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John McCain Speaks in Florida; Financial Turmoil; Ike's Aftermath
Aired September 15, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN, ANCHOR: At the center of this crisis, the legendary investment bank Lehman Brothers. Again, this company has been around 150 plus years. The company is filing for chapter 11 bankruptcy protection because of $60 billion in bomb real estate holdings. You add on top of that, Merrill Lynch, having some problems. News that Bank of America is buying it out. The old stock deal valued $50 billion and we are not done with those two. We got more here to add the nation's largest insurance company, AIG, being forced into a restructuring deal to raise some much needed cash. The bottom line though what this means to you? How it affects your finances? Our money team is all over this. Susan Lisovicz at the New York Stock Exchange for us. And also Allan Chernoff outside the offices of Lehman Brothers. Susan, let's start with you with how the market reacted to it this morning.
SUSAN LISOVICZ, CNN CORRESPONDENT: You're calling it a seismic shakeup, I think most everyone would agree with you and what that's translating into is a very sharp sell off. No surprise we saw Europe tank at its open because of the continuing concerns about the banking system, the U.S. economy which is the world's greatest.
Right now, we're seeing the Dow off 312 points or two and quarters percent. The Nasdaq, S&P 500, each down about two percent. The bottom line here, OK. One thing is that we always talk about consumer spending. It's the engine of economic growth. OK. Well, if we can't get access to capital, we can't spend money. And when you see two major investment banks basically go by the wayside, when you see a huge insurance company like AIG, it's shares down 65 percent right now, losing 65 percent of its value in one session so far. You know, there are very real expectations that credit's going to be tighter and oh, that it's going to cost more. So that's certainly not good for the economy.
The Fed has stepped in. We talked about it just a few minutes ago. Broadening its collateral to investment banks trying to inject some liquidity. There's a $70 billion injection from a consortium of banks. But the bottom line is there's still a lot of questions. And it's not good for the economy. The Federal Reserve makes the decision on interest rates tomorrow. And Washington Mutual, there were real concerns about WAMU's ability to weather this storm. WAMUs share right down are down 20 percent. This on the day when oil prices are down four bucks and below $100 a barrel. This is truly a momentous Monday. T.J.
HOLMES: A momentous Monday, a Monday in mourning. All kinds - you can call this thing all kinds of things but none of them are good. And it's something to see oil prices that everybody is waiting and hoping to go down. They're going down now, but we're in the middle of all this other -
LISOVICZ: Yes, that would be alone enough to spark a rally on another day, not today.
HOLMES: Not this day. Susan Lisovicz, we will see you again shortly. Of course, this was a pillar of Wall Street. Lehman Brothers, we're talking about here. We saw its stock plunge 94 percent this year. Now the company, filing chapter 11 as we're talking about and outside of Lehman Brothers right now is out senior correspondent Allan Chernoff is joining us live out there, keeping an eye on things. Hey there, Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: T.J., the decline that Susan was just talking about at the stock market, you know, it's all about confidence. People have lost some confidence in the financial markets. Well, confidence over here is basically dissolved. That's the reason that Lehman Brothers now is filing chapter 11 bankruptcy. Confidence just eroded over the past few months. this firm made major investments in mortgage securities, pools of mortgages. They really went south and that has devastated this firm.
Inside, the employees also devastated. A few people have come out. They've told us they've just been shocked. They really believe that at the last minute over the weekend, something was going to happen. Some deal would come through, some bank would buy it with the help perhaps of the treasury and the Federal Reserve. The Treasury said you know what, we helped out when it came with the Bear Stearns deal. We helped out last week with Fannie Mae and Freddie Mac. The line was drawn right here in front of Lehman Brothers. The treasury said no more to putting up taxpayer money to support a treasury bailout of a Wall Street firm.
And as a result, you see Lehman Brothers gone. Also stunning, we talked about the Merrill Lynch deal. Bank of America buying the biggest brokerage firm in the nation at $50 billion, sounds like a lot. It's a real discount to where that firm was just a year ago. Also, having been devastated by this mortgage crisis. We are definitely going to e talking about major job losses. Not only here, but also at Merrill Lynch as a result of that deal to buy it out. Back to you in the studio.
HOLMES: All right. Allan Chernoff there for us outside Lehman Brothers, thank you. The other major part of this story, the other component, Merrill Lynch, battered by bad real estate deals, now being bought by Bank of America. Merrill Lynch posted net losses of $17 billion over the last four quarters. In 2007, its stock price peaked above $98 a share. Well, the deal with Bank of America values the stock at $29 per share. President Bush reacting to all this financial turmoil. He met this morning with the President of Ghana and told reporters he's confident the markets are resilient.
(BEGIN VIDEO CLIP)
PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: ...concern about the adjustments that are taking place in our financial markets. The White House and throughout my administration, we're focused on them and we're working to reduce disruptions and minimize the impact of these financial market developments on the broader economy.
(END VIDEO CLIP)
HOLMES: Well, we'll have much more from our correspondents. And talk about how this really affects your wallet. Christine Romans, we've been talking to her this morning. She joins us about 15 minutes along with Andy Serwer of "Fortune Magazine." Also checking with our Gerri Willis a little later this hour. Well, the financial markets boiling with change. You can keep up with what's happening on Merrill Lynch, Bank of America and Lehman on the best website for business news at cnnmoney.com. That is the top destination for "Issue Number one," the economy.
Well, along with this dire financial news this morning. We are all paying more for gas. I think what you're thinking. Thanks, T.J. Tell me something I don't know. Well, you can blame it on Ike. AAA reports that a gallon of regular cost $3.84. That is up 17 cents in just three days. Again, blame Ike. The hurricane shutdown much of the nation's refining operations but there is some heartening news. Oil prices plunged to a seven-month low today. Apparently, all those oil wells and refineries weathered the hurricane fairly well.
All right. We felt Ike's affects at the gas pump, now let's talk about the real damage there on the ground. First up here, it's now blamed for killing at least 27 people in six states. Hardest hit, Texas, perhaps the biggest search and rescue operation in that state's history is underway right now. Rescuers going door to door along the coast. Power is out to millions. Tens of thousands in shelters. No idea when they'll be able to return home after many of their homes damaged or destroyed in the storm. I want to head over to our Betty Nguyen and the devastated town of Galveston this morning. Betty, my co-anchor, of course, on CNN SATURDAY and SUNDAY MORNING has been there weathering the storm, been there since Friday. And hello to you again. And I know the more you're out there, the more devastation you've seen, Betty.
BETTY NGUYEN, CNN, ANCHOR: It is really difficult just to understand the fury that this storm brought. Hurricane Ike blew ashore as a category 2 which meant little anchors like this really didn't stand a chance. Look at these two sailboats. They have blown ashore. They are sitting on the side of a major roadway here in Galveston. And if you'll take a walk with me, Joe, my photographer, I want to make sure that he's careful because there are a lot of lines down around here. This is an idea of why so many were killed in this storm across six different states.
We are in a place called Aunt Margie's bait shop. This is what's left of the shop. Nothing but debris. Over here, you can see how another boat has blown into the building. There's very few walls still standing. In fact, there are 150 buildings that have been destroyed in this storm right here in Galveston. At least that's the number that we have so far. That number could double or triple as soon as more assessment is done. The search and rescue operations are underway today, T.J.. In fact, they're hoping to really remove some 10,000 plus people from this island.
But take a look at the damage. And this is why they're having to try to go door to door and sometimes by boat to reach the folks who rode out the storm and hopefully made it through alive. The devastation is everywhere. This is Galveston Island and just next door is the Port Bolivar Peninsula. And on that peninsula, we are being told that 80 percent of it is wiped out. So this is a glimpse of what Hurricane Ike has done, a powerful storm. It's knocked out power to all of Galveston Island. We are essentially cut off from the rest of the world at this point. No one is being allowed in, only medical emergency medical crews because of the danger that is just all around with this debris.
HOLMES: All right. And so much of this, Betty, we know, our videographers, you know our photojournalists take so many pictures with their cameras and rolling but so much of the devastation you see, you see walking down the street. You know, sometimes when your shift is even over sometimes, and you snap pictures as well. So walk us through some of these that you took.
NGUYEN: Yes, I took some pictures from a place called Kemah which is not too far away from Galveston Island. It sits on, in fact, Galveston Bay, so obviously, they had a very large storm surge there as well. And what you're looking at is the damage that washed ashore on the bridge that connects Kemah to Seabrook, Texas. I mean, these were items that should be in people's homes. These are memories. These were things that matter to them, but right now, they're just a bunch of rubble that at some point they're going to have to come and clean up. But that's going to take a whole lot of time and a whole lot of equipment because it is all over the place.
In fact, businesses are under water there still to this day. I found a Dairy Queen that is sitting in, I don't know, about four to five inches of water. The drivethru is flooded and what's so funny about that picture of the Dairy Queen, you can't see it in that particular one, I don't believe but there is a sign next to it that says, now hiring. T.J., I have a good feeling that they won't be doing that any time soon.
HOLMES: Yes. We saw that this weekend. You shared that with us. And anything they're hiring might be a clean up crew, but that's it. Our Betty Nguyen for us there at Galveston this time around. Betty, thank you so much. We'll see you again.
And while most of us have our eyes on Ike. Have you heard about Lowell? The tropical storm that made a move at the midwestern states has dumped heavy rains from Iowa to Ohio on Saturday and Chicago reporting record rainfall. Crews had to save people from their flooded homes and cars. Then remnants of Hurricane Ike moved in later bringing strong winds and even more rain. Right now, repair crews are rushing to restore power to more than a million homes and businesses in the region.
Chad Myers in the weather center for us. Whew, what's next? Can we take any more of this stuff? CHAD MYERS, CNN METEOROLOGIST: Well, I just checked the hurricane center website and it said no more tropical formation expected in the next 48 hours. So we got that going for.
HOLMES: Whoopee. All right.
MYERS: We'll see. We got 48 hours to look forward to. Look at all these, all the counties you see here in green, every county there, a flash flood warning or a flood warning or some river out of its banks and still obviously, all the way down across the deep south as well into Houston. And people don't realize how bad that southwest and southern Louisiana was hit. I had some pictures of New Iberia on last night, completely flooded. Probably worst flooding from Ike than from Gustav even though Gustav rolled right over the city there.
Boston 85, D.C. 85. Today, a pleasant day in Nashville. Kansas City you're getting cool 70. Chicago drying out a little bit, all the way up to 62 today. The story, I think for the rest of the week really is we don't have anything out there that's spinning that's all that intense. Had a couple of showers here, east of Puerto Rico but that's it. And the best news I have, I have 70 to 100 planes in the sky flying to Houston today. I haven't shown you that. All weekend long there wasn't a plane in the sky all weekend in Houston. At least today, we got some motion. T.J.
HOLMES: All right. Chad Myers, keeping an eye. So we got a 48- hour break.
MYERS: Yes.
HOLMES: And we will take it, Chad. We'll take whatever -
MYERS: I'm going to Starbucks. I'm ready for it.
HOLMES: All right. Chad, thank you so much. We'll check in with you shortly.
If you'd like to get involved in the hurricane relief efforts, you can visit CNN.com/impactyourworld page. We have links to organizations and you can pitch in and help out. Again, that's CNN.com/impact.
We'll turn to another tragic story, we saw over the weekend California commuters getting back on the trains now. Chasing down a new lead on Friday's deadly collision, killed 25 people here. Could a teenager's cell phone have played a part? Stay here with CNN, the most trusted name in news.
(COMMERCIAL BREAK)
HOLMES: Once again, keeping an eye on the numbers, keeping an eye on the markets. That's the Dow, down 266 points. That is off the session low of about 300 plus today. Of course, the landscape of Wall Street has changed today. You portfolio likely has changed as well after Lehman Brothers investment bank there, 158 years it has been in business, announcing its bankruptcy. Also Merrill Lynch being bought out by Bank of America and also the country's largest insurance company, AIG, announcing it has some problems. It's a bit cash strapped, trying to see off parts of its company. So a lot of turmoil happening on Wall Street right now. We're keeping an eye on the numbers.
We will turn to the other side of the country now to California, where commuters are returning to the train. This is the first work day since a fiery head on collision killed 25 people and injured 130 others. CNN's Chris Lawrence is in Los Angeles where investigators are trying to figure out how in the world something like this could happen.
(BEGIN VIDEOTAPE)
CHRIS LAWRENCE, CORRESPONDENT (voice-over): Passengers saw the freight train bearing down, then felt an explosive collision.
AUSTIN WALBRIDGE, TRAIN CRASH SURVIVOR: It was like running into a brick wall at 60 miles an hour. I don't remember much. I just woke up and there was people laying all over the ground. It's just a disaster.
LAWRENCE: But was it a preventable one? Officials say the engineer ran through a red signal and switch. That tripped an alarm in the control center. But by the time the dispatcher warned the conductor, the trains had already collided. Now one question is, was the engineer text messaging with others while operating that commuter train?
KITTY HIGGINS, NTSB: We're going to be obtaining records from their cell phones and from the cell phones of the deceased engineer to begin to determine exactly what might have happened.
LAWRENCE: Either way, civil engineer Najm Meshkati says too much is left to chance.
You don't want to put the lives of hundreds of people on a red light?
DR. NAJM MESHKATI, USC DEPT. OF CIVIL ENGINEERING: On the light bulb of a red light.
LAWRENCE: Meshkati says railroad officials need to outfit more trains with a collision avoidance system. Positive train control uses a combination of digital communication and GPS. And if engineers miss a signal, these electronic devices automatically apply the brakes.
HIGGINS: It could have prevented this accident. If this engineer had run a red light, run this signal, the train would have stopped. It would have stopped. You could not have moved forward.
LAWRENCE: Right now, that system only covers a small section of tracks, including Amtrak's Boston-to-New York route. For years the NTSB has been pushing to make it mandatory but right now the legislation is stalled in Congress with an estimated price tag of over $2 billion. VOICE OF KITTY HIGGINS: I guess I ask myself, what's it going to take? How many more accidents are we going to have to see like this that could have been prevented if this technology were in place?
(END VIDEOTAPE)
LAWRENCE: Well, railroad industry executives say they've poured hundreds of millions of dollars into researching this technology and there are still some reliability issues. They say the massive cost of the system outweighs the possible safety benefits. T.J.
HOLMES: All right. Our Chris Lawrence on this tragic story out there. Chris, we appreciate you. Good to see you.
We need to turn back now to Hurricane Ike, President Bush getting a briefing today from the FEMA Administration Administrator Paulson about the situation after the hurricane. We have comments from him now. Let's listen in.
PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: Thank you very much, Secretary Chertoff for your briefing, you just came back from Houston. Administrator Paulson, the briefing of course was on the damage done to Texas and Louisiana as a result of Ike. We obviously watch this recovery carefully because the federal government is playing a crucial role in helping the people in the devastated areas were covered.
We're working closely with the state and local authorities on a variety of subjects. Recently, I was informed that there's going to be numerous points of distribution for food, water and ice throughout Harris County to help the people there adjust. Obviously, until electricity is fully restored, people are going to need help with water, food and ice. There is some good news on electricity. Electricity is beginning to be restored.
Obviously, there's a lot more hazard to folks that are waiting for electricity, but people are working hard. There are crews coming in around the country to help. The energy situation is one that's of concern for our drivers, for our folks to expect some upward pressure on price because the storm disrupted the supply of gasoline, as a result, of shutting down refineries and pipelines. The two major pipelines are up and running which is positive news. And happened quicker than we thought it would happen. And yet until those refineries get up and running full blast, those pipelines will be looking for, you know, product.
So there's going to be a pinch. I wish it wasn't the case but it is. On the other hand, if the pinch is too hard, if people think they're being treated unfairly, they need to get on the Department of Energy website because -- or the FTC website and make their complaints known. The storm was, you know, damaged a lot of infrastructure, but truthfully, was not as bad as some predicted on the energy sector.
The, going down tomorrow. I'm looking forward to going down. Members of my administration will be going down, looking forward to hearing from, you know, the local folks. I'm confident that there be people that are very frustrated because their lives have been severely affected by this storm and my message will be that we hear you and we'll work as hard and fast as we can to help you get your lives back to normal. Thank you.
HOLMES: President Bush there making comments after getting briefed on the situation on Hurricane Ike. He is heading down to the region, affected region tomorrow as you heard there. Also, telling consumers, telling the American people, expect an upward pressure to be put on those prices at the gasoline pump. We have already seen that and the President giving the warning you might need to expect that for some time. So we'll continue to follow the situation there with the hurricane and the recovery efforts.
Also, the other big story today, Wall Street, the turmoil there. Anxiety as well on Main Street. We'll talk about how today's financial turmoil affects your money. Stay here.
(COMMERCIAL BREAK)
HOLMES: All right. Once again, keeping an eye on the financial markets. The Dow there down about 240 plus points, down 300 plus points at one point in the day. The market's reeling after the major shakeup of the likes we've never seen on Wall Street today with several major icons essentially in trouble. One, Lehman Brothers filing for bankruptcy. The other, Merrill Lynch having to be sold. What does this mean for your finances? Let's talk about this with Christine Romans of our CNN Money team. Also, Andy Serwer, the managing editor of "Fortune magazine."
And Andy, I will start with you. And I will start with this story that we're seeing. This breaking story about what the governor of New York is going to allow AIG, this is the other components to this story that the biggest insurance company in this country is now allowed to use some $20 billion dollars. Explain what has happened here and we'll start with this.
It is the kind of the story and the news we just got.
ANDY SERWER, MANAGING EDITOR, "FORTUNE MAGAZINE": Right. Well, AIG is in a lot of trouble right now and needs cash. It does have cash in various subsidiaries, and the Governor is allowing the company to draw up those reserves and bring it and help this company along. It gets very complicated, very quickly.
CHRISTINE ROMANS, CNN CORRESPONDENT: Yes.
SERWER: But basically, this is a situation, Christine, where it is allowing the company to help itself, if you will.
ROMANS: And you know, T.J., if it was just the AIG story over the weekend, we'll all be talking about the state and what it means about the health of Wall Street. If it were just the Merrill Lynch story, it would be front page, you know top of the fold, really big news. But Any, I'm interested we've never seen a weekend with so many important headlines. What does it say about the magnitude of this problem and what does it mean for people watching?
SERWER: Well, it's completely unprecedented, we've never seen anything like this in our lifetimes and what it means is the financial system right now in the United States is really shaken to its core. These are big, big, huge global institutions that touch on so many millions of Americans. We have accounts at these companies. We trust this companies. Our money is there and let's be clear, right now, you're money is safe at these institutions and in the banks.
ROMANS: So your money at Merrill Lynch is safe.
SERWER: That's right.
ROMANS: Your money at Lehman is safe.
SERWER: Right.
ROMANS: We're talking about a total reworking and what the landscapes going to look like when the companies moving forward.
HOLMES: Guys, a lot of people hear there and they hear you OK fine, let's trust what they're saying that our money is safe. But aren't people out there just going to start to freak out a little bit? What are people going to start to do and I mean if people start to grab their money, move their money out of the place, is that going to make things worst?
SERWER: Well, we've seen companies, excuse me, people doing that at some of these other smaller banks, where there have been some problems, for instance, Countrywide and Indy Bank.
ROMANS: Right.
SERWER: But I think here, you know, people maybe are becoming almost a little bit numb. But there is additional fallout in terms of how this is going to affect consumers and small businesses going forward.
ROMANS: What about - I mean, what we're hoping to avoid is this credit crunch from getting worse. And the credit crunch means the oxygen which is the ability to borrow something for small businesses, for people buying cars and homes.
SERWER: Right.
ROMANS: And all that. Does any of this help that or it does it just keeps it from getting worse?
SERWER: I think - let me just tell you a quick story, Christine. I was talking to a woman over the weekend who runs a small business and her credit company, her business credit card jacked up the rate big time and I said you must have done something wrong and not paid your card on time.. She said, no I didn't. She contacted the credit company and they this preemptively, in other words, they were concerned that her business might ride in the trouble. So they raised her rates in order to prevent something from happening. Now, that's bad news. That kind of fear in the economy.
HOLMES: Wow. Fear, a lot of people are fearful right about now. WE certainly hope to talk to you more throughout the day.
ROMANS: Sure.
HOLMES: We'll let you all go for now. Christine Romans, Andy Serwer, thank you both for now. We're keeping an eye on something political happening today as well.
John McCain is in Orlando, Florida, about to open a town hall meeting there. We're keeping an eye on it. Expect to hear from him about the financial crisis that we have been talking about all day. Live coverage just minutes away.
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HOLMES: To Orlando, Florida, now. Senator John McCain on his series of town hall meetings. There, his wife, Cindy McCain, apparently doing the introduction to him today. We are expecting a lot of talk about the economy given what happened on Wall Street. Let's listen in.
CINDY MCCAIN, JOHN MCCAIN'S WIFE: My husband that makes this special race and, most importantly, why we need him right now. And there have been good people all through this race. We've had a remarkable run. But this comes down to leadership. It comes down to experience. And it comes down to character. And, in my opinion, the man standing to my left is the only person that has those three qualities and so much more and that can truly lead this country, but more importantly, for all of us who have or do have relatives or know of people, young men and women who are serving right now, who understand what it means to send young men and women into combat, but, more importantly, how to bring them home and to bring them home in honor and in victory. So I give to you, the next president of the United States, my husband, John McCain.
SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: Thank you. Thank you, Cindy. Thank you. Thank you. Thank you. Thank you, all. Thank you. Thanks very much. Thank you. Thank you very much. Thank you for that kind welcome. Thank you for being here. Thank you.
It's very appropriate that we be here on the first day of Hispanic Heritage Month. And, frankly, I'm in the company of some wonderful people who have served the state of Florida and this nation and I'm, of course, very proud of Mel Martinez, one of the great American stories, that shows that -- he's very modest and he doesn't like me to mention the facts. And that is that at age 15, as you know, he came to this country with nothing but the shirt on his back and served as a member of the cabinet and is now one of the great United States senators. This is what America's all about. And I thank you, Mel, for everything that you have done.
Governor Charlie Crist, thank you so much for your great work as governor. And sitting next to, Charlie -- well, actually, between him is the brains of the outfit, Carol (ph), as you know. But as I -- you know, governments matter. Governments matter. And there's no greater example of that than these two great governors of the state of Florida, Jeb Bush and Charlie Crist. Governments matter. Governments matter.
I could go on and on about both of them, but I would like to point out that Florida now leads the nation in education reform. You know, what is our great obligation to next generations of Americans? Is it equal opportunity to attend school, but having to attend only a failed school? No, it isn't. And what Governor Jeb Bush, with a great team around him, did for education in this state should be and will be a model for the rest of the nation. And I thank you, Jeb, for everything.
I would like to mention there's an old quarterback with us who's still looking for a job in the NFL and great leader and great American and dear friend, Jack Kemp, who I think all of you know. I got to tune in to a couple of games on Sunday and it looks like there may be some openings for Jack. I hope so, that he's here.
And former governor, Bob Martinez, thank you, sir, for everything that you are here. Thank you very much.
And we have, of course, a great mayor of Orlando, who still owes me and my family a great deal of money from our many visits in Orlando. So thank you, Rich Crotty, for . . .
And Carlos (ph), thank you so much for being here. John Quinoinas (ph), thank you. And Mildred Fernandez (ph), thank you for all your great work. Thank you. Thank you very much.
And I know that you know that there's been some excitement in the last week or two. And that's about the governor of the great state of Alaska, Sarah Palin, who I know you are very excited about. You're going to get to know the Palin family, and already you've learned to know and appreciate the governor.
But I also want to tell you just a word about her husband, Todd. He, every year, gets into this race. He's a little crazy because in a snowmobile, they call it snow machine in Alaska, he goes across Alaska for 2,000 miles, in the dead of winter, in 40 degree below temperature, and he's four-time world champion. He's a remarkable guy. So he's ready for Washington. He's ready.
And I've been pleased to introduce Sarah around the country and to the nation. And I want to tell you, I can hardly wait to introduce her to Washington, D.C. because the message is -- to the earmarking pork barrelers, change is coming. And real change is coming to Washington, D.C., my friends. That's what's coming.
Now, my friends, before I answer your questions, I'd like to respond to your comments because town hall meetings are very important. I would not be the nominee of my party today, my friends, if I hasn't had hundreds of town hall meetings around this country. And it gave me not only the opportunity to get the support of the voters, but help me understand their hopes and their dreams and their aspirations. And the town hall meetings have been incredible.
And, by the way, New Hampshire, we did a great deal of them. And it gave me an opportunity to not only for the people of this country to hear from me, but me to hear from them. And, you know, I have urged Senator Obama on time after time after time, why don't you come down here with me, why don't you come with me and we'll both do town hall meetings together and we'll pick whatever audience that anybody can take. And let's do the town hall meetings.
A lot of the people don't like the tenor of this campaign and a lot of the back and forth. I guarantee you, I know that if you stand on the same stage with your opponent and you hear from the American people and the American people hear from you, a lot of that negative stuff disappears. So the next time you run into one of your Democrat friends, would you say, look, why don't you urge Senator Obama. We've got a long time to go. I think 51 days to be exact. Or 50, which -- Cindy knows. Fifty.
Cindy knows better than I do. Thanks for everything, Cindy. Thanks. Many people -- she did a great job at the convention and many people -- many people in Arizona have often said, why isn't she the candidate.
So why don't we do that, Senator Obama? Why don't we stand together on the stage around this country. I'll even pay for the airplane. And I promise not to fly it, but I'll pay for it.
So I'd like to just mention the couple of things to you. And, first of all, a little straight talk. As you know, as you well know, we're seeing tremendous upheaval on Wall Street. The American economy is in a crisis. It is in a crisis. People tonight will be sitting around the kitchen table trying figure out how they're going the stay in their homes, how they're going to keep their job, how they're going to put food on the table and America is in a crisis today. The unemployment is on the rise and our financial markets are in turmoil. People are concerned about our economic future.
But let me say something. The economic crisis is not the faults of the American people. Our workers are the most innovative, the hardest working, the best skilled, the most competitive, the most competitive in the world. That's the American worker.
And my opponents may disagree, but those fundamentals, the American workers and the innovation, their entrepreneurship, the small business, those are the fundamentals of America and I think they're strong. But they are being threatened today. Those fundamentals are being threatened today because of the greed and corruption that some engaged in on Wall Street and we have got to fix it. And we have got to reform the way that they do business.
And, frankly, my friends, our workers have been the strength of our economy and they remain the strength of our economy today. And those fundamentals are threatened. They are threatened and at risk because some on Wall Street have treated Wall Street like a casino. So we're going to fix it.
And their efforts are not being matched at the top. From Washington to Wall Street, the top of our economy is broken. We've seen self-interests, greed, irresponsibility and corruption undermine these hardworking American peoples. The fundamental of America.
We're going to put an end to the abuses in Washington and on Wall Street that have resulted in the crisis that we are seeing unfold today. Enough is enough. Enough is enough. We're going to reform the way Wall Street does business and put an end to the greed that has driven our markets into chaos.
We'll stop multimillion dollar payouts to CEOs that have broken the public trust. And we'll put an end, as I've said, to running Wall Street like a casino. We'll make businesses work for the benefit of their shareholders and their employees. And we'll make sure that your savings, the IRAs, 401(k) and pensions are protected.
And, my friends, one of this things we have to do is we have a regulatory system in Washington today that was designed in the 1930s. And there's an alphabet soup of different agencies. And the have to be streamlined, they have to be consolidated and they have to be effective. And those regulators have been asleep at the switch. And we've got to fix it. And there's lot of other things we've got to do as well. But have no doubt that we still have the most productive, the most innovative, the most entrepreneurial, the best workers in the world reside in the United States of America today and we've got to give them a chance and honor those fundamentals.
So, my friends, I've fought corruption in Washington, as you know, and whether they've been Democrat or Republican, it doesn't matter. Senator Obama has never taken on his party. I've taken on my party and I'm proud of it.
But I can also tell you, that I know how to bring spending under control. Spending has gone completely out of control. We have lost the trust of the American people and it is breed (ph) corruption. I don't say that lightly. I say it because we now have former members of Congress residing in federal prison. So we've got to fix it. We've got to fix it and we will.
And I just want to tell you, the first earmark pork barrel bill that comes across my desk, I will veto it and I will make them famous and you will know their names. You will know their names. You will know their names. We will veto it. And we won't have any more bridges to nowhere.
And I want to mention another issue, too. Immigration reform. It doesn't directly affect the Puerto Rican community, but it does directly affect the well being of Americans. And I want to tell you that I took on the issue of immigration reform because I thought it was the right thing to do and I knew that there were many in my party who wouldn't support me because I took on immigration reform. And it had to be done in a comprehensive fashion. And I know we care about all of our citizens. And the fact is, that Senator Obama proposed amendments that would have killed the legislation. I fought for it. And I also want to tell you, as president, we will bring up immigration reform.
We will secure our borders. And we will make sure that there's a temporary worker program that works and that we will also address the issues.
And we will address the issue of those people who have come to this country illegally and broken our laws by doing so, but we will also do it in a humane and compassionate fashion. That's what America is about.
And I don't want to take up too much more time because I look forward to your questions. But I will say that on our southern border, my friends, it's not only -- the struggle isn't just illegal immigration. It's with the drug cartels that are in danger of overwhelming our southern border.
And I'm happy to tell you that there's a president of Mexico, Calderon, who I have visited with. And he's fighting hard. But I'm telling you, there are towns in Mexico on the border today that they're in danger of being taken over by these drug cartels. So it isn't just the issue of illegal immigration, it's the struggle that the Mexican government is in with the drug cartels to regain control of their country. So we've got to work closely with the Mexican government, as I want to do with all nations in our hemisphere, maybe a couple of exceptions, but -- I'll be glad to talk to you more about that. But we also should reward the president and people of Colombia with a Colombian Free Trade Agreement, which I support. And I strongly support it. And I believe in it. And I believe in free trade.
So let me just mention two things very quickly. One, we've got to stop sending $700 billion a year overseas to countries that don't like us very much. We have to achieve energy independence. And we will. And we will.
HOLMES: All right, listening in to Senator John McCain there in Orlando, Florida, at a town hall meeting. He's just getting started there, making several comments on several issues. Talking about the (INAUDIBLE) country's dependency on foreign oil there as he was wrapping up -- or as we were wrapping up with him. But he's certainly (ph) talking about the economy. Made some comments at the top about cleaning up Wall Street and putting in more regulations. Some of the same things we heard echoed by his vice presidential nominee, Sarah Palin, when she was talking at a rally out in Colorado. We saw that live here a short time ago as well.
Now on the Democratic side, Barack Obama also talking about the economy today. He put out a statement. We haven't heard from him yet. We're going to hear from him as far as him speaking to us. We will hear from him at about 1:00 in Grand Junction, Colorado. Expecting that really coming up at the top of the hour. We'll take that live as well when we hear from him.
But he did put out a statement this morning at least about the economy. And it reads, in part, "for years, I have consistently called for modernizing the rules of the road to suit a 21st century market. Rules that would protect American investors and consumers. And I've called for policies that grow our economy and our middle-class together. That is the change I am calling for in this campaign, and that is the change I will bring as president."
But again, we're waiting to hear from him at the top of the hour. He will hold a rally at the top of the hour in Grand Junction, Colorado. Stay here, we're all over this political news and major business news of the day.
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HOLMES: Welcome back to the CNN NEWSROOM. We are keeping an eye on several major stories today. One of them being the recovery effort going on in Texas and the surrounding areas after Hurricane Ike hit over the weekend. The governor of Texas, Governor Rick Perry, gave a briefing a short time ago. Let's take a listen to what he had to say.
(BEGIN VIDEO CLIP)
GOV. RICK PERRY, TEXAS: So we play a very important role in the future of the United States and I have asked the president and the administration to just treat us as fairly as they treated Louisiana back during Katrina. Whether it's individual assistance, whether it's whatever that is available. That they just treat us like they did our neighbors in Louisiana and during Katrina and Texans will take care of . . .
(END VIDEO CLIP)
HOLMES: All right. We'll turn back to issue number one, the economy. And the economy is a little shaky right about now for a lot of people. The Dow down, as you can see there, about 257 points. Been down 300 plus today after just some major financial news rocked Wall Street today. All this financial turmoil may have you asking yourself, is my bank in danger of failing and where's my money. Personal finance editor Gerri Willis, who, of course, is part of the CNN Money team, joins us now to talk about that.
All right. Everybody's looking for a little -- it just seems so massive.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: It does seem so massive.
HOLMES: Just kind of break this down to the least common denominator and put this whole thing in context. But it is still a big deal. WILLIS: Well, the roots of this are -- all right, it's not news to regular investors and regular consumers. Look, the real estate crash, the credit crunch, the consumer, we have been struggling with this for more than a year. It finally came home to roost to investment banks and brokers this weekend. The implications, T.J., are wide ranging.
This could make the credit crunch wider, deeper. It's going to be harder to get a loan. Stocks will continue languishing. We don't know for how long. Your 401(k) will get hurt. And for Merrill brokerage clients out there, the broker will continue to operate probably under B of A pretty much as it does right now, possibly. They'll keep the Merrill branding, that's the thinking. B of A will probably try a seamless turnover.
Some rumors continue to swirl, though, around banks like Washington Mutual. We're still watching them to make sure those banks will continue operations as normal. But at the end of the day, I think you have to sit back and say, this is no time to panic, this is not a time to be moving your money around. Because, at the end of the day, we're all going to be here tomorrow and so are many, many of these institutions.
HOLMES: All right, forgive me, but no time to panic? When do you want me to panic then? This sounds pretty serious. Not the time to panic.
WILLIS: Well, you know, if you were running Lehman Brothers, you can panic because your company's going away. But for most folks out there, they don't own Lehman Brothers stock. They don't own Lehman Brothers' bonds.
However, if you do have investments with that company, they do have a broker dealer. They have a lot of high net worth clients. The Securities Investor Protection Act is the unit that protects customers. Your investments should be protected. Remember, the SEC has strict rules about keeping the brokerages money separate from your investments. So even if the firm goes under, your money should still be there.
And there is another layer of protection here. If money is missing from an account after a firm fails, SIPA comes in and protects you money up to 500,000 per customer, per account. Traditional savings, checking, CD, money market accounts, your deposits are insured by the FDIC, as we've been saying here over and over again. There are protections out there for folks. You've just got to make sure you understand them and, you know, again, now is not the time to panic. Now it's to take account of everything you have.
HOLMES: All right. Well, I will calm down. It is not time to panic just yet unless, like you said, you're running Lehman Brothers.
Gerri Willis for us. We appreciate having you and the rest of the CNN Money team on board to help us out with this today.
WILLIS: My pleasure.
HOLMES: Thank you so much.
WILLIS: Thank you.
HOLMES: We'll turn back to talk about the hurricane now. That big hurricane, Ike, came ashore over the weekend. Three days ago now. Galveston, right now, is in shreds. People who live there being told, don't come home just yet.
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HOLMES: We can tell you know the confirmed death toll for Hurricane Ike now stands at 27 in six states. Rescuers say they've saved almost 2,00 people from splintered homes and flooded streets. Many said they thought they were going to die in that hurricane. Perhaps the biggest search and rescue operation going on right now that has ever taken place in the history of Texas. Crews are vowing to continue their search until they've knocked on every door in some of those hardest hit areas. We've also got word that they're having to go by boat going door to door sometimes. Also Texas Governor Rick Perry telling CNN that it could actually be weeks before people are allowed to return to Galveston.
ROB MARCIANO, CNN CORRESPONDENT: Unprotected by the sea wall, Bayside residents, on the backside of Galveston Island, saw the brunt of the storm surge flooding. In some cases, homes completely destroyed. And even as the flood waters recede, some areas remain cut off. People struggling to get back to see what their homes look like. Well, we ran into one family trying to do just that. Well, we borrowed a boat and gave them a ride.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It's a long ride, so we'd better get going.
UNIDENTIFIED MALE: I can imagine what the underneath of my house looks. It's going to be similar to that, probably.
UNIDENTIFIED FEMALE: The garage is gone. The garage is gone.
(END VIDEO CLIP)
HOLMES: Yes. A tough time for a lot of people looking at a lot of that devastation. Continue coverage of Hurricane Ike and the financial situation on Wall Street in CNN NEWSROOM as it continues right now with Betty Nguyen and Christine Romans.
