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American Morning

Hurricane Irene Expected to Hit Carolinas; New York and New Jersey Prepare for Worst Case Scenarios; Bomb Blast Rocks U.N. Building in Nigeria; The Manhunt for Gadhafi; Irene Evacuations Spread; Airlines Make Irene Plans; Hurricane Irene Closing In; Irene Heads for North Carolina Coast; New York and New Jersey Prepare for Worst Case Scenarios; Fed Chairman Ben Bernanke To Give Speech on Economy

Aired August 26, 2011 - 06:59   ET

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


(BEGIN VIDEO CLIP)

ALI VELSHI, CNN ANCHOR: Collision course. This morning, Hurricane Irene bearing down on the Eastern Seaboard, upward of 50 million people in its path including major cities.

CAROL COSTELLO, CNN ANCHOR: Mass exodus, with states of emergency already declared in seven states. People from the Carolinas up to New England being warned not to take any chances and to get out of Irene's way on this AMERICAN MORNING.

(END VIDEO CLIP)

COSTELLO: And good morning to you. It is Friday, August 26th. Welcome to AMERICAN MORNING. If current predictions, hold we could see damage along the East Coast and here in New York City that we haven't seen in decades.

VELSHI: Some places even longer than that. Here's a look at Irene right now. It is a strong Category 2 hurricane. It's about 400 miles south of Cape Hatteras, North Carolina. It's closing in. The storm is expected to intensify once again to a Category 3 before making landfall.

COSTELLO: Up and down the coast, people are preparing for a direct hit. North Carolina's governor warns the time to prepare is now.

(BEGIN VIDEO CLIP)

GOV. BEVERLY PERDUE, (D) NORTH CAROLINA: We are asking people all over eastern North Carolina, our coastal regions, to take this storm very seriously and to begin to implement their plans.

(END VIDEO CLIP)

VELSHI: The New York metropolitan area has not seen this kind of storm in decades. So far, only voluntary evacuations are in place, but mandatory orders from the Jersey Shore to Long Island could come later this morning. New York City could be facing a worst case scenario. Major flooding in Lower Manhattan, Kennedy Airport under water and mass transit paralyzed.

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG (I), NEW YORK: What we have to do is assume the worst, prepare for that, and hope for the best.

GOV. CHRIS CHRISTIE, (R) NEW JERSEY: If it continues on the current track from a flooding perspective, this could be a 100-year event. So, people should not take this lightly.

(END VIDEO CLIP)

COSTELLO: Not in Maryland or Virginia either. Major airlines have already begun canceling flights. Some good news, though. Many airlines are dropping fees for passengers who change flights to help travelers get to where they need to be before the hurricane hits.

As for the rails, beginning today Amtrak is canceling all service south of Washington, D.C. through at least Sunday.

VELSHI: We've got a team of correspondents covering every angle of this storm. Reynolds Wolf and John Zarrella are in North Carolina where we will first see this make landfall. Mary Snow is in New York City's Battery Park, an area of the city that will be in danger if it even comes close to a direct hit. And Susan Candiotti is on long island.

But before we get to any of them, let's go right to Rob Marciano, meteorologist with us here in New York City this morning. Rob, give us the latest model showing where Irene is headed.

ROB MARCIANO, AMS METEOROLOGIST: The models now are trending a little bit further to the east, just a smidge, but we're still looking at a double landfall.

This is a satellite picture, winds of 110 miles per hour, seems to be locked up at the moment. We have seen a little bit of weakening in the past 12 hours, running into a little bit of dry air, a little bit southwesterly sheer. But whether it's a category two or three storm it really doesn't matter. The size of this thing is certainly what's most impressive.

Here's the forecast model guide and some of our computers. We've showed this to you from time to time. Each of one of these lines represents a different computer, and they're still very, very clustered to scoot up the Eastern Seaboard across the Delmarva and across Long Island at some point during the day on Sunday.

As far as the National Hurricane Center forecast track, kind of mimics that, takes a blend of that. Of course, with some expertise of forecasted in there, and it does show the cone involving New York City, also involving points off towards the east as well.

But again, the size of this thing is what's most impressive. Tropical storm force winds extend outwards 500 miles as far as the diameter is concerned. So we're going to see a threat that will encompass a wide range of real estate from the South Carolina coastline across parts of North Carolina. That's where the direct hit is going to be. That's where we're going to see the most significant surge anywhere from six to 12 feet.

The other thing is we've got a new moon coming. So that makes the tide astronomically high. So you get that plus the wave action and the surge from the storm itself, that makes it even more impressive.

Hurricane warnings have been extended north now to Sandy Hook, New Jersey, meaning that hurricane conditions are likely in the next 36 hours. Hurricane watches have been posted now all wait up across the New England coastline. And it's likely we'll see hurricane conditions there also in the next 48 hours.

Rainfall is going to be the other big thing here, and that probably will be the worst part of this storm. Because we have seen so much rainfall in the past couple weeks, the ground is saturated. And you've got trees that are loaded up with foliage. We haven't really seen a big windstorm in a long time, so that combination is going to cause a lot of trees to come down.

Regardless of whether this things makes a secondary direct hit close to New York City, that's going to be a huge issue that will affect tens of millions of people. Trees coming down, dangerous trees coming down, that will knock power out as well, and of course a storm surge, we're talking about places like Long Island Sound and coastal Long Island and across New York harbor. That will be more dependent on the exact track of this thing and location. Obviously elevation will play a big role as well.

Guys, we'll toss it back to you.

COSTELLO: We know you'll keep an eye on it. Rob Marciano, many thanks.

Right now thousands of people are leaving beach communities in North Carolina. They're bracing for that direct hit from Irene. John Zarrella is live in Morehead City, possibly the place where the storm could make its first landfall. Are people prepared there, John?

JOHN ZARRELLA, CNN CORRESPONDENT. You know, you're absolutely right. We could see the first landfall here, certainly very likely, the left side of the eye wall as it moves up along the coast towards the Outer Banks.

They've ordered a mandatory evacuation here, and this is Atlantic beach, just over one bridge to get to Morehead City, the only bridge leading to this island, Atlantic Beach.

Take a look at some of the preparations they've made here at the beach here. They've put these two by fours up here to keep the water. These are the cut-throughs for people to get through the beach. So they want to keep the water from actually coming from the ocean, which you can see out there. Now, interestingly enough, where we are, what you're looking at, see the white caps starting to roll in, this is a south-facing beach. So if you can follow me over here, this is actually east. So Irene is going to be coming this way up the coast. And a lot of times when you have these kinds of storms here, a lot of the storm surge is a reverse storm surge that comes from the other side of the island.

Now, look what they've done here, take some precautions. They've got the windows boarded up, and they've got sandbags down here. They're telling me that this is double pained glass, so they're not too concerned about the glass right there on the doorway entrances.

The real concern, of course, here is going to be the water. You can see we look like we're almost below sea level here at that Atlantic Beach, and it's not going to take much of a surge, if we should get some water coming up this way, to actually inundate this area and really damage this beach a lot.

But again, mandatory evacuations here on this island. People have been told to leave. Yesterday as we were coming in we saw streams of cars pulling boats filled with suitcases and just people leaving this area of North Carolina heading inland.

And again, it's very likely, Carol, that we could be the first along the Carolina coast to really feel the effects from this hurricane and quite possibly be hit by at least a portion of the central core of the storm, the eye wall. And again, that's eastward, so that's the way the storm is going to be tracking. South facing beach here, just the way the coastline runs.

So everyone here, taking final precautions. We didn't see a whole lot of places boarded up yesterday here, but perhaps today, more folks will be out trying to get their businesses secured and their homes secured along Atlantic Beach before they actually leave. But it's pretty quiet here. It doesn't look like there are too many people who have stayed behind. Carol?

COSTELLO: That is the best news. Morehead City, we'll keep an eye on it. John Zarrella, many thanks to you.

We've always talked about what if. Now we can find out what will happen if a hurricane makes a direct hit on New York City. It could happen Sunday afternoon.

VELSHI: The city already is talking about a total mass transit shutdown and evacuating hospitals and nursing homes in some low-lying areas. Mary Snow for us live in Battery Park, which is in lower Manhattan, an area that is one of those low-lying areas that could be affected. What have you found when you looked into the plans that city has, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, you know, Ali, when talking about those what-if scenarios, they're done because it is so rare New York would be hit by a hurricane. But because areas like this one are so vulnerable, experts say it wouldn't take a major hurricane to cause significant damage. (BEGIN VIDEOTAPE)

SNOW: If anyone is worried about a hurricane hitting New York, it's coastal geology professor Nicolas Coch. And to understand why, he took us to Southampton, New York.

NICOLAS K. COCH, QUEENS COLLEGE, CUNY: This is actually where the 1938 hurricane broke through and made this bay a branch of the ocean.

SNOW: Koch says most New Yorkers forget that it was here that a powerful category three hurricane made landfall in 1938. It was called the Long Island Express and it caused widespread damage even in New York city, some 70 miles away.

(on camera) Even if New York city is spared a direct hit.

COCH: That's right. It's going to have massive flooding, yes.

SNOW (voice-over): For years Koch has been sounding the alarm about how vulnerable New York City is because of its topography. He said storm surges could trigger massive flooding in low-lying areas, particularly lower Manhattan.

Consider this simulation done by NOAA showing what a category two hurricane could do to a tunnel linking Brooklyn and Manhattan. Donald Cresitello with the Army Corps of Engineers mapped out worst case scenarios. A category one hurricane, for example, could flood the subway station at the southern tip of Manhattan with three and a half feet of water. A category two storm, he says, could put JFK airport under five and a half feet of water.

DONALD E. CRESITELLO, U.S. ARMY CORPS OF ENGINEERS: If a storm were to occur, it could be catastrophic given the population density in the northeast.

SNOW: High winds are also a big concern. And city officials have evacuation plans at the ready. Despite all the preparations, Koch says it's not the hurricane he's most worried about.

(on camera) What's your biggest concern?

COCH: The New Yorker.

SNOW: Why?

COCH: Because they don't listen. You can always tell a New Yorker, but you can't tell them very much.

(END VIDEOTAPE)

SNOW: So in addition to everything else, add stubbornness to the list of things that city officials have to take into account when making these preparations. And, Ali, the mayor has said he is expected to make a decision by tomorrow morning on whether to order mandatory evacuations in low-lying areas. But already there have been ordered evacuations for some hospitals and nursing homes in those areas.

VELSHI: I saw a bit of a smirk on your face after Koch's comments because you're a -- you're generations of New Yorker and know that's the case. New Yorkers say I'll go when I'm good and ready to go and I can handle it. But people should prepare. Thank you for that, Mary Snow.

SNOW: Sure.

VELSHI: Hurricane watches and warnings in effect from North Carolina all the way through New England. Millions of people, potentially, in the storm's path. Now it's expected to bring widespread damage, power outages and floodings. Cities and states along 700 miles of the Atlantic seaboard are making some preparations.

Let me bring it to you by region. Let me show you what's going on in the south first of all, if I can get that to do the right thing. All right. Starting in the Carolinas, both South and North Carolina and Virginia have declared states of emergency. Mandatory evacuations are in place in low-lying areas, including Hyde County, North Carolina, the Outer Banks, and in parts of Norfolk, Virginia, where we've told you they are taking a lot of naval vessels out to sea because they think they'll be able to handle the storm better at sea than in port.

In the mid-Atlantic, states of emergency have been declared in Maryland and in Delaware, also mandatory evacuations in low-lying areas including Ocean City, Maryland. Now, the mayors of Washington, D.C., and Baltimore announced that sand bags are available for residents in those cities.

And let me give you a sense of what's happening in the northeast, New York and beyond. You've got governors of New York and New Jersey and Connecticut all declaring states of emergency. Tolls are going to be suspended on portions of the Garden State Parkway in New Jersey. That's going to help with mandatory evacuations from Atlantic City and the surrounding barrier islands. They want traffic to move as smoothly out of there as possible.

New York City is also considering mandatory evacuations of Coney Island, Battery Park, and parts of Staten Island. Mary was talking about that. And there could be mass transit shutdowns. Subways and trains could be shut down, emergency management agencies in Rhode Island and Massachusetts and New Hampshire and Maine, all of them urging citizens to be prepared, including putting together emergency kits that will last for up to three days, kits with fresh water, with nonperishable goods, batteries and flashlights and things like that. Carol, I hope you have yours ready or are getting it ready.

COSTELLO: Hey, I'm going to hit the store right after the show, so I'll be ready. Thanks, Ali.

In Washington, D.C., the Martin Luther King Jr. Memorial dedication this weekend has now been postponed. Event organizers were in the process of setting up a stage and chairs when forecasts indicated Irene was getting stronger. The ceremony will happen sometime now in September or October. We'll keep you posted.

Still to come this morning, a wildfire burning out of control in California, the flames dangerously close to Yosemite National Park. We'll have details for you.

Plus, new reports of fighting in Tripoli this morning, as Moammar Gadhafi sounds defiant in what's believed to be another new audiotape. We'll get the latest on the situation in Libya, next. It's 12 minutes past the hour.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

VELSHI: A massive bomb has gone off at the U.N. Buildings in Nigeria's capital. We are hearing that there are casualties.

COSTELLO: Yes. The explosion wiped out an entire wing of a three-story United Nations Building sending it crashing to the ground.

CNN's Christian Purefoy is live on the phone from Nigeria. What happened?

CHRISTIAN PUREFOY, CNN INTERNATIONAL CORRESPONDENT (via telephone): Well, we've seen security sources on the ground and obviously they're still trying to figure out exactly what's going on and their priority right now is to try and help the injured, the bomb, you know, the explosion happened maybe just over an hour or so ago.

But what other things are being confirmed now is that this is a bomb attack, the U.N. has confirmed there was a bomb (INAUDIBLE) saying it is an explosion. From the photos now we're seeing coming out on Twitter and social networks from (INAUDIBLE), quite a powerful explosion. And the hospitals in Abuja have said that there are many casualties, lots of them seriously injured. And the ambulances keep bringing patients in.

They still don't have a figure of how many people are injured, how many people may have been killed. They are still trying to deal with the crisis. And it does seem to be very serious, Carol.

VELSHI: All right. Christian, we'll stay on top of it with you, get back to us with any new developments that you've got. I know you're staying on top of it and trying to find out what's going on.

Christian Purefoy in Nigeria for us. Again, a bomb blast has destroyed part of a U.N. building there.

COSTELLO: Also this morning, CNN's team at the Tripoli Airport is reporting Gadhafi loyalists are shelling the Administrative Buildings there. The manhunt intensifying for Moammar Gadhafi. Rebels are now going door to door looking for the dictator. And while he remains a fugitive, he did surface in - in an audiotape, at least we think it was him, and again, he was urging loyalists to keep on fighting. Joining me now to talk about the situation in Libya, is Ambassador Nicholas Burns, former Undersecretary of State and professor at the Harvard Kennedy School of Government. Welcome, Mr. Ambassador.

NICHOLAS BURNS, FMR. UNDERSECRETARY OF STATE: Thank you.

COSTELLO: We talked to you on Monday and you said you thought Gadhafi's hours were numbered. It's now Friday. Are you surprised he hasn't surfaced?

BURNS: Well, I think, you know, the rebels have won a nearly complete victory, but not totally complete. They've got to find Gadhafi and they've got to establish total control over - over Tripoli. Gadhafi seems to be wanting to fight to the last man. He wants to rally his supporters. He doesn't have many left. His security forces melted away a couple days ago.

The rebels have really taken over nearly all of the country with the exception of a few towns. So it's a very important moment for them. They've got to re-establish control, establish control, I should say, over the entire country. They've got to find Gadhafi before this can be over.

COSTELLO: Yes. I was just going to say, there's been some suggestion that yesterday was the bloodiest day so far. Reporters were seeing signs of massacres by both sides. Could this play out over the weeks and where do you see this going?

BURNS: You know, it wouldn't surprise me if Gadhafi survived and was on the run for a few more days or even a few more weeks. It's a very large country.

The rebels, you know, have worked very hard to consolidate control, but they don't have complete control over the entire country. Gadhafi, obviously, has still some supporters with him. He is either likely in Tripoli or he is in a remote military base some place. But I think his days are numbered. He's effectively lost this war.

The momentum is with the rebels. There was an international meeting in Istanbul yesterday where countries got together to pledge support for the rebels. The Arab League is going to officially admit this new government, the transitional government, as the legal government of Libya in a meeting tomorrow. So I don't think Gadhafi can hold out any hope that he's going to regain power in Libya.

COSTELLO: So here's something else confusing, the Pentagon had to come out yesterday and say the United States and NATO were not involved in the hunt for Gadhafi. And they did that because Britain's Defense Chief said NATO was helping to find Gadhafi. So, which is which? What are we supposed to believe?

BURNS: Well, as you remember, five, six months ago when the United Nations gave a mandate to NATO to take action, it was to protect civilians, it wasn't to be an active agent in support of the rebel alliances. But frankly, as the months have gone by, NATO became an active supporter of the rebel alliance. It became in effect the combat air wing of the rebel alliance and so there's some gray area here that obviously NATO is trying to - is trying to skirt.

COSTELLO: And I kind of have to talk about this just because it's so strange about some of the things found in Gadhafi's compound. We saw the golden gun and the crazy outfits. But there was also this photo album, and the photo album was full of pictures of Secretary of State Condoleezza Rice. What do you make of this?

BURNS: It's hard to know what to make of it. You know, Gadhafi, as everybody knows, was an - was an eccentric and rather bizarre person. And I don't - I don't know anything about this story, except to say that I'm sure Secretary Rice is not thrilled by this.

COSTELLO: No. I understand she did meet him once, I think in 2008, and he was said to be obsessed with her, which is - is rather unusual, coming from the leader of any country.

BURNS: Well, you know, it might be tempting to focus on something like this. I know "The New York Times" had a piece on it this morning. But the real story here is that Gadhafi was a brutal dictator. He ruled with iron clad authority for 41 years.

It is a very positive development, I think, for the United States and for the rest of the world that he is disappearing from the scene. He no longer rules the country. Let's hope that this rebel alliance can now transform itself from an army into an effective government, because that's what really has to happen here. That's the serious issue that people have to focus on. I think the United Nations certainly does and our government does as well.

COSTELLO: Yes. I'm sure most people absolutely believe that. Ambassador Burns, thank you for joining us this morning. We appreciate it.

BURNS: Thank you. Appreciate it. Thank you.

VELSHI: Still to come this morning, insurance companies already taking a beating and Hurricane Irene hasn't even made landfall in the United States yet. We'll tell you why coming up.

And it's the day Wall Street has been waiting for all week. Carol's excited. What will the Federal Reserve Chief Ben Bernanke say in his big speech in Jackson Hole, Wyoming, and how is it going to matter to you? We'll talk about it on the other side.

AMERICAN MORNING back after the break.

(COMMERCIAL BREAK)

VELSHI: Twenty-five minutes after the hour. "Minding Your Business" this morning.

Today is the big day, Federal Reserve Chief Ben Bernanke is going to speak at the annual meeting in Jackson Hole, Wyoming. Wall Street's been waiting all week for this event hoping that the Fed chief might announce some measures to help out the struggling economy. Maybe even hint at another round of Fed stimulus.

A lot of volatility this morning in pre-market trading. Right now, U.S. stock futures on the Dow, NASDAQ and S&P 500 trading pretty flat ahead of the opening bell. Investors really hoping for some good news from that Bernanke speech.

And about an hour a revision of the second quarter gross domestic product will be released, that measures how fast the economy grew in the second quarter. Economists forecasting that GDP was weaker than first thought, growing at a rate of just one percent. Wall Street will be pouring through the data to get a fresh read on the health of the U.S. economy.

And U.S. markets closed - closed sharply lower yesterday. Nervousness about Europe's debt problems and uninspiring jobs report snapped the three day winning streak on Wall Street. The Dow and S&P 500 both dropped about 1.5 percent. The NASDAQ lost more, down about two percent by the end of the trading.

France, Italy and Spain extending a ban on short selling of financial shares, trying to minimize volatility in markets there. Short selling is when investors bet that the price of a stock will fall. Credit worries in Europe continue to drive investment sentiment down this week worldwide. Rumors about a potential downgrade of Europe's largest economy Germany helped pushed U.S. markets lower yesterday as well.

And stocks to watch, State Farm, Nationwide, AllState and Travelers, those are some of the most exposed insurers with Hurricane Irene fast approaching the East Coast. Shares in AllState and Travelers dropped three percent yesterday. Many of the country's largest insurance companies have already sustained serious losses this year because of damaging weather this spring.

Don't forget for the very latest news about your money, check out the new CNNMoney.com.

AMERICAN MORNING back right after the break.

(COMMERCIAL BREAK)

VELSHI: Crossing the half hour now. Let's check this morning's top stories. The top story itself is the hurricane warnings now posted from North Carolina, the Coast, all the way to the Jersey Shore.

Tens of thousands evacuating the shoreline as Irene, which is a high-end Category 2 storm moves closer to the United States.

COSTELLO: Irene preparations and evacuations now spreading north. Thousands of people have already been told to leave North Carolina's Outer Banks, also parts of Maryland and New Jersey. New York City ordering hospitals and nursing homes located in low-lying areas to evacuate.

VELSHI: Irene forcing Amtrak and a number of U.S. airlines to cancel routes and flights. American Airlines canceled 126 flights yesterday and more are expected to be grounded today.

American U.S. Airways, United, Continental, Delta, JetBlue, Southwest and AirTran, all dropped ticket change fees for passengers scheduled to fly two or from many cities along the East Coast this weekend.

COSTELLO: OK, let's go to Rob Marciano to tell us how big a disruption this will be for 50 million people.

ROB MARCIANO, AMS METEOROLOGIST: Well, tell you what, the systems that try to kick this storm out have already been disrupted. We had that cool front that came through yesterday with thunderstorms. That tried to push Irene out.

Now we have another one that's going to come through over the weekend, but this thing is so big. It's like a big log moving down a stream. It takes a pretty stiff current to veer it off in a different direction.

Let's start with the good news, Florida through Georgia, South Carolina, virtually on stage with this. You will get beach erosion with some rough weather. But look at the spiral bands already working into the southEast Coastline as this now moves up toward the north.

Here's the satellite image, we have seen a little bit of weakening overnight, a little bit of dry air, a little bit sheer in the upper levels of the atmosphere, but it still got warm water to go over and still a very, very strong Category 2 storm. Borderline Category 3 and may be that when it makes landfall by tomorrow afternoon.

Northerly movement at about 13 miles per hour and the wind speeds sustained at about 110, hurricane-force winds extend 80 miles out, tropical storm force winds extend over 200 miles out, especially to the east side. Here's the forecast track. We expect it to reach southern parts of North Carolina and Cape Hatteras, the Outer Banks especially hit hard with this tomorrow afternoon.

Then across Pimlico Sound, across the Delaware and Potomac and Chesapeake Bay area during the early morning hours on Sunday across Jersey and to the east of New York City Sunday afternoon, but very, very, very close to the city itself.

And with this wind field and the size of this storm, places like D.C., Philadelphia, will feel at least tropical storm force winds with this. New York City will likely feel hurricane-force winds with this as will some points farther to the east and north.

We have a hurricane threat for, obviously, the Outer Banks here. Storm surge anywhere from 6 to 11 feet, Pamlico Sound, and on the east side of the Cape Hatteras area, and then also towards Jersey as well, we could see a storm surge there from 4 to 8 feet and New York City will be completely dependent on the track and your specific location.

Southern parts of the city could be under water places like JFK and LaGuardia depending on the track and size of this thing could be under water. It's going to be a critical forecast as we get through tomorrow.

We still have almost two days, guys, before this gets to New York city and before that happens, it's got to make landfall across North Carolina and it will do some damage in its current size and strength. Back to you.

VELSHI: That's what we're looking at right now, Rob, North Carolina, the first state that is going to take a direct hit from Irene.

I'm joined now by -- from Raleigh, Governor Beverly Purdue. Governor Purdue, good to talk to you again. I would like to one day interview you not about a natural disaster.

We seem to talk about this a lot unfortunately. You have warnings up and down the North Carolina coast. Where do you stand right now? How are the evacuations going? Who is evacuating, who isn't?

GOV. BEVERLY PERDUE (D), NORTH CAROLINA: Our evacuations have been ongoing since yesterday. Our ferry evacuations are nearly finished. We shut many of the ferries down this morning. We're preparing for the worst and praying for the best, that's what we do every time in North Carolina.

Our people are in the process of evacuating from all over the coast, shelters are open. We have highway patrol and Red Cross on the ground. We are ready for the storm. We hope that people are taking seriously the warnings. This is a big, bad storm and we know she's headed for coastal North Carolina.

VELSHI: Almost a year after you had the preparations for Hurricane Earl, so folks in North Carolina are somewhat accustomed to this. Is everybody following the directions? Is it moving relatively smoothly?

PERDUE: Well. we have a system in place as we've talked about before from the ground up. Locals and state and fed working together, all of our emergency declarations are in place. So we have the troops on the ground and the preparations made.

Obviously, there are always a few outliers who will stay and they take that risk. They assume the risk themselves. As the storm comes in, we have to shut down and pull in our safety and highway patrol local folks off the ground.

We're going to do what's best for the public safety. And so during the storm there will not be anybody on the ground to help folks. People need to take this seriously. North Carolina hasn't seen a storm this broad and with this much capacity to do damage in several years and again, for newcomers this is a big deal.

VELSHI: Yes, you dod have visitors there. One of the things always tough in these times when you activate the national guard, emergency workers trying to prepare their own families, but you've had to bring in more national guard?

PERDUE: We brought in more national guard and more patrol. Our Red Cross is on the ground in the area. All of our shelters are open. We opened shelters yesterday afternoon. So people who are evacuating now have a place to go.

And so that requires the deployment of tremendous resources because we've already gotten the federal disaster order. We have those federal funds in play in North Carolina as we speak. I can say directly that we're ready, we're preparing, and we're praying for the best and readying for the worst.

VELSHI: You sound confident about it. I know you folks in North Carolina have been through this before and we're all going to be watching very closely and hoping for the best for you. Governor Beverly Purdue from Raleigh, North Carolina.

COSTELLO: Still to come this morning, North Carolina's Outer Banks you heard the governor, they're expected -- the hurricane is expected to hit the Outer Banks of North Carolina some time tomorrow.

We have John Zarrella there. He's going to bring you a live report when we come back. It's 36 minutes past the hour.

VELSHI: It could be a big threat to places like New York City, storm surge, water filling lower Manhattan, tunnels and subways. Jacqui Jeras has a look at how real that threat is. We'll be right back.

(COMMERCIAL BREAK)

COSTELLO: It's 39 minutes past the hour. Inching closer to the East Coast, hurricane warnings now posted for the North Carolina shoreline all the way to the Jersey shore.

Thousands evacuating as Hurricane Irene, a high-end Category 2 storm, moves closer to the United States winds near 110 miles per hour. It has weakened slightly, but it is still expected to become a major hurricane again.

VELSHI: We have got live team coverage. Meteorologist Jacqui Jeras in CNN's hurricane headquarters in Atlanta, Susan Candiotti in Smith Point on Long Island in New York and meteorologist Reynolds Wolf in Kill Devil Hills, North Carolina.

Let's get right to Reynolds, preparations are under way as the Outer Banks are bracing for a direct hit from Hurricane Irene. Reynolds, what's the situation?

REYNOLDS WOLF, AMS METEOROLOGIST: The situation right now is from our vantage point is tranquillity. I mean, look up and down the beach for the time being, Ali, and it looks like paradise. Sure you have some clouds off in the distance.

You see one surfer out here braving the wave action coming, waves getting bigger that we've seen just in the last 45 minutes or so, but for the most part things are pretty quiet. They did have evacuations yesterday for all tourists.

They get roughly about 150,000 on average that show up each summer day and they were sent off yesterday. There's still some holding on. They're going to be evacuated today. There also is going to be the mandatory evacuation for the 35,000 or so people that call this area home.

That's going to get under way at 8:00 local time. Now one of the reasons why things are so dangerous on the Outer Banks is plain and simple, the geography alone. This is something not made on lime stone or bedrock or even a coral reef. It's just plain sand.

So we're talking about a strip of sand that jets out away from the Carolina coast that's about 200 miles long at its widest point near Hatteras Island, it's about three miles.

So when you think about a tropical system that makes its way up the Atlantic, doesn't have to have a direct hit, with the counter clockwise rotation along the Outer Banks you will have heavy wave action that will roll off the top.

When you get to the sound and inter-coastal waterway on the other side the backside of this tropical system is going to bring in another round of water from the opposite direction.

So plain and simple, Ali, think of a heavy weight boxer working on a speed box with a sharp right hook and left hook, he's battering it. That's the situation on the Outer Banks. That can happen without even a direct hit, Ali.

VELSHI: Wow. All right, good explanation, Reynolds. We will be watching very, very closely obviously to see what it does in North Carolina and what happens after that. That's got a lot of people concerned. Reynolds, thanks.

COSTELLO: It does have a lot of people concerned. New York also threatened by Hurricane Irene. Officials say it could be the worst storm the city has seen in decades, sparking fears of flooding and major damage.

Some voluntary evacuations already under way on Long Island, Susan Candiotti joins us live from Smith Point, New York, on Long Island. It looks so beautiful there now, Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: I'll say. Let me give you an idea of where we are. Again, you said Smith Point Park, that's on a barrier island that is on the south shore of Long Island, and it's more than half way out toward the far eastern end.

This area is expected to be in the cross hairs of Irene when finally that storm makes its way here probably on Sunday. Now, this area has taken a lot of hits over the years from big hurricanes and nor'easters.

One of the worst was called the Long Island Express back in 1938. That was a Category 3 storm, 200 people lost their lives from New York all the way through New England. Now, of course, in the ensuing years there's been a lot more development, a lot more beaches that have been built up.

But, of course, a storm like this, can wipe out a lot of beach, cause a lot of erosion and certainly do a lot of damage to low-lying areas. So authorities here are warning people, that they really have to listen and prepare.

(BEGIN VIDEO CLIP)

EDWARD MANGANO, NASSAU COUNTY EXECUTIVE: When we believe those strong winds, coupled with the tide, present an issue, we will begin the evacuation. It's being monitored, right now we put out the call for preparation, be prepared to leave your home on short notice.

(END VIDEO CLIP)

CANDIOTTI: In fact, someone from the Army Corps of Engineers, years ago, said that some of these low-lying areas are really sacrificial areas, some of these beach front communities, when you get a storm with the intensity of an Irene.

Let's hope that the flooding won't be too bad, but surely that's expected. We hit a lot of stores last night too and saw that already people are going out there, they were very busy. Some of the shelves empty of bread and running low on water.

Hopefully they'll get restocked and hopefully people will get out there and get what they have to get, scoop up all those supplies. Finally, Carol, and Ali, we'll leave you with a beauty shot out here. As soon as we got out here as the sun was coming up, we saw big antler deer.

You have to take a look at this and makes you wonder, we have to worry about animals, what happens to them? What happens to the wildlife out here? Hopefully, they know how to seek shelter and will do that, but you know, it makes you think about that when you take a look at how beautiful they are.

VELSHI: Absolutely.

COSTELLO: That is. Thank you for that shot. It's so beautiful. Susan Candiotti on one of the barrier islands of Long Island. Thank you.

VELSHI: The single biggest effect if this hurricane hits New York City is the storm surge. That storm, that surge, could put parts of the city completely und water. What a lot of people don't realize about New York City it's a honeycomb underneath. It's not just subway tunnels. It's tunnels of all sorts, and it's an island. Jacqui Jeras is in CNN's hurricane headquarters. Jacqui, tell us about New York City and the risk that's posed to the city.

JACQUI JERAS, AMS METEOROLOGIST: The risk is really high, Ali, even with a smaller hurricane or a weaker hurricane. And that island that you mentioned, it has been built up. It's been filled in. This used to be a much swampier area, and quite honestly probably shouldn't have built this much here.

Now, this is a computer model basically that shows us what the storm surge is. This isn't just one big push of water. This is a consistent slowly rising push of water that's going to be moving in as those winds funnel into the bay areas, that they funnel up the rivers into Manhattan. That's going to be one of the areas we're most concerned about as we zoom in here. Those winds could make the rivers flow backwards at some time.

So this is going to get maybe ten blocks in from the coastal areas. That's a good potential. This is going to move into the shipyard areas. You know nothing is going to be able to navigate here into the ferry.

Let's take you down towards Manhattan Island. Battery park we think will get flooded all within this area. And in addition to both of the tunnels, the Brooklyn battery tunnel, the Lincoln tunnel into the Wall Street area over here, into the World Trade Center site, the water could get into these areas. So this is very populated.

Then across the river, the Hudson on the eastside -- or west side into New Jersey, look at how far that water is going to be rising up towards these buildings inland through the streets and through the alleys as it moves in.

Storm surge generally arrives about five hours before the peak of the storm and the track of this storm is going to be everything. If this goes just to the west of New York City or right into Manhattan, the worst of the storm surge is going to be in this area. If it goes east, and this is more of a Long Island storm, that will be a lot less in terms of the surge.

So we're hoping for, you know, a category one, maybe a category two is the best estimation right now, but many of those models really bring it into the heart of New York City. So surge not the only concern.

Something else we're talking about is power. With the winds, the high rise buildings where windows could get blocked out. If you live on floor 10 or above, you need to be prepared to take a safer place at a lower level potentially, unless you're in that storm surge area that we talked about.

This is an estimate for New York City in terms of intensity of the storm, how many people will be without power and for how long. And so if we're looking at a category one, it would be between 250,000 and 500,000 people that would potentially be without power for three to six days. If this is a category two, we could be talking about 500,000 to 750,000 people. Looking at that, as much as maybe two weeks those folks will be without power. So even a weaker storm, so to speak, a one or a two, is going to cause a whole lot of damage and catastrophe in New York City.

COSTELLO: Right now I just want to go to Ohio and visit my mom.

VELSHI: No kidding. (LAUGHTER)

JERAS: Come down to Atlanta. We're doing OK.

COSTELLO: That would be great too, let me tell you. Although I would rather see mom. Sorry, Jacqui.

JERAS: I know you would.

COSTELLO: I know you have tips on what people need to have in case of an emergency and that goes for everybody up and down the East Coast.

Yes. You don't need to be on the coast just to be prepared. You've got to do this well inland because of those power outage threats and flood threats. We could have rivers coming out of their banks. You might be without food and water for a number of days.

So make sure you have go bottled water and food. Each person needs to have at least a three-day supply. That food needs to be no nonperishable because you might not have a generator and your refrigerator is probably not working.

First aid kit and have medicine with you. If you have prescription medication you need a seven-day supply here. You need a flashlight. And it's not one of those crank ones we were showing you yesterday, you need the extra batteries. And make sure that they work. Battery operated radio, that's good, a NOAA weather radio, because they will alert you to evacuations, flood warnings, all kinds of great information. It's hazards, not just weather information on the NOAA weather radio.

And cash because your ATMs might not be working either and cell phones might not be working. So make sure you have an out-of-town contact, like your mom in Ohio, Carol, where you can call your husband and say hey, you know, call mom so I know you're OK and you can call your mom, and he's doing all right.

COSTELLO: My husband is in Baltimore and they're going to get hit too.

JERAS: So you both need to call mom because you both might not have power.

COSTELLO: Thank you.

VELSHI: Thank you, Jacqui. Great advice. We're going to have to follow it.

Take a look at the seas off North Carolina now. Jacqui just finished saying the surge comes before the storm. This is what you're seeing now. The seas are getting a lot rougher. The Atlantic Ocean there off the coast of South Carolina. Was that South Carolina or North Carolina? That's Florida. It's still the same Atlantic Ocean. It's Florida.

We'll be right back after the break.

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COSTELLO: There's a lot going on this morning. Here is what you need to know to start your day. Hurricane Irene taking aim for the North Carolina coast and maybe New York city and New England after that. Warnings now posted from North Carolina all the way to New Jersey. Forecasters say it is an extreme threat to almost the entire East Coast, more than 50 million people potentially in its path.

CNN's team at the Tripoli airport reports Gadhafi loyalists are attacking administrative buildings inside the airport. NATO jets flyers are also hear flying overhead. We are learning they hope to conduct an offensive after losing four passenger aircraft.

And 53 people killed in a grenade attack at a casino right over the U.S. border in Monterrey, Mexico. At least 30 others are still trapped under the rubble. Emergency crews have stopped rescue efforts for now. They are afraid the building may collapse. Rescue efforts have been stopped for now. They saw two men past the building and hurl grenades into the building.

A wildfire now spreading in California near Yosemite National Park. So far it's burned 1,000 acres of forest. Officials say an exploding propane tanks sparked the fire. Some evacuations are underway.

A Los Angeles county judge has denied a request to sequester the jury in the Michael Jackson trial. Attorneys for Dr. Conrad Murray made the request, claiming media coverage could hurt their client. A judge disagreed. Dr. Murray faces charges of manslaughter in Michael Jackson's death.

You're now caught up on today's headlines. AMERICAN MORNING will be back in 60 seconds.

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VELSHI: A highly anticipated speech today by Federal Reserve Chairman Ben Bernanke is our topic for today's morning opinion. Bernanke is expected to announce steps to spur the faltering economy. It's a meeting of the Kansas City Federal Reserve in Jackson Hole, Wyoming.

A Bloomberg news op-ed says one group in particular will be listening very closely to what the fed chairman has to say, retirees living on fixed income who have watched their savings dwindle away. Quote, "It's as if monetary policy has been personalized to punish one group that behaved well, savers, and reward another that over-borrowed and overspent. I doubt that Bernanke will offer any new solutions today."

Also an editorial in Bloomberg says instead of the Fed pumping more money into the economy, what the U.S. needs is a national jobs policy. Quote, "Whatever Bernanke says today, he can't rescue the economy alone." That is a fact. The Fed can't get directly involved in jobs. They can do things that they hope will end up people creating jobs, but they have a very limited tool box.

COSTELLO: He is not like Mighty Mouse coming to the rescue.

VELSHI: We will let you know what the outcome is for you.

New this morning, billionaire Warren Buffett is hosting a fundraiser for President Obama next month in New York and that should be a big boost for Obama's reelection campaign. The base price for a ticket, $10,000. And attending a VIP reception with Buffett requires a donation of $35,800.

The New York Yankees making history. The team hit three grand slams in a single game. It is the first time that has happened in major league baseball history. The last time the Yankees hit two grand slams in a game was back in '99. Oh, yes, the Yankees beat Oakland 22-9.

VELSHI: I was watching that game last night. I just kept looking at the score thinking is that an error? It was football scores in a baseball game, 22-9.

Tampa Bay Rays Pitcher Jeremy Hellickson is making history. He became the team's first pitcher to strike out four batters in the same inning. If you want to know how that happens, the catcher dropped the ball on strike three so that batter was able to run to first base. Still considered a strikeout even though the player made it safely to first base. So Hellickson then struck out another batter. That is a stat that's good to have because you're not going to see a lot of those.

COSTELLO: No. Baseball has some strange rules, doesn't it?

Just ahead in the next hour, tracking hurricane Irene, making a line for North Carolina. New warnings posted this morning farther north. It's 57 minutes past the hour.

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