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Dead Even Race; A Mortgage Lifeline; Hurricane Ike Across Cuba

Aired September 08, 2008 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: You're informed with CNN. I'm Tony Harris.
You will see developments come into the NEWSROOM all day long. Hurricane Ike bearing down hard on Cuba right now. The storm set to blow into the Gulf and threaten the U.S. coast.

Stocks surge today as the feds step in to save two mortgage giants. If you pay taxes or need a mortgage, we've got the bottom line.

Barack Obama or John McCain? Both want the "change" label. Who really has a history of shaking things up? A CNN "Reality Check" today, Monday, September 8th, in the NEWSROOM.

And we promised it just a moment ago. News just in on the presidential race. A new poll out just moments ago shows a dead heat between John McCain and Barack Obama.

Senior Political Analyst Bill Schneider live from Washington, D.C. with the details.

Good to see you, Bill. And let's talk about two polls here. We're talking about the CNN/Opinion Research Corporation poll and we're also talking about the CNN Poll of Polls.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: That's right.

First of all, take a look at our CNN poll taken over the weekend after the two political conventions. There you see it, 48-48. You can't get any closer than that.

It was tied before the conventions, 47-47. Now it's 48-48. It appears that the convention left things where they started, in a complete dead heat.

Now, there have been other polls that have been taken over the weekend, and they show just a very slight edge, not significant, for John McCain. Our Poll of Polls shows John McCain at 47 percent, Barack Obama at 46, but other polls have a larger number of unsure voters. The number of unsure is up to 7 percent in our Poll of Polls, but in our own CNN poll, where we pushed voters very hard to make a decision, the number of unsure is lower.

That's first time, by the way, we've seen McCain even with a minor edge, in this case one point, in CNN's Poll of Polls. So this race looks like it was tight and it's getting tighter. HARRIS: You know, we talk about a horse race all the time, we talk about a sprint to the finish. That's exactly, Bill, what we have in this case -- 48-48 with just less than 60 days. I mean, this is really a sprint to the finish now.

SCHNEIDER: It certainly is. And we're seeing divisions in the electorate that we've been seeing for some time. Some of them are surprising.

Women, are they responding to Sarah Palin? Well, actually, women are voting for Barack Obama and Joe Biden 52-45 over the McCain/Palin ticket. Men are voting for John McCain and Sarah Palin.

HARRIS: Wow.

SCHNEIDER: Voters under 50 are voting for Obama. Voters 50 and over are voting for McCain. So we're seeing some very sharp demographic divisions within the electorate, leaving at a dead heat.

HARRIS: What a snapshot of this race as it stands right now at the moment.

Bill Schneider for us from Washington.

Bill, good to see you. Thank you.

SCHNEIDER: Sure.

HARRIS: Let's show you the latest video on a story that we've been following throughout the morning here.

Once again, we're going to take you to Baltimore, Maryland. And again, this is the Edmondson Village Shopping Center. Boy, this is a very popular shopping center in the Baltimore area off Route 40, just a little bit south of 695 there.

We're talking about a number of buildings, a number of businesses that are engulfed in flames. The latest video coming to you from our affiliate in Baltimore, WBAL.

At one point, 15 businesses engulfed in flames. Right now, firefighters still working on it. We have no reports of injuries. Evacuations have been handled and everyone is out of the building and everyone, we understand, is safe. Again, no reports of injuries at this time.

We're just going to keep an eye on this situation and this story as this major shopping center, shopping mall in the Baltimore area, is really fully engaged now in fire. We'll keep an eye on it and give you the latest information as we get it for you here in the NEWSROOM.

Issue #1, the economy. And investors cheering for Fannie and Freddie today. Stocks soaring globally on the news the mortgage giants are now controlled and backed by the federal government. The temporary takeover paid for by, you guessed it, you and me. Why? Allowing the two to fail would be catastrophic to the global economy. Fannie and Freddie own or back nearly half of U.S. mortgages. That's $5 trillion worth.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in the financial markets here at home and around the globe. This turmoil would directly and negatively impact household wealth from family budgets to home values to savings for college and retirement.

(END VIDEO CLIP)

HARRIS: So, too big to fail, huh? Well, here's the plan.

The government is prepared to inject as much $200 billion into Fannie and Freddie by purchasing preferred stock. The government can also buy as much as 80 percent of common stock. Ordinary investors holding common stock lose dividends. Their share is worth little or nothing.

The government also is setting up something of a piggybank for Fannie and Freddie. The Treasury will loan money to the companies as needed.

Finally, the CEOs at Fannie and Freddie have been let go. Both walk away with huge severance and benefits. Deals worth together perhaps $24 million.

Let's break all of this down with the CNN money team. Our Susan Lisovicz watching investor reaction on Wall Street. But first, Senior Business Correspondent Ali Velshi and Business Correspondent Christine Romans.

All right, guys, what went wrong here? Why did the government have to jump in?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: You know, this is one of those situations where banks would give mortgages to people, those mortgages would then be sold to a second party. And those banks would now have more money in order to make more loans.

Well, what happened is, in this mortgage crisis, all of those second parties disappeared, and all that was left was Fannie and Freddie. So, while they own or guarantee, as you said, $5 trillion worth, almost half -- more than half of all U.S. mortgages, in fact, they're responsible for about 80 percent of all new mortgages because there's no one else to do this. So, if they disappeared, if they failed, there would be no one for your bank to sell those mortgages to so they could get more money.

HARRIS: Yes.

VELSHI: That would make it harder for individuals to get mortgages and probably more expensive.

HARRIS: Christine, you wanted to jump in there?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, I was going to say, there's been a death watch for these two companies for a long time now. As housing prices have started to fall and as folks have looked at the unraveling at the housing market, they were saying, you know, something terrible's going to have to happen here to Fannie and Freddie. And then in the end now, the Treasury Department coming in and Henry Paulson saying that indeed the alternative is worse, the U.S. government stepping in. That's one of the reasons why you stocks up here today.

But this isn't the end of it, really. I mean, everyone we've talked to today said this keeps things from getting worse. This is going to help.

VELSHI: It doesn't necessarily make things better.

ROMANS: It doesn't necessarily. And it might be even taken as a symbol of just how bad things have become when you have the United States government intervening...

(CROSSTALK)

HARRIS: Right, exactly. But you know what guys? You know, if feels like what's happening here is we're propping up a bottom, but no one knows where the bottom is at this point.

VELSHI: Right.

HARRIS: So I'm wondering, will this, in your estimation, help to turn the housing market around?

ROMANS: Well, keep in mind, this does nothing for the jobs market.

HARRIS: There you go.

ROMANS: You have two tracks here. You've got a housing market that's coming apart, but then you also have this other problem.

VELSHI: Right.

ROMANS: And the housing market started to fall apart when really the overall economy was still healthy. Now you have people losing their jobs.

VELSHI: Yes. Let's say the effect of this is that interest rates drop on a 30-year mortgage from 6.39, where they are now, to, let's say, 6 percent. Some people say it might go lower.

ROMANS: If you don't have a job, are you going to take advantage of that?

VELSHI: It's not going to set the housing market on fire. In fact, these people aren't buying houses not because mortgage rates are too high, it's because the economy is in the doldrums.

HARRIS: That is -- you know, and when we finally fix this thing, this whole quasi-government -- it's public, it's private.

VELSHI: Right.

HARRIS: When we finally fix this, can we lose one of those distinctions, at least?

VELSHI: One of those, right, public or private.

HARRIS: Come on.

ROMANS: Pick a lane.

VELSHI: This blurry stuff is what's confusing, because there are public companies. So you had stock in it when it was profitable, you were making the money. But guess what? Now that it's a problem, the government has to step in to back it up. The common shareholders, as you said, their shares are worth virtually nothing now. And it might be some time before those...

(CROSSTALK)

ROMANS: But you know, we're told that the Treasury Department was very keen on making sure that, ultimately, in the short run, a lot of taxpayer money is going to go into this. But you've got to hope that they put protections in there that somehow there could maybe even be a return on investment for American taxpayers...

VELSHI: If these companies come back, yes.

ROMANS: ... if these companies can come back.

HARRIS: And we're also a little worried about the government running something this year.

ROMANS: Oh, no. No.

HARRIS: Christine, Ali, good to see you.

ROMANS: Tony, you're so cynical.

HARRIS: I'm sorry. I went total cynic on you just then.

All right. Good to see you both. Thank you.

VELSHI: All right. You too.

HARRIS: Fannie and Freddie probably aren't household names around your household, but the mortgage giants are likely a part of your life now.

CNN's Gerri Willis and Susan Lisovicz will be along later this hour. This is really an important story, with real ramifications for you. Now, to get the latest developments on this story and to follow your fortunes, fast changing, to be sure, just go to CNNMoney.com, check it out every day for market analysis, to see the numbers, and some real pinpoint analysis on this story as it develops. That's CNNMoney.com.

All right. We are tracking an absolutely monster. We're talking about Hurricane Ike, ripping across Cuba this hour. Giant waves, ferocious winds, heavy rain. It is a powerful Category 2 storm.

Our Havana bureau chief, Morgan Neill, is in Havana, and we will hear from him in just a couple of moments.

In the meantime, Florida is getting ready for Hurricane Ike. The storm is on an unpredictable path in the Gulf right now. Authorities have just canceled evacuation orders for the Florida Keys. Many people had been boarding up and getting out.

Our Susan Candiotti is live for us in Key West, and we will talk to her at the bottom of the hour.

(WEATHER REPORT)

HARRIS: Right now we want to get to Morgan Neill, our Havana bureau chief. He is on the phone with us.

And Morgan, your reporting last hour was just so dramatic as you were describing what you were seeing. Give us the very latest.

MORGAN NEILL, CNN HAVANA BUREAU CHIEF: Well, it sounds like good news we're getting from Jacqui there. The storm passing to the south. And let me do that again, describe just what I'm looking at here.

I'm on the seawall, on the north side of Havana. Of course, just across the Florida Straits, from Florida itself.

What we're seeing are waves crashing into the seawall. Some of them starting to top over the top of the seawall. And this is something we've really seen in the last two hours.

But of course the real damage to this point that we've seen in this storm was a good ways away, all the way to the eastern extreme of Cuba, the city of Baracor (ph) there, saw something similar in it. The waves, the storm surge forcing waves into the seawall, but to a much greater extent.

There, we saw waves going over the top of a five-story building. We saw flooding, people up to their waists throughout that city of Baracor (ph), also in neighboring cities along that coast. We've seen power lines knocked down, trees knocked over, reports of 1,000 or more homes damaged.

HARRIS: We may have lost our connection to Morgan Neill, but how vivid was that? Morgan describing the scene as he is actually witnessing it right now. And if you take a look at some of those pictures, quite a scene there in Cuba.

We will keep an eye on the situation and maybe get an opportunity to talk to Morgan in just a couple of moments.

We want to hear from you -- and we have him back? Oh, he's gone. OK.

We want to hear from you as we focus on Ike. What are you doing or not doing to prepare for the storm? We'd really like to hear what you're in fact doing. Send us your iReports at cnnireport.com, and we will bring you those images in about 30 minutes from now.

Plays well with others, a qualification for president. It's certainly a requirement for change. McCain, Obama, a "Reality Check."

(COMMERCIAL BREAK)

HARRIS: Both Barack Obama and John McCain are saying they're the one to bring real change to Washington, but Obama says McCain is hardly the maverick he claims to be. What kind of records do each of them really have when it comes to reaching across the aisle?

CNN's Josh Levs is back with us with another "Reality Check."

Good to see you, Josh.

JOSH LEVS, CNN CORRESPONDENT: Hey, good to see you, too.

And this is the other big issue that they're talking about right now, especially this weekend. This was still this back and forth. I mean, you know throughout this whole campaign season, change has been this major concept, a lot of people responding to it. But now a lot of voters seem to want specifics -- are you a maverick? What have you done?

We saw the latest back and forth on Saturday. I'm going to show you now what Barack Obama said to an AARP address, and then what John McCain said in Albuquerque, New Mexico.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Actually, Sarah Palin is doing a really good job. She is talking about the sort of economic issues that she faces every day. She also comes across as a budget cutter, particularly the little anecdote about selling that plane on eBay resonated with a lot of women, certainly in that Republican hall when I was in there, and certainly listened (ph) to the Democrats as well.

(END VIDEO CLIP)

LEVS: Hey, I apologize about that. Let me just tell you basically what they said.

The whole idea is, is John McCain a maverick, is he not? Has he always voted in line with President George Bush or does he sometimes go in another direction? Let's just get to the answer right now. I have a good list for you. Let's go to the full screen we have. It's a graphic.

And this summarizes for you basically what they've done on each side. This is a great list.

This comes to us from The Associated Press here. They point out that John McCain did indeed do all this bipartisan work, starting with campaign finance reform with Senator Russ Feingold. He reached across the aisle right there. Also on immigration with Senator Ted Kennedy and climate change with Senator Joe Lieberman.

But, Barack Obama did as well. Let's go to this list.

WMD proliferation, you hear him talk about this a lot. He reached across the aisle and worked with Senator Richard Lugar. And he worked on a Google-like database of federal contracts. That was with Senator Tom Coburn.

And they have this really good summary, I think. Let's go to this right here.

From The Associated Press, they say this: "McCain, with two decades in the Senate, has worked in a bipartisan fashion on a number of issues. Obama, just elected in 2004, though, has a much slimmer record of accomplishment."

He has done it, but there's a slimmer record. Obviously less time.

They do point out though, and this is one thing you hear on the campaign trail a lot, Tony, "Unlike McCain, Obama did not put himself at odds with his own party leaders by working with Lugar."

So that's something, Tony, that John McCain jumps on a lot.

HARRIS: Yes.

LEVS: He says, look, you've done some things across the aisle, but did you really have to be a rebel? Obama says some people haven't been happy with things he's done, but McCain says, look, I've had these times I really upset my party.

HARRIS: We're going to get to the place where we're really sort of splitting the hairs on this thing, it sounds like.

You know, Josh, the claim about John McCain voting with President Bush so much of the time, what did you find out about that?

LEVS: Yes. Well, we have the numbers for you. Let me go to this last graphic, because this is a really good summary of those numbers.

You keep hearing this thing about 90 percent, 95 percent.

HARRIS: Yes. LEVS: What's the reality here? This is it. This comes to us from FactCheck.org.

John McCain, in 2007, did vote 95 percent in line with President Bush. Look a little bit farther back. Throughout his time -- they say throughout President Bush's time, his vote 90 percent in line with Bush, but there was one year back in 2005 when it was just 77 percent in line with Bush.

Then we've got some Obama numbers at the bottom. Actually, this might be interesting to some people.

Obama doesn't think President Bush is wrong about everything. Obama has voted in line with President Bush about 40 percent of the time last year. And if you want to know if Obama has voted in line with his party, then he pretty much did completely last year, 97 percent of the time last year.

Those are the numbers. Again, Tony, you're going to hear this back and forth all the time.

HARRIS: Yes.

LEVS: But those are the real numbers. It gives you a sense that, yes, they reached across the aisle a bit. There is that different history there.

HARRIS: We need more. We need more reality checks.

LEVS: I'll be here.

HARRIS: They're great. All right, Josh. Thank you, man.

LEVS: Thanks.

HARRIS: Let's take a look at the Big Board. Three hours or so just about into the trading day, and clearly, as you'll see here from the numbers, first of all, overseas markets responded well to the news of the bailout of Fannie and Freddie by the Treasury Department. And U.S. stocks doing well, 131 points positive, great positive territory. Off of session highs, but still in positive territory.

More to come in the NEWSROOM.

(BUSINESS REPORT)

HARRIS: You know, they've got Missouri on their minds. John McCain and Sarah Palin looking for votes outside Kansas City. Live coverage in just minutes in the NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: And right now let's take you to Lee's Summit, Missouri, just outside of Kansas City -- John McCain and Sarah Palin.

GOV. SARAH PALIN, (R) VICE PRESIDENTIAL CANDIDATE: John McCain refused to break faith with the troops, who have now brought victory within sight. I'll tell you, as the mother of one of those troops, that is exactly the kind of man I want as commander in chief.

Now for his part, our opponent, he still can't acknowledge the coming victory in Iraq. And he couldn't just yesterday, even in an interview. He said, he's for change, but in Iraq, change happened. And that's a great thing for America, senator.

So here is how I look at the choice that we face in this election. In politics, there are some candidates who use change to promote their careers and then there are those, like John McCain, who use their careers to promote change.

Americans, this is the moment when principles and political independence matter a lot more than just a party line. He doesn't run with the Washington herd. He's willing to shake things up in Washington. And that is only one more reason to send the maverick of the Senate to the White House.

Senator McCain has called the two of us a team of mavericks. And he knows that we've done some shaking up, up there in Alaska. As mayor, I shook up the old system and took on the good, old boys. I reminded people that government is not always the answer. In fact, to often, government is often the problem. So we got back to the basics and we put government back on the side of the people.

I eliminated taxes on personal property. I eliminated taxes that were hurting small businesses. Property taxes were just too high so I cut rates, mill (ph) levies (ph), every year that I was in office. And these reforms worked and we took off.

As governor, I brought the same agenda of positive change then to the state. We took on the old politics as usual in Juno and we broke the monopoly that had controlled our state, and that was the special interests and the lobbyists surrounding the big oil companies. We cane to office promising major ethics reform to end the culture of closed doors, self dealing. Today, that ethics reform is the law of the state.

And you know, as mayor and as governor, I tried to lead by example. So, as mayor, I took a voluntary pay cut, which didn't really thrill my husband. And then, as governor, I cut the personal chef position from the budget, which didn't really thrill my kids. And then I put the state's -- our government's state checkbook, I put it online for all the world to see. You're going to see every penny that we spend up there. Doing that, though, of course, I didn't thrill all the bureaucrats. But, OK. And then the luxury jet. It came with the office, but I put it on eBay.

So, I came to office promising to control spending, by request if possible, but by veto if necessary. Today, our state budget is under control. We have a surplus. I had put the veto pen to nearly half a billion dollars in wasteful spending.

We suspended the state fuel tax. And now that we have a surplus, I'm returning a chunk of that surplus straight back to the people because they can spend it better than government can spend it for them. We gave their money back to the hard-working Alaskans. And in these tough times, I'm ready to help John McCain bring tax relief to all Americans. To all of you.

I championed earmark reform -- you're going to hear about this from the senator -- to stop Congress from wasting public money on things that don't serve the public interest. I told Congress, thanks but no thanks for that bridge to nowhere. If our state wanted to build a bridge, we would build it ourselves.

Just the other day, our opponent brought up earmarks. And, frankly, I was surprised that he would even raise the subject at all. I thought he wouldn't want to go there. In just three years, our opponent has requested nearly $1 billion in earmarks. That's about a million dollars for every working day. So we've reformed the abuses of earmarks in our state. And I'm ready to help president John McCain end these corrupt practices once and for all.

Through competition as governor, I got agreements to build a nearly $40 billion natural gas pipeline that will help free America from foreign suppliers that do not have our interests at heart. And look forward in a McCain/Palin administration, we're going to expand nuclear energy, expand our use of alternative fuels and drill now to make this nation energy independent.

As a matter of national security and for your prosperity, we need American energy resources brought to you by American ingenuity and produced by American workers. You know, Missouri, our opponents, lately, they've been going on and on about how they always fight for you. But since my running mate -- he's not going say this on his behalf, let me say it for him. There is only one man in this election who has ever really fought for you. He is the only great man in this race. The only man who is ready to serve as our 44th president. And I am so honored to get to introduce to you, my running mate, my friend, Senator John McCain.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you, Missouri. Thank you so much for being here.

This state, we must win and we will in order to win the presidency of the United States. And your enthusiasm and your turnout today, I'm so encouraged by it. And, by the way, I'm happy to be introduced by Governor Palin today. But I can't wait to introduce her to Washington, D.C. I cannot wait.

Have no doubts, we're going to win this election. And let me offer an advanced warning to the old big spending, do nothing, me first, country second Washington crowd, change is coming. Change is coming. Change is coming.

As Sarah mentioned, I've been called a maverick. Now we have a team of mavericks that's going to -- and we understand who we work for. We don't work for a party and we don't work for a special interest. We don't work for ourselves. We're going to work for you and we're going to drain the swamp in Washington, D.C., and we're going to take on the special interests.

And we're going reform government. And we've fought corruption. I didn't care whether they were Republicans or Democrats. I fought big spenders in both parties. And, you know, here's an interesting fact. Governor Palin just mentioned, she vetoed a half a billion dollars in earmark pork barrel spending and Senator Obama asked for nearly a billion dollars in pork barrel earmark spending. $932 million, almost $1 million for every day single day he was in the United States Senate. It's remarkable.

And, my friends, I'm going to tell you this right now. I will veto every pork barrel earmark spending bill that comes across my desk. You will know their names. We will make them famous. And we'll stop him (ph) -- and we'll stop it. We will stop it, my friends, because it breeds corruption. It breeds corruption. And we can no longer stand for that. We've got to have a government that starts working for you and not for themselves. And that's what we're going to do. And we'll take them on. And we'll take them on, my friends, we'll take them on and we'll defeat them because America knows it's time for change and it's time for the right change.

Governor Palin took on the old bulls in her party. She ran against an incumbent, Republican governor. I've taken on my own party from time to time when it's necessary and we'll take them on. Senator Obama has never stood up to anyone in his party yet and that's what Americans want is for us to stand up for America. And that's what we'll do.

My friends, Governor Palin just mentioned about a $40 billion pipeline to bring natural gas down from Alaska down to what they call the lower 48. And speaking of someone who's a great person and well- known and almost as popular as the governor, and that's Todd Palin, who's a four-time champion of a 2,000 mile race across Alaska in what we call a snowmobile, a commercial fisherman -- a commercial fisherman and a proud member of the United Steel Workers Union. And a great man and a great father. I can tell you, a wonderful father.

So we're going to bring those same values also back to our nation's capitol. Those values that Americans treasure. And Americans, wherever they are -- aren't like Senator Obama said in small towns in Pennsylvania that only cherish their second amendment rights and their religion because they don't like the economic conditions. Americans in Missouri, Pennsylvania and all over this country value those rights because they love America. Because they love America.

HARRIS: John McCain and Sarah Palin at a campaign stop in Missouri. Just outside of Kansas City. Coming up at 2:00 p.m. Eastern time, Barack Obama has a campaign rally in Michigan and, of course, we will bring that to you live as well right here in the NEWSROOM.

Look, if you pay taxes or are looking for a mortgage, Gerri Willis says the bailout of Fannie Mae and Freddie Mac will impact you.

(COMMERCIAL BREAK) HARRIS: Issue number one, the economy. Stocks are higher today. Investors comforted by the government's bailout of mortgage giants Fannie Mae and Freddie Mac. The move assures big investors, including foreign governments, that their investment is backed by Washington. The goal settled turmoil in the housing and financial markets. The cost to you and to me, the taxpayers here, is expected to run well into the hundreds of billions. That ginormous tax bill, certainly one way this bailout hits home for you. Personal financed editor Gerri Willis is here with other examples.

Gerri, good to see you again.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR CORRESPONDENT: Good to see you, Tony.

HARRIS: What does this mean for consumers?

WILLIS: Well, let's start with homeowners and people who would like to be homeowners, Tony. Look, this deal won't fix housing prices. If you bought at the top of the market and prices are down, you're probably going to have to wait out this cycle. However, if you want to take advantage of low prices by buying, the news is good. Look, Treasuries action could bring down mortgage rates by anywhere from an eighth of a point to 3/4 of a point from their current levels of 6.39 percent. Hey, this is real savings for buyers. On a mortgage for a median priced home, a half point drop in rates could mean monthly savings of $70. And that's not nothing.

HARRIS: So this should mean -- this action by the government should mean that loans will be easier to come by, correct?

WILLIS: Not necessarily. I spoke to my sources, you know, folks who actually are mortgage brokers, mortgage lending, they're lenders that are in the market. They say you still need a credit score of 700 or more and the 20 percent down payment to get the best terms. But if you have an adjustable rate mortgage, you are in luck. Here, look, if your adjustable rate mortgage has reset higher and is squeezing your bucket -- budget, now is the time to investigate getting a new loan, getting out of the painful resets. Also, if you've had your home equity line of credit frozen by your bank, which has been happening a lot, Tony, the Treasury's move now may not alleviate that situation. Banks froze these popular products because of changes in housing prices, not the credit crunch. So you're still going to have to deal with that.

HARRIS: What's the story for me if I've actually put some money down, put some skin in that game and I'm an investor in Fannie and Freddie?

WILLIS: Well, you know, the reality is, you probably are. Freddie Mac and Fannie Mae shareholders have already been devastated. The stocks are down 80 percent this year. They fell more this morning after officials announced dividend cuts for both the common and the preferred shares.

Look, if you own a 401(k), you probably own shares in these companies. Among big mutual fund companies holders, AllianceBernstein, Legg Mason. If you have a standard stock index fund, you're into these stocks too. Taxpayers are, of course, on the hook for the cost of this new plan, which is where you started this whole conversation with, Tony. The Treasury could ultimately spend $30 billion to $200 billion to fix this problem. I know it's a big range, but it really depends on how long it takes these markets to turn around. Of course, we'll bring you the very latest on this story as it develops. But, good news, bad news scenarios.

HARRIS: Yes, it is. OK, Gerri, thank you.

WILLIS: My pleasure, Tony.

HARRIS: Let's talk about -- for a moment about Hurricane Ike. A real monster right now. Hammering Cuba. There's the radar image right now. Jacqui Jeras in the hurricane headquarters in just a moment.

(COMMERCIAL BREAK)

HARRIS: OK. Here's the terrific thing about working here. The minute you say something that is wrong and it happens to be more than it probably should, you get a blast from anywhere in the room. So I'm describing this monster storm Ike and I'm talking -- oh, take a look at the radar image there's Jacqui. Knucklehead it is the -- and what are we looking at now behind you. That is a satellite image. It's a satellite.

JACQUI JERAS, CNN METEOROLOGIST: Satellite. Yes, the white clouds.

HARRIS: I give. Uncle.

Good to see you, Jacqui.

JERAS: All right. Good to see you too, Tony.

The satellite pictures showing still a very strong Ike. Hurricane category two, with winds at 100 miles per hour. It's been raking across Cuba since last night and it's now trying to make its way back here over the open waters, which isn't good. Any time you're over water, you get a little bit more of that intensification.

Look at that northerly flow here. Starting to move towards Havana. So they're going to start to watch those conditions go down hill with the winds increasing and also some of that wave action too.

There are hurricane watches and tropical storm warnings in effect for the Florida Keys. Those evacuations have been expired now but they still don't want you to go back just yet. That's because, you know, not all the emergency personnel and hospitals are staffed at this time. There you can see the forecast track. Once it gets beyond Cuba, we'll have a better idea of where it's going. But right now it's looking like the northern or western Gulf -- Tony.

HARRIS: I'm going to clear your area of anything you can throw at me.

All right, Jacqui, thank you.

JERAS: That's a radar.

HARRIS: Yes, thank you.

Tropical Storm Hanna, oh, yes, remember Hanna? Some amazing pictures to show you, shot by our i-Reporters.

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HARRIS: Want to take a moment here and show you some i-Reports now of Tropical Storm Hanna as it charged the East Coast over the weekend.

This video, shot by Antonio Merrick, in Alexandria, Virginia. Take a look at this. What used to be a canal, now clearly a rushing river. Merrick says that canal is prone to flooding, but he has never seen anything quite like this.

And you can barely hear our i-Reporter, Nicole Detweiler, over that wind as she was vacationing in the outer banks of North Carolina when Hanna stormed through. Detweiler says the wind knocked the cover off the hot tub even though it was strapped down. Man.

When the weather becomes the news, as it certainly has lately with Fay, Hanna, Gustav and now Ike, remember to send us your pictures, your videos. Just go to ireport.com.

News just in on the presidential race. A new poll out shows a dead heat between John McCain and Barack Obama.

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HARRIS: And there she is. CNN NEWSROOM continues right now with Betty Nguyen.

And, Betty, we've teed it up for you. Let it rock.