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Superstorm Causing Power Outages; HMS Bounty Crew Abandons Ship; Hurricane Coverage14 Rescued, Two Missing from HMS Bounty; Hurricane Sandy Forces Candidates to Change Plans

Aired October 29, 2012 - 09:00   ET

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

SOLEDAD O'BRIEN, CNN ANCHOR: Obviously big concerns in a high wind if that scaffolding starts to collapse. Things that we are watching today.

Want to hand it to -- head it over now to "CNN NEWSROOM." They're up next.

CAROL COSTELLO, CNN ANCHOR: And good morning to you. I sure hope you're keeping dry somewhere. I'm Carol Costello. Thank you so much for being with us.

We begin this morning, of course, with Hurricane Sandy, within hours expected to explode into this superstorm. Most of us have never seen anything like it in our lifetime. It's already huge, with tropical storm force winds spanning a width of nearly 1,000 miles. It's aiming at the heart of the east coast, the most heavily populated corridor in the country. Fifty million people are expected to feel the effects. Hundreds of thousands are now under evacuation orders.

FEMA predicts damage costs of about $3 billion and that's just for wind damage alone. Heavy rains or snow, storm surges, widespread flooding across the region depending upon where you live.

And we're also following a drama unfolding out to sea. A rescue is under way for the crew of the HMS bounty, the ship built for the Hollywood movie "Mutiny on the Bounty." Unbelievable. We'll have more on that rescue in just a minute. But let's begin with the first reports of power outages. They're already rolling in sadly.

CNN meteorologist Rob Marciano is in the iconic New Jersey town of Asbury Park.

Hi, Rob. Can you hear me?

ROB MARCIANO, AMS METEOROLOGIST: I hear you, Carol. And you're right about that. This is a special place. You know, the heyday of the '20s, this boardwalk would be bustling. The convention center you see behind me, it's gone through a number of boom and bust cycles and resurgences. But they've got sandbagged up. I'll tell you, and what's the locals are telling me that this thing has been primed to go for a couple of decades now and you can see the water and the surf already pounding it. Some of the piles on there. The outer reaches of that -- of that building. And this may very well be the storm that does it.

Relentless surf has been pounding this beach. And right now we're almost at about high tide. And you can see the foam coming up right up to the -- right up to the border here of the boardwalk. And that alone is unheard of. I mean the ocean should be about 200 yards that way. So even with the storm being 250 miles from us, we're getting a surge of about three feet right now.

Matter of fact, just down the road in Atlantic City, just up the road at Sandy Hook, they've already reached major coastal flooding storm surge stages. And what's going to happen tonight is about twice of what you're seeing right now. So in the next 12 hours, these seas will continue to build and continue to churn and continue to pound away at this shoreline. Obviously doing a tremendous amount of damage as far as beach erosion. But structural damage tonight. We'll just have to wait and see with what happens there.

We've got winds now that are approaching tropical storm force. And that relentless wind that will increase over the next 12 hours will be with us probably tomorrow, and right through the day, tomorrow afternoon and evening. So coastal communities have been evacuated. Here on this county alone there's about 600,000 people that live here. They've got a couple of shelters open. But most people have just -- are sheltering in place or are up there with their friends and family.

Look at the foam. Right up here. Foam. I mean all the locals are telling me they don't see that. Last time they saw that, really 1992 which was in the last epic nor'easter that came through here. And at that point the water came up and over this boardwalk. We expect that to happen later on tonight -- Carol.

COSTELLO: All right. Rob Marciano, many thanks.

I should explain where I am. I'm in Washington, D.C., this morning where people are also getting ready for the big storm to get in.

As you can see, a pretty steady rain. It's not raining really heavily yet. We're expecting that -- were expecting the rain to come down really hard around 11:00. And then the winds will start to pick up. They're expecting 40 to 50 mile per hour wind gusts. Steady rain is supposed to last, what, 36 hours. And that will really saturate the ground. A lot of big trees in this area that will probably topple over and fall on to electrical lines.

And you know what that means massive power outages. I'll be in old town Alexandria later this afternoon bringing you updates from there.

If you want a sense of just how seriously local officials are taking this approaching storm, consider this. The New Jersey Weather Service issued this dire warning yesterday for anyone ignoring evacuation orders. "If you are reluctant, think about the rescue recovery teams who will rescue you if you are injured or recover your remains if you do not survive."

And listen to what Connecticut governor said earlier on CNN.

(BEGIN VIDEO CLIP)

GOV. DANIEL MALLOY, CONNECTICUT: We expect today's tide, the one at noon today could be in the area of the 1992 perfect storm backup in Long Island sound. That's going to be a big wake-up call for people if that happens as to what tonight can be, which is far worse.

(END VIDEO CLIP)

COSTELLO: All right. We don't know if the crew of the HMS Bounty heeded the warnings. But we do know they are in big trouble this morning. They are in the water 90 miles off the coast of Cape Hatteras, North Carolina. They're sitting in lifeboats waiting to -- to be rescued. The HMS Bounty is a Hollywood ship. It's a replica of an historic ship used in the movie "Pirates of the Caribbean." It was also used in "Mutiny on the Bounty" years and years ago. The crew was trying to escape the storm but got caught up in it instead.

CNN's Sandra Endo is in Ocean City, Maryland. I believe we have Lieutenant General Russel Honore on the phone as well. Hopefully we have you, General. But let's start with Sandra.

Sandra, is it possible with weather conditions like this to rescue these people?

SANDRA ENDO, CNN CORRESPONDENT: It's very hard to hear you, Carol. But the weather conditions here in Ocean City have not let up. They've actually gotten worse. The temperature has dropped. The wind and the rain is just relentless. For the past 24 hours now we have just been pounded. And this is just the outer bands of Hurricane Sandy. We are expected to hear from town officials who are meeting with Coast Guard officials as well to give us the very latest on the conditions.

But take a look behind me. This is the big threat right now. And this is the coastal tide. And it's high tide right now. The massive waves are crashing down on to shore. You can see the beach erode right before our eyes. There was a fencing there. That has been washed away. And you could see the waves come over this protective sand dune and actually flood the area right in front of these waterfront properties.

And that's obviously a big concern for residents and town officials here. They're concerned about the storm surge and the flooding. And that's obviously something they're going to keep a watchful eye on. But clearly the combination between high tide, the full moon which makes it even higher tide, and also the long, lingering effect of Hurricane Sandy is all a combination for potential disaster -- Carol.

COSTELLO: Sandra, I also wanted to ask you about those people who are -- who are waiting to be rescued off the coast of North Carolina. I know that you've talked to the Coast Guard earlier today. What is the Coast Guard telling you about those people?

ENDO: Well, some good news about that, Carol. The 17 members, the crew members onboard that vessel that was taking on water about 90 miles off the shore of North Carolina, they are in lifeboats. They have abandoned ship. And they are trying to make their way back to land. So a rescue effort is under way to try to get those people back to shore safely.

But clearly not ideal conditions. I think they're, like, 18-feet waves that they're battling with. So clearly some good news, though, that they are off that vessel that was taking on water -- Carol.

COSTELLO: I don't know if that's good news because I wouldn't want to be sitting in a lifeboat in the middle of a hurricane, frankly. It's cold, it's wet and it's dangerous. Do you know that -- do you know where the ship was headed? What were they trying to do?

ENDO: That's a good question. We don't know why that ship was out in the Atlantic. Especially under these dire, severe weather conditions. We do know that it was a replica of a ship that was being used for a movie. And so clearly that could be a possible reason. But it's still unknown right now as to why that ship was out there. Certainly we're going to try to find out more from the Coast Guard.

COSTELLO: OK, Sandra. Keep in touch. Thank you very much, Sandra Endo, reporting live from Ocean City, Maryland, this morning.

So how do you survive these changing, rough conditions when you're out in the Atlantic in a lifeboat? Retired U.S. Army Lieutenant General Russel Honore joins us now.

General, first of all, are you amazed that these people are -- have even put themselves in this situation?

LT. GEN. RUSSEL HONORE (RET.), CNN CONTRIBUTOR: Yes. But you can never be surprised in these great disasters that people out doing activity like this. From what I've read, secondhand information, the captain was trying to go on the outside of the storm to make his way down to Florida. Obviously he didn't go far enough.

Now the United States Coast Guard using those C-130 Hercules aircraft, it's the same aircraft we use for hurricane hunters, have bravely gone in and re-established communications with him. So they are talking with him. The fact that he's in the lifeboat. He's followed the standards obviously to have emergency communications. And he had a big enough lifeboat for all his crew. So he prepared for worst-case conditions.

I doubt if he had ever expected to use this lifeboat. Now with the winds the way they are, Carol, the winds will have to come down some so those Seahawk helicopters that you see the Coast Guard go out and rescue people in can possibly get to them. But with 17 people, that will take a lot of turns by a lot of helicopters to pull that many people out.

The only other luck they might have is something called the blue water Navy, the Navy, you know, moved about 26 ships out of Norfolk. And one of those may be large enough to get (INAUDIBLE) a sea rescue. Otherwise they're going to have to wait until the Coast Guard get a big enough cutter that can handle that type of wave. So they are hanging on by the grace of God at this time. COSTELLO: Supposedly they're wearing these cold water suits to protect themselves from the elements because it's really cold. I would suspect the water is really cold. How do you survive -- I mean how long can you survive sitting out there waiting?

HONORE: Well, that would be hypothermia kicking in, Carol. And I don't have the particular details of the temperature where they are right now. But that would be the long-term impact. I understand that the vessel that they're in does have some kind of cover from what I've read. But the Coast Guard would have to address that because they've been out talking to them. As long as they can communicate with them, they've got a lot better chance of being rescued. But the best chance now is for the Coast Guard to be able to slip in. Something with a long enough rope like you get in there and rescue them because it won't happen by air at this time.

COSTELLO: All right. Lieutenant General Honore, thank you so much for enlightening us. I know you're going to join us in the next hour in the NEWSROOM. Thanks so much. We'll keep updating this story and our prayers go out to those people sitting out in that lifeboat waiting to be rescued.

Let's now go to Battery Park City in New York City. That's where John Berman is.

John, I understand it's getting worse there.

JOHN BERMAN, CO-ANCHOR, CNN'S EARLY START: I'm standing in water now, Carol. You know, just a few minutes ago, the water came up over this seawall right behind me, started lapping in. And now I'm standing in about four inches of water. This is part of the evacuation zone in lower Manhattan. And you can see why. Some 370,000 people evacuated from certain areas in New York City. Low-lying areas. Moved to hotels. Moved to their friends' houses, to 76 shelters that have been set up around the city.

And this is the reason why. They're expecting a storm surge here of some six to 11 feet when the storm really starts hitting at high tide tonight. That's about 8:50 tonight. It's high tide right now. A little bit past high tide right now. So this is just a small taste of what's to come. Frankly, I would have thought we would have started seeing this water recede soon because we're past high tide. But it might be that the storm surge is coming in at a faster rate than the tide is receding.

And this is a real risk for certain parts of lower Manhattan. If there is serious flooding down here, if we do see that storm surge up to 11 feet, there are concerns that it could flood subway tunnels, maybe get into the electrical grid.

Mayor Michael Bloomberg has talked about shutting down two electrical networks here. At least. Which could take out power to some 17,000 people at least. Of course, many of the businesses, the Wall Street area, a whole bunch of stuff goes on down here in lower Manhattan that takes electricity. That could be at risk. They will be watching this throughout the day. As I said, high tide is 8:50 tonight. It's not big, giant waves like you see up and down the east coast, smacking the coast line. No, it's a slow, steady rise with this water creeping. And I can tell you I've been standing here for the last five hours all morning. It's been dry all morning. Now all of a sudden the water starts coming in. And now we're standing in five inches of it -- Carol.

COSTELLO: Yes, it looks miserable there. John Berman reporting live from Battery Park. Thanks so much.

Sandy is already making travel a nightmare and having worldwide implications. Thousands of flights have been canceled across the country. In addition the major New York airports, JFK, LaGuardia and Newark are open. But flights are not going in and out.

Reagan National, Dulles, and Baltimore Washington International canceled almost all flights. And in Philadelphia all flight operations have been shut town. Overseas travel also affected. With nearly 50 flights out of London's Heathrow already canceled. The best advice, if you have to travel and you're not going near the storm check with your airline before heading out the door.

With a huge storm, a storm this huge, where you are will ultimately determine what you see. Rain, snow or flooding.

Meteorologist Jennifer Delgado of CNN International is here to break it down for us. And, you know, I can't help but think of the poor folks in West Virginia. They're going to have a steady downpour today and then they're going to have a blizzard. That is like some special kind of hell.

JENNIFER DELGADO, AMS METEOROLOGIST: Absolutely it is. It's certainly a different type of beast to the storm. Now we are going to talk more about the snow. But looking on the radar right now you can see where the rain is. Heavy rainfall coming down right along the Delmarva Peninsula, moving to parts of Washington, D.C. As we go through about the next hour we're going to see a heavier band working through the region.

But even for some areas right along Interstate 95 we are hearing reports of some flooding issues there. And that's why we do have some flood warnings popping up there. And we're going to continue to follow that. But as we move over towards the west in parts of West Virginia, down in the southwestern part, we are getting reports of snow coming down.

Now this is the light stuff. Now here's the good news. Say you want to try to get out to the store and get some supplies because there's a blizzard on the way. The good news is you can still get out now. But the bad news is there's a blizzard on the way. And it's really going to be firing up as we head later into the evening hours as well as into the overnight hours.

And I'll give you an idea in the future. And we'll take you through until about 2:00, 3:00. Next six hours ahead. Here's where the heaviest rainfall is going to continue to work in; some very heavier bands in the orange as well as the red. And, then, of course, the snow gets working in. But that blizzard warning in place, we're talking in some of these locations across West Virginia, we're going to see those winds gusting up to 50 miles per hour. Then you add in two feet of snow, big time problems there.

We'll have more coming up in just a moment. Stay with us.

(COMMERCIAL BREAK)

COSTELLO: Good morning. I'm Carol Costello, reporting live from D.C. As you can see, the rain continues to come down. But the worst, of course, is yet to come.

Around noontime the rain will really start coming down and the winds will really pick up and then people will really have to hunker down.

Sandy has the potential to be one of those once in a lifetime storms. The Federal Emergency Management agency is very busy right now from briefing the president to finalizing disaster response plans.

Craig Fugate is FEMA's administrator. He joins us from FEMA headquarters in Washington.

Sir, you must be one tired guy this morning.

CRAIG FUGATE, FEMA ADMINISTRATOR: Good morning.

COSTELLO: Can you hear me, Craig?

FUGATE: Yes. You're breaking up.

COSTELLO: OK. I'm going to start -- can you hear me better now?

FUGATE: Yes.

COSTELLO: OK. I was starting to feel like I was in that phone commercial, but I'm glad you're here with us and you can hear me.

What concerns you the most today?

FUGATE: That people are, one, looking at some of the initial impacts going, well, it's not that bad, and not realizing it isn't here yet. What you're seeing is just the outer bands.

So, people need to stay where they're at if they're safe. If they haven't evacuated, get somewhere safe. Stay off the roads. Stay inside. Stay safe as the storm comes ashore.

COSTELLO: Tell me specifically what FEMA is doing to help.

FUGATE: We've been moving folks in teams and equipment since Friday. Getting stuff in place throughout the region since we don't know exactly who's going to get hit the hardest. And really trying to gear up for what will happen when the storm moves through the area as well as supporting the states as they're getting ready for the initial impacts. COSTELLO: I know that power outages will be a big concern. The utility companies have tried to get ready. They've created tent cities in states like Maryland. They have people who've come in from other states, so they can mobilize quickly and get to those who need it the most, you know, as fast as they can.

Have you communicated at all with the utility companies?

FUGATE: Yes, we have. Again, we talk about FEMA, it's really about the federal teams. The Department of Energy is our lead. They're working with the utilities, making sure they have what they have.

But I think people need to understand that the weather is going to have a lot to do with how quickly the crews can get to work given the high winds that are going to last for potentially hours, if not over the next couple days.

COSTELLO: We keep hearing that power may be out for several days, up to a week in some places. What are you hearing?

FUGATE: Well, again, we won't know till the storm gets here. That's why we've asked people to prepare for extended power outages. Until we actually start seeing how much damage over how large of area and get those initial reports, it's hard to say.

But given the storm is going to move so slow we do know it will take time for the winds to come down. Crews can't work in high winds. So, although power is going out now, it's getting restored. As conditions worsen, those crews will come off the road and won't be able to get back to work till the weather starts to improve.

COSTELLO: Do you notice that the effort is more organized on the parts of utilities than, let's say, in previous storms?

FUGATE: Well, I think every time you have storms, you learn from that. I think Irene gave a lot of opportunities to look at how to do things better in this storm. But I think the difference is this is such a large area that it will take time. Particularly since this storm is moving so slow, even though they've done a lot more to get ready, it may still slow down getting those initial power lines back up because of the weather.

COSTELLO: Craig Fugate, thanks so much for sharing information with us this morning from FEMA. Thanks so much.

Let's head out to West Virginia for just a bit. West Virginia Governor Earl Ray Tomblin joins us on the phone from Charleston, West Virginia.

Governor, thank you so much for taking time out of your day to talk with us.

GOV. EARL RAY TOMBLIN, (D) WEST VIRGINIA (via telephone): Sure. I'm pleased to be with you, Carol.

COSTELLO: Is it snowing there yet? TOMBLIN: Yes, at our higher elevations, it is. It already has started snowing. It's raining all over the state. Of course, we're expecting the high winds to head in here later today.

We have deployed our department of highways crews, our national guard. They're working with our power companies that have been deployed all over the state. Like the FEMA director said, yeah, we're anticipating a lot of power outages and so forth, especially with the high winds and the heavy snow. We're expecting at least two feet of snow, if not more, in our mountain regions. So, yes, we're looking at possible flooding in our eastern panhandle over near D.C. and around the rest of the state.

So we are preparing. We have asked people to, you know, try to get the emergency supplies in -- batteries, food, water, all those things. And so, yes, we've been gearing up for this for the last couple of days. Hopefully we'll not be hit too hard. But we're just sitting and waiting now for the real storm to hit.

COSTELLO: Well, it's hard to imagine that it'll rain continuously for a few hours and the winds will pick up and then you're going to -- then it's all going to turn to snow and get cold. I can't even imagine what that will be like. Can you?

TOMBLIN: We're getting a little bit of everything. So, I guess that's something that maybe the coastal towns are not getting, snow. But here in the higher elevations, we'll be getting that also. Especially this time of year, there's still leaves on some of the trees which if it's a heavy snow, we'll have more of a tendency to break trees and bring power lines down.

So, anyhow, our electric companies in West Virginia have contacted their sister companies out of state. They have workers coming in. We're just asking people to wherever possible, stay off the roads. Let the emergency crews get through. Clear the roads so that the power company can get in and do their work as quickly as possible.

COSTELLO: Governor Tomblin, I know you have a long couple days ahead. Thank you so much for joining us this morning. We sure appreciate it.

TOMBLIN: OK, thank you. Bye-bye.

COSTELLO: Bye-bye.

We're going to take a quick break. When we come back, more on the coverage of superstorm Sandy.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

COSTELLO: Some scary news 90 miles of the coast of Cape Hatteras, North Carolina. We've been telling you about that big ship, the HMS Bounty. It's a replica of a historic ship.

There was a crew of 17 onboard. They were trying to escape hurricane Sandy but instead they got caught in the storm. They had to abandon ship, 17 people got aboard lifeboats. And they were just waiting to be rescued.

We have word now the U.S. Coast Guard was able to rescue 14 of them. But two are missing, whereabouts unknown. There's also a 17th person. The Coast Guard is not sure whether that 17th person was actually on the ship. They don't know where that person is.

So I guess technically three people are missing. We're going to keep you updated on this. We'll have more information in the coming minutes on CNN NEWSROOM.

Now, let's head to Virginia Beach, Virginia, where things are really deteriorating.

Art Kohn from WAVY joining us now.

Good morning, Art.

ART KOHN, WAVY TV: Yes, good morning, Carol. You know, Carol, for the last few days our local meteorologists have been promising us that this would be the worst of it. And you know what? It's turning out to be that way.

To give you a good idea, I'm at 16th Street just of off Atlantic Avenue in Virginia Beach. To my left is the Virginia Beach fishing pier. I'll ask photographer Walter Hildebrand to give you a good look over there.

We are seeing some very long seas brushing the top of the pier. There's one there even as we speak. Now, as long as those waves remain underneath the pier, we think that the pier should be OK. What would be a problem, if the wave height gets even larger, which would only have to be another two or three feet with some of the swells we've seen come in, then the integrity of the pier could be threatened.

But the other thing we're really watching out here is the tidal surge. Water has been coming up to the boardwalk and just a few times washed over the boardwalk. I've lived here in Virginia Beach all my life. I can tell you, we've only seen that happen a few times.

In addition to the tidal flooding along the coast, another big concern here is some of the inland areas of Virginia Beach that are fed by the Lynnhaven River and Elizabeth River basins. What we're worried about there is a phenomenon called tidal stacking. Because of this prolonged wind -- remember, this is an event that's been going on for days now -- because of the prolonged wind we're having a lot of flooding in those areas inland away from the coast as well, several roads impassable.

So as long as this rain and wind continues, that problem is going to persist and probably get worse. That's what we're looking at the most right now, Carol.

COSTELLO: Art, I couldn't help but notice those two people walking under umbrellas behind you. It's hard to believe anybody would be out in the elements, because not only is it rainy and damp, it's really cold. The kind of cold that kind of seeps through every layer of clothing that you have on.

KOHN: Yes. I can tell you about the seeping through every layer of clothing. But I'll tell you something, Carol. It's funny that you noticed that.

You know something? That's the way coastal residents are. They're drawn to events like this. Despite the miserable conditions, they will come down here to look and see for themselves.

You know, we implore them not to do that. We tell them to watch this. But it's -- as I said, what you're seeing right now we haven't seen to this extreme in quite a while. And people just can't resist it. And coastal residents are (INAUDIBLE), that's the way we are.

COSTELLO: I think that's the way we are as Americans, frankly. We're a curious bunch, aren't we? Sometimes to our detriment.

Art Kohn from W --

KOHN: Yes, no doubt about it.

COSTELLO: You got that right. Art Kohn, thank you, from our affiliate WAVY in Virginia Beach, Virginia.

The National Hurricane Center just one of many government agencies helping to monitor the superstorm.

Rick Knabb is director of the National Hurricane Center. He joins us now from Miami.

Rick, tell us what you know about the storm. What's the latest?

RICHARD KNABB, DIRECTOR, NATIONAL HURRICANE CENTER: Well, the latest is that it is making this turn to the left as it sets its sights on the coastline with a landfall of a circulation center sometime late tonight, early tomorrow morning. But what we're also seeing is already some very bad weather on the coast in the Mid-Atlantic States and moving up to the Northeast.

The rain is falling in some spots in the coastal region here, in the Chesapeake Bay area. Tropical storm force or gale force winds already occurring in some places. We're seeing initial water rises in many parts of the mid-Atlantic, northeastern coastline. A prelude to the storm surge that we are expecting to see later tonight and into tomorrow.

COSTELLO: You listen to the weather reports all up and down the East Coast and also in the Midwest and the meteorologists are saying this is a superstorm. We've never seen anything like this.

And I must say that as a viewer, you kind of think, oh, are you exaggerating? So tell us, are these meteorologists exaggerating? KNABB: We are not exaggerating the threat, no. This has many, many hazards that are going to impact a lot of people. And the weather is going to be bad for a long period of time. And even if the center passes 200 or 300 miles away from you, you could experience very dangerous or even life-threatening conditions.

Storm surge at the coast for which many people have been told to evacuate -- I urge people to heed those evacuation instructions. The strong winds at the coast and inland and heavy rain, the flooding that could occur well inland as well for a few days after landfall and long after it comes ashore. And even the heavy snow that we're going to se over mountainous areas of the Appalachians, West Virginia, for example.

This is going to affect a lot of people. And we're not underestimating the threat here. I think it's good for people to be hearing that there is a serious storm coming that could affect them individually in ways they've never been affected before.

COSTELLO: Rick, thanks so much. Rick Knabb from the National Hurricane Center in Miami.

We're going to take a quick break. We'll be back with much more coverage of hurricane Sandy.

(COMMERCIAL BREAK)

COSTELLO: OK. The picture beside me is from affiliate WPVI. That's a look at Atlantic City, New Jersey. As you know they closed all the casinos in New Jersey. Hopefully, everybody's at home where they're supposed to be hunkering down in preparation for the storm.

It's raining. It's nasty there right now. You can see it's a little rough, the surf. But the worst is yet to come. We have a couple hours yet and things will really start to deteriorate in New Jersey and all along the East Coast of the United States and also parts of the Midwest.

Hurricane Sandy, as I said, just hours from exploding into the superstorm. Most of us have never seen anything like it in our lifetimes. It's already huge with tropical storm force winds spanning the width of nearly 1,000 miles.

It's aiming at the heart of the East Coast, the most heavily populated corridor in the country. Fifty million people already feeling some of the effects, hundreds of thousands now under evacuation orders.

FEMA predicts damage costs about $3 billion. That's for the wind damage alone. Hard to think about all the water damage there's going to be.

Heavy rains or snow, storm surges and widespread flooding across the region depending on where you live.

Right now, we'll have an update on the HMS Bounty. Fourteen sailors have been rescued off the coast of North Carolina. Two crew members, though, are still missing. Their ship, the HMS Bounty started taking on water last night about 160 miles from hurricane Sandy. It's off the coast of North Carolina.

The 80-foot ship was built for the 1962 Hollywood movie "Mutiny on the Bounty." The ship was also used in "Pirates of the Caribbean." We'll have much more information on the HMS Bounty in the next hour of NEWSROOM.

Let's head back to New Jersey, CNN meteorologist Rob Marciano is in the iconic town of Asbury Park.

Hi, Rob.

MARCIANO: Hey, Carol. We are on the beach here. Asbury Park, New Jersey, where the sea foam is being sprayed up and the surf continues to pour in. This is an area that should not see this water this high up. Obviously these are staircases to what should be perfectly good sandy beaches. Instead, we've got surf that continues to hammer away at this structure and at that boardwalk.

We're right around high tide, which is about two to three feet above what we normally see, we've got that. Plus the moon is full. That's going for us.

So, one more cycle for high tide, when is that? That's tonight -- 8:00, 9:00 p.m. And that's when we expect landfall of Sandy to make its way about 50 to 100 miles to our south. That puts us right in the area where we should get the strongest amount of storm surge.

So this entire area has been evacuated. That boardwalk which has seen its ebb and flow of economic cycles is deserted at the moment. We expect the water to come up and over the boardwalk later on tonight.

We have already seen -- I should say I've heard up the road to Sandy Hook and down the road toward Atlantic City where you spoke about the casinos being closed, those areas have reach major flood stages from coastal storm surge and we're going to see at least twice the amount of surge later on tonight and we are seeing right now.

And certainly the waves have been big, anywhere from 15 to 0 to 15 feet. They will increase. Some of the buoy rings offshore are outstanding. They'll continue to build as the storm makes its way here.

Still, well over 200 miles offshore, and we are getting a tremendous surf action here not to mention the wind and rain that will be increasing throughout the day today.

A couple of shelters in place for this county. About 600 people have taken advantage of that. The people that have evacuated are battening down with friends and family. Right now much of Jersey is sheltering in place as per the request of Governor Chris Christie yesterday who urged his residents not to take any chances. From what we've seen, they've heeded that warning -- Carol.

COSTELLO: And that's a good thing. Rob Marciano reporting live from Asbury Park, New Jersey.

I should explain where I am. I'm in Washington, D.C., today. Below me is H Street.

A steady rain has been falling but not a heavy rain. The weird thing about this tropical storm, hurricane, usually it's really warm during hurricanes. It's cold right now. It's a damp kind of cold.

It kind of goes through every layer of your clothing. I mean, I am freezing right now. It's not even that cold really, probably 45 or 50 degrees. Because it's wet and it's damp, it feels so much worse.

As you can see, there's light traffic on H Street. Usually that street would be pretty chockfull of cars. Federal offices are closed today. A lot of people didn't go to work. Of course, schools are closed all across the region.

So people have really heeded warnings. They've stayed at home. And that is only a good thing.

Sandy, of course, is expected to have this enormous financial impact, too. Our Alison Kosik is at the New York Stock Exchange. That's closed, too, today.

Good morning, Alison.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, Carol.

You know, these estimates about what kind of damage this hurricane could cause, they're all over the map. It's early yet. Sandy hasn't hit some areas.

So, at this point it's a guess. And keep in mind these estimates often end up being much higher after we see the real damage numbers.

But here are some of the numbers we're seeing so far. What FEMA says is wind damage alone can cost up to $3 billion, talking about, you know, downed trees from those heavy winds, broken windows.

Insured losses can go more than $4 billion. That's the hit that insurance companies would take because of claims.

Another issue with this storm, of course, what kind of damage your homes are going to sustain. Meaning flooding and what's known as destruction of property. CoreLogic puts that number at $88 billion in losses. That number is really high because you see Sandy -- you see how big this storm is. It's hitting a huge, populated area. Lots of houses are in her path.

One more area of concern: how much business businesses are going to lose? You know, two days of business. They're going to be shutting their doors, likely wiped out. It could be more days than that.

Also flights canceled. You know, along with local businesses being closed.

One economist that we saw, Peter Morici, he puts economic losses for this storm as high as $35 billion to $45 billion -- Carol.

COSTELLO: Wow. Of course, you're not at the New York Stock Exchange because, of course, it's closed today. Has that ever happened before?

KOSIK: It has happened before. It is really rare to see weather be the reason for the New York stock exchange to shut down. But it has happened before. In 1985 hurricane Gloria hit. That shut down the NYSE. Before that, a snowstorm in 1969.

You know, as far as the NYSE sees it, it's really all about safety. You know, can these traders get to the floor? Can, you know, even electronic trading, too.

And now, it's not just the NYSE. The NASDAQ is also closed today. Not sure yet about tomorrow. But likely the New York Stock Exchange will be closed.

Now, the storm isn't expected to hit New York City until later this afternoon. So those days could be changed as well.

Now, interestingly enough, the futures market, Carol, that opened yesterday as normal. It just closed at around 9:15 this morning. If you're interested, Dow futures are down about 80 points. Not a big deal which is good, because it shows there's not a lot of panic.

Some other effects we're seeing in the financial markets, third quarter earnings season. Some companies are delaying their earnings reports because of the storm -- Carol.

COSTELLO: Alison Kosik reporting live from New York City for us this morning -- thanks, Alison. We'll be back with much more after this.

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COSTELLO: All right.

You're taking a live look at Ocean City, Maryland. The outer bands of Hurricane Sandy really doing a number on the surf there; you can see it's really rough there. You know the luckiest thing, it's offseason in Ocean City. So not many people were in town and most people have obeyed evacuation orders. Those mandatory evacuation orders went into effect on Sunday night.

It looks pretty empty. And we like to see that. Sandra Endo will give us a more complete update on Ocean City, Maryland, in the next hour of NEWSROOM.

With us on the phone now is Chief Petty Officer Nyx Cangemi, with the U.S. Coast Guard. He's in Portsmouth, Virginia to give us an update for us on the tragic story 90 miles off the coast of Cape Hatteras, North Carolina. That's where a ship, the HMS Bounty started taking on water, a crew of 17 were aboard her. They had to abandon ship and get into lifeboats.

The U.S. Coast Guard had to come to the rescue and Nyx why don't you take it from there. How did the Coast Guard manage to rescue these people in the midst of an oncoming storm?

NYX CANGEMI, CHIEF PETTY OFFICER, U.S. COAST GUARD (via telephone): Well, it's more from -- good morning, Carol. It's a pleasure to speak with you this morning. With our rescue crews, with our air crews, especially with an oncoming storm or hurricane, we're actually minimally staffed at that point. We usually remove our air assets and Coast Guard assets out of -- out of an area so that way they don't sustain any damage.

So our search and rescue capabilities are already limited in the middle of a storm. Doing a rescue such as this one requires a lot of coordination, recalling certain aircraft and crews, going through enormous amount of safety precautions in order to get our crews out there and to assess the situation in an effective and safe rescue not only for the survivors, but also for our Coast Guard crews.

COSTELLO: So how did you get the 14 people off those lifeboats? Was it by helicopter or did you get them by ship?

CANGEMI: Well, early in the morning we sent out a -- an aircraft, an airplane that located the vessel and established communications with them. They kept -- basically kept an eye on the -- on the ship and this was before they abandoned ship at the time.

And back in Elizabeth City in North Carolina we started prepping the helicopter crews to actually go out and effect a rescue. And at approximately 6:30 this morning, we hoisted the first five survivors from the life raft while a second helicopter came in and rescued an additional nine.

It was originally reported that there were 17 people aboard the ship. And it was later confirmed that there was actually 16 on the boat. And we pulled off the 14 and we have a helicopter -- another helicopter en route to actually assist the airplane searching for the two people in the water right now.

COSTELLO: So you're searching for two people in the water. Tell me what that kind of search is like.

CANGEMI: Well, the conditions out there on the water are about 40- mile-an-hour winds and 18-foot seas. Visibility is about a mile. So they're definitely challenging conditions. But we're throwing our -- our air assets at it. And we are the search and rescue experts. And we're remaining hopeful that we can find these two missing.

COSTELLO: We so appreciate your efforts. I mean this is really heroic because it puts you in a lot of danger, too, as the rescuers in this operation. The other question I had for you, did it surprise you that this ship -- we've lost him.

As you heard, it's -- it could be a tragic end for some of those people on board the "HMS Bounty", but we hope not. The U.S. Coast Guard is on the scene they are trying to rescue those final two crew members. We'll keep you posted.

We're going to go to break. We'll be right back. (COMMERCIAL BREAK)

COSTELLO: Good morning to you. I'm Carol Costello. Checking our "Top Stories" now. Hurricane Sandy just hours from exploding into a super storm. It's already fearsome with tropical storm force winds reaching nearly a thousand miles across. That's how wide the storm is -- a thousand miles. Sandy is now bearing down on the heart of the East Coast, the most heavily populated corridor in the country. Fifty million people could feel the effects, hundreds of thousands now under evacuation orders.

FEMA predicts damage costs of about $3 billion. And that's just for the wind damage alone. Heavy rains, or snow storm surges and widespread flooding across the region, depending upon where you live.

With eight days to go until the election, new presidential polls show just how tight this race is. The latest CNN National CNN poll of polls has Mitt Romney with a 48-46 lead over President Obama.

In the battleground state of Ohio, a poll of likely voters gives the President a 48 percent to 45 percent edge. And a Star Tribune poll of likely Minnesota voters gives the President a three-point advantage but that's also within, of course, the poll's margin of error.

Super storm Sandy, of course, is bearing down on Election 2012. Both campaigns have stopped sending those annoying fund-raising e-mails because they don't want to bother you while you watch the water rise in your basement.

Seriously though, the storm is already suspending early voting and the optics of both campaigns. President Obama decides to quit campaigning and run to country. And Mitt Romney -- he can't attack the President while he's trying to steady the ship, or can he?

With us is now, CNN contributors LZ Granderson and Will Cain. Thanks for joining us, guys.

WILL CAIN, CNN CONTRIBUTOR: Hi Carol.

COSTELLO: We just heard the President has decided not only to cancel a Florida campaign appearance he had scheduled for today but he was also going to cancel another one scheduled for Wisconsin so he can be in D.C. and, you know, keep the ship steady. I suppose that's a great idea, right, LZ?

LZ GRANDERSON, CNN CONTRIBUTOR: Well, it's a smart idea. That's what the President of the United States should do in a situation like this. We're talking about a storm that could impact as far west as Wisconsin, in terms of winds hitting power lines and causing some outages. So it's very important for him to be presidential right now.

COSTELLO: And as far as Mitt Romney goes, he can't attack the President too much. This is a time that the country needs to come together. So, Will, what does Mitt Romney do?

CAIN: You know, Carol, I mean I think he attempts to be empathetic. He defers to the President and the leadership position the President has and the burdens and responsibilities that go along with that. And he attempts to help in any way -- you know, any private citizen is going to try to help in this situation.

Politics has to take a backseat. There are political risks. You hate to analyze things politically at a time like this. But, you know, President Obama has the risk of handling this the right way and Mitt Romney has the risk of looking like he's politicizing any event that goes wrong.

COSTELLO: But I think it's important and LZ, maybe you agree and maybe you don't, that Mitt Romney sort of stay in the spotlight because he can't afford for people to forget about him for three days.

GRANDERSON: Well, you know, he's actually in a real dangerous situation because the more he's in the spotlight regarding this hurricane, the more his appearance during the debate in which he said things like FEMA having money for FEMA is immoral and how he wants to privatize relief funds.

He doesn't really want that conversation to underbelly or underscore what's going on right now because as people begin to see how important the government is in terms of handling these situations, they're going to be able juxtapose that to what Romney wants to do, which is take all that money out of FEMA, give it back to the states.

And he said even better, put it into the hands of private citizens so people will try to make a profit off of whether or not citizens who've been put out of their homes are able to find some safety and shelter. I think he doesn't want that kind of statement to be circling around him during this time.

COSTELLO: Will, do you think that will sort of complicate Mitt Romney's message? Is LZ right?

CAIN: No, LZ is wrong. What LZ just said is unfortunately untrue. That's an example of inserting politics in this situation.

GRANDERSON: Check the tape. Look at the tape.

CAIN: LZ, this isn't a debate where you --

GRANDERSON: It's on the tape.

CAIN: -- this isn't a debate. I'm not going to play this game right now. He's talking about a debate from the Republican primaries where Romney was asked about FEMA and not privatizing it but handing it over to the states. He did give a non-answer where he endorsed the concept of federalism but he never said he would take FEMA out of the federal realm. It just didn't happen.

GRANDERSON: He doubled down on it this weekend, Will. Maybe you were out of the loop. But he doubled down on it.

COSTELLO: I don't think Will's going to play that game, LZ. GRANDERSON: I don't want to play the game either. I don't want to play the game either, but I think it is important that we understand what exactly both candidates want to do in these situations. And Romney has said that he wants to take the money and put it not only in the states but also open it up to privatizing it. And the President is showing how important it is that the federal government has a hand in these type of crises.

I mean if you remember Joplin, Missouri, I mean you're talking about nearly $3 billion in damage. A state like Missouri cannot handle a $3 billion hit like that. It's not budgeted. And they need the federal government to come in and help in that case.

I think you'll see similar situations after this hurricane tragedy that there will be some states that won't have the money to be able to handle this and will need FEMA. What Romney has suggested is putting that type of funds into the hands of private citizens and letting them try to figure it out for themselves. And I think that people will be able to juxtapose that to what's happening and see maybe that's not the best solution.

COSTELLO: Ok. I'm going to have to wrap this up. I'm sorry, Will because I have to hit the top of the hour. But thanks for a spirited conversation this morning in the midst of Hurricane Sandy. Will Cain, LZ Granderson, thanks so much.

We want to take a break. We'll be back.

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