to regulate this now. We still think more studies need to be done and those studies are going to take some time.

Which, you know, I asked her, look, there's been at least 90 studies done on this, 26 which have shown health effects, health -- negative effects on people, specifically pregnant women and specifically people who have some history of a thyroid problem. That's a significant population of the country. Why wait? Why not regulate this now?

And she said, this is one of those things where the science, she feels, still fleshed (sic) out more and she thinks it's just going to take time. So this is going to be a big back and forth, I think, as part of the Senate testimony to which you were just eluding.

HOLMES: Sanjay, you kind of eluded to it, but how damaging to a human being is this stuff in the amounts we're talking about?

GUPTA: Well, you know, there's no federal standard so it's hard to know. In some places, there are millions of parts per billion of this. And other places it's just in the tens of the dozens.

What the concern is that it could actually cross the placenta, for example, affect fetal developments. So pregnant women most at risk. It also seems to get into the breast milk. So even after the baby is born it could be a problem. And people who have thyroid problems, it could make their thyroid function diminish and possibly force them to be on medications.

That seems to be the extent of it but again, it is still being studied now.

CHETRY: If you drink bottled water, is it in bottled water? Or can you avoid ingesting it?

GUPTA: It appears to be mainly in contaminated tap water. So bottled water perhaps -- especially bottled water that is coming from other sites. That's something people who are consumers don't always know.

HOLMES: Sanjay, we appreciate you. Some alarming stuff this morning. But bottled water, way to go. But didn't they say that's dangerous, too, at times? All right, Sanjay.

(LAUGHTER)

Talk to you later.

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