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American Morning: Wake Up Call

Gadhafi Heard But Not Seen?; Hurricane Irene Eyes East Coast; Winehouse Tests: No Illegal Drugs; Court: Anthony Must Serve Probation

Aired August 24, 2011 - 05:00   ET

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

CAROL COSTELLO, CNN ANCHOR: Good morning to you.

It is Wednesday, August 24th. This is your A.M. WAKE-UP CALL.

I'm Carol Costello, joining you live from New York.

International leaders meet today to talk about getting aid into Libya.

As for Moammar Gadhafi, he is still nowhere to be found, even though rebels have taken control of his compound. But Gadhafi is still talking -- at least we think he is. Two Arabic networks have aired audio messages supposedly from the embattled Libyan leader. He calls upon Libyans to clear out of Tripoli and get rid of what he calls criminals, traitors and rats.

Rebel forces are still fighting Gadhafi loyalist in some parts of Tripoli, but they claim to control 90 percent of the country.

CNN's Sara Sidner has been in the middle of it all, the heart of Tripoli, Green Square. Most of the gunfire you hear is in celebration.

This is what it looked like when rebels took over Gadhafi's compound.

(BEGIN VIDEO CLIP)

SARA SIDNER, CNN CORRESPONDENT: It's getting a little too loud for you to hear me and a little too much celebrating. We're trying to get -- I just got hit with one of the shells from one of the guns.

KYRA PHILLIPS, CNN ANCHOR: Sara, we can hear you just fine. Maybe you should take some cover here.

SIDNER: We're OK. Please don't shoot, sir. We're in between two walls, so we're fine.

(END VIDEO CLIP)

COSTELLO: I liked how she said, "Please don't shoot, sir," and thankfully, he did not. We'll have much more on Libya later.

Now, we want to talk about big, bad hurricane Irene. It's beating up Turks and Caicos this morning. It could be a category three by the time it gets close to the United States. A state of emergency in effect form parts of the North Carolina coast.

Let's head straight to Atlanta and get more from Jacqui Jeras.

FEMA is saying, "Hey, get ready." How bad will it be?

JACQUI JERAS, AMS METEOROLOGIST: I think it's going to be really bad, Carol. And, unfortunately, you know, we've been talking about this easterly trend that this thing has been taking in the forecast models. Just consistently, every model run seems to go east, east, east.

And it makes it a tough forecast because when it goes parallel to the coast, it makes it a little harder to determine exactly when that turn is going to take place and where that landfall is going to be. Right now on the current track of Irene, really everybody up and down the Eastern Seaboard needs to be concerned including you guys in New York City and everybody into Boston even.

This is a very powerful storm. It's really getting itself organized right now. Winds are up to 110 miles per hour. You can see that eye on satellite indicating the strengthening of this system as well. And we are just one-mile-an-hour shy of becoming a major hurricane or a category three as we call it.

All right. Let's take a look at the official forecast track. And this has changed since yesterday, so pay attention.

It's moving through the Turks and Caicos right now, moving into the southeastern Bahamas. It's going to spend the day moving through the Bahamas, including through tomorrow, every single island really will be impacted by this storm because it is just so huge. And the islands are relatively flat. So, it's going to do very little in terms of weakening this hurricane.

Florida, less likely to have much of an impact at all, maybe gusty winds, and certainly, the threat of rip currents. So, keep that in mind if you're heading the beaches and thinking about that. And then as we head into late Friday, Saturday and then into Sunday, that's our best chance for seeing the landfall potentially in the outer banks. The emergency order has been declared there where people need to worry and start getting potentially out of the way and making sure they've got all their emergency plans in place.

And take a look at that. You know, this could be heading up towards New York City, Long Island, on up towards Martha's Vineyard. So, this storm is really starting to shape up to be one of the worst case scenarios, Carol, in terms of potentially two landfalls now. Or even if it isn't a second landfall, it's certainly going to be a huge wind maker, lots of power outages can be expected with this storm. We got a long way to go with Irene.

COSTELLO: OK. But I will be ready.

JERAS: Good. I'm ready, too. Where is my kit?

I got my emergency disaster kit. Check it out. All my stuff. Ready to go.

COSTELLO: That's just nerdy. That's really nerdy.

JERAS: You better have one. It's smart, Carol. Smart and sexy. Just saying.

COSTELLO: You know what everyone is talking about here, though. Actually, all over the East Coast.

JERAS: The earthquake. Did you feel it?

COSTELLO: No. I was buying shoes. I think I'm the only one in New York City who did not feel it. But the earth did shake.

Stick around for a second because I want to tell everybody how the earthquake specifically affected things all along the northeastern part of the country actually because, hopefully, all will be still today.

But the 5.8 magnitude quake did leave its mark. Buildings and landmarks in Washington will be closed today, including the Washington Monument. The quake cracked some stones at the very top.

The National Cathedral closed, too. Three spires fell off the top of the building. But the building itself is structurally sound.

The old Post Office Tower reopens at 9:00 A.M. Eastern.

The Labor, Interior, Health and Human Services, Agriculture and Homeland Security buildings will be closed so inspectors can check them out for damage.

Public schools in Prince George's County, Maryland, also closed today.

Power is now restored at the power plant near the quake epicenter in Virginia that had been running on generator.

And this is what a 5.8 earthquake looks like inside a liquor store. This is surveillance from Maryland.

All those bottles almost came down. He did some serious teetering. You know what that is? Oh, Wow. You can see several boxes also fell from the shelves.

So, Jacqui, an earthquake --

JERAS: Save the wine, Carol. Save the wine.

COSTELLO: Exactly. An earthquake this strong anyway is so unusual. I guess it was centered near Richmond, Virginia. How unusual is it?

JERAS: Well, it's pretty unusual. In fact, this was almost the strongest earthquake they've ever had in the state of Virginia. They had one other one which happened back in May in 1897. That was a 5.9. This one has been revised as a 5.9.

You know, we don't have a lot of fault zones in the East compared to parts of the West. And so many people felt this shake. It was just incredible. And a lot of that has to do with the type of earth we have in the East. Even though it's a little bit rocky, it's older rock. It's a little bit softer. That allows the waves to travel a little bit further.

So, we don't see them nearly as often or as strong. We tend to not see them quite as strong. The strongest earthquake in the east was in Charleston, South Carolina, by the way. And that happened back in the 1800s as well.

COSTELLO: Just incredible.

JERAS: Scary. Unexpected. You never know when they're coming.

COSTELLO: Right. A lot of people thought, oh, what is it? Is it a bomb? Did a truck hit my building? Nobody really knew what it was.

JERAS: Right. Not used to feeling that. In California, they would be like, oh, it's just a 5.8.

COSTELLO: I know. One of my friends tweeted me from California. He said, ah, a 5.8 shakes my martini. It's nothing.

JERAS: I know. But, you know, their building codes are different, right? You build for earthquakes and plan for that out West. Out East you just don't do that. It makes a difference.

COSTELLO: Understand.

Let's not forget Colorado either because it got hit with an earthquake first. The state had its biggest earthquake in more than 40 years yesterday. This was a 5.3 shaker that hit about 180 miles south of Denver.

This is surveillance video from there, too. There were no reports of major damage. As you can see, lots of stuff fell off store shelves.

The first class action lawsuit has been filed over what happened at the Indiana state fair. Seven people died after a concert stage collapsed in a storm nearly two weeks ago now. A plaintiff says she watched one of the victims die and that it traumatized her. Several state agencies and those who put on the concert have been named as defendants.

Check out this video from a convenient store in Nacogdoches, Texas. Three robbers go after the clerk as she's counting cash. Her daughter then goes after the robbers with her broom. Mother and daughter are OK. The robbers got away with about $2,000.

Turning our attention back to Libya -- everyone on the hunt for Moammar Gadhafi. Comedian David Letterman has an idea of where he might be.

Here is your punch line this morning.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, COMEDIAN: How about this thing going on in Tripoli, in Libya, huh? Pretty exciting, right? Do we have any Libyans here tonight? Anybody here from -- huh?

Apparently, Colonel Gadhafi is in hiding, and they don't know where he is. They think he's where his two sons, Hoss and Little Joe. But they can't find them?

The main question about Libya is once they topple Moammar Gadhafi, can Libya put together a functioning stable government?

And if they can do that, for the love of God, will they show us how to do it? Because if we don't get ourselves up --

(APPLAUSE)

LETTERMAN: Whoa! I didn't realize this. In our audience, in the balcony, Colonel Moammar Gadhafi. Is he up there?

(END VIDEO CLIP)

COSTELLO: That was an incredible likeness, wasn't it?

Say goodbye to the idea that robots are delicate pieces of technology to be handled with care. A new crop of robots is meant to be hurled into enemy territory in the heat of war. How throwable robots are changing battle.

But, first, here is your quote of the day. This is a quote, "Imagine having dark skin and name recognition and the nerve to think that equals -- knowing that equals some" -- I'm going to read that over. I'm going to read that quote over and I'm going to do with the plum this time.

This is the quote, "Imagine having dark skin and name recognition and the nerve to think that equals knowing something about politics."

Find out who said that horrible thing in 90 seconds. Stick around.

(COMMERCIAL BREAK)

COSTELLO: Twelve minutes past the hour. This is your A.M. WAKE-UP CALL.

Now, back to the quote of the day. The quote, "Imagine having dark skin and name recognition and the nerve to think that equals knowing something about politics." This was actually said by the wife of New Jersey State Assemblyman Pat Delany.

According to "Politicos," she responded to a mass e-mail from the campaign of Olympic gold medalist Carl Lewis. Lewis is trying to run for office in New Jersey. Pat Delany resigned and apologized for his wife's e-mail.

Now, let's see how the world's money is doing this morning. Let's go to Kristie Lu Stout. She is live from Hong Kong.

Hi, Kristie Lu. What's making headlines around the world markets today?

KRISTIE LU STOUT, CNN INTERNATIONAL ANCHOR: Hey there, Carol.

Well, both hope and fear are ruling the markets today. There is hope that the Federal Reserve will act to bolster the economy. And that has been powering shares in Europe. The trade there opened higher after gains in the U.S. And we're seeing green arrows for the FTSE, the DAX, the Zurich SMI and the CAC 40.

Now, here in Asia, it is a completely different story. Investors are digesting that Moody's downgrade of Japan's credit rating. The Nikkei, it closed down 1 percent, Hong Kong's Hang Seng fell 2 percent. And the main indices elsewhere like Australia and South Korea also ended the day down.

So, Carol, investors here in Asia focusing on a more bearish economic outlook.

Back to you.

COSTELLO: Kristie Lu Stout live from Hong Kong this morning -- thanks so much.

Facebook is switching up its privacy controls. One big change, users can choose who sees a photo or status update right when they post it, kind of like Facebook competitor Google Plus.

Here's what else is new. No more photo tag surprises when you logon. They have to be user approved. You can peek at what your profile looks like to other people and you can change the visibility of a post even after it's gone up.

Throwable robots are a hot new battlefield trend, helping soldiers spy on enemies from a safe distance. Several companies showcasing the tossable bots at a D.C. conference this month. They let troops peek over walls, climb stairs, they even kill enemies via remote control. Developers say eventually, the robots could be used to clear minefields and dangerous rooms by just using a joy stick.

Lifesaving prescription drugs in short supply. Now, doctors and patients are scrambling for critical treatments. How they're making due, next.

(COMMERCIAL BREAK)

COSTELLO: It is a new day in Libya. As you know, the walls to Moammar Gadhafi's Tripoli compound have crumbled. Now, the complex is in rebel hands. But from Gadhafi's point of view, the loss was a tactical move. He's reportedly released two radio messages calling the rebels criminals, traitors and rats, and saying he will fight to martyrdom or victory.

Let's go around the world. Sara Sidner is on the phone. She's been in the thick of it.

I understand, Sara, you're on your way back to Tripoli. You were at the Gadhafi compound when the rebels took over. I know they searched the tunnels and stuff.

No sign of Gadhafi or his family?

SARA SIDNER, CNN CORRESPONDENT (via telephone): (INAUDIBLE). The compound would be equivalent of a king's palace and they're going through the compound. We're actually in Tripoli. We're very close to Bab al-Aziziya.

The streets of Tripoli are quiet. They are very, very secure as far as rebel checkpoints in the street here. And as we're going towards the neighborhood where Bab al-Aziziya, we -- hold on one second. We are slowly making our way.

And what's happening, every time we get close to a neighborhood, there is a check point. And some of rebels don't even know where some of these (INAUDIBLE) are because they're from places like Benghazi and Tripoli.

(INAUDIBLE)

COSTELLO: We're losing Sara. We're trying to get her back on the phone. But as you might expect, phone service out of Tripoli is mighty difficult to manage.

But Sara Sidner on the phone reporting. She is in Tripoli. It's pretty quiet on the streets there. And she said there are a lot of checkpoints set up, so it's taking some time to get into the heart of the city.

In the meantime, the search for Moammar Gadhafi goes.

Imagine showing up for cancer treatment to find out your doctor or hospital is out of your chemo drug. It's happening more and more across the country, thanks to a shortage of lifesaving drugs. Some patients have to find alternative treatment. Others are forced to put off treatment altogether.

Fighting the cholesterol battle? The answer may not be a prescription but what you eat. Canadian researchers found a cholesterol lowering diet did, in fact, lower cholesterol, especially the bad kind. The key: whole grains, soy protein and nuts and will power.

Former first lady, Nancy Reagan, is OK after taking a fall at her husband's presidential library. See who swooped in to keep her from hitting the ground, next.

(COMMERCIAL BREAK)

COSTELLO: Time for your Political Ticker with Tim Farley, host of "Morning Briefing" on Sirius POTUS, live from Washington.

Good morning, Tim.

TIM FARLEY, SIRIUS XM POTUS: Good morning. Good morning.

COSTELLO: Let's talk about President Obama and his vacation.

Everybody was complaining, oh, the president is going on vacation, but he's actually been pretty busy.

FARLEY: Yes. He must be asking himself when will this hellish experience of rest and relaxation come to an end because he's dealt with the hurricane. He's keeping close touch with emergency personnel to watch that.

We had the statement on Libya.

And, then, of course, we had the whole situation where the earthquake where the president was on the golf course as you can see getting briefed by people, and this is the first time he had allowed cameras to be around since he went golfing with John Boehner.

As a matter of fact, I think we have super exclusive video. The president was taking a putt, I think, as he was talking with, you know -- as the earthquake hit. Let's see.

(VIDEO CLIP PLAYS)

FARLEY: I don't think that was really the president, by the way.

COSTELLO: But it was still enjoyable to watch.

FARLEY: Sure. Why not?

There were no serious injuries yesterday and there was some damage. And you've been talking about that this morning. And we've had a couple of aftershocks. But all seems to be well.

We were watching the hurricane, though, because it could affect the Martin Luther King Memorial dedication on Sunday. We may be getting 85-mile-an-hour winds around the time that's supposed to take place. It's something we had to watch.

But, again, the president -- enjoy your vacation, Mr. President.

COSTELLO: It's interesting he allowed people to take pictures of him playing golf. You can see that being used in some RNC campaign commercial or something like that.

FARLEY: Yes, perhaps. It may be. Although you don't really see him -- you know, he's casual. He's on the phone. He's in touch with somebody. I don't know exactly how damaging that could be, but something they might use.

But presidents take vacations. He's in charge. Who knows if six months from now people will be thinking about this.

COSTELLO: Well, the Iowa caucus doesn't happen for, I don't know, a couple of weeks. But as it comes closer, the Iowa caucus I'm talking about, Rick Perry continues to do very well.

FARLEY: Interesting. PPP or Public Policy Polling shows that he's actually ahead of Mitt Romney now and Michele Bachmann.

And for her, this is a big state because she would like to have that win.

The caucus scheduled for February, could be in January, don't know yet because it depends on how the other states fall.

It indicates he has -- that is Governor Perry -- is really building a little momentum. In addition to that, he has very high favorable and very low unfavorable compared to some of the other candidates, including Michele Bachmann.

COSTELLO: Tim Farley, always interesting. Thanks so much. Tim Farley, host of "Morning Briefing," on Sirius POTUS.

A very close call for a police officer in California. He is expected to recover. But be warned, the pictures you're about to see are kind of graphic.

The shooting happened Sunday in El Cajon. That officer by the white pickup truck was actually shot in the neck. He's been on the force for four years. He and fellow officers were responding to a domestic dispute.

The suspect had killed his mother-in-law and a 14-month-old baby before setting a house on fire. Police also found him dead after the gunfight.

But the police officer, he's OK this morning.

Wow!

Former first lady, Nancy Reagan, lost balance and took a tumble last night. But before we show you the video, don't worry, she's doing just fine. She was walking through the Ronald Reagan presidential library guided by Florida Senator Marco Rubio where she stumbled.

Ooh! Rubio caught the 90-year-old as several others rushed to help her.

Nancy Reagan did recover and she made her way to her seat to hear the senator speak. And as far as we know, she's A-OK this morning.

Look how the first day of school ended for some seventh and eighth graders in Iowa.

(VIDEO CLIP PLAYS)

COSTELLO: That's a heck of a way to get the school year started, isn't it? All the students and the driver are OK. The bus evacuation drills they've endured since kindergarten finally paid off. It's not clear yet what went wrong with that bus.

The Amy Winehouse toxicology results are in. Her cause of death is still a mystery. Hear what her family members are saying about the report.

(COMMERCIAL BREAK)

COSTELLO: Good morning to you. It is Wednesday, August 24th. This is your A.M. WAKE-UP CALL.

I'm Carol Costello, live in New York. It's 30 minutes past the hour.

Let's get to Hurricane Irene. She is getting closer and closer to the United States. Irene is now pounding the Bahamas after hitting the nearby Turks and Caicos Islands. And, Irene could grow into a Category 3 by the time it gets close to the U.S. State of emergency now in effect for parts of coastal Carolina, but much of the Atlantic Coast is keeping a close eye on the storm. Jacqui Jeras tracking Irene. We'll check in with Jacqui a little later.

The Amy Winehouse toxicology reports are in, and there were no illegal substances in her system when she died. That's according to her family members because the results have not yet been released publicly. They say the test did show alcohol in Winehouse's body, but it's still unclear why the 27-year-old singer died in her London flat last month. An official report is due out in October.

Casey Anthony has until the end of the week to come out of hiding and report to a probation officer in Florida. Before her murder trial, Anthony pleaded guilty to stealing a friend's checkbook and writing checks for about $650. And now, an appeals court has ruled that she did not serve her probation time for that fraud while she was jailed. She was jailed, as you know, awaiting trial in the death of her daughter.

Here's something to make you -- all of you frequent flyers smile this morning. New passenger protection rules are now in place. Passengers who get bumped involuntarily will be better compensated. If your bag gets lost, the airline will have to refund your luggage fee. And airlines will be punished more for long tarmac waits on international flights.

Oh, did you feel it? The 5.8 magnitude earthquake that rattled buildings and nerves up much of the east coast? It clogged traffic, forced evacuations, and left a lot of people scratching their heads in the middle of the work day.

(BEGIN VIDEO CLIP)

COSTELLO (voice-over): You may not have seen it coming, but your pet probably did. An iReporter in Virginia captured this dog standing up and staring out the window before the room started shaking. The dog knew. I guess, it's animal instinct.

(END VIDEO CLIP)

COSTELLO (on-camera): As savvy as your pet can be, he can't use Twitter.

Here are some of the best laughter-shock tweets compiled by "Time" magazine. 5.8 earthquake in Virginia, Justin Bieber unharmed. Here's the next one. Luckily, I was holding a bag of chicken cut let's filled with bread crumbs. Another tweet, there was just a 5.8 earthquake in Washington? Obama wanted it to be 3.4, but the Republicans wanted 5.8, so he compromised.

A note to man's best friend, don't mess with a girl's best friend. A dog in Georgia ate $10,000 worth of diamonds. Honey Bun was walking the counter at a jewelry store where his owners worked when he chowed down on the gems. A day later, the diamonds were recovered, but the diamonds were sent back to the distributor, and Honey Bun walked away with a clean bill of health.

Bank of America, Goldman Sachs and Citibank just some of the banks that are showing signs of trouble. When we come back, we'll talk about why some experts are worried about the return of the so-called zombie banks.

But first, in today's businessman's special, we want to tell you about the magic price point for tablet computers. That's coming up in 60 seconds. Stick around.

(COMMERCIAL BREAK)

COSTELLO: Thirty-four minutes past the hour. This is you're A.M. WAKE-UP CALL. Now, back to the business man's special. The $99 tablet computer, Hewlett Packard is now selling their touch pads for just under $100. They tried selling them for $499 and then tried $399. They're now trying to clear out their inventory by dropping the price to 99 bucks, and it's working.

When we checked for the tablet on HP's web site, it says that they are temporarily out of stock due to the overwhelming demand after the price reduction. And just so you know, the touch pad reportedly has about $300 worth of components inside.

For morning money news, let's head to Christine Romans who's here in New York with me. Good morning, Christine. So, how are the markets shaping up this morning?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, they had a really good day yesterday. I mean, they got lost in a 5.8, the number everyone was talking about yesterday, right, but you had the Dow up yesterday. Today, you've got futures down a little bit, but not as low as they had been earlier, so we're watching closely to see what kind of stabilization, if any, the markets get.

Watching -- taking a cue, really, from Asia where there was a downgrade of Japan. So, we're watching that Japanese officials intervening in that market. So, there's some things happening overseas. We'll see if it plays out in the U.S., carol.

COSTELLO: Got you. Let's talk about the so-called zombie banks, because it seems we're facing the same problem we did, oh, you know, back when the recession really hit.

ROMANS: Yes. I want to be clear that most people are saying we don't have the banking problem what we had in 2008. So, while we're looking at the return of the so-called zombie bank, don't get too nervous yet about those battle days of 2008. This is a hangover, if you will, from all of those bad mortgages and those packaging those bad mortgages into bad securities. This is still haunting these big banks.

When you talk about zombie banks, you're talking about institutions, Carol, that are too big to fail, really, still, too big -- too important to the economy to just go out of business, but they're kind of limping around because they have all of these either lawsuits or bad loans on the books and a slowing U.S. economy. When you look at the stocks of the big major banks, they're all at 52-week lows.

You look at Bank of America. It's been cut in half over the past year. Goldman Sachs, you know, the CEO hired a personal attorney, a very well-known criminal attorney this week because of a probe from the Department of Justice. So, the return of the zombie banks as they say, these bank stocks have just been really, really hurt. And of course, you want a vibrant banking sector.

No matter what you say about bankers or bank bailouts or how banks got us into this mess, Carol, the bottom line is you got to have a healthy banking sector to have a healthy economy.

COSTELLO: Yes. We're stuck with them, huh?

ROMANS: Yes, we sure are.

COSTELLO: See you in a bit. Thank you.

Check out today's "Get Smart" question. What percentage of the total U.S. debt do Americans owe? Is it 85 percent, 69 percent or 54 percent. The answer is coming your way in two minutes. Stay with us.

(COMMERCIAL BREAK)

COSTELLO: Thirty-nine minutes past the hour. This is your A.M. WAKE- UP CALL. Now, back to the "Get Smart" question. What percentage of the total U.S. debt do Americans owe? 85 percent, 69 percent, or 54 percent? The answer is, B. 69 percent. According to "USA Today," Vice President Joe Biden got it wrong when he claimed that Americans owe 85 percent of U.S. debt.

The paper states Americans own about 54 percent of the public debt, but 69 percent of the total debt. That includes the money that the U.S. government owes itself.

President Obama, as you know, is on vacation, but his time of rest and relaxation has been interrupted by three big events. He was golfing yesterday just around the time that 5.8 magnitude earthquake shoot the east coast. He's also keeping up with the volatile situation in Libya. And Hurricane Irene which is on track to hit, where else? The east coast. A new poll puts Texas governor, Rick Perry, ahead of his Republican rivals in Iowa. Here's the breakdown. According to Public Policy Polling, Perry grabbed 22 percent of the vote among likely caucus- goers, followed by Mitt Romney at 19 percent, Michele Bachmann at 18 percent, Ron Paul at 16 percent, and Herman Cain rounds up the top five with seven percent.

The much anticipated dedication of the Martin Luther King Jr. memorial in Washington could be delayed. The $120 million memorial opened to the public on Monday, but organizers planned the dedication for Sunday to coincide with the 48th anniversary of the march on Washington. Now, those plans are up in the air all depending on where Hurricane Irene heads and when.

Here are three things to put on your radar today. Lawyers head to court around 10:00 a.m. eastern to challenge Alabama's new controversial immigration law. A federal judge is being asked to block the law which is set to take effect on September 1st.

At 11:00 a.m. eastern, the Congressional Budget Office updates its annual budget forecast. It will be interesting to see if events like the debt ceiling deal will affect the annual outlook.

And beginning at 1:25 p.m. eastern, education secretary, Arne Duncan, holds a Twitter town hall meeting. Duncan will answer questions at hashtagaskarne.

If you live near the east coast, you need to be watching Hurricane Irene. It could cause all kinds of problems this weekend. We'll have details for you after the break.

But first, on this day in history back in 2010, something was downgraded that had nothing to do with the S&P and the American credit rating. The planet Pluto was downgraded from a real planet to a dwarf planet. It's 42 minutes past the hour.

(COMMERCIAL BREAK)

COSTELLO: Good morning to you. It is Wednesday, August 24th. This is your A.M. WAKE-UP CALL. I'm Carol Costello. Thank you for joining us this morning. It's 44 minutes past the hour.

Now, to big, bad Hurricane Irene. A storm we've been keeping an eye. It's beating up Turks and Caicos Islands and the Southeastern Bahamas this morning. It could grow into a Category 3 by the time it gets close to the United States. Our Jim Spellman is in Nassau who joins us now live on the phone. So, Jim, how is Irene affecting things there?

VOICE OF JIM SPELLMAN, CNN CORRESPONDENT: Good morning, Carol. Well, so far, the winds have started to pick up. No signs of rain. This will be later today before we really start feeling impacted the storm. But, you know, there are so many American tourists and tourists from all over the world here, and the message is clear to them, get out. This morning -- early this morning, the cruise ships disembarked to get out of the way of the storm. The airport is crowded. People are trying to get out. They're going to shut down all the flights about midday and try to move all those airplanes away from this storm here. Less options for the Bahamians that live here. And virtually, this island, New Providence Homes to Nassau, Paradise Island, where so many tourists come, it's only about 20 miles long. So, it's really not too many places to evacuate to.

They're going to set up shelters away from the coastal areas and hope to keep everybody safe. The tourist hotels, for the tourists who do have to stay are pretty well reinforced. Some of them even claim to be built to Category 5 capabilities. They'll put it to the test as this thing comes through here later today and into tomorrow. It's a preview of what the United States is going to deal with later in the week -- Carol.

COSTELLO: Thanks so much. Jim Spellman live from Nassau. By the way, a state of emergency is now in effect for parts of the North Carolina coast just in case Irene hits. And Jacqui Jeras, tell us about that, because FEMA says that people living along the lower part of the east coast of the United States should get ready now.

JACQUI JERAS, AMS METEOROLOGIST: Yes. Everybody really needs to be ready now and be prepared for a major hurricane making landfall in the U.S. And this, you know, could be North Carolina, but this could also stay offshore and head on up towards the northeast. Our models have been consistently trending eastward, and we're expecting that trend to continue, and I'll show you those in just a second. A lot of them are keeping it offshore now, but it's really quite honestly, we don't know for sure if this is going to be hitting the Carolinas or not.

All right. Here's what we do know about Irene, and that's -- this is a very powerful hurricane that's going to continue to intensify. Take a look at that satellite image. Look at that eye in the center. This thing is tightening up. It's getting stronger. The pressure has been dropping. And when we see that pressure drop, then in turn, we start to see those wind speeds increase. We're at 110 miles per hour. It has to be 111 to be a major hurricane, but what's one mile an hour, right?

May as well consider this a major hurricane, as we speak. It's moving through the Turks and Caicos. Hurricane warnings are in effect through the entire Bahamas chain of islands. This will be a very strong, terrible storm for them, unfortunately, just getting whipped with high storm surge. Maybe as much as nine to 11 feet and heavy rain all. Then, it's going to make its approach towards the U.S. You can see how large that cone of uncertainty is.

You know, Carol, this far out in time. We're talking about that airs (ph) about 200 miles from that center line. So, we'll have to continue to watch this very, very closely. If it takes this track, this is going to be scraping the megalopolis, bringing damaging winds and heavy, heavy rainfall. In fact, take a look at this map right here. This is what we called the QPF map for the next five days. It stands for quantitative precipitation forecast.

And I know you're going to call me a geek again. Just go right ahead. The bottom line is, look at how much rain is going to come in with this thing with all that moisture from the Atlantic. We could be talking six to ten inches easy with isolated amounts heavier than that, and we've already had flood problems in the northeast as the ground is already very, very saturated.

All right. Let's show you those computer models that I was talking about and how they've been trending. Look at how closely they are clustered together. The closer they are clustered together, the more confidence we have in our forecast, and they're very tight near where the storm is now, but look how they start to spread out as we head down the line, and many, many of those models are keeping it offshore through the Carolinas.

We're going to have to watch this thing very, very closely. There's a cold front in the Midwest, Carol. That's the good news for those folks, and it's that cold front that might help kick Irene a little further to the east yet still. So, stay tuned for more updates.

COSTELLO: I hope so, and I like that you're geeky in this these situations. It's very helpful.

(LAUGHTER)

JERAS: Good.

COSTELLO: Jacqui Jeras, thank you.

JERAS: Sure.

COSTELLO: International leaders meet today to talk about getting aid into Libya. As for Moammar Gadhafi, he is still nowhere to be found, even though, rebels have now taken control of his compound, but Gadhafi is still talking, at least, we think he is. Two Arabic networks have aired audio messages supposedly from the embattled Libyan leader. He calls upon all Libyans to clear out of Tripoli and get rid of what he calls the criminals, traitors, and rats.

Rebels forces are still fighting Gadhafi loyalists in parts of the city, but they claim to control 90 percent of the country now. CNN's Sara Sidner has been in the middle of it all, in the heart of Tripoli, Green Square. Most of the gunfire you will hear is in celebration. This is what it looked like yesterday at Gadhafi's compound.

(BEGIN VIDEO CLIP)

SARA SIDNER, CNN CORRESPONDENT: Yes. It's getting a little bit too loud for you not to hear me and a little bit too much celebrating, but we're trying to get away from the -- I just got hit a little bit with one of the shells from one of those guns.

UNIDENTIFIED FEMALE: Sara, we can hear you just fine, but maybe you should take some cover here?

SIDNER: We're OK. Please don't shoot, sir. We are in between two walls, so we're fine.

(END VIDEO CLIP)

COSTELLO: She's amazing, isn't she? We heard from Sara just a short time ago. She said the streets of Tripoli are quiet now. There are many check points that up around the city. We'll check back with Sara Sidner on "American Morning" in just a few minutes.

Did you feel it? Did you feel the earth shake? Hopefully, the east coast will be still today, but the 5.8 magnitude quake has left its mark. Buildings and landmarks in Washington, D.C. will be closed today including the Washington monument. The quake cracked some stones at the very top. The national cathedral is closed, too. Three spires came off the building, but the building itself is OK.

The old post office tower reopens at 9:00 a.m. eastern. The labor, interior, health and human services, agriculture, and homeland security buildings will be closed so inspectors can check them out for any structural damage. Public schools in Prince George's County, Maryland are closed today, too. Power is now restored at a nuclear power plant near the quake epicenter in Virginia -- in Virginia, rather. It had been running on generators.

And, this is what a 5.8 earthquake looks like inside a liquor store. This is surveillance video from Maryland. All of those bottles almost came tumbling down. Oh, they did some serious teetering, didn't they? And of course, several boxes fell off the shelves, but all in all, everybody was OK. And isn't that what really matters?

Don't forget Colorado, because it got hit first. The state had its biggest earthquake in more than 40 years yesterday. This was a 5.3 shaker and hit about 180 miles south of Denver. We've got surveillance video for you from there, too. No reports of major damage, but as you can see, lots of stuff fell off store shelves.

The first class action lawsuit has been filed over what happened at the Indiana State Fair. Seven people died after a concert stage collapsed in a storm nearly two weeks ago. The plaintiff says she watched one of the victims die, and it traumatized her. Several state agencies and those who put on the concert are named as defendants.

And a woman accused of tossing her baby from a hospital parking garage is now in jail. Police near Los Angeles say the woman actually went back to the scene of the crime a few hours later and that's when they placed her under arrest. Her seven-month-old son amazingly survived, but he's in extremely critical condition.

Mark your calendars. Sprint is getting ready to get into the iPhone game. More details live from the NASDAQ MarketSite.

(COMMERCIAL BREAK)

COSTELLO: Fifty-six minutes past the hour. This is your A.M. WAKE-UP CALL. Here are three things to put on your radar. Sunday's dedication of the Martin Luther King Jr. memorial could be delayed because of Hurricane Irene. Around 7:15 a.m. eastern, CNN contributor, Roland Martin, will talk with the CEO of the MLK Memorial Foundation on the Tom Joyner Morning Show. Lawyers set to court around 10:00 a.m. eastern to challenge Alabama's new controversial immigration law. A federal judge is being asked to block the law which is set to take effect on September 1st.

And beginning at 1:25 p.m. eastern, education secretary, Arne Duncan, holds a Twitter town hall. Duncan will answer questions at hashtagaskarne.

Time now for a little laugh because it is Wednesday. Yesterday's quake sure had a lot of people talking all up and down the east coast, including here in New York City and including comedian, David Letterman. So, here's your punch line.

(BEGIN VIDEOTAPE)

DAVID LETTERMAN, HOST, THE LATE SHOW WITH DAVID LETTERMAN: A lot of people react differently to an earthquake. Like, down at the city hall, Mayor Bloomberg, they felt the earthquake, and he ran and looking for cover. And they found Mayor Bloomberg during the earthquake standing under his desk.

(LAUGHTER)

LETTERMAN: They traced the epicenter of the earthquake to Governor Chris Christie's aerobics class.

(LAUGHTER)

LETTERMAN: They traced the epicenter of the earthquake to Kim Kardashian's honeymoon suite.

(LAUGHTER)

LETTERMAN: You could tell the earthquake, I mean, Donald Trump. You could see the ripples going through (INAUDIBLE).

(APPLAUSE)

(END VIDEOTAPE)

COSTELLO: That's pretty good. Let's head to Joya Dass for a look at your money this morning. She joins us live from the NASDAQ MarketSite here in New York. Hey, Joya.

JOYA DASS, CNN CORRESPONDENT: Carol, good morning to you. Well, what can I tell you? Yesterday, we saw a decent close to the markets, but this morning, the futures are pointing, at least on CNNMoney.com that we are going to see a little bit of a selloff at the open.

COSTELLO: Boy, that was fast. I was expecting you to give me a load of bad news, but you didn't. That's why I was, like, I was in a state of shock.

(LAUGHTER)

DASS: You know what I was really thinking in my head, short people get such a bad rap. (INAUDIBLE) you're just talking about.

(CROSSTALK)

COSTELLO: OK. Quickly now, I understand a new carrier is getting ready to get into the iPhone game.

DASS: You know what, we've been talking about iPhone 5 coming to market for some time now, but the newest pizza (ph) news is that Sprint is actually going to start carrying the device. Now, what this is going to do is to actually delay the release of the device. IPhone 5 was supposed to hit the market in September.

It probably isn't going to come to market until about October, but that means now Sprint, AT&T, and Verizon are all going to be selling the device. And anyone who's Sprint Nextel (ph) stock owner was definitely happy yesterday because the stock has been down about 16 percent year to date, and yesterday, I believe it was up 10 percent, Carol.

COSTELLO: Talking about the iPhone, how can anybody possibly compete?

DASS: Well, I mean, goodness, there is actually a couple other competitors out there, and we know who they are. Actually, I happen to own one, the Android. And Google has become like a force to reckon with. What's happened to the Blackberry? Research in motion is still trying to, you know, scramble to keep up. I believe, this past week, they said they're going to actually make music available to users. How late to the dance are they on that?

COSTELLO: Oh, you're not kidding like -- I have a blackberry and I feel like I'm carrying around this antiquated thing in my hand. So, I think its days are numbered if even I think that.

DASS: Right. And then, don't forget, of course, the third contender in the group, the Windows 7 phone.

COSTELLO: Joya Dass, many thanks. Nice to see you this morning.

DASS: Take care.

COSTELLO: AMERICAN MORNING continues right now.