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Watching Where Wall Street is Headed; Firefighters Battle Wildfire in Central Oregon; Republican Ticket Stumps in Cedar Rapids
Aired September 18, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: So where is Wall Street headed? A live look now at the big board.
As you can see it shows positive numbers, which is a nice thing, especially when they're in the triple digits, up about 170 points or so.
CNN's Susan Lisovicz is at the New York Stock Exchange with the latest.
Hi, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi.
Well, the patient has a pulse, that's good to see...
COLLINS: Yes. Good.
LISOVICZ: ... after -- after the Dow Jones Industrial Average, the most closely watched stock average in the world, lost 800 points, more than 800 points in three days. And what you refereed to is one of the reasons why we're seeing a bounce.
These extraordinary measures not only from the Federal Reserve but from central banks around the world to put money -- to make money available at virtually no cost to financial institutions to encourage them to lend.
After all, the credit market is really sort of the grease that keeps the wheels turning. And the credit markets have seized up. Why is that? All of the frightening things that have happened just in the last few days alone and, of course, in the last few months, if you want to consider Bear Stearns, Fannie Mae, Freddie Mac, as well as Lehman Brothers, Merrill Lynch, and now AIG.
So the Federal Reserve pumping this liquidity along with central banks. That and the fact that perhaps the sell-off that we saw this week may have been a little bit over done, is bringing some investors back into the market.
We're looking again at the financial space. There are published reports that Morgan Stanley is talking to Wachovia, that one of the last two independent investment banks, may not want to ride this out alone -- this credit crisis alone. So we're watching that.
Its shares right now are higher after falling to decade lows -- lows that we haven't seen in the decade for Morgan Stanley and also Washington Mutual. Shares are up 18 percent. Reports say that it's put up -- it's shopping itself around basically and its shares are rising on that.
And the overall market is higher. And the -- and most financial stocks are higher. And that's something that we haven't seen in the last few days, Heidi.
COLLINS: Yes, no kidding. All right. A wild ride without a doubt.
CNN's Susan Lisovicz from the New York Stock Exchange.
Thank you, Susan.
LISOVICZ: You're welcome.
COLLINS: Pay up and try to shore up. Central banks around the world hoping to calm jittery investors by pooling together billions of dollars.
Here to break it all down for us, CNN's Christine Romans.
All right, so what do you make of this? I'm trying to read up and really understand, especially when we just talked with Terry Savage a while back, about what sort of precedent this might send and how it might sort of change the overall financial structure moving forward?
CHRISTINE ROMANS, CNN CORRESPONDENT: This is all men just pumping liquidity, as they call it, into the markets. It's coordinated e effort from central bank to make money available to the banks to lend to each other and to keep sort of the whole system from seizing up, to keep the credit moving.
They call it a credit crunch or a liquidity crisis, to keep all of that stuff going, to grease the wheels. That is supposed to push confidence, it's supposed to help get things moving again.
And we already know that the Fed and the United States government has already taken extraordinary measures to keep things moving, whether it's, you know, the bailout of Bear Stearns or Fannie Mae and Freddie or any number of things that it's done, including some very, very technical things that I won't -- that I will not bore you with the details with.
But I will just say that they're making some money available. And you can see that the street seems to like it today. But what I keep hearing from everyone is that this is all about leadership, and whether it's the central banks or whether it's our elected officials, or the people who are running for president, that the market yesterday was sending a message that it was looking for some leadership about what's going to happen next.
And that's why -- what the president has to say is so important here coming up... COLLINS: You know...
ROMANS: We want to hear what he has to say about it.
COLLINS: Of course. It's also fair, is it not, to ask the question about the culpability ability of the companies.
ROMANS: Yes.
COLLINS: Obviously, these investment banks and so forth.
ROMANS: Yes, well, absolutely. I mean look -- I mean you have people who are paid tens of millions of dollars in salaries and bonuses who were, you know, as everyone thought, the brightest guys on Wall Street. And suddenly, you know, your company is going out of business? A humongous -- you have to go in and the government take over AIG?
I mean it's almost -- you can't even hardly fathom something like that. So there's culpability among the people who are running these companies. Where were the watch dogs and the regulators? I mean we're going to be cleaning up after this for a very, very long time.
What kind of laws did we dismantle or did we write or did we not even know we needed that could have prevented this?
COLLINS: Yes.
ROMANS: Or was this just a bubble that burst and that any kind of regulation could haven't prevented it? We just don't know yet.
COLLINS: All right, well, moving forward, as we try to, we will follow all of it for everybody here on CNN.
All right, Christine Romans, appreciate that.
Want to give you a live look now at the White House where the president is scheduled to speak just a few minutes from now.
Here's a measure of just how urgent the economy has become. In fact, the president canceled a fund-raising trip today so he could meet with his top advisers. The focus, of course, this nation's deepening financial crisis.
Vice President Dick Cheney is going to be standing in for President Bush at one of those two scheduled fundraisers.
Government bailouts, hundreds of billions of dollars, who really pays?
CNN's Allan Chernoff has some answers at the bottom of the hour. We'll bring that to you.
Overseas now, seven U.S. soldiers died early this morning when their helicopter crashed west of Basra, Iraq. Military officials say the helicopter was part of a convoy flying from Kuwait to Balad. Investigators think the crash was an accident and not the result of enemy fire.
Family in mourning. Classmates in shock. A high school student from Lackawanna, New York is among four civilians who are killed in Wednesday's car bombing at the U.S. embassy in Yemen.
(BEGIN VIDEO CLIP)
PETER HAZZAN, PRINCIPAL, LACKAWANNA HIGH SCHOOL: Always smiling, great disposition, was always funny and was willing to help anybody out.
She had a whole bunch of friends that she can count on, and all those students were really hurt by the news of her tragedy.
(END VIDEO CLIP)
COLLINS: The 18-year-old senior was due the to graduate next spring. She was visiting family in the Yemeni capital and had just been married. Her husband was also killed in the attack.
Our Ben Wedeman is at the U.S. embassy in Yemen where officials hope to get operations back on track by Saturday.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN CORRESPONDENT (on camera): We're in front of the main entrance of the U.S. embassy in Sanaa, Yemen, which on Wednesday morning at 9:15 was hit by a very coordinated and sophisticated attack that U.S. and Yemeni officials believe was in some way connected to al Qaeda.
The attack left 16 people dead, six Yemeni security guards, six of the attackers and four people who apparently were lining up to receive visas.
Now it was a sophisticated attack involving two car bombs. It appears that there was one suicide bomber. You can see the signs of it on the wall. It appears the black is where the blast occurred and above it is bloodstains. And there are also body parts still on the ground in that area.
Now U.S. is embassy officials, apparently, were not aware that we were coming here to shoot. We got the permission from the Yemeni security officials. So we have to do this very quickly and clear out because I suspect the embassy security people want us to leave as soon as possible.
Now they're still looking for clues in the area, collecting some of the debris. They told us they don't want us to disturb any of the evidence that might be in this area.
Now today is Thursday. It's the day off. It's the weekend for the U.S. embassy. It's also Ramadan, so things are very slow here at the moment. But, obviously, there's a lot of concern here in the Yemeni capital, after this, the worst out of the four attacks that have taken place on U.S. facilities in the Yemeni capital since 2003.
I'm Ben Wedeman reporting from Sanaa in Yemen.
(END VIDEOTAPE)
COLLINS: Screams for help. Just released 911 tapes have the desperate pleas of passengers in that commuter train cash in California.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: OK. We have the units already on the way. Do you know how many people are hurt?
UNIDENTIFIED MALE: Well, I can see about seven or eight people in the one car I'm in that are bleeding and on the floor.
(END VIDEO CLIP)
COLLINS: Desperate 911 calls coming from the Los Angeles area commuter train that crashed. Fire officials have just released audio clips from that crash.
Dispatchers say hundreds of calls came in after the commuter train collided with the freight train. 25 people were killed, more than 130 injured.
Federal investigators say the commuter train engineer was text messaging while on duty the day of the crash. What kinds of safeguards are in place for train engineers?
CNN's Thelma Gutierrez visits a training facility to find out.
(BEGIN VIDEOTAPE)
THELMA GUTIERREZ, CNN CORRESPONDENT (on camera): This locomotive is part of the Modoc Railroad Training Academy in Sacramento. It's the only training school of its kind. It's non-profit for conductors and engineers in the country.
Behind the controls now is Dave Rangall. He's a former conductor, an instructor, and he runs if school.
(voice over): Dave Rangall has trained hundreds of engineers and conductors about the do's and don'ts on the track. He says last week's train crash in Los Angeles has shaken the railroad industry to its core.
DAVE RANGALL, MODOC RAILROAD ACADEMY: The tragedy is that something happened. And whatever happened had gone horribly wrong.
UNIDENTIFIED MALE: Ma'am, is that train versus another rain or train versus a vehicle?
UNIDENTIFIED FEMALE: Yes, train versus another train.
GUTIERREZ: 25 people died, 135 injured. Federal investigators now say the Metrolink engineer responsible for operating the passenger train had sent and received text messages while he was on duty. What they don't know yet is precisely what time.
While that's against Metrolink's policy, there are no federal rail safety regulations that address the use of cell phones or similar devices by locomotive engineers.
Rangall says train crews often carry phones but he says he and other railroad workers don't believe texting alone would distract an engineer long enough to ignore warning signals and alarms that an experienced engineer is trained to look out for.
Like this alerter alarm that Rangall says is in every train. It goes off every few seconds. And the engineer has to hit a button to make it stop.
(on camera): What is it doing right now? It's flashing?
RANGALL: It's telling me to do something, to interface with the locomotive, to bring it to a stop, to do something to keep me alert, to keep me aware, to keep me awake.
GUTIERREZ: And it's doing that every 20 seconds?
RANGALL: Yes. It's going off.
GUTIERREZ (voice over): If you don't hit the button, the train stops.
Then there are the railroad signals. The NTSB says the engineer was familiar with the route. Rangall wonders how he would have missed all three signals.
RANGALL: We're trained to look at those signals, to respond, to interpret the signals.
GUTIERREZ (on camera): Well, what if you're distracted and you're not looking up, and you don't see the signals? Is it easy to go through one, two, three signals?
RANGALL: No, not really.
GUTIERREZ (voice over): Like the airline that has two pilots in the cockpit, Rangall believes, for safety, there should be two railroad crew members in each cab.
(END VIDEOTAPE)
COLLINS: Want to let you know Thelma Gutierrez will be back with a live report from the train school in our NEWSROOM p.m. show so make sure you watch out for that.
Waiting and standing by for President Bush. Want to give you an idea of how close we are now. I believe we're just under a minute or so, waiting for the president to come out and address the economy.
Obviously, there are many recent developments. Don't even know where to begin with all that.
CNN's Susan Lisovicz is standing by now.
And we do know, Susan, that the president will be talking after this meeting that he had with his top advisers this morning.
LISOVICZ: Well, and I'm sure that his administration has been talking to financial people for the last few days intensely, given some of the developments that have occurred, Heidi.
COLLINS: In fact, Susan, he's come to the podium. Let's go straight to him.
(JOINED IN PROGRESS)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: ... The American people are concerned about the situation in our financial markets and our economy. And I share their concerns.
I've canceled my travel today to stay in Washington where I'll continue to closely monitor the situation in our financial markets and consult with my economic advisers. Spoke to Secretary Paulson this morning, and I will meet with him later on today.
In recent weeks, the federal government has taken extraordinary measures to address the challenges confronting our financial markets. We've taken control of Fannie Mae and Freddie Mac, the home finance agencies, to help promote market stability and to ensure they can continue to play a role in helping our housing market recover.
This week the Federal Reserve acted to prevent the disorderly failure of the insurance company AIG, a development that could have caused a severe disruption in our financial markets and threatened other sectors of the economy.
Yesterday the Security and Exchange Commission took action to strengthen investor protections and step up its enforcement actions against illegal market manipulation.
Last night the Federal Reserve in coordination with central banks around the world took a substantial step to provide additional liquidity to the U.S. financial system.
These actions are necessary, and they're important. And the markets are adjusting to them. Our financial markets continue to deal with serious challenges. As our recent actions demonstrate, my administration is focused on meeting these challenges.
The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence.
Thank you. COLLINS: Very quick comments coming from President Bush there talking about the meeting that he had, an emergency meeting, in fact, with his top advisers. He says he will also be talking a little bit later on today with secretary of the Treasury, Hank Paulson.
And you heard him mention each and every one of the happenings, if you will, over the last couple days, everything from Freddie and Fannie, the housing market needing to recover, injecting some type of stability, he is saying, into the economy and that Washington is doing what they can to promote that type of stability.
Want to head it over now to Christine Romans and Ali Velshi.
Very, very quick statement, guys. We knew that he wasn't going to be making any major policy announcements today. But he did bring up something interesting to me, the SEC tightening those rules on short sales which, overall, I understand that not everybody gets what that is.
Can you talk about, for me, the importance of it?
Yes, Ali, go ahead.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, and that was one of the triggers yesterday that caused the market to start selling off. It was a protection mechanism about trading that some -- types of trading that some people think is manipulative and unnaturally moves the market.
It's probably not the most important part of this discussion. It just happens to be the most current. And I think what the president was doing was underscoring that the SEC is involved in this.
If you think back to the scandals in 2000 and 2001, the biggest criticism was where is the SEC in all this?
COLLINS: Right. Well...
VELSHI: You know one of the things that was interesting that the president, as you said, didn't make any policy statements. He sort of -- listed the things that the government has done and various government agencies have done.
There are a lot of people who say they would just like to have the government in the discussion. What the president achieved in this conversation was saying, we're not telling anybody that the fundamentals of this economy are sound. We're not telling everybody everything is OK.
We're telling you I canceled this trip, this fund-raising trip. We're hunkered down here with the economic advisers and we are going to look at every part of this and try and fix it.
ROMANS: Well, Heidi, something, I think, that's interesting, too, is that, you know, it was until December of last year the president said the economy was fine. He used the word storm clouds on the horizon, not only in December of last year, just a little over a year and a half ago Henry Paulson was saying this is the best global business conditions of his professional career.
So the administration until only the last -- not even a year, didn't even think that there was a real problem overall in the economy. So you can see in the last year things have changed so dramatically.
VELSHI: Right.
ROMANS: Wall Street is looking for some kind of leadership, some kind of confidence that -- Washington and Wall Street know what's happening, because just a year ago, no one could have imagined all this would happen.
VELSHI: And there's a very fine line there, Heidi, between the president not wanting to talk the economy down.
COLLINS: Right.
VELSHI: But understanding that people across America -- well, it's not just Wall Street, average Americans are feeling massive impacts. For the rest of America, it's been inflation, it's been energy prices, it's been home prices, it's been interest rates.
And most importantly it's been the 605,000 jobs that have been lost...
ROMANS: So far.
VELSHI: ... since the beginning of this year. So it's the understanding that, OK, we get it. We're not going to keep telling you nothing is wrong. Something is wrong.
ROMANS: But, you know, the president also -- there's also a phrase the president is sometimes the cheerleader in chief. You know the president can't come out...
VELSHI: Right.
ROMANS: ... and say...
VELSHI: It's all going to hell in a hand basket.
ROMANS: Right. He -- that would just be irresponsible. So there's that fine line...
VELSHI: Right.
ROMANS: ... that he has to walk between acknowledging...
COLLINS: And I think you also -- yes, I think you -- you guys also bring up a greater point in the all of this. And it's something that there is an awful lot of discussion about and quite a bit of controversy, the idea of regulation and how much of that really is responsible or should be responsible for the current financial crisis, if you will, that the country is in.
VELSHI: Yes, it's kind of interesting. What we've been hearing a number of people say...
ROMANS: We actually argued about this, right?
VELSHI: Right. Right. First of all...
COLLINS: I bet. A lot of people do.
VELSHI: We've been hearing some people say we're going to eliminate greed. Greed called it...
COLLINS: Yes, good luck.
VELSHI: We're not eliminating greed.
ROMANS: Right.
VELSHI: That's not going to happen. Greed is sometimes a motivator and sometimes it gets out of control. And we need to figure out you can't deal with the greed. You can deal with the system and how it protects itself against that.
When you look at the mortgage crisis which started this whole thing off, it was greed in that system.
ROMANS: All the way along the chain.
VELSHI: Absolutely. All the way.
COLLINS: Exactly. And my question would be, if I'm a shareholder for one of these companies and I'm wondering, all right, well, I know that it's OK by the government to go ahead and have my investment bank, you know, risk as much as they are risking.
VELSHI: Right.
COLLINS: Don't I then go to the company and say, gees, you guys didn't protect me at all. I mean you made these decisions, right?
ROMANS: Well, you know -- we'll have to look at Sarbanes Oxley. We have to look at some of the things that came into law after Enron. And, you know, I'm just very curious what kinds of laws may have been broken along that way.
I mean there's some very detailed stuff in Sarbanes Oxley that...
VELSHI: Yes.
ROMANS: You know you...
VELSHI: But as we've heard from a lot of people all the way through this whole thing for the last -- more than the last year, at this point it's like a -- it's a brush fire that's become a forest fire, and the first thing that has to be done, is it has to be contained.
ROMANS: Right.
VELSHI: And then there needs to be a lot of investigation as to what went wrong and what can be changed.
COLLINS: True.
VELSHI: But we have not contained this brush fire.
COLLINS: Absolutely.
VELSHI: That's the problem.
COLLINS: And the big question is how long will that take and what does it mean for everybody at home in their personal finances?
VELSHI: Yes. And, folks, you know, we're doing this radio show in about half an hour just to open the phone lines and so people can call, and we've just been flooded with e-mails from people who are saying exactly what it is -- what am I supposed to do?
What do I sell my stocks? Do I buy stocks? Do I close out my 401(k)? Do I keep on investing in it? What is it -- should I keep my money and put it where my mouth is?
ROMANS: I asked this very question and actually found on an economist who we really like around here. And he said today, go to work, do your job. Concentrate on doing a good job.
Don't do any big moves in the market or in the real estate market for one month, two months, three months. Watch what's happening and see how it comes down. Make sure you don't have too many much money in one bank account because you're FDIC is insured for up to $100,000...
VELSHI: Per account. Yes, in -- one institution.
ROMANS: Per account. Your brokerage accounts, they can't raid your brokerage accounts to do -- you know so your brokerage accounts are OK.
VELSHI: Right. They're OK insofar as they may not...
ROMANS: Right.
VELSHI: ... be performing improperly.
ROMANS: Right. Correct.
VELSHI: But they can't use -- the investment can't use your money in your brokerage account to continue with their operations.
ROMANS: His bottom line advice, Heidi, was go to work and do a good job. Take care of your family. COLLINS: Well, understood. Understood. But I think isn't it also true that we need to talk about the demographic for that. I mean if you are a person...
VELSHI: Right.
COLLINS: ... who is getting ready to retire, if you're a person who's on a fixed income...
ROMANS: Yes .
COLLINS: ... that's an entirely different bit of advice...
ROMANS: Yes.
VELSHI: And this is the -- you're right, Heidi. And that's the problem. What do you do now? Now that you've seen that your 401(k) is down 15 to 20 percent on the year if you were well diversified.
If you weren't, it might be down more. Do you sell and lock in those losses?
ROMANS: Right.
VELSHI: Or do you -- do you assume that this is some time in the course of the next six months to a year, going to get better because prices will go down low enough that other sovereign wealth funds -- we talk about those -- funds from other countries might come in and say these banks are really a good deal. We're going to buy them up.
There's nobody who says we're done, that this isn't over. But there's also nobody says the financial system in the United States is going to collapse entirely out of this. There will be survivors.
COLLINS: Right. And we actually heard Secretary Paulson say that when he was asked just a few days ago about the actual banking system...
VELSHI: Yes.
COLLINS: ... and the confidence that people may have in it. It's certainly a question mark right now. But he says certainly not broken.
Hey, guys, thanks so much. Those are great discussions. Christine Romans, Ali Velshi, I know you guys are watching these numbers very, very closely.
VELSHI: Yes.
COLLINS: Moving on now, smart span, a new bridge opens in Minnesota today, one year after the old one's deadly collapse. So what's different about this new bridge?
(COMMERCIAL BREAK) COLLINS: Quite a sight a couple of hours ago in Minneapolis, Minnesota. Cars began moving across 35W. A happy day for drivers. The 35W Bridge there.
But as you remember, it marks a terrible tragedy as well. 13 people were killed, 145 injured when the old bridge collapsed in August of last year.
A little bit earlier this morning I talked to Minneapolis Mayor R.T.Rybak about the remarkable achievement of getting that bridge up and running in such a short time.
(BEGIN VIDEOTAPE)
MAYOR R.T. RYBAK, MINNEAPOLIS: Well, we're obviously extremely happy to have the most significant transportation link in Minnesota open again, obviously, especially as it flows into downtown. But something happened here, something horrible and tragic, and so you celebrate the workers who did phenomenal efforts to make this open.
And you also remember Greg Joelsted, a construction worker who was on that bridge and died...
COLLINS: Yes.
RYBAK: ... from the incident. It's mixed emotions. But today we are, I have to say, very, very pleased that people did remarkable work to get this open so quickly.
COLLINS: Well, let's talk about that for a minute, because I'm familiar with the bridge having lived in Minnesota for 20 years and I know what a thoroughfare it is and how huge it is for lack of a better term.
Everybody really came together architecturally and technologically to get this thing done. And albeit, way ahead of schedule.
RYBAK: Well, you know, it really shows what happens when you get every arm of the community reaching across a gaping hole in the community and finding some way to come together. And that's a, you know, lofty metaphor, but it's true.
Every politician, every construction worker, every citizen gave up a little bit in the short term to be able to make this happen. And I hope it says a couple things. One, that this is a special bridge and it always will be.
But two, that we can do big things and great things if we come together. But I hope the third thing is to really be committed to making sure this never happens again. And I'm still, frankly, concerned that we haven't made the investment in infrastructure around this country to really learn from this tragic lesson.
(END VIDEOTAPE)
COLLINS: Of course, you remember the bridge collapse triggered a nationwide investigation into the country's crumbling infrastructure.
The new bridge is special in a number of ways. From the time it took to reconstruct to some unique features that make it a sort of green bridge.
CNNMoney.com's Poppy Harlow visited the site yesterday and has our "Energy Fix" now from New York.
Hi there, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hi there, Heidi.
This is really -- it's an amazing dichotomy, the I-35W bridge is both the site of human tragedy and of course human triumph as we just heard. Just a year ago today, they began to work on that bridge. As you see it's now carrying traffic and it also has some pretty unique features including LED lighting. It's the first bridge in the country to have that technology. Also, the Department of Energy headed out there to test it. The LED lights should last longer and use a whole lot less energy. The Minnesota Department of Transportation says they used less energy to build the bridge. They did a lot of that construction right on site, rather than shipping in the materials from remote locations. They also decided to recycle.
(BEGIN VIDEO CLIP)
KEVIN GUTKNECHT, MINNESOTA DEPT. OF TRANSPORTATION: There was a fair amount of concrete from the old bridge, and we ground all of that up, and some of that got incorporated back into the roadbed.
(END VIDEO CLIP)
HARLOW: Unlike the old bridge, the new one has its own storm water system. Meaning when it rains it will collect all that rain water and all the debris won't fall into the river. So that's not really an energy fix, Heidi, but it's still a green feature.
COLLINS: Yes, not to mention all the technology and the safety of this one as well.
Plenty of reasons to celebrate, even though such mixed emotion as I was talking to the mayor amid all the tragedy that happened there.
HARLOW: Really, Heidi. I know you know it well, you lived there for many years. I grew up there. I walked on the bridge yesterday. It was just sort of an undescribable feeling, it's bittersweet for all the people also that worked on the project.
(BEGIN VIDEO CLIP)
GUTKNECHT: Our goal, I guess, all along has been to get it done, get it open to traffic as quickly as we can and at least repair this roadway so that we can help the community continue to heal.
(END VIDEO CLIP) HARLOW: The bridge was also built with an eye on the future. It is public transportation ready, meaning if the city wants to, they can put the light rail system right on that bridge. It's strong enough to hold it. So that's a pretty interesting feature of it as well, Heidi.
Plenty of reasons to think there will be demand for public transportation, what we saw this morning. Oil back above $100 a barrel, it's up about 10 bucks in the last two days, Heidi. Of course that is amid all the chaos on Wall Street -- Heidi.
COLLINS: Yes, can't forget that. That's for sure.
All right. CNN's Poppy Harlow with our "Energy Fix" this morning. Thank you, Poppy.
Town hall talk on the agenda for John McCain and Sarah Palin. Yesterday, they talked to voters in Grand Rapids, Michigan. Palin took questions from the audience for the first time since she joined the Republican ticket. Here is what she had to say about energy and its relationship to national security and the economy.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: I know a little bit about energy. And that's going to be my baby when I get to D.C., is working on the energy independence that this nation needs, not just for national security, but for our future prosperity. We need to quit relying on foreign sources of energy.
(APPLAUSE)
We need to quit circulating $700 billion a year in other countries, some of these countries who don't like America very much, to import their sources of energy. We can be drilling here. We can be drilling now. We can be tapping into alternative sources of energy and it's going to take those American resources produced by American ingenuity, produced also by American workers, that will get us to that energy independence.
(APPLAUSE)
We'll talk a little bit about tonight, too -- pension reforms that will help guarantee your retirement. Those same pensions being promised, the things that again the government can do, playing an appropriate role to help you out. So this election, you're going to have a couple of choices, obviously. And it's going to come down do who you can trust. And it's going to come down to who has set an example for you, what you can look back on in terms of track record and precedents set by candidates.
(END VIDEO CLIP)
COLLINS: Palin and McCain plan more town hall meetings today in Cedar Rapids, Iowa and Green Bay, Wisconsin.
Barack Obama staying on message. It's the economy still in crisis. He linked rival John McCain to the economic policies of the Bush administration. As Obama put it -- quote -- "we can't steer ourselves out of this crisis if the new driver is getting directions from the old driver." Later today Obama will rally supporters in New Mexico.
Our ears to the ground in battlegrounds. New polls from states that could end up deciding the White House winner.
(COMMERCIAL BREAK)
COLLINS: Quickly, want to get a look at the big board today. Dow Jones Industrial Averages up about 142 points, resting now at 10,753.
So much financial news going on out there. It's really been remarkable to watch the massive yo-yo effect that it's having on the stock market. So obviously as you have been telling us, the economy is issue #1 for you, and commanding the attention of President Bush as well. Just a few minutes ago, in fact, the president confronted the latest sour news. He conceded there are still serious challenges in the U.S. economy, but stressed that the government is taking steps to keep the financial crisis from getting worse.
Taking action overnight, central banks around the world -- they have banded together to pump more money into global markets that have become increasingly shaky. That move may have calmed investors on Wall Street. So again, look at the big board there, up to the positive triple digits.
Again, the economy, the source of a lot of finger pointing, as you would imagine, on Capitol Hill. It's all about the government's $85 billion loan to AIG, the insurer. Many lawmakers outraged that taxpayers are forced to bail out the world's largest insurer. And that's where the blame game begins.
Democrats blame the White House, the White House blames Congress. And Republicans say it is the fault of the Treasury Department and the Federal Reserve. Lawmakers seem to share in one thing, anger that they were not notified of the deal in advance.
Government bailouts, billions here, billions there. And sooner or later it adds up to real money. And guess whose money it is?
CNN's Allan Chernoff has some sobering news now.
All right, Allan. What do you have?
I'm afraid to ask.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Heidi, I don't know where to begin. There is so much sobering news out there right now.
You mentioned that the congressmen are upset. People on Wall Street are exceedingly nervous. And let me just say it's not just the stock market that they're worried about. They are especially worried about the credit crunch. That's something that AIG itself experienced. It couldn't get the loans, it couldn't get the money it needed from the private sector.
That's happening with other companies as well. We are going to hear about more major, major problems.
But with regards to AIG, I can tell you this, at least there's one place where people are happy inside of that building. The employees have jobs. We did a little report. Let's have a little look.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): AIG employees are relieved the government bailed their company out --
UNIDENTIFIED MALE: Everybody is glad it has happened.
UNIDENTIFIED MALE: Very, very happy.
CHERNOFF: -- and AIG insurance policyholders, who were on edge before the rescue, have new security. But for the average American, Uncle Sam's lifeline to the nation's biggest insurance company has so far failed to bring financial stability. Not only did stocks sink, but the nation is now $85 billion deeper in the hole.
(on camera): Where will that chunk of change come from? The Treasury Department has already started raising the money, borrowing $40 billion Wednesday by selling one-month Treasury bills to investors around the world, especially those with dollars to spare.
LACHMAN ACUTHAN, ECONOMIC CYCLE RESEARCH INSTITUTE: Literally, the people who are giving us money, literally if you're counting the pennies that are transacting tonight, it's going to be China and the Middle East.
CHERNOFF (voice-over): But Washington has to raise funds for more than just the $85 billion AIG rescue loan. It's kicking in $200 billion to support mortgage giants Fannie Mae and Freddie Mac. That's on top of the $29 billion the Feds put on the line to facilitate an emergency purchase of broker Bear Stearns.
ACUTHAN: We're borrowing more money every time we do one of these bailouts. Absolutely.
CHERNOFF: While the U.S. went deeper into debt to help AIG, it may turn out to be a good deal as some AIG employees argue.
UNIDENTIFIED MALE: I think the taxpayers and the government got a great deal. They got -- for putting up $85 billion.
CHERNOFF: AIG has to repay the loan with an interest rate that currently tops 11 percent. And, the government gets 80 percent of the insurance giant which has assets that are worth hundreds of billions.
BILL VELTO, AIG EMPLOYEE: The company that they invested in is one that's well diversified, has a great deal of financial strength, a great deal of assets. (END VIDEOTAPE)
CHERNOFF: And now AIG will be trying to sell some of those assets so that it can repay Uncle Same that huge chunk of change that it is borrowing -- Heidi.
COLLINS: Yes, and a big fat interest rate as well.
To what degree, Allan, is this a crisis of confidence? We keep hearing that word.
CHERNOFF: Hugely -- to a dramatic degree.
This is not only with regard to AIG. Our economy, our financial markets right now are frozen in a crisis of confidence. The problem here, as I mentioned, is that companies don't want to lend to each other. They want to, basically, hoard cash, get their balance sheets as healthy as possible because you're seeing major financial institutions being driven down. So they're very, very worried about being able to lend money. If they're not lending money, the economy freezes up. It affects all of us.
COLLINS: All right. CNN's Allan Chernoff for us on one of the many, many stories in the financial sector today.
Thank you, Allan.
A tight presidential race just keeps getting tighter. CNN's latest poll of polls has Senator Barack Obama with a two-point lead over John McCain, 8 percent of voters say they are not sure right now.
And we've got brand new numbers from crucial battleground states. CNN's senior political analyst Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Indiana a battleground state? The McCain campaign has spent no money on TV ads there. Indiana went for George W. Bush over John Kerry by a whopping 21-point margin in 2004. But our new CNN poll of Indiana, conducted by the Opinion Research Corporation, has McCain ahead by only six.
Another surprise battleground, North Carolina. Bush carried North Carolina by 12 points in 2004, even though a North Carolinian, John Edwards, was on the Democratic ticket. Obama sees an opportunity in North Carolina. He has out spent McCain 10 to 1 on TV ads. The latest CNN poll in North Carolina, McCain ahead by just one point. If we do a poll of polls in North Carolina, McCain leads by 10, still a little closer than four years ago.
Florida was not a squeaker in 2004. Bush carried it by five. And now, uh-oh, McCain, 48, Obama, 48 in Florida. Don't sweep up those chads.
Everybody agrees Ohio is a battleground state. Both campaigns have been spending heavily there. Last time, Ohio went for Bush by two points. Now, Obama is leading by two.
What happened? Here is Obama's take?
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed.
SCHNEIDER: Not my philosophy, McCain says.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The American worker is strong. But it's been put at risk by the greed and mismanagement of Wall Street and Washington. The top of our economy is broken.
SCHNEIDER: Wisconsin was another close one in 2004. Kerry by one point. And now, Obama is up by three. In every battleground state, the Democratic ticket is doing better than it did four years ago.
(on camera): Some other polls do not show quite as dramatic a shift to the Democrats. The poll of polls in Ohio, for instance, shows McCain leading by three. About the same as in 2004.
Bill Schneider, CNN, Washington.
(END VIDEOTAPE)
COLLINS: All the latest campaign news is at your fingertips. Just go to CNNPolitics.com. We also have analysis from the best political team on television. It's all right there at CNNPolitics.com.
Focus -- financial crisis. We've heard President Bush, we've heard the economics experts. Now, it's investors' turn to speak. We've got their message on Wall Street.
(COMMERCIAL BREAK)
COLLINS: Many people are calling the recent financial turmoil the worst crisis since the Great Depression. But, it looks like investors are getting at least a little relief today. Susan Lisovicz is on the floor of the New York Stock Exchange with more on how stocks are faring and reacting.
Hi there, Susan.
LISOVICZ: Hi, Heidi.
Well we're seeing some recovery now that we're an hour and a half into trading, or nearly an hour and a half into trading. But you know, there's a big difference between now and the Great Depression. And one of them is that there are mechanisms in place to prevent things from getting that bad. And by the way, the chairman of the Federal Reserve, Ben Bernanke is a scholar on the Great Depression.
So there have been extraordinary measures that have been happening this year. And one of them just happened overnight, which is that the Fed and central banks around the world are pumping hundreds of billions of dollars into the system to try to encourage lenders to lend. You just really can't get through this credit crunch if lenders aren't putting out money. When we saw this near collapse of AIG, it really paralyzed the credit market.
But that's not the only headline in the marketplace today. AIG is no longer going to be a member of the coveted Dow 30 as of Monday. It will be replaced by Kraft Foods.
And Heidi, we continue to watch developments in the financial sector. There are reports that Morgan Stanley is seeking a merger partner, despite reporting nearly $1.5 billion in quarterly profits yesterday, better than expected earnings. Its stock has been under enormous pressure. So Morgan Stanley, we're watching to see whether it, in fact, will pair up with another company. And also reports that Washington Mutual has put itself up for sale -- Heidi.
COLLINS: Even though the stocks are up right now, a lot of people obviously saying the problems are far from over.
LISOVICZ: That's right. This problem -- this crisis didn't develop overnight, Heidi. This is a direct development from easy, cheap money that spawned the housing bubble, and eventually a lot of problems that we're dealing with.
And there are some very seasoned observers who are saying that things are going to get worse before they get better. And I think really one of the most frightening things was AIG this week --
COLLINS: Absolutely.
LISOVICZ: -- a company with a trillion dollars in assets, doing business in 130 countries around the world, a company that assesses risk that, in fact, couldn't assess its own risk. And what we've seen this week is a real flight to safety. Gold recording its biggest one- day dollar gain ever yesterday, a flight to U.S. treasuries and other commodities. But at least today we're seeing a little bit of a relief rally. We'll see if it can hold, Heidi.
COLLINS: Yes, all right. Susan Lisovicz on the floor of the New York Stock Exchange.
Thank you, Susan.
LISOVICZ: You're welcome.
COLLINS: And you can follow your fortunes at CNNMoney.com. We've got all the day's market news and numbers, expert analysis and a whole lot more. Make sure you check that out.
Meanwhile, evacuations in Oregon. Wildfires threatening homes and historic buildings. What firefighters are saying now about their battle.
(COMMERCIAL BREAK) COLLINS: Firefighters say they are making progress now battling a wildfire in central Oregon. It's all happening about 160 miles southeast of Portland. And a stretch of Highway 58, if you happen to know the area, has also been closed because of this. More than 100 people forced from their homes. Fire officials report 20 percent containment at this time. They hope the fire will be fully contained by the end of the weekend.
Another blaze in the northeast. Outskirts of Oregon's Mount Hood threatening several historic buildings. Nearly 20 homes and businesses have had to be evacuated.
Rob Marciano is standing by in the severe weather center now with more on this and the weather across the country there.
You've got the -- there's the whole country.
ROB MARCIANO, CNN METEOROLOGIST: There you go.
COLLINS: Hi, Rob.
MARCIANO: Hi, Heidi.
Yes, it's still kind of -- still kind of high out there in the Pacific Northwest, not quite as bad today as it has been. The heating beginning to calm down, not as much wind going either. But they will still have low levels of humidity so those two fires that are burning in the Cascade range on the east side, especially in that one northeastern flank of Mount Hood -- they'll hopefully get a handle on it if not today, tomorrow. But that one burning there at Cooper's ski resort, which is an oldie but a goodie. So -- try to get rid of this hot, dry air soon.
We got a little front that will kick in some of this low humidity or kick it out and maybe get in some lower levels of humidity, or higher levels of humidity with more moisture, as we go on through time.
We roll through some of the daytime highs out west, 102 in Monument, Madras, Oregon, 94. That is near the northern fire. Bend, 93, and 92 degrees in Colville.
Quick check on New Orleans. WWL, some haze, 75. Highs in the lower 80s. All quiet on the Louisiana front. And that's good news.
Heidi, back over to you.
COLLINS: Boy, I guess so. All right. We'll take that any day.
Thank you, Rob. Appreciate it.
Born in the 1800s, the world's oldest man celebrates his birthday today. His secrets to a long life.
(COMMERCIAL BREAK) COLLINS: The world's oldest man, according to Guinness, is celebrating his 113th birthday today. He lives in Japan with his fifth son and says he is not ready to die. The centenarian's recipe for a long life -- no smoking, no drinking and a glass of milk every day at 3:00 in the afternoon. Got to be at 3:00. OK. Good for him.
I'm Heidi Collins. Join me again tomorrow starting at 9:00 a.m. Eastern.
For now, CNN NEWSROOM continues with Don Lemon.
