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Stock Markets Rocked by Fall of Icons; Candidates Comment on Wall Street Crisis; Palin Goes Solo in Colorado; Ike Blamed for 27 Deaths in Six States; Biden Talks Economy in Michigan

Aired September 15, 2008 - 11:00   ET

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

(JOINED IN PROGRESS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... Secretary Paulson throughout this weekend and this morning. I appreciate the work the Treasury Department and the Federal Reserve and the Securities Exchange Commission and major financial institutions here and around the world are doing to promote stability in the financial systems. As policymakers we'll focus on the health of the financial system as a whole. In the short run, adjustments in the financial markets can be painful, both for people concerned about their investments and for the employees of the affected firms. In the long run I'm confident that our capital markets are flexible and resilient and can deal with these adjustments.

I admire President Kufuor, and the reason I do is because he has shown the world that democracy can flourish on the continent of Africa. He's been a steady and principled leader. We're soon to leave office, but I'm going to finish strong, and I know you are, as well.

We had a good discussion about important issues, such as fighting disease. One of the initiatives that we're working on together is the fight --

T.J. HOLMES, CNN ANCHOR: Good morning there, everybody. T.J. Holmes here at the CNN NEWSROOM, sitting in for Tony Harris.

You're listening to the president there along with the president of Ghana, President Kufuor. But at the beginning there, the president stopped and took about a minute or so to talk about the disruption we've seen on Wall Street. A lot of people worried about that today. Talking about the resiliency of the U.S. markets.

He thinks certainly the markets can sustain any type of disruptions that can deal with these latest adjustments given what we've had here lately. But really some stunning developments that we've had really in the U.S. financial markets.

Once again, good morning to you all. T.J. Holmes here sitting in for Tony Harris in the NEWSROOM. Big worries from Wall Street to your street, really. Wall Street may never look the same again. Your portfolio might never look the same again, either. Issue #1 right now is the economy. It's front and center this hour.

And at the center of this Monday meltdown, the legendary investment bank Lehman Brothers. This company, 158-year-old company, filing for Chapter 11 bankruptcy protection because of $60 billion in bum real estate holdings. And you add to that, news also that Bank of America is buying Merrill Lynch. The old stock deal there value at $50 billion. Also, if that wasn't enough, how about this? The nation's largest insurance company, AIG, being forced into a restructuring. All of this just a week after the government rescued the giants Fannie Mae and Freddie Mac. Also six months after the collapsed of Bear Stearns.

And a lot going on in the markets. We need some perspective here on what's behind all this turmoil, and what it could mean for you. What it could mean for your finances.

Christine Romans had been busy this weekend and busy this morning. Part of the CNN Money Team, live for us now from New York.

A lot of people are worried about their portfolios. People are quite literally losing money this morning.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's absolutely right. And they have been for some time. The financial stocks have been hammered, really hammered for more than a few months now as there have been great concerns about the health of Wall Street.

Any one of those things that you tip through, T.J., is enough to really, really paint a terrible picture on Wall Street, and you've got a whole bunch of things happening. It's no surprise that the president at the very top of his remarks today coming out with that. And now on the campaign trail, you'll hear both candidates talking about what is happening here.

The magnitude of this is kind of hard to grasp. I think, yesterday, a lot of people calling it Black Sunday. You had heads of all the major banks. You had Wall Street titans. You had the Feds, the Treasury, the SEC, all hunkered down trying to fix the problem and figure out what to do with Lehman in particular.

Something about Lehman that I think is a good way to look at it is this is a company who has prospered along with the United States of America. In fact, has almost been a proxy for what we've seen in terms of United States over the past 157 years become global leader. And to see Lehman go from a profit last year when the CEO made some $22 million in a bonus for what a good year they had to here filing for bankruptcy, I think really frightens people about the underlying health of some of these big companies on Wall Street.

And why should you care? You should care because your 401(k) probably has some financial stocks in it. You should care because these companies, they are the big banks, commercial banks and investment banks and all of the financial infrastructure of the United States, this is the oxygen for the American economy.

And when that oxygen is running low or is for some reason shut off, it's a real problem all the way down to your home prices, your student loans, your car loan, your home mortgage, everything, T.J. HOLMES: All right. And certainly, I guess this is an indication after we saw Bear Stearns, the criticism after that. Also after the Fannie Mae and Freddie Mac and the government stepping in. The government this time around, they had to show that they are out of bailout business.

ROMANS: They can't bail out everybody. They just can't bail out everybody. And the term is called moral hazard. And in those first two big bailouts, the free market types keep saying you cannot have the American government be so involved in the capitalist system. They should be regulators, not partners, and they shouldn't be bailing out. And this time it looks like the Treasury Department said sit down, try to work it out, but we're not bailing you out.

HOLMES: All right. Christine Romans for us this morning, which has been an interesting morning, interesting weekend.

ROMANS: Sure has.

HOLMES: Had some scary stuff here. Christine Romans, thank you so much. We'll be talking to you again. Well, the credit crisis we've been talking about, the turmoil in the housing market, is there any end in sight to all of this? Well, earlier in the NEWSROOM, "Fortune" magazine managing editor Andy Serwer talked about what could lie ahead.

(BEGIN VIDEO CLIP)

ANDY SERWER, MANAGING EDITOR, FORTUNE MAGAZINE: Regulators in Washington D.C. like Treasury Secretary Paulson and Fed chief Ben Bernanke keep trying to step in and stem this crisis, but so far, obviously, it's not over.

They're not really having their intended effect in terms of stopping things from spreading. So it really looks like there are other shoes to drop here. For instance, we that insurance giant AIG is in some trouble here. They're going to have to get themselves in order.

So far this is mostly a business banking crisis, not a consumer banking crisis. So -- but I think that that could well spread into the consumer sector, which means people on the street.

(END VIDEO CLIP)

HOLMES: People on the street, that's me and you folks. Serwer says fallout from the financial turmoil could also lead to higher credit card rates and tighter lending restrictions. Well, of course, the presidential candidates today woke up to the same financial (INAUDIBLE) as all of us.

Here now, John McCain this morning. He's opening a two-day swing from Florida talking about the economy.

(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: You know that there's been tremendous turmoil in our financial markets and Wall Street. And it is -- people are frightened by these events. Our economy, I think, still, the fundamentals of our economy are strong. But these are very, very difficult time. And I promise you, we will never put America in this position again. We will clean up Wall Street. We will reform government. And this is a failure.

(APPLAUSE)

We've got take every action to build an environment of robust energy supplies, lower inflation, controlled health care costs, access to international markets, low taxes and reduce burden of government to allow people to move forward toward a future of prosperity.

The McCain-Palin administration will replace the outdated patchwork quilt of regulatory oversight and bring transparency and accountability to Wall Street. We will bring transparency and accountability and we will reform the regulatory bodies of government.

(END VIDEO CLIP)

HOLMES: Meanwhile, Democrat Barack Obama says the country is staring at its biggest financial crisis since the Great Depression.

CNN's Jim Acosta on the trail in Grand Junction, Colorado.

Jim, good morning to you.

This is an issue, and nobody likes to say it, but the economy is bad. That's good for Democrats. But any day that Barack Obama is not talking about the economy, many analysts say is a bad day for him. This gets the topic back to one that many people say he can win on.

JIM ACOSTA, CNN CORRESPONDENT: That's right. And the Obama campaign will say that they are not enjoying this morning on Wall Street by any stretch. But they do want to get this campaign back to the issues. You're right, T.J. And the economy is, as we say here at CNN, issue number one.

And the Obama campaign is saying that Barack Obama will be talking about what happened on Wall Street at his event. That's coming up in a couple of hours now here in Grand Junction, Colorado. This state being an important battleground in the upcoming general election.

And while Barack Obama is not blaming John McCain for what happened on Wall Street this morning, he is saying that Senator McCain did support many of the policies of the Bush administration that Senator Obama says led to this crisis that is unfolding this morning.

And he issued a quote that we're going to be hearing probably live and in person here in a couple of hours. But here's a quote from Senator Obama. "The challenges facing our financial system today are more evidence that too many folks in Washington and on Wall Street weren't minding the store. Eight years of policies that have shredded consumer protections, loosened oversight and regulation, and encouraged outsized bonuses to CEOs while ignoring middle-class Americans have brought us to the most serious financial crisis since the Great Depression."

So some tough words there directed at the Bush administration and at John McCain from Barack Obama. And not only we are expecting to hear Senator Obama address the economy today. But Joe Biden, he's running mate, who was out on the campaign trail today. We were told about this yesterday by the Obama campaign that to expect a very tough line of attack coming from Joe Biden today, directed at John McCain on issues such as the economy.

The speech has been dubbed, quote, "Bush 44." Once again, the Obama campaign and Joe Biden trying to paint John McCain as simply offering another four years of George W. Bush.

So, that is the message of the day from the Obama campaign. They are going to be on the economy. They are going to be on the crisis on Wall Street and talking about how all of this is going to affect people and their pocketbooks come this fall -- T.J.

HOLMES: Yes. It's back to being issue number one this morning. Jim Acosta for us. Thank you so much from Grand Junction, Colorado. Thank you.

And, of course, these harder economic times getting even harder, and for some families the solution may be for mom to go back to work. We'll be talking about that this morning. Also, the financial markets are boiling with change as we've been talking about. You can keep up with what's happening with Merrill Lynch, Bank of America, and Lehman on the best Web source for business news at CNNMoney.com. The top destination for issue number one, the economy.

Now, of course, a lot of the politicians out and about. We talked about the economy today. We're hoping to listen in to the vice presidential candidates. We're looking at two pictures that are waiting on events from Governor Sarah Palin. Also waiting to hear from Senator Joe Biden as well. When those comments come our way, we will bring them your way. Stay here.

(COMMERCIAL BREAK)

HOLMES: Keeping an eye on two live pictures here. Expecting two competing rallies, if you will, of the vice presidential candidates. Expecting Joe Biden -- Senator Joe Biden of Delaware to speak in Michigan on the campaign trail. And also, Governor Sarah Palin of Alaska, John McCain's running mate stepping out on her own a bit this week, with campaign rallies she's going to be going solo in Colorado today. We're keeping an eye on both of those events.

Stay here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HOLMES: The Republican vice presidential candidate Sarah Palin flying solo this morning. She's in the battleground state of Colorado. So is our Dana Bash. Part of course of The Best Political Team on Television.

Dana, joining me on the line here. Dana, good morning to you.

VOICE OF DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Good morning.

HOLMES: And Sarah Palin on her own right now.

BASH: On her own, but very much on script. In fact, you know, you've been reporting with Jim Acosta and others about how the candidates are making it very clear at the top of their remarks that, you know, that they understand what's going on in Wall Street today. Well, Sarah Palin is no different. We're told that she is going to talk probably pretty similarly to what we heard from John McCain this morning in Florida about the fact that the two of them are going to promise, they're going to clean up Wall Street and reform the government. And the two of them support the idea of not having a taxpayer bailout of these firms. Sarah Palin we're going to hear at the top of these remarks.

The big picture, you know, what we've been seeing from Sarah Palin, this is her second rally, her second solo rally in the battleground state. This is a pretty historically conservative area of Colorado. And one that really has been trending a little bit more towards the Democrats. So what she is trying to do, T.J., both at this stop and the one that she had over the weekend in Carson City, Nevada.

She's trying to, you know, tap into and generate the enthusiasm in these places that we've seen. What she's done with Senator McCain and their battleground states.

HOLMES: And just quickly here, tell us about that energy. We are looking at this picture. People aren't getting worked up just yet. Well, here they are. Some like they're starting to get worked up, but does she still starting to bring in that type of energy, those type of crowds than McCain, well, you know, honestly just couldn't bring in on his own.

BASH: That's exactly right. And, you know, she is generating big crowds. And the interesting thing just in talking to some of these voters who are waiting outside, really, since like 3:00, 4:00 in the morning to get into this rally in a horse stable here in Colorado is, you know, many of them said some things that we heard really since before the Republican convention, T.J., that they were kind of (INAUDIBLE) with McCain, but they're really excited about the McCain- Palin ticket. And that's why they're here.

But you talked to McCain advisers and they say that they are, you know, obviously generating the enthusiasm the conservative-based, especially in the neck and neck historically red states like Colorado. That's really critical.

But they're also trying to reach out to some registered Democrats and independent minded voters particularly with what Sarah Palin is trying to do here in the west is trying to connect them as somebody who is like them in terms of her approach, you know, her outdoorsman attitude and things like that. That was along the lines of the things we expect to hear today.

HOLMES: All right. Dana Bash for us there in Golden, Colorado. And you can't beat that. The campaign rally being held in a horse stable, as she said. Dana, thank you so much. We will be checking in with you later. We'll also be checking in when that rally does get under way. We'll be monitoring and I'll bring you some of that.

And also, as we said, Senator Joe Biden, Obama's running mate also expected to make an appearance today in Michigan. We'll bring you some of that when that happens as well.

Let's turn now to what we saw over the weekend. The major weather story, Hurricane Ike. While we still have millions of people without power, tens of thousands unable to return to their damaged or destroyed homes. Now three days after the hurricane slams ashore. Here's what we know right now.

Ike blamed for at least 27 deaths in six states. And it's possibly the biggest search and rescue operation in the history of the State of Texas. That rescue operation continues right now. A lot of those rescuers are going door-to-door in some of those hardest hit areas.

The governor there of Texas, Rick Perry says it could be weeks before residents can return to Galveston. That island city was devastated by this storm. Meanwhile, people in Houston are under a week-long curfew.

Another issue we're seeing now, gas prices jumping after Hurricane Ike. AAA says the national average price for a gallon of regular is now at $3.84 a gallon. That's about a nickel higher than just the price yesterday, and about 20 cents higher than before the storm hit. People in parts of Texas are just lucky to even find that gas.

We went ahead now to our Betty Nguyen who road out the storm, of course, in Houston who has now made her way to other devastated parts in Galveston.

Now, Betty, good morning to you. What are you finding there in Galveston?

BETTY NGUYEN, CNN CORRESPONDENT: Let me tell you, T.J., the damage is extensive here in Galveston. 150 buildings have already collapsed. We're right now at a placed called Aunt Margie Bait Shop. Hopefully, Aunt Margie made it out alive, because her store did not fair so well. You've got a boat sitting in the middle of a building.

Right here, I think this is what's left of a computer. This is a toilet. And it's a place where you can literally walk through walls because of all the damage. They say the storm surge on this particular part of the island was up to 12 feet high. So you can see why not only are you seeing damage all over this part of the island, but the power is out. There is no electricity here on Galveston Island. And just a little bit further to the north, the situation is very similar.

Houston, two million people without power. So what they're trying to do, those who have ridden out the storm, they're living off of generators, trying to get to some kind of power to their homes. But those generators require gasoline, and all of that is creating long lines at the gas pump.

(BEGIN VIDEOTAPE)

NGUYEN (voice-over): The hunt for gasoline in Houston has lines nearly 4 four hours long.

KENNETH POPE, NEEDS GAS: I never thought I would wait this long. I didn't know I was going to wait this long.

NGUYEN: But you need it, don't you?

POPE: But I need it. I got to have it. That's the only way I can run my generator.

NGUYEN: As lines wrapped around the block, frustration began to set in.

DANNY POPE, NEEDS GAS: The cops are keeping people from fighting. I mean, all of us -- young, old, everybody is up here ready to swing on each other about these lines up here.

NGUYEN: But ahead in line, there are signs this station is running low. Meanwhile, an argument breaks out in another line.

UNIDENTIFIED MALE: Gas in an unauthorized container.

UNIDENTIFIED FEMALE: She brought a home depot bucket, going to fill it up with gas.

UNIDENTIFIED MALE: And two milk cartons, she's going to put gas in it, too.

NGUYEN: They're not going to let you put gasoline in milk cartons.

UNIDENTIFIED FEMALE: Yes, but what can I do, sir? Now, everywhere it's close.

UNIDENTIFIED MALE: We only have super.

NGUYEN: Back at the pump, the only thing left is super unleaded.

(on camera): You weren't planning on paying those super prices, though, were you?

UNIDENTIFIED MALE: No, sure wasn't, but it's better than nothing.

NGUYEN (voice-over): Especially when you're already out of gas.

Are you helping so you can get further in the line, or you're helping because you're just being a Good Samaritan?

UNIDENTIFIED MALE: I'm helping both.

NGUYEN: Aid also comes in the form of a donated gas container. Only problem, this station is on empty.

(on camera): Can you make it to another gas station?

Then you have folks like this who don't even have gas to get to another station. What are you going to do now?

UNIDENTIFIED FEMALE: Oh, we're just going to push the car over to the parking lot over here behind us, and then we're just going to call a friend to come out here and give us a ride.

NGUYEN (voice-over): The trick now is finding another place to fill up.

(END VIDEOTAPE)

NGUYEN: And good luck with that because it is very difficult to find a gas station that's open in Houston. Here in Galveston, don't even try. Nothing is open here. I want you to take a look at what we were able to find, though, T.J.

Right over here to my right, if you'll take a walk with me, are two boats that have been washed ashore. They're just sitting there. This is just a tiny glimpse at the debris that we're seeing here in Galveston. An island that is virtually cut off from the rest of the world right now, because no one is being allowed on to this island due to all the danger around us and all the debris. Only medical emergency crews are being allowed onto this island -- T.J.

HOLMES: My goodness, there, Betty. Everywhere you're going, you just notice that and seeing that destruction in different spots. Our Betty Nguyen for us there in Galveston. We will see you again soon. We will turn now to our Jacqui Jeras in the weather center.

Is this thing out of here yet? You've been watching this for us all weekend. Ike was making its way across the country, and supposed to be in New England and finally getting out of here. Is this thing gone yet?

(WEATHER REPORT)

HOLMES: We hope not to see any developments. Jacqui Jeras, thank you so much. We'll be talking to you again here shortly. And a lot of you also, if you want to help out some of these storm victims. There are ways you can help. We can help you find a way to help. Go to our Web site at CNN.com in our "Impact Your World" page. You will find links to organizations offering assistance. Again, that's CNN.com/impact.

And of course we are your home for political news, we're keeping an eye on this political development today. You see Governor Sarah Palin there on the left. The vice presidential nominee expecting to make some statements possibly about the economy as soon as she steps up with this rally. She's there in Colorado. We're going to take a quick break, come back and take you with her.

(COMMERCIAL BREAK)

(JOINED IN PROGRESS)

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: ... It's taking a toll on our economy, and that means people's life savings. And I'm glad to see that in this case, the Federal Reserve and the Treasury have said no to using taxpayer money to bailout another one -- this time Lehman Brothers.

(APPLAUSE)

Every effort has to be made now, of course, to insure the accounts and deposits of hard working Americans, that those investments are protected. This crisis happened for several reasons, which has to be addressed right now. Guys and gals, our regulatory system is outdated and it needs a complete overhaul. Washington has ignored them.

(APPLAUSE)

Washington has been asleep at the switch and ineffective, and management on Wall Street has not run these institutions responsibly and has put companies and markets at risk. They've placed their own interest first instead of their employees and the shareholders who actually own these companies. So John McCain and I, we're going to put an end to the mismanagement and abuses in Washington and on Wall Street that have resulted in the financial crisis.

(APPLAUSE)

We're going to reform the way Wall Street does business and stop multimillion dollar payouts and golden parachutes to CEOs who break the public trust.

(APPLAUSE)

It's so important that the United States -- we've got to remain the strongest financial market in the world. It must be the markets that the American people and investors everywhere can trust. So restoring the integrity and the confidence and the leadership in our markets, and in our government, is essential. This is going to be one of the highest priorities of our administration.

(APPLAUSE)

This is all going to be about reform and putting the government back on the side of the people, putting it back on the side of the good people here in Colorado. And that's why I'm here today.

(APPLAUSE)

So glad to be here with you in Jefferson County, which is the beautiful gateway to the Rocky Mountains. It's gorgeous here.

(APPLAUSE)

Kind of selfish here also. It's great to be in the state that the Denver Bronco, Chris Cooper, and the Avalanche's Scott Parker now call home.

(APPLAUSE)

So Chris and Scott are from Alaska, and they've got a lot of fans up there. And, you know, Scott was part of the avalanche team that brought home the Stanley Cup.

(APPLAUSE)

Another son of Alaska, Mark Schlereth, he helped the Broncos win the Super Bowl in '98 and '99.

(APPLAUSE)

See, we got that connection. And Alaskans, we like winning. And with Colorado's help, we're going to keep that streak going. It's why we're here. With your help, we're going to elect John McCain the next president of the United States of America.

(APPLAUSE)

Truly, Colorado, I appreciate being here. I feel like I am home. I think as Governor Owens said, we've got a lot in common -- these western states. We hold together and pulled together. Somebody from one of those western states, up there in Alaska, I want to introduce to you, my husband, Todd Palin, Alaska's first dude.

(APPLAUSE)

Yes, Alaska's first dude is a commercial fisherman and --

(APPLAUSE)

-- is blue collar production operator up in the oil fields of Alaska's North Slope. Todd is a four-time winner of the Iron Dog Race.

(APPLAUSE)

That's the world's longest and toughest snow machine race. Todd is also a proud member of the United Steel Worker's Union, and he's a great dad.

(APPLAUSE)

In the next 50 days, Colorado, it's going to be a hard-fought contest here, especially in Colorado. But John McCain and I, we are ready, and with your help we are going to win. And I thank you in advance for that, Colorado.

(APPLAUSE)

We're taking our case for reform to voters of every background, in every party, or no party at all. And with your vote, we're going to Washington to shake things up.

(APPLAUSE)

Here's how I'm looking at the choices that we have in this election. In politics, there are some candidates who use change to promote their careers. And then there are those leaders, like John McCain, who use careers to promote change.

(APPLAUSE)

Colorado, you know that this is a time when principles and political independence matter a lot more than just a party line. And Americans are tired of politics as usual. That's why we need to take the maverick of the Senate and put him in the White House.

(APPLAUSE)

Now Senator McCain calls the two of us a team of mavericks because he knows we've done some shaking up up there in Alaska. As mayor, I took on the old politics as usual in my town. And we got back to the basics. And we did put government back on the side of the people. And then as governor I brought the same agenda of positive change to the state capital. The old oil monopoly that had controlled our state, we broke it. And the good ole' boy network of lobbyists and special interests that used to run things up there, well whatever they're running now, I know it's not the state of Alaska.

(APPLAUSE)

Nearly half a billion dollars in excessive spending in our state budget -- that's what vetoes are for. And the major ethics reform that I had promised to usher in to end the culture of closed doors and self-dealing, today, that's the law of the land in the state of Alaska. Also things like, you probably heard, the luxury jet that came with the office, I put it on eBay.

(APPLAUSE)

And that infamous bridge to nowhere, I did tell Congress, thanks but no thanks. If we wanted a bridge up there, we were going to build it ourself.

(APPLAUSE)

Today our state has a surplus, and I'm returning a chunk of that surplus money back to the people of Alaska because they can spend it better than government can spend it for them.

(APPLAUSE)

Up north, we're trusting the people with their money. And in these tough times across our nation, John McCain and I are ready to do the same for all of you. We're going to bring tax relief to all Americans.

(APPLAUSE)

And our economy will grow. And we will get government out of the way of private sector progress.

Our opponent wants the to raise income taxes, and raise payroll taxes. And raise investment income taxes. And raise business taxes. And raise the death tax. But John McCain and I know that's not the way you grow an economy. That's not how you bring new opportunities to Colorado.

My family has faced the same challenges that many of you have, and many across America today. My husband Todd and I, we have a commercial fishing operation. My sister, she just opened a service station. Todd's folks, they own a hardware store. We've all built small businesses and worked hard to earn a living. We know the struggles out there.

(APPLAUSE)

It's the small businesses, the mom and pops, that are the corner stone of America. You're right.

(APPLAUSE)

John McCain and I are going to support the working Americans that make up the backbone of our economy, and we're going to lower taxes. And we're going to create new jobs. We're going to bring new green- collar jobs here to Colorado. Every small business will have a friend in the White House. We got to have this because we've got to bring our economy back, putting it back on track. And that's going to be due to the hard work and the cooperation of government with the hard work of our small businessmen and women across this great country.

(APPLAUSE)

You know, we hear a lot about experience in this presidential race. And I have to remind Americans, I know you already know it, but it's not just about years of experience, it's about example also. And I want to give you a couple of examples of what I was able to do to kind of --

HOLMES: All right. Been listening in to Governor Sarah Palin of Alaska at a rally there in Colorado.

Then, on the left side of your screen, we've just seen Senator Joe Biden of Delaware, the Democratic vice presidential nominee, stepping up to the podium there in Saint Clair Shores, Michigan, there at another rally. He's expected to take some pretty good shots at his friend in the Senate, Senator John McCain. Let's listen in to him.

(JOINED IN PROGRESS)

SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: ... Folks, I'm delighted to be here. In my home state of Delaware, we're going through the same kind of economic travails you are. I'm a UAW guy, never belonged to you, but I'm a United States senator because of the UAW.

(APPLAUSE)

And in my state of Delaware, we (AUDIO GAP) understand that two of the largest auto plants outside of Michigan -- our Chrysler plant that has been opened for six decades is closing, our General Motors plant has been there for equally as long. It used to employ 4,800 people, it's closing. When I went to the United States Senate in 1973, about 10 percent of my workforce was UAW. Now it's dwindled to virtually nothing. And one of the problems is that I don't think people in the Republican Party, quite frankly, understand it.

Ladies and gentlemen, there's a sad note to open this rally, and that is that Senator Levin's wife, Vicki, passed away. And there is a funeral today, and Carl, my good friend, his brother, and the senator are there, obviously.

But with us today is one of my closest friends, one of my best allies, and someone who I've never, ever, ever seen fight harder for her home state than Debbie Stabenow. Debbie Stabenow--

(APPLAUSE)

I don't know where Debbie is. I'll tell you what. Debbie -- Debbie is the very best.

Also, a good friend and former colleague and a great governor of this state, Jim Blanchard is here as well.

(APPLAUSE)

I got a chance to meet Commissioner Sarah Roberts, who is going to be your next state representative.

(APPLAUSE)

Ladies and gentlemen, eight years ago a man ran for president who claimed he was different, not a typical Republican. He called himself -- if you remember -- he called himself a reformer. He admitted that his party, the Republican Party, had been wrong about a number of things in times past. He promised us, if you remember it was a major selling point, that he would work with Democrats. He said he had been working with Democrats for a long time in Texas. That candidate was George W. Bush.

Remember those promises. Remember what he said. Remember the promise to reach across the aisle, to change the way things were done in Washington, to change the tone, to restore honor and dignity to the White House.

You know, we saw how that story ends. A number, a record number, of home foreclosures, home values tumbling and the disturbing news that the crisis that you've been facing on Main Street is now hitting Wall Street, taking down Lehman Brothers and threatening other large financial institutions. We've seen eight straight months of job loss in America, nearly 46 million Americans without any health insurance, average income is down while the price of everything, from gas to groceries, is going up and up. A military -- a military stretched thin from two wars, one of necessity and one of choice. Multiple deployments of not only regular military, but National Guard as well as reservists. A nation more polarized than I've seen any time in my career, and a culture in Washington where very few, the very few, wealthy and powerful have a seat at the table and the rest of us are on the menu.

Eight years later --

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-- eight years later now --

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-- eight years later we have another Republican nominee who is telling us the exact same thing. He's saying, this time will be different. He says it really will. This time he's going to put country before party to change the tone, reach across the isle. He's going to change the Republican Party. He's going to change the way Washington works.

Folks, we've seen this move before, and we know the sequel is always worse than the original.

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If we forget --

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-- if we forget this recent history we're going to be doomed to repeat it. We'll get four more years just like the last eight. If you're ready for four more years of George Bush, then John McCain is your guy.

You know, just as George Herbert Walker Bush was nicknamed Bush 41 and his son was nicknamed Bush 43, John McCain could easily become known as Bush 44.

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You know, the campaign -- the campaign of the person (ph) who runs will tell you everything about how they'll govern. The McCain/Palin campaign decided to bet the house, decided to bet the house on the politics perfected by Karl Rove. Those tactics may be good at squeaking by an election, but they're very bad if you want to lead one nation indivisible. Ladies and gentlemen --

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-- Ladies and gentlemen, I count John McCain as a personal friend. I've known him since before he became a United States senator. If he need my personal help, I would go. He served our country bravely, nobly. But, folks, America needs more than a brave soldier, they need a wise leader.

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Take a hard look -- take a hard look at the positions John McCain has taken over the last 26 years of his career on the economy, on health care, on foreign policy, and you'll see -- you'll see why I say that John McCain is just four more years of George Bush. And I'm not looking for applause line. This is deadly earnest. On the issues -- on the issues that you talk about at your kitchen table: Can we afford Mary's tuition? What are we going to do about mom's MRI? How are we going to pay for it? Winter is coming, how are we going to heat the house? On those issues, the issues that we talk about every day, middle class people, John is profoundly, profoundly out of touch.

John McCain has confessed, and I quote, I want to make sure I get it right -- he said, "It's easy for me to be in Washington and frankly be somewhat divorced from the day-to-day challenges people have."

Well, he's right. He's right. If all you do is walk the halls of power, all you'll hear is the wants of the powerful. Ladies and gentleman, I believe that's why John McCain could say, with a straight face, as recently as this morning, and this is a quote, "... the fundamentals of the economy are strong." That's what John said.

He says that we've made great progress economically in the Bush years. Ladies and gentlemen -- ladies and gentlemen, I could walk from here to Lansing, and I wouldn't run into a single person who thought our economy was doing well, unless I ran into John McCain.

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Folks, John just doesn't get it. He just doesn't understand what average, middle class people are going through the last eight years. He doesn't get it. I don't doubt that John cares, he just doesn't think. He doesn't think that we have any responsibility to help people who are hurting. Just look at John's budget. Who would he give the tax cuts to? And how would he spend the money?

You know, my dad used to have an expression. He would say don't tell me what you value, show me your budget and I will tell you what you value.

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Folks, by that measure John McCain doesn't stand with the middle class by that measure. He stands firmly with George Bush in the corner of the wealthy and well connected. He stands with the CEO of ExxonMobil, who a year ago was testifying before my judiciary committee. And when I asked him, do you need the $2 billion in tax breaks you've just been given to drill for oil? He looked at me and his jaw quivered. I said, sir, you're under oath. And his response was, no, no, we don't need it. Well John McCain not only supported that tax cut, John McCain now wants to add $4 billion in new tax cuts for the ExxonMobils of the world and the wealthiest Americans.

Look folks -- look folks, in addition to that, John's proposals, as he misrepresents ours, John's proposals call for an additional $300 billion a year in tax cuts over the next 10 years each year for corporate America and the wealthiest among us. Folks, I promise you, there's simply no daylight between John McCain and George Bush, at least none that I've been able to discern...

HOLMES: You've been listening in here to Senator Joe Biden. We were given a heads up that he was going to be going after Senator John McCain, and they were not messing around when they told us that. He is taking some hard shots at who he calls his personal friend -- John McCain -- calling him now Bush 44, a reference to the current President Bush being Bush 43, saying McCain would be a Bush 44 because their policies are so similar.

We'll continue to monitor that rally. Also monitoring the rally that Sarah Palin was having out in Colorado.

Also monitoring the markets. Let's see where they are right now. Down 280 points now after really just a tumultuous weekend for Wall Street. Lehman Brothers bankrupt. Bank of America taking over Merrill Lynch. Also AIG, the country's largest insurance company in trouble as well, looking for some cash. A lot going on on Wall Street. We're all over this story. Stay here.

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HOLMES: Issue #1, the economy right now, your money. News involving some financial giants, icons really, on Wall Street, sending shock waves this morning. Fuelling this crisis, the legendary investment banker, Lehman Brothers, filing for Chapter 11 bankruptcy protection. This company was burdened with more than $60 billion in bad debt stemming from the real estate holdings. Also on top of this, you take financial giant, Merrill Lynch, snapped up by Bank of America in a $50 billion stock deal.

Need some more here? The nation's largest insurance company is selling off part of its business. AIG trying to raise some desperately needed cash.

So there you have it on Wall Street. You've got Lehman Brothers, Merrill Lynch, AIG, all in trouble. But the Federal Reserve trying to take some action, trying to help out here. Our Susan Lisovicz at the New York Stock Exchange.

Susan, you've just got to catch your breath here really? Really, what can the federal government do in this case? What can the Feds do -- the reserve, I guess?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well the Fed has really been taking unprecedented action to preserve the sanctity of the banking system, T.J. It's as simple as that and yet it did something additional over the weekend. Basically, it expanded the collateral that investment banks can use for loans from the Fed. That in and of itself was extraordinary. The Fed just making its loans available to investment banks, but now, it's allowing stocks to be used as collateral. It's also increasing the frequency of its auctions for its lending facilities. And so basically, it's upping the ante.

When you broaden your lending policies, you heighten the risk and the Fed obviously believes that the risks to the banking systems are so great that it is going to take this step -- triage, one veteran Wall Street observer told me. But yet another thing is happening as well. A consortium of 10 banks is putting up $70 billion as backstop in case the Fed doesn't take some of this as collateral. That -- it's basically strongarming these banks to say, hey, you're in this too. And you've got to help and that's what's happening.

These are extraordinary measures. And clearly, it's trying restore some sort of stability in the banking system, which ultimately we all need, right? Whether it's loans for a car, tuition, house, you name it.

HOLMES: But you know, you say the Fed is making these steps, they believe they might help, they believe it's necessary. What do investors believe right about now?

LISOVICZ: Good question.

Well, we're seeing a selloff. Not surprising but it's very orderly so it seems to be very calm in the marketplace. A lot of questions yet. The Dow is close to session lows, right now down 300 points, or two and two-thirds percent. We saw greater percentage declines in Europe earlier today.

Lot of questions about AIG in particular, this nation's largest insurance company. It's shares, right now, plunging 65 percent. There is a sense, there is a hope, that some sort of restructuring plan will come from AIG and hopefully soon.

HOLMES: All right. Susan Lisovicz, busy woman on a busy morning, a scary morning there on Wall Street.

Thank you so much. We'll see you again soon.

LISOVICZ: You're welcome.

HOLMES: A lot of attention being paid this morning, and rightfully so, to the financial markets. You can keep up with what's happening with Merrill Lynch, Bank of America, Lehman on the best web source for business news, that's CNNMoney.com. That is the top destination for issue #1, the economy.

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HOLMES: Hello there, everybody. We are keeping all eyes on that number right there, the Dow, the market, is dropping today after a shakeup on Wall Street.

You are in the CNN NEWSROOM where we're keeping an eye on it all for you.

I am T.J. Holmes sitting in today for my good friend Tony Harris. It's Monday, September, 15th.

The headlines for you.

The stock markets roiled (ph) by the fall of two icons -- Lehman Brothers in Chapter 11 bankruptcy, after the Feds say no to another bailout. Also Merrill Lynch forced into a buyout deal.

Also, still keeping an eye on what's happening in the aftermath of Hurricane Ike. The Texas landscape has been changed. The governor says it could be weeks, also, before anyone can go home to Galveston.