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$85 Billion of Your Money; Battleground Duel; Help for Haiti; Fatal Formula; Those Bullish Ads

Aired September 17, 2008 - 12:00   ET

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

DON LEMON, CNN ANCHOR: All right. It is Wednesday, September 17th. I'm Don Lemon. Here are the headlines right here in the CNN NEWSROOM. The federal government to rescue, it's rescue time. Insurance powerhouse AIG, they want them to avoid bankruptcy.
A pair of superstars help Haiti recover from a devastating parade of storms. I'll talk with Matt Damon and Wyclef Jean.

The battleground states, a member of the best political team on television tells us where things stand today. Just six weeks to go.

We're following a developing story on Wall Street. The financial headlines and a sense of here we go again. The government is bailing out a financial giant. This time, AIG, the world's biggest insurer and it's putting up $85 billion of your tax dollars to do it. The company was pushed to the brink by indirect exposure to the subprime mortgage meltdown. An unprecedented step today by the U.S. Treasury department. It will sell $40 billion worth of bonds this afternoon for the Federal Reserve.

In essence, it's making sure the Fed has enough cash on hand during the credit crisis. We will get back to this developing story in just a moment. We want to get to the White House now, the president is talking about the attack on the American embassy in Yemen.

(BEGIN VIDEO CLIP)

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: In a time of danger. I have been incredibly impressed by the sacrifice of our troops who have been put in harm's way, and I've been incredibly impressed by the level of leadership for those troops. General David Petraeus was asked to do a very difficult job, and he did it with distinction and honor, and he was a part of the planning for the surge. He implemented the surge along with a lot of other great people and the United States and the world is better off because of it.

And now the general has agreed to be commander of CENTCOM which oversees a very important part of the world, in the Middle East. So thank you for taking on that assignment, General. Recently we saw how important it was with the attack on our embassy in Yemen. There were some security forces that lost their lives there and we send our condolences to their families. This attack is, is a reminder that we are at war with extremists who will murder innocent people to achieve their ideological objectives. One objective of these extremists is they kill, it's to try to cause the United States to lose our nerve, and to withdraw from regions of the world, and our message is, it's that we want to help governments survive the extremists. We want people to live normal lives. We want mothers to be able to raise their sons and daughters in a peaceful environment. So they can utilize the hopes and dreams of a better world, and I want to thank our diplomats who stand in harm's way.

I thank our military who stands in harm's way, and I want to thank General Petraeus and his family for being so dedicated to our great country. General.

GEN. DAVID PETRAEUS, FMR. MULTI-NATIONAL COMDR. OF THE FORCES, IRAQ: Thank you, Mr. President. It's great to be home, sir. It's a great privilege to serve there with our young men and women.

BUSH: God bless you. Thank you.

(END VIDEO CLIP)

LEMON: All right. That's the president there and also General David Petraeus, the former multi-national commander of the forces in Iraq. Now the incoming head of CENTCOM, Central Command. He will be taking over that. The President speaking about the attack in the U.S. embassy in Yemen where 16 people lost their lives including Yemeni police and also some civilians there.

We want to move on now and talk about a very rocky day on Wall Street. It's really been a very rocky 72 hours. Take a look at the Dow now. Down almost 400 points. 379 points. If it keeps moving in the downward direction, it's going to be a very critical time for us here. It will be breaking news in a second if it keeps moving in that direction.

Meantime, the CNN money team, I want to tell you there, is standing by as we're looking at all this to help us with the very latest on this money melodrama. You see there CNN's Allan Chernoff, who has been following the story every day from AIG headquarters, or at least down at the financial area of New York, Susan Lisovicz, she's at the New York Stock Exchange for us with the latest on those very bleak Dow numbers. You see, 397 points. Susan, shake your head if you can hear me. Almost down 400 points. And also, our Josh Levs joins us in the CNN NEWSROOM. He is checking on the web and also looking at some very interesting things about what is going on.

That's a lot to talk about. So we'll bring in our senior business correspondent, our senior correspondent, Allan Chernoff who joins us now from AIG. Allan, as I'm talking I keep looking at those numbers. We're talking about the bailout of AIG and then we're seeing this Dow going down and down and down today.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Don, you know, let's put this all in perspective. This is not the way our capitalist system is supposed to work. Having the U.S. government come in with $85 billion to bail out the biggest insurance company in the nation, not something that really instills confidence. And that's part of the problem here. Part of the reason there's a cloud over all of downtown New York. You could say over the whole nation right now.

Why did the government do this? They only did it as a last resort. They were essentially not trying just to protect one company. They were trying to prevent billions and billions of dollars of losses at financial institutions around the globe, if that had happened. If AIG had failed, that would have been a result and then we would have seen loans tightened up everywhere. Much, much tighter credit and that would have depressed the global economy.

That's the only reason that the government took this absolutely extraordinary step. Now, a lot of people, as you know, on Capitol Hill, are not too happy about it. It's really not the sort of thing that we expect our government to be doing, but the employees over here, at least they're relieved.

(BEGIN VIDEO CLIP)

CHERNOFF: Must have been stressful yesterday, huh?

DAVE PARKY, AIG EMPLOYEE: Yes. I guess so. But we're here. We're here to survive and it's carrying on business.

PATRICIA MCDANIEL, AIG EMPLOYEE: I was sort of frightened because right now with the economy being what it is and everything so uncertain, I didn't know if today I was going to be able to walk in here. So I'm glad to be doing that, I'm glad to be walking into my building.

(END VIDEO CLIP)

CHERNOFF: Well, they're going to keep on working and in a way now they're working for us. The U.S. government alone, 80 percent of this economy. Don, you can be sure we're going to have lots of calls for reform of regulation of the financial markets.

LEMON: All right. Allan Chernoff, our senior correspondent joining us from outside of AIG. We appreciate that report. And just a few blocks away in lower Manhattan is our Susan Lisovicz. She is at the New York Stock Exchange. Susan where we're watching these numbers very closely. If it goes any lower it's going to be breaking news here.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I mean, you know, this is - it's a big sell-off, but this is not something that would certainly stop trading. Not by any means. We have a ways to go for that to happen. I think perhaps, you know, the most telling thing here is that the government stepped in to try to restore confidence and calm. Confidence in the credit markets, in our banking system, and that's not happening. That's not happening today.

I think if you had to put it into two words, it would be who's next? Because where you're seeing the most vicious selling is once again in the financial sector. AIG shares are down 46 percent. Stock is trading at $2 now. This was a $70 stock over the past year. Goldman-Sachs which is one of the, you know, the rock stars on Wall Street, shares are down 22 percent. Morgan Stanley moved up its quarterly earnings report. Reported better than expected earnings after the bell to try to calm down the markets. Its shares are down nearly 40 percent. So what you're seeing is the continued lack of confidence in the financial sector, and you know, there may be a little bit of, of this also playing out.

One quick thing is that the Securities and Exchange Commission said it's going to tighten restrictions on something called short selling. There's a type of short selling short selling in general. Which a lot of critics say had contributed to the death spiral that we saw in stock prices with Bear Stearns, with Lehman Brothers and with AIG and those rules, that rule takes effect tomorrow. So there may some players jumping in today and taking it out on the financial sector. That may or may not be at work today, but that is news, but it did come out this morning, Don.

LEMON: All right. Susan Lisovicz, we appreciate that. Thank you. We have our eye on Wall Street here today in the CNN NEWSROOM. You can follow the crisis on Wall Street. The buyouts, the bailouts, falling oil prices, rising gas prices all of it at cnnmoney.com. Get all the day's market news and numbers plus expert analysis, just log on right to that page.

Let's turn now to the deadly attack at the U.S. embassy in Yemen. Ten Yemeni police and civilians were killed along with six militants, suspected Islamic insurgents, disguise as Yemeni forces open fire outside the building. They followed up with back-to-back explosions. No embassy workers were killed. The U.S. calls it a failed attempt to breach the walls of the compound. Media reports say a group affiliated with Al Qaeda is claiming responsibility. Some witnesses say the ground shook.

(BEGIN AUDIO CLIP)

VOICE OF TREV MASON, WITNESS TO ATTACK: We heard the sounds of a heavy gun battle going on. I looked out my window and we saw the first explosion going off. A massive fireball very close to the U.S. embassy. The gun battle went on for further 10 to 15 minutes followed by two further loud explosions.

(END VIDEO CLIP)

LEMON: The U.S. government is condemning the attacks. Live now to our state department correspondent Zain Verjee in Washington. Zain, you heard the President just moments ago speaking out. What's happening at the state department now?

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well the State Department is calling it a vicious yet unsuccessful attack, unsuccessful because it failed to breach past the embassy walls and kill many more people. A short while ago, spokesman Sean McCormick says the attack was sophisticated. He says that there were two cars involved. Both exploded. One at the main entrance of the embassy and another a little further up at a pedestrian entrance. No U.S. embassy staff was hurt or killed. So who does the U.S. think is responsible, Don? Here's what Sean McCormick had to say.

(BEGIN VIDEO CLIP)

SEAN MCCORMICK, STATE DEPARTMENT SPOKESMAN: It is fair to say that this attack bears all the hallmarks of an Al Qaeda attack. The kinds of attacks we've seen in the past.

The world and these terrorist groups and their specific associations and linkages are rather murky. Sometimes you have, I guess one way to put it is, you know, subcontractors or front troops, for Al Qaeda, they might use different names. At this point I'm not prepared to draw some exact linkages for you, but, again, if you look at the facts on the ground it does bear a lot of the -- it looks a lot like what we have seen in the past from Al Qaeda.

(END VIDEO CLIP)

VERJEE: The U.S. has been pretty critical, Don, of Yemen's fight against terrorism and especially angry when it released one of the "USS Cole" terrorists. Secretary of State Condoleezza Rice speaking to the President driving home the point that Yemen needs to do more to counter terrorism cooperation with the U.S. Yemeni officials have told us they have been cracking down.

LEMON: Zain, it just kind of begs a question then, why is it so hard for the U.S. to fight terrorism in Yemen?

VERJEE: Well, firstly, you have the issue of the terrain. It's a really tough land. It's a rugged, mountainous region. The borders are very, very porous. Experts say that the militants in that area can move back and forth really easily to Afghanistan, Pakistan, Iraq, along with their weapons. Another problem they say is a political one. That it really comes down to some of the leaders in Yemen who don't, they say, have the political support to make the kind of tough decisions the U.S. really needs. So Al Qaeda presence in Yemen has really been a very big worry for the U.S. Special forces, too though, Don, American ones have been working with Yemeni military to crack down on militants but they according to analyst have had some limited success.

LEMON: Our state department correspondent, Zain Verjee. Zain, we appreciate that.

So just who is calling the shots for Al Qaeda these days? The CIA chief says it is not Osama Bin Laden. According to CIA director Michael Hayden, Bin laden no longer oversees the terror organizations day-to-day operations but he says capturing or killing Bin Laden would still have a powerful effect on the group. That's according to Hayden. And Al Qaeda and its associates are the greatest security threat facing the United States.

A handful of swing states could decide the race for president. What are Barack Obama and John McCain doing to win these battleground voters? (COMMERCIAL BREAK)

LEMON: You are in the CNN NEWSROOM. And you see that right there on your screen. We're taking a look at the Dow, following all the developments on Wall Street with the bailout of AIG and everything that's going on. So keep an eye on that board and we'll bring you the very latest right here today in the CNN NEWSROOM.

I want to talk about long lines. On the long road to recovery for Hurricane Ike. The lines stretched around the block outside a Houston Church this morning. It is a distribution site for relief supplies from FEMA. Houston residents waited in line for hours yesterday to get food, water and ice. And Homeland Security Secretary Michael Chertoff returns to Texas today. Now, he may get an earful from officials who say help has been slow to arrive.

Towns along the Texas coast, devastated by Hurricane Ike, are just now beginning to recover, and one of the top tourist attractions in Texas suffered a very big blow. And you know who's there for us covering that, is our Susan Roesgen. She is there in Kemah, Texas, along the coast not far from Houston, and she is standing in the debris of that amusement park. What do you got there, Susan?

SUSAN ROESGEN, CNN CORRESPONDENT: Well, you know, actually, Don this is part of a whole 50-acre complex, an entertainment complex that's been in the works for about ten years here and it brings in millions of people every year. I'm standing in front of the, well, what was Landry's Seafood House. This building was the first in this area on the Kemah boardwalk back in the '40s, but this is part of what's been destroyed here. Eight restaurants, all damaged. And this amusement park, the big draw here, and the scariest ride of all was Hurricane Ike.

(BEGIN VIDEOTAPE)

ROESGEN (voice-over): When Hurricane Ike came roaring to shore on the Texas coast, the pharaoh's fury was not enough to stop a 17- foot wall of water.

UNIDENTIFIED FEMALE: She landed.

UNIDENTIFIED MALE: Of course, she landed.

ROESGEN: The Pharaoh's head landed several yards away. Tim Anderson, the boardwalk's general manager, grew up in this area, but he wasn't prepared for what Ike did to the boardwalk's big draw, the amusement park. A child's playground now looks more like a child's nightmare.

Some of the damage here, you can't even see. Where I'm standing, used to be the carousel. It's gone. And the horses wound up as far as half a mile away.

UNIDENTIFIED MALE: I was totally flabbergasted.

UNIDENTIFIED MALE: I was feeling pretty good when I looked at this ride at first but then when I walked around on this other side it doesn't look nearly as good.

ROESGEN: The little train that carries children and parents all around the park can't run on broken rails, and no way to ride a Ferris wheel when the cars are left dangling upside down. But maybe the most eerie thing of all is that the entire 50-acre park of rides, restaurants and shops is almost completely silent.

TIM ANDERSON, KEMAH BOARDWALK: But to have no kids here laughing. No rides running, you know. No restaurants in operation and the restaurants have a whole different sound and fun atmosphere in and of themselves, it's pretty strange.

ROESGEN: The town of Kemah has just 2,300 residents, but an average of three million people come to visit this park each year. So the entire town's economy has taken a huge hit from the hurricane. The kind of wild thrill no amusement park could match.

UNIDENTIFIED MALE: I've always liked rides. Although I've never wanted to ride out a hurricane.

(END VIDEOTAPE)

ROESGEN: And you can see that they're already cleaning this place up. The general manager out here, Tim Anderson, whom you saw in that report, says he was here the day after the storm trying to get this thing back up and running. It's normally open, Don, 363 days a year. They only close Thanksgiving and Christmas. And what they're trying to do, is get it up and running again. Get all 2,000 employee who work here back to work. Maybe in a month or a month and a half -- Don.

LEMON: And you can see from our economy, the folks need the jobs. They need to get back to work. All right, Susan Roesgen joining us from Texas. Thank you, Susan.

The misery left by Hurricane Ike is not limited to the Gulf Coast. Parts of the midwest are still under water from flooding. Some of that flooding triggered by the storm. As much as 10 inches of rain fell in Indiana, Missouri and Illinois. And in Missouri, some rivers are more than 15 feet above flood stage. Remnants from Ike also left parts of the midwest in the dark as well.

In Ohio alone, about one million homes and businesses are still without electricity. Many schools are closed because of the power outages. Let's check in now with CNN severe weather expert Chad Myers. Chad, so is the worst over for the folks in the midwest?

CHAD MYERS, CNN METEOROLOGIST: Yes, the worst is over but the cleanup still remains. And around Cincinnati and Hamilton County and Columbus, Ohio, on up to Cleveland, in Youngstown, power lines are just still everywhere there. That's why we're talking about millions of people there still without power. Chicago, you think you're immune to tropical systems. Well, in fact you got hit by Lowell, the L storm from the Pacific that came over Arizona and then on up here. Hit a cold front next to you on Saturday into Sunday. And then when you thought it was safe to go back outside, little pieces of Ike came up and just started raining on you again. That's what all of these dark green counties are. Those are counties that are still flooding. Some rivers, some creeks, some streams still flooding in all of those counties. Well it dry out a little bit. It has dried out too much in the Pacific northwest.

Here's where Idaho, Washington and Oregon, you're seeing all of this fire danger. We have wind. We have low humidity and fairly warm temperatures still for this time of year drying things out, and any spark, any spark, will be causing fires for tonight all the way until 11:00 tonight and then the winds will die off. That's the only reason why it says until 11:00. Because that's when the winds begin to taper off.

A beautiful day across parts of the southeast. Cloudy but still 75. You know, you don't get many days like that in Atlanta. 78 in D.C., 77 New York City and not really too many hot spots across the country right now. Even 98 in Phoenix is better than they've been for most of the summer -- Don.

LEMON: That's a cool spell, huh?

MYERS: Almost.

LEMON: All right. Thank you very much.

MYERS: You're welcome.

LEMON: Chad.

U.S. military leaders making apologies overseas. We will tell you why.

(COMMERCIAL BREAK)

LEMON: The U.S. is apologizing to Afghanistan. Defense Secretary Robert Gates is in Kabul and he is saying sorry for recent U.S. attacks that killed Afghan civilians. Gates has agreed to the creation of a permanent joint investigative unit to probe civilian casualties. This comes after sharply different conclusions were reached following a U.S. air strike last month. The U.S.-led coalition initially said up to 35 Taliban militants and seven civilians died in that attack, but cell phone pictures showed otherwise. Afghan and U.S. investigator, later concluded 90 civilians were killed. 60 of them children.

In neighboring Pakistan, the top U.S. military commander is doing some damage control. Joint Chiefs Chairman Admiral Mike Mullen is vowing to respect Pakistan's sovereignty. Relations between the two countries have been tense since U.S. ground forces went into Pakistan's tribal regions earlier this month without Islamabad's permission. Pakistan's army now has ordered to open fire on American troops if they launch another raid on Pakistani territory.

"Your Money" is being used to bail out a lot of companies these days. How will it work and what will it cost you?

(COMMERCIAL BREAK)

LEMON: You're in the CNN NEWSROOM. I'm Don Lemon.

With start with Wall Street. Look at that. The Dow down 381 points. It has been hovering in that territory all morning. The Dow opened down 125 points. Unbelievable stuff there.

We're following your stories, your issues with this money today. It is issue number one.

Of course, the economy is issue number one, as we say here. It is a financial lifeline tied to your wallet. Issue number one is always your money. And, as we've been reporting this morning, it is our top story again today in the CNN NEWSROOM.

The federal government is saving insurance giant AIG from possible collapse with an $85 billion loan. All of it your money. But what does it mean for you, the taxpayer. That's the big question. Our Josh Levs figuring it all out for us.

Josh, what does it mean for taxpayers? Are we going to see taxes rise? I guess that's the question.

JOSH LEVS, CNN CORRESPONDENT: Well, hopefully not, actually. And this is good that you put it that way because I want to trace you through it step by step. And as you know, we're trying something a little different today since it's so complicated. We're kind of doing it through storytelling inspired by this, Don. Check out what I found. Schoolhouse Rock behind us. Just as you were saying you're a big fan. We're going to try following this style because it gets so confusing. We're going to try to make it simple.

Let's go to our first picture here. Here's a picture of someone working. Basically, this is where the financial process starts as far as this story is concerned. You work, you get paid.

Now the next one shows, obviously, as it works, you pay your taxes, which go to the IRS. Now this is when we get close to today. The IRS then takes its money and puts it over to the Treasury Department.

Now see that picture of the Treasury there? It has the little pieces of paper coming out of it? The Treasury issues securities.

And on this next graphic, what we're going to show you, is that the Federal Reserve buys those securities right in. It buys them. And it makes money off of them. And the money that it makes off of those securities pays for the majority of its operating budget. The largest portion, I should say, of it's operating budget comes from that money right there. So you can immediately see the relationship between your money and the Federal Reserve.

Also, the Federal Reserve is part of the federal government. So it's all taxpayer money. Everything they have. Now we've got arrows going both ways. And this is significant. The Federal Reserve looks at one of these desperate business and says, OK, it's best for us, as a nation, if we prop up this business before it goes caput and we all pay for it. So the Federal Reserve pours, in this case, a huge amount of cash into this desperate business. But the arrow goes the other way, too. And the reason is, the Fed Reserve should make a lot of money off of what they're doing if it goes as planned, which is based on figures today, about 11 percent interest over two years. You're looking at the Federal Reserve ending up making a lot of money off of all the billions that it's tossing in to AIG.

Now I can't guarantee you it will work out ideally. I can't tell you definitively that that's what will end up happening. But the money does go both ways starting right away.

So if all goes as planned, then taxpayers should not pay any more money than they would be otherwise because the Federal Reserve is loaning and receiving. So it should work that way.

LEMON: All right. Let's see. Thank you very much.

LEVS: Did you like the pictures there?

LEMON: Yes, I do like the pictures, the Schoolhouse Rock pictures. Thank you. If we had more time, we'd get into it, but, you know, the candidates have been talking about this as well, issuing statements.

We want to tell you now that the presidential candidates today, Barack Obama, he is in Nevada. He has an event scheduled in Elko this afternoon and a rally in Las Vegas this evening. John McCain is spending the day in Ohio, earlier today, in Maumee, a suburb of Toledo. Tonight he is in Wooster to rally more of his supporters.

The fight for the battleground state. CNN will release new poll numbers from five key battleground states at 4:00 p.m. today. Those states are Florida, Ohio, Wisconsin, North Carolina and Indiana. Senior political analyst Mr. Bill Schneider is in Washington.

And, Bill, these are some very key swing states. What are the candidates doing to win votes in them? Probably a lot of stuff.

WILLIAM SCHNEIDER, CNN CORRESPONDENT: Well, they are doing a lot of stuff. Among which they're releasing ads on the economy. A very timely subject. New ads have just come out. Barack Obama has a two- minute ad, that's a very long ad by political standards, in which he talks about using a bipartisan approach, building a new consensus involving reform of the tax system and new regulations on Wall Street. Listen to what he says.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: Here what I believe we need to do. Reform our tax system to give $1,000 tax break to the middle class instead of showering more on oil companies and corporations that outsource our jobs, in the anything goes culture on Wall Street, with real regulation that protects your investments and pensions. I approve this message because bitter partisan fights and outworn ideas of the left and the right won't solve the problems we face today. But a new spirit of unity and shared responsibility will.

(END VIDEO CLIP)

SCHNEIDER: Now, John McCain has also released an ad, a shorter ad, dealing with the economy. In his ad he also talks about new regulation. An interesting thing for a Republican to call for, regulation of Wall Street. But he also accuses Barack Obama of wanting to raise taxes. Something Obama denies. Listen to what McCain says.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: You, the American workers, are the best in the world. But your economic security has been put at risk by the greed of Wall Street. That's unacceptable. My opponent's only solutions are talk and taxes. I'll reform Wall Street and fix Washington. I've taken on tough every guys than this before.

NARRATOR: Change is coming. John McCain.

MCCAIN: I'm John McCain and I approve this message.

(END VIDEO CLIP)

SCHNEIDER: Very interesting situation where both candidates are calling for change. Both candidates are calling for bipartisanship. Both candidates are talking about new regulations against the greed that they see on Wall Street. So they're not way apart. The biggest battle, of course, is John McCain's charge that Barack Obama will raise your taxes. Meaning the taxes for most Americans. Barack Obama denies it -- Don.

LEMON: All right, Bill Schneider. Bill, we appreciate it. Thank you very much.

Big name actors and singers have gone to Haiti to help the victims of Ike. And I got a chance to talk to Matt Damon and Wyclef Jean about their efforts.

(COMMERCIAL BREAK)

LEMON: Another day of long lines in the long road to recovery from Hurricane Ike. The line stretched around the block outside a Houston church earlier today. It is a distribution site for relief supplies. Houston residents waited in line for hours yesterday to get food, water and ice. Homeland Security Secretary Michael Chertoff returns to Texas today. He's likely to hear complaints from local officials who say help has been slow to arrive.

In Haiti, hundreds of thousand are still desperate for help in the aftermath of Ike and previous storms. Often when aid does arrive, it set off a frantic struggle among hungry storm survivors. One woman ended up caught in razor wire, tangled and bleeding. As many as 800,000 Haitians are in need.

Actor Matt Damon and Haitian born singer Wyclef Jean toured the flood ravaged country to bring attention to the suffering. I talked to them about what they saw.

(BEGIN VIDEOTAPE)

LEMON: How do you explain to people what you're seeing and the desperation that's going on there in order to move them to help out in this situation? Matt.

MATT DAMON, ACTOR/ACTIVIST: Well, this is like, you know, extreme poverty. People who are surviving on less than a dollar a day. That's 1.2 billion of our fellow human beings are trying to survive on less than a dollar a day. This situation -- now I've seen extreme poverty all over, you know, Africa, India, Central America. This is a natural disaster on top of extreme poverty. So it's a catastrophe on top of another catastrophe.

And so the situation is so desperate. It really goes back to what Wyclef said. Human beings should not live like this. And so you see almost inhuman types -- you know, type of a, you know, of behavior.

LEMON: (INAUDIBLE), yes.

DAMON: Yes, exactly, because people are -- people are being forced into a subhuman condition by disasters both natural and manmade.

LEMON: Because they're trying to survive.

DAMON: Exactly. Exactly.

LEMON: And when you guys were there, I understand you both are big celebrities and people know you. Of course, Wyclef, because Haitians absolutely love you. But you said it wasn't about celebrity for you, especially at one point when you were in front of the cathedral. I am told that you just started to sing because your heart was full. What did you sing?

WYCLEF JEAN, ARTIST/ACTIVIST: I mean, really, for me, you know, just coming from there is real emotional. And, you know, they always say you can't change the world by a song, but basically, you know, I sung a song and basically said, you know, after the darkness, the light must definitely come. And we invited everybody basically to the front. And despite what they was feeling that day, they were so honored to basically have our presence, you know, which was a great thing. And then Sunday . . .

LEMON: Wyclef.

JEAN: Yes, sir.

LEMON: Do you mind singing a little bit for us?

JEAN: (singing in foreign language). We're saying, you know, basically, if you have a ear, let you listen, because, you know, the country needs to change.

(END VIDEOTAPE)

LEMON: All right. What are the two stars doing next for Haiti? Make sure you check that out. The full interview Saturday at 10:00 p.m. Eastern only here on CNN. And you see that web site. That is a web site that Wyclef Jean has set up, yele.org. And you can go to that web site and you can help out.

Again, Saturday night, 10:00 p.m., the full interview. What else are they doing? They're doing a lot of stuff. And we'll bring it to you right here on CNN.

Also, if you'd like to get involved in relief efforts for those already effected by Hurricane Ike in Haiti and elsewhere, visit cnn.com's Impact Your World page. You'll find links to groups providing food and shelter to people in need. That's at cnn.com/impact.

Executed after 33 years on death row. In Georgia, last night, Jack Alderman died by lethal injection. He was originally sentenced back in 1974 for killing his wife for insurance money. Witnesses say it took him 14 minutes to die. Alderman had been on death row longer than any other prisoner in Georgia.

He never hit the brakes. Federal investigators say a commuter train engineer had only four or five seconds to avoid a collision. He ran a red light, slamming into a freight train. Friday's crash in Los Angeles left 25 people dead. And investigators also revealed the engineer was working an 11.5 hour split shift. The NTSB has subpoenaed the driver's cell phone records. There are allegations he was texting before that crash.

Formula for disaster. Chinese officials now admit the scope of contaminated baby milk is growing. A third Chinese infant has died and more than 6,000 babies have gotten sick from the tainted formula. Our John Vause reports from Beijing.

(BEGIN VIDEOTAPE)

JOHN VAUSE, CNN CORRESPONDENT, (voice over): From a scandal, to a national crisis. Around China, anxious parents are now taking their children to hospitals for medical checks, worried they may have developed Health problems from tainted baby milk powder, which in some case has been deadly.

"We have no idea what to do," says this woman. "My baby needs milk. I'm worried we won't find a solution."

And with thousands of children already made sick, the government is preparing for much worse to come. CHEN ZHU, CHINA HEALTH MINISTER, (through translator): Hospitals have been told to set up dedicated units and prepare beds, medical equipment and personnel.

VAUSE: Government tests now shows 22 brands of infant formula, not just one, have been spiked with the industrial chemical melamine, normally used to make plastic, but when mixed with milk, which may have been watered down, it can produce artificially high readings of protein, allowing it to pass inspection.

The highest concentrations of melamine were found in products made by San Lu (ph), China's biggest maker of baby milk powder and the first to be linked to the scandal. Wednesday, state media reported the company's president was detained by police, but no other details were given.

Parents began reporting sick children back in March. The first death was in May. But it wasn't until last month when anyone started looking for melamine. Officials stay it took so long to make the connection because it's illegal to mix the industrial chemical with food products.

LI CHANGJIANG, GEN. ADMIN. OF QUALITY SUPV., (THROUGH TRANSLATOR): After this incident, we're considering including a test for melamine and part of a national standard.

VAUSE: In Hong Kong, melamine was found in Chinese-made frozen yogurt and recalls have been issued in five countries -- Bangladesh, Myanmar, Burundi, Gabon and Yemen, which import infant formula from China. Beijing has now ordered urgent inspections of every dairy producer in the country and all dairy products -- milk, butter, yogurt, cream -- are being tested for melamine to try and reinsure consumers that the food they eat won't kill them.

John Vause, CNN, Beijing.

(END VIDEOTAPE)

LEMON: The candidates are battling it out in the swing states. We'll show what you they're saying.

(COMMERCIAL BREAK)

LEMON: All right, let's talk some issues when it concerns the economy.

Senator Barack Obama on the economy. He is slamming old financial policies and calling on Washington to reform the industry. He says, in Golden, Colorado, yesterday, here what he says in his own words.

(BEGIN VIDEO CLIP)

OBAMA: The American economy does not stand still, and neither should the rules that govern it. The evolution -- the evolution of industries and new financial instruments often warrants regulatory reform to foster competition and lower prices or to replace outdated oversight structures.

Old institutions cannot adequately oversee new practices. Old rules may not fit the roads where our economy is leading. But instead of sensible reform that rewarded success and freed the creative forces of the market, too often we've excused an ethic of greed, corner cutting and inside dealing that threatens the long-term stability of our economic system.

Now, remember, we've seen this before. It happened in the 1980s when we loosened restrictions on savings and loans and appointed regulators who ignored even these weaker rules. Too many S&Ls took advantage of the lax rules set by Washington to gamble that they could make big money in speculative real estate. Confident of their clout in Washington, they made hundreds of billions in bad loans knowing that if they lost money, the government would bail them out.

And they were right. The gambles did not pay off. Our economy went into recession. And the taxpayers ended up footing the bill.

(END VIDEO CLIP)

LEMON: Well, Senator John McCain echoing similar ideas. He says some big businesses have been abusing their power an he's calling for members of both political parties to reform industry regulation. McCain spoke in Vienna, Ohio, yesterday. Here he is in his own words.

(BEGIN VIDEO CLIP)

MCCAIN: Too many people on Wall Street have forgotten, disregarded the basic rules of sound finance. In an endless quest for easy money, they dreamed up investment schemes that they themselves don't even understand. With their derivatives, credit default swaps and mortgage backed securities, they tried to make their own rule, but they could only avoid the basic rules of economics for so long.

Now as their schemes unravel and bankruptcies and collapse, it's once again the public who's left to bear the costs. And I promise you, that on my watch, we're never going to let these kinds of abuses go on (INAUDIBLE).

Members in both parties must accept a share of the responsibility. Some members seem to measure the financial health of banks and lenders by the size of their political contributions instead of the extent of their debt. They listen to the lobbyists instead of the accountants. I can promise you the days of dealing and special favors will soon be over. And in a McCain/Palin administration, the public interest of the country will always come first.

(END VIDEO CLIP)

LEMON: For all the latest campaign news, check out our political ticker. Just log on to cnn.com/politics. It's your source for all things political.

A lot of well-known companies have asked us to trust them with our money. Now they're scrambling to survive. Where does that leave us?

(COMMERCIAL BREAK)

LEMON: Financial giants are collapsing. Stocks are falling. Confidence has vanished like a ghost. Will somebody please help Chicken Little chill out? Our Jeanne Moos is on -- she's the one to do it, I should say.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT, (voice over): Stock market, shock markets. You know what gets me? The advertising for all these financial companies that flop.

UNIDENTIFIED MALE, ADVERTISEMENT: No adversity lasts forever.

MOOS: You know, in retrospect, all those ad slogans really do seem like bull. Take Merrill Lynch.

UNIDENTIFIED MALE: Merrill Lynch, for all intents and purposes is gone.

MOOS: But what will never be gone is that old slogan . . .

NARRATOR: Because at Merrill Lynch, we are bullish on the future.

MOOS: That one even made it into the ad slogan hall of fame at number 16. Then there's AIG, the insurance giant everyone's worried about.

NARRATOR: The AIG Companies, the strength to be there.

UNIDENTIFIED MALE, ADVERTISEMENT: Does your retirement plan provide protectability of income and protection against market risk?

UNIDENTIFIED MALE, ADVERTISEMENT: Buddy, we're with AIG.

UNIDENTIFIED MALE, ADVERTISEMENT: Oh.

MOOS: Should have said, uh-oh! But investors seem to be taking stock market losses in stride.

UNIDENTIFIED MALE: Oh, I've lost a lot of money, yes. A lot of money. But I'll get it back. It's in the hundreds of thousands.

MOOS: It's enough to cause this guy to rename his 401(k).

Have you lost much money in the past couple days?

UNIDENTIFIED MALE: No. I got a 201(k).

MOOS: A 201(k).

Now that Lehman Brothers has failed, folks are putting souvenirs like key chains and stress balls from the famed investment bank on eBay. Here's a mouse pad that says, "safe." A former employee put up this mug with the Lehman Brothers slogan, "where vision gets built."

Talk about a vision. Some jokester offered a piece of toast with LB, for Lehman Brothers, on one side, and BS, for Bear Stearns, on the other.

Wall Street tourists are still bullish. Bullish on every angle of the famed bronze bull. And not everyone dreads getting their brokerage statement.

UNIDENTIFIED MALE: What Connor (ph) is currently eating is our Merrill Lynch statement. And we wanted to show you this new temper tantrum.

MOOS: Let's hope that's not his college fund.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

LEMON: Very funny.

I'm Don Lemon. That will do it for me. Fredricka Whitfield is here. And you know why? Because the next hour of the CNN NEWSROOM starts right now.

FREDRICKA WHITFIELD, CNN ANCHOR: Bailing out the country's biggest insurer will cost plenty. But leaving it to die could have cost a lot more. AIG, a company just too big to fail.

(BEGIN VIDEO CLIP)

LARRY KING, CNN ANCHOR: People take money out of the bank?

SUSIE ORMAN, FINANCIAL EXPERT: Are you kidding?

(END VIDEO CLIP)

WHITFIELD: That's Susie Orman for you, cutting through the Wall Street speak and telling you what you ought to be doing and not doing with your money right now.