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President Bush tries to Quell Wall Street Concerns; Minneapolis Reconnects, New Bridge Replaces Collapsed Structure; Firefighters Make Progress Against Oregon Wildfire

Aired September 18, 2008 - 11:00   ET

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

DON LEMON, CNN ANCHOR: That's high tea, I think, at 3:00, or is that 4:00, Heidi? Now it's high milk time.
OK, it is Thursday, September 18th. Here are the headlines right here in the CNN NEWSROOM.

President Bush tries to calm Wall Street this morning. Dow stocks hit higher after Central Banks around the world take action. And the presidential candidates call for financial reform. The bottom line on their plan to fix the money mess.

And Minneapolis makes a connection. A new bridge opens across the Mississippi River today, 13 months after the old one collapsed.

Good morning, everyone, I'm Don Lemon. You're in the CNN NEWSROOM.

All right, issue #1, of course, it is the economy. Your money amid the financial turmoil. It's front and center this hour. The markets right now are trading up. We will show you the markets. Keep it up on our screen for you throughout the afternoon. This comes after another big loss yesterday.

There you see 62 points in the plus territory. This came after a big loss yesterday despite some current gains, the Dow still down more than 700 points from where it started this week. The Federal Reserve is now joining forces with the world's other top Central Banks. They're pumping billions of dollars into the global banking system to shore up confidence. Now, amid the market volatility, investors are seeking refuge in safe bets like gold and treasury bills.

President Bush is focusing today on ways to stabilize and strengthen the economy. He canceled a fund-raising trip to Florida and Alabama staying in Washington to meet with his top economic advisers. The president came out just last hour hoping to reassure the country.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: These actions are necessary and they are 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.

(END VIDEO CLIP)

LEMON: And we want to tell you the White House plans a news briefing this hour. We will surely monitor that for you and bring you the latest developments when that happens.

Well, helping us make sense of the market madness and helping you as well. CNN's Christine Romans and the CNNMoney team in New York. And yesterday, we're hearing from investors, hearing from people concerned about their 401(k)s and what this meant to them.

What are you hearing today, Christine?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, it's interesting. Remember how angry people were? They were angry about bailouts. They were angry this was happening. They are wondering why on Main Street they were going to have to be touched by what was happening on Wall Street. And they were sort of struggling to understand how this could be allowed to happen. Let's talk about that a little bit. We had the Fed and Central Bankers today injecting liquidity into the global financial system.

Allan, what does that mean?

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: It means that they're making money available to the bankers, to the investment firms and the hope is that that money is going to be shared, lent, spread around. The problem that we confront right now, because of this crisis of confidence, companies are so nervous that they are afraid to lend money. That is actually halting the wheels of our economy of capitalism right now. That is one of the critical problems underlying all the problems we're seeing right now.

ROMANS: And so what does that mean? How does it trickle down to us? Does it mean it is harder for me to get credit? Hard to start a small business? What are the implications?

PAUL LA MONICA, CNNMONEY.COM: Yes, exactly as you point out. We've already had -- this credit crunch has meant that even for borrowers that have good credit histories, we're not talking about the subprime borrowers who clearly had some issues with their credit in the past. Good credit-worthy people and businesses are having difficulty getting loans. And as Allan pointed out, with banks afraid to lend to each other, they're certainly not going to lend to you and me.

ROMANS: This is all about the financial companies. This is the heart of commerce, really, and it's -- we're facing some real big -- well, you keep hearing things like unchartered territory. I mean, global rethink of how -- I mean, financial journalists don't throw around terms like that. But this is the biggest sort of change in 70 years to the system.

POPPY HARLOW, CNNMONEY.COM: You know, it's interesting, I asked my mother yesterday. I said have you ever seen anything like this. Has your father ever seen anything like this? She said I don't think so. And that we're talking about someone on Main Street, not in the inner workings of Wall Street here. It's scary to a lot of people. But the reason we're all using those words is because it's really true.

And when we look at what's left on Wall Street, the stand-alone banks, we're hearing all these rumors, right? Morgan Stanley might tie up with Wachovia these rumors. It's the only one of two stand- alone big investment banks left on Wall Street. That says a lot. And if they tie up, we only have one left. I mean, we keep seeing these deals left and right. And people trying to avoid being the next Lehman or the next Bear. It's terrifying for a lot of people.

CHERNOFF: It's indicative of the anxiety right now within the financial world. The fact that these blue-chip firms are just rushing to find a partner. Merrill Lynch, the biggest brokerage firm in the nation, all of a sudden just rushing into the arms of Bank of America, a company, frankly, that has a lot of toxic assets. Bank America bought Countrywide Financial. They made a lot of lousy mortgage loans.

ROMANS: You know this really -- go ahead.

LA MONICA: To be fair, Bank of America is viewed to all of you Bank of America customers out there, as one of the stronger firms throughout this financial crisis. And even with the Countrywide deal, they surprised a lot of people earlier this year by saying that it's actually going to add to earnings this year sooner than expected.

Whether or not that still happens in light of what's changed on Wall Street remains to be seen. But I think the event, there's a big difference between them and say a Washington Mutual that is really in trouble right now.

ROMANS: Let me ask you guys about the anger that we're getting from people who are talking -- bailouts are very unpopular. I mean, you know, we're hearing over and over again, people like, wait a second? Is this my money? What's going on? How could just a year and a half ago we were told over and over again that the global economy is so strong and the United States has such a solid foundation. And then now, you know, we're literally picking up the pieces.

HARLOW: It's bailout or they fall apart, right? AIG insures $1.1 trillion in asset. A lot of you out there rely on AIG to be solvent. So, it's one or the other, right? It's the lesser of two evils. The same issue with Fannie and Freddie.

The question I think, and I think the candidates are asking this, how did we get to the point where Fannie or Freddie back up or own half the mortgages in this country. How do we get to the point where AIG is so critical to not only our economy, but to the world?

LA MONICA: The problem is with Wall Street, we clearly had so many companies rushing to create new ways to make money. And that's the big question. Why is an insurer -- (CROSSTALK)

ROMANS: I know you think they knew. I mean, some of these companies were involved in ways to create money. And they didn't even know exactly how they were working. But they saw that that part of the -- that cost center was making a lot of money and they kept going for it.

(CROSSTALK)

LA MONICA: It's greed, plain and simple. A company that writes life insurance policies, and property, and casualty insurance, and auto insurance really has no business getting involved in these exotic new instruments that are designed to make money off of subprime mortgage. And that's what happened. They blew up in their face.

(CROSSTALK)

CHERNOFF: Which is not regulated.

LA MONICA: Yes. AIG lost more than $18 billion. And it wasn't because of their insurance.

ROMANS: All right. Allan Chernoff is here, (INAUDIBLE), Paul La Monica and Poppy Harlow.

We send it back to you, though, Don. We'll talk a little bit later in the hour.

LEMON: Yes. Very good information there, Christine. Thank you.

We'll see you in just a little bit more. And remind our viewers, we're going to keep the market news with the market -- it's showing up on our screen. You'll see it there all afternoon just so you know what's going on.

We're going to continue now and talk about this economic turmoil. It is creating problems for college students looking for loans as well. Online lender myrichuncle.com has suspended its student loan program. Our Josh Levs is looking into that.

And Josh, this is very popular for people looking for alternate loans, even consumer loans as well. But it is the student loan program that they have suspended.

JOSH LEVS, CNN CORRESPONDENT: That's right. Yes. And while we're talking about issue number one, I'm going to pop in here and tell you about this. I'm just learning some of this stuff, myself. But this is another piece of this economic puzzle. Let's in fact close in just for a second on the screen behind me. You can see what we're talking about. It's the story of today at CNN.com about a student who had to cash in his savings after his private loan fell through. And it turns out he's very not alone.

I want to go to a graphic here that's going to give you a sense of how widespread a problem this is. So, first of all, the size of the market. You know, a lot of students take loans in order to pay for school. Federal funds are most of it, about $60 billion. What we're talking about right now are those private loans, which is still about $17 billion a year to students who need to pay for school.

Now, let's look at this next screen. Because this will show you what's happening now. Since August, Don, just since August, 33 lenders have had to drop their private loan programs for students. And you're finding that about 8 percent of students who are out there are the ones relying on these private loans. So if you're seeing 33 just since August, you can imagine what's been happening over this past -- I should say August 2007. So, it's the past 12 month. But it's incredible what's been going on.

And we are hearing that a lot more places could be doing this. So, the truth is this could get bigger and bigger. And one thing we want to do is encourage you to send us your stories. If you are a student out there, or you know a student who might be in that situation, send us your iReport right here to ireport.com. We're going to share some of these in the coming days, because we want to keep telling the story. It's affecting people across the economic spectrum. All ages, including students, Don.

LEMON: Yes. And more iReports on what people are giving up. That will happen just a little bit later on.

LEVS: That's right.

LEMON: But your story is important because obviously students are our future. We want to make it as easy as possible for people to get an education. So, this is definitely concerning.

LEVS: That's right. It's huge.

LEMON: Thank you, Josh.

LEVS: Thank you.

LEMON: Lots of people are worried about this market mess. Our senior business correspondent, Ali Velshi, is hosting an economy, issue #1 special on CNN radio and CNN.com. He is taking calls and he is also taking e-mails. And he joins us now to talk about those big concerns as well.

What are you hearing, Ali?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Hey, Don. Don, thank you for -- you're joining us.

You're listening to us along with all of our listeners right now. And we are getting swamped with e-mails and questions from people. Our phone lines are open right now at 877-266-4189. But I'll give you a sense, Don, of what people are talking to us about.

There's a great deal of anger out there about bailouts from the government or money from the government to keep companies afloat from people who are saying why is that not coming to small businesses. When small businesses fail or make mistakes, they don't get a lending hand. What about Americans who are not being able to pay their bills or who are overextended. That's kind of one set of questions I'm getting.

And then, Don, I was just saying to our listeners, one of the other things that we're getting are questions from people who say is this the opportunity to invest in the market or to buy a house? What should I be doing? So that's the sort of theme of what we're talking to listeners about. But we want people to ask us what they want to know. We want them to tell us what they want the candidates to do or the administration to do.

LEMON: And, Ali, you know, the interesting thing, though, is that if the government had not bailed out or helped out, maybe a better way of putting it, AIG, there are some people who are saying that the economy would have been worse and it would have been worse on consumers than what they're doing now.

VELSHI: Let me tell you, it's not a very refined analogy. But I tend to think, we need to think of AIG like we would think of an automaker if it failed. It's not just the automaker and its workers, it's people connected to it in the steal business, and the rubber business, and the glass business, and the fabric business, and the gas stations, and the auto repair places.

You have to think of AIG as much more than an insurance company. It is intricately woven into the fabric of our economy in a very different way than Bear Stearns or Lehman Brothers are. Those two companies, it's bad for the investors and it's bad for the workers, but the world doesn't need more investment companies to keep on going. We do need insurance, and AIG is the biggest. So, there's definitely some question, though, as to what our policy is. Do we step in when private companies fail backing that up with taxpayer dollars?

LEMON: All right. Our Ali Velshi is our senior business correspondent. He is on CNN Radio today. And you can also follow him, CNN.com/live. Ali --

VELSHI: So, give us a call. We're just sorry to interrupt you folks. I went there --

LEMON: Appreciate -- Ali Velshi on the radio.

Residents of Galveston learning the hard way. You can't go home again, at least not yet.

(COMMERCIAL BREAK)

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

Working around the clock. Power crews from across the country are on the job 24-7 along the Texas coast.

(COMMERCIAL BREAK)

LEMON: Well, firefighters say they are making progress against a wildfire in Central Oregon. The fire southwest of Bend, closed a stretch of Highway 58. More than 100 people forced from their homes. And fire officials report 20 percent containment. They hope, they hope the fire will be fully contained by Sunday.

Another blaze in the northeast outskirts of Oregon's Mount Hood is what we're talking about. It is threatening several historic buildings. Nearly 20 homes and businesses have been evacuated.

Efforts to let residents of Galveston home again after Hurricane Ike, well, that's a bust. Look at this traffic jams. Take a look at that. It is on Interstate there. Galveston officials had decided to let home and business owners return for a quick look and leave day time visit. But traffic to the island backed up for 20 miles. So, some who stayed or managed to make it back are checking their neighbor's homes as well as their own.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They've cut everybody off of the island now. And I'm one of the remaining locals on the island that can go around and take shots of everybody's homes that are still here and still standing. And when I do leave, I'll be able to download pictures and send them to everybody via e-mail to help ease their mind.

(END VIDEO CLIP)

LEMON: No power, no water, not much of anything working on the island. And city and state officials say they're now concerned about the spread of diseases.

Well, north of Galveston, cleanup at the Houston zoo with a little help from one of its residents. That's Tucker, Tucker right there is a 3-year-old elephant giving a hand, or rather just probably say a trunk there, Rob. What do you think? The zoo is open but with a limited number of concession stands. Plus, the zoo's education programs canceled until next week.

We all need a little makeover every now and then, even the residents of Mount Rushmore. Workers are doing their annual preservation work on the national monument, ceiling cracks in the granite to keep water out. Carving on the memorial began in 1927. It took 14 years to complete.

I wonder how much --that work would probably take longer (INAUDIBLE).

ROB MARCIANO, CNN METEOROLOGIST: Yes, I know. (INAUDIBLE) as a matter of fact. Have you ever been to Mount Rushmore?

LEMON: I have. Just to look and drop by, and that's it. It's amazing. You're right.

MARCIANO: It's one of the great things as a matter of fact.

LEMON: It is amazing but it's smaller than I thought. MARCIANO: It is a little smaller.

LEMON: You think it's going to be like gigantic.

MARCIANO: It is a little small, but against that cobalt blue sky, that's often the case in the black hills.

LEMON: Yes.

MARCIANO: It's something that, it's kind of out of the way. It's not easy to get to. But one of the trip every American should make.

LEMON: How are you doing, back-to-back hurricanes and storms? And did you dry out yet?

(WEATHER REPORT)

LEMON: I know. Well, you guys deserve a break. And you know it's the first time you can sleep with the air off and windows open.

MARCIANO: Yes. It's all around the corner.

LEMON: All right. Thank you very much. You know, Rob was talking about the hurricane and the mess left down south. Plywood in big demand all along the Gulf Coast. People boarding up homes before the storm and repairing damage afterwards. But is there a better solution?

CNN's Jacqui Jeras takes a look at a new type of wood.

(BEGIN VIDEOTAPE)

JACQUI JERAS, CNN METEOROLOGIST (voice-over): It's estimated that up to 40 percent of what's found in landfills is building waste material. Things like wood that's slow to decay. But, researchers at Stanford University say they're developing a renewable material that decays faster and could be an alternative to plastics and wood.

PROF. SARAH BILLINGTON, STANFORD UNIVERSITY: The goal is not to use natural resources that can't be easily replenished. So we're not chopping down trees.

JERAS: This artificial wood is made by stacking two different materials. A polymer or plastic extracted from bacteria and a natural fabric-like hemp. They are layered to the desired thickness, hot pressed and cut. The result researchers say, is a durable renewable building material that is not made from petroleum.

PROF. CRAIG CRIDDLE, STANFORD UNIVERSITY: There's real reasons to get rid of petrochemical plastics if we can and to find a biodegradable substitute.

JERAS: And in a landfill, it can produce more methane gas as energy that could eventually be used to make more of the artificial wood. But research is still under way to see whether it's a viable building material.

CRIDDLE: We can align environmental interests and economic interests so that people can make money and do well for the environment. Then we really have something exciting.

JERAS: Jacqui Jeras, CNN.

(END VIDEOTAPE)

LEMON: Very interesting, Jacqui.

Genetically engineered meat. How about that? Do you know what it is? Well, you need to find out because it might be on your dinner table.

(COMMERCIAL BREAK)

LEMON: We have some good news out of this tragic story. The bridge is back. Minneapolis opened the new 35W span over the Mississippi River this morning. 13 people were killed when the old bridge collapsed last summer. The new bridge has sensors embedded in the concrete. They'll feed a constant stream of data to engineers. And the mayor of Minneapolis was in the NEWSROOM this morning.

(BEGIN VIDEO CLIP)

MAYOR R.T. RYBAK, MINNEAPOLIS: 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 am still frankly concerned that we haven't made the investment in infrastructure around this country to really learn from this tragic lesson.

(END VIDEO CLIP)

LEMON: Federal investigators plan to discuss their investigation into the bridge collapse in November. A design error and construction materials on the bridge are thought to be at fault there.

Meantime in California, hundreds of 911 calls after last week's deadly train crash describe a scene of chaos and confusion. A Metrolink commuter train crashed head-on into a freight train, Friday, killing 25 and injuring more than 130 people. Some callers seem frantic, others, calm.

(BEGIN VIDEO CLIP)

CALLER: We just collided with something. I don't know what. We have a lot of -- I've got several people who are injured and bleeding.

OPERATOR: Can you tell me how many people are hurt? CALLER: Well, I see 1, 2, 3 -- those are probably mine -- 4,5,6.

OPERATOR: That's just on your car?

CALLER: That's just in my side of the car.

(END VIDEO CLIP)

LEMON: Unbelievable. Well, federal investigators have confirmed, check this out, that the Metrolink engineer, was sending text messages while on duty. They aren't sure yet if he was texting at the time of the crash, though.

Engineers and conductors have to go to school to learn how to run the rails. And we'll take you to one of them. The Modoc Railroad Academy and show you how it works. It's very interesting story. Take a look at that. That's a little bit later on today on CNN.

FBI agents headed to Yemen to investigate a terror strike. Police have reportedly rounded up 25 people after an attack on the American Embassy in Sana'a. It's common for Yemeni forces to haul in suspects after such an attack, but as a diplomatic source put it to CNN, usually nothing comes out of it. 16 people were killed in a burst of bombs, gunfire and grenades. Six of them terrorist. The group didn't penetrate the embassy's walled compound. A New York teenager is among the dead. And family members say Susan Elbaneh was killed along with her new Yemeni husband.

A woman is set to take charge in Israel. She'd be the country's first female prime minister since Golda Meir in 1974. Tzipi Livni narrowly won election to lead the Kadima Party. Livni must now form a coalition government most likely with the labor party. If she fails, elections would be held. Well, the 50-year-old is currently Israel's foreign minister under Ehud Olmert who is resigning. He is a subject of a criminal investigation.

Europe and Asia doing their part to prop up the global economy. Can it calm the fears?

(COMMERCIAL BREAK)

LEMON: It has been issue #1 for quite a while now, and of course it is today -- the economic turmoil. We're keeping an eye on Wall Street this hour. The markets trading up all morning. Let's take a look real quick at the big board. Up 39 points, the Dow is.

They're struggling -- rebound from a big loss this week. The turmoil prompting the Federal Reserve to join forces with the world's other top central banks. They're pumping billions of dollars into the global banking system to shore up confidence. Let's hope it works.

President Bush says he shares Americans concerns. After meeting with economic advisers this morning, the president promised that the government will act aggressively to avert a deepening crisis.

Let's get back to New York now and Christine Romans, our CNNMoney team. They're there helping us make sense of the market madness.

What are you working on now, Christine?

ROMANS: Trying to make sense of it is exactly right, Don.

There's a real feeling that everyone is trying to make sense of it, even our policymakers, even the people who got us into the mess, even the big banks on Wall Street who are talking about maybe new dance partners. Who knows how they're going to try to get through this?

I want to turn to our money panel and talk to Allan Chernoff in particular about what we do now.

How do we get out of this? Let's place the blame aside, and the anger about bailouts, and let's talk about how we get out of it.

CHERNOFF: We've got a lot of toxic assets on the balance sheets of so many companies, these investments in mortgage securities. Now Barney Frank, the head of the House Financial Services Committee, has been talking about this idea of creating a new agency similar to the Resolution Trust Corporation. Remember back during the savings and loan crisis, that was created by the government to basically take over failed savings and loans and get rid of the assets of those companies.

It worked out pretty well. And the concept that's being talked about on Wall Street, and in Washington, is bringing up some new agency, creating some new agency like that, to take the bad stuff away, sell it off gradually, and then let's get back to business.

ROMANS: What about the leadership here? You heard Harry Reid say -- Senator Harry Reid say we're all trying to figure out what's happening here right now. You heard the president come out today and talked about how they are focused on this problem. You've heard the candidates sort of address it and say that it wouldn't happen again under them, or they have the way to fix it.

But where is the leadership on this issue? Is this RTC idea -- does it sound like they're big ideas being bandied about?

LA MONICA: The RTC idea is certainly a big idea if that actually happens. And I think there's some merit to possibly going down that route again.

The leadership right now appears to be probably with -- really the regulators, with Treasury Secretary Henry Paulson and with the Federal Chairman Ben Bernanke and his vice chairman, Tim Geithner. I don't really see it as much from senators, congressmen or the candidates just yet -- ROMANS: That's politics.

LA MONICA: Yes, and obviously the candidates are focusing on getting elected, not necessarily solving the problem right now. That's a little presumptive.

ROMANS: Well they certainly got handed a curve ball, didn't they, in their plans for their economic plans and all that?

Let's talk about bringing this down to the consumer, regardless of what they finally do to try to clean up this mess. Is my money safe? Are my investments safe? What kind of investments should I have? How does it impact me?

TAMI LUHBY, CNNMONEY.COM: Right. Well one thing a lot of people are talking about these days are money funds, which a lot of people think are the most safe funds that you can have. They think they're like money in the bank. But they're not. They're not FDIC insured. However generally, they do remain at having a value of a dollar.

So, people really need to just check what they have in their investment accounts. Do they really have money funds, which generally don't break a dollar? There's been one fund this week that has, although most experts say that it's not going to become a pervasive problem.

ROMANS: How do you find out?

(CROSSTALK)

ROMANS: You have to be smart and do a little research, but how do you find out?

LUHBY: People are asking whom to blame. But it's really up to you to find out what you own in your accounts. So call up your investment house and find out what types of -- where is your money. And is it in actually short-term bond funds, which are riskier, or are they truly in money market funds.

ROMANS: The response from different people based on what's happening here depends on whether you have a job, whether you have a kid that's going to college, how close you are to retirement. It's hard to give advice or to tailor anything to one particular kind of person because there are 300 million people in this country are who all in different stages of the American dream.

CHERNOFF: It's time frame, risk tolerance, all of that. If you're a long-term investor, over 10 years or more, then you look at this incredible volatility on Wall Street, you can sit back and say, OK, I don't need the money in the next couple years. I'll probably be able to ride it out and all that. But if you need money on the table in the next year or so, you do have reason to have concern some here.

ROMANS: We'll leave it with that.

Don, back to you.

LEMON: All right, Christine and the money team. Thank you very much. We'll see you guys in a little bit.

You can follow your fortunes at CNNMoney.com. We've got all the day's market news and the numbers, expert analysis and much, much more. Just go there and take a look. All right. If the race for the White House were run today, new polls suggest it would wind up a photo finish. And that means close. Whoever is going to win would win by a nose today. CNN's senior political analyst, Bill Schneider, is here with the latest numbers from the key states.

And as we -- as I said, this is a dead heat. What states are we talking about?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, let's do a comparison of 2004 with 2008. The economy right now is much worse than four years ago, and the Democratic ticket is doing a little better in every state.

(BEGIN VIDEOTAPE)

SCHNEIDER: 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.

(END VIDEOTAPE)

SCHNEIDER: Now, some other polls do not show quite as dramatic a shift to the Democrats. The poll of polls in Ohio, for instance, has McCain leading by three, which is about the same as in 2004 -- Don.

LEMON: All right. CNN senior political analyst, Bill Schneider.

Bill, we appreciate it.

We'll check in with CNN's Ed Henry in a bit. He is standing by in Cedar Rapids, Iowa. That is where John McCain and Sarah Palin are getting ready to address a rally in the next hour. There you go -- live pictures there of the podium and people waiting for that to start. We'll get to that for you -- promise you -- when that happens.

And check out our Political Ticker for all the latest campaign news. Just logon to CNNPolitics.com, your source for all things political.

Let's talk now about tinkering with nature. This is a very interesting story. Pay attention. The FDA will look at plans to regulate meat, milk and eggs from genetically engineered animals. Got your attention? Medical correspondent, Elizabeth Cohen, joins us with the latest information on that.

When you're talking about medically engineering meat --

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Right.

LEMON: And other things --

COHEN: People want to know.

LEMON: -- people want to know.

So tell us, what do we need to know about this?

COHEN: OK. What you need to know is that today the FDA basically paves the way for meat from genetically engineered animals to reach your table. Now let me give you an example of genetic engineering. And this is real. You take a gene from a cow, you put it into a pig, and that pig will have piglets that grow more quickly and get to market more quickly and more efficiently. And so that obviously makes money for the people who are making that pig.

So that's just one example. Basically what you're doing is you're taking the gene from one animal, putting it into another animal, so that they grow more quickly, or maybe they produce meat that is more healthy.

You're looking skeptical.

Some people say this is a good thing. Don't you want meat that's healthier? If you have to do genetic engineering to do it, why not?

LEMON: I know, progress is good. But then we always talk about organic and natural and that's better for us. But what I'm wondering is does everyone think this is safe?

Maybe not.

COHEN: No. There are definitely people who have testified to Congress and who say, you know what? This is a little bit strange. Are we sure that it's safe? Is the government making sure? And they think these products ought to be labeled "Genetically Engineered," which the FDA is not making companies do.

LEMON: All right. No date though, right, for the shelves?

COHEN: No. But it could be just a matter of months before the FDA let's them do this.

LEMON: OK. Thank you very much.

All right. To become that empowered patient that we tell you about, and you want to learn more about all this stuff she's talking about, the genetically engineered meat, logon to our Web site. That's where you can find the latest medical news, a health library and information on diet and fitness, and genetically engineered meet, the possibilities there. The address -- CNN.com/health.

OK. Membership denied. AIG, the huge insurance group the U.S. government just bailed out, is being kicked out of the Dow 30.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: The Dow Industrials gave up 800 points in the first three trading days of the week. The market opened higher this morning, but that rally is now fading. Susan Lisovicz is at the New York Stock Exchange to update us on that.

OK. So the rally is fading, Susan?

SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, and that really doesn't speak very well as to the sentiment here. In fact, there's a bunch of traders on the floor who have a betting pool as to where the Dow is going to end up. And let me put it this way, I think most of the participants think that the gains that we do have aren't going to hold. And that's what's happening here.

There's a lot going on. Obviously the Federal Reserve and central banks around the world trying to pump liquidity into the system to try to get financial institutions to lend. It's an exact opposite of what was happening a few years ago when money was just plentiful. No documentation needed, loans were ever ready. And now there's just a great aversion to risk. So we have that development. That helped spark a triple digit rally at the open. We're obviously continuing to watch what's happening in the financial sector.

There are published reports that Washington Mutual has put itself up for sale, that Morgan Stanley is in talks with Wachovia. We're seeing Morgan Stanley shares down nearly 20 percent. Washington Mutual shares, meanwhile, are up 14 percent.

And overall, we are seeing the Dow hanging on, not much, though. Blue chips right now are up 36 points, or one third of a percent. The Nasdaq is basically flat. And -- not much of a rally to speak of here.

LEMON: All right, Susan, we'll check back with you throughout the day obviously with all of this going on. Thank you very much.

The Republican presidential ticket stirring up crowds in the Midwest. We're awaiting the arrival of John McCain and Sarah Palin. There's that rally right there. We'll bring that to you just as soon as it happens.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: Democratic presidential candidate, Barack Obama, makes two stops in Nevada. In Elko on Wednesday he called the ole' boy's network in Washington a McCain staff meeting. Obama later used a rally at a baseball stadium in Las Vegas to make a promise to American homeowners.

(BEGIN VIDEO CLIP)

OBAMA: If you only own one home, then if you go bankrupt, you can't modify your payments in a bankruptcy court. The judge can't modify the situation so you can stay in your home. But if you own seven homes, if own seven homes then the judge can -- if you go bankrupt, the judge can modify payments for your second and your third home and your fourth home and your fifth home, and sixth home, your seventh home. That's not fair. That's not right.

So we're going to change it. And I'm going to offer -- and I'm going to offer a tax credit to struggling families that will take 10 percent off your mortgage interest rate, because you deserve the same break that folks in wealthy homes do.

(APPLAUSE)

We'll set up a home score system that's going to help every consumer figure out whether they're going to be able to make their mortgage payments before they buy their house. And I will crack down on predatory lenders who all too often target the African-American community, target the Hispanic community, with tough new penalties that will treat mortgage fraud like the crime that it is.

(APPLAUSE)

But the most important thing I'll do as president is restore opportunity for all Americans. And we need to recapture that fundamental American spirit. Now to get our economy growing we need to -- we need to make sure that if you work hard, if you work hard and you play by the rules, then you are going to be able to get ahead, that you can find a job that pays the mortgage, that you are able to get your child in to the school and the college that they want to go to, that if you get sick, you won't go bankrupt, that your kids can get the kind of education and that we can leave a legacy of greater opportunity to future generations.

That's the change the American people need. Change means --

(APPLAUSE)

Change means a better life for you.

(END VIDEO CLIP)

LEMON: And later on this afternoon, Senator Obama will speak in New Mexico.

The Republican presidential ticket is stirring up crowds in the Midwest. We're awaiting the arrival of John McCain and Sarah Palin in Cedar Rapids. Live pictures as you see them there.

You're watching CNN, the most trusted name in news.

(COMMERCIAL BREAK)

LEMON: Business magnate, Donald Trump, contributed to Hillary Clinton's campaign for president. That was last November, during the Democratic primaries. Well last night, he told CNN's "LARRY KING LIVE" who he has decided to endorse now that is between Barack Obama and John McCain. Listen.

(BEGIN VIDEO CLIP)

LARRY KING, HOST, "LARRY KING LIVE": Have you formally endorsed a ticket?

DONALD TRUMP, CHMN. & CEO, TRUMP ORGANIZATION: No. But I'm endorsing McCain. I am --

KING: What does that mean?

TRUMP: I am basically very strongly -- you have to understand, I've known him, I like him, I respect him --

KING: So you're endorsing him?

TRUMP: He's a smart guy and I think he's going to be a great president.

KING: So you're endorsing him?

TRUMP: Sure. I'll endorse him on your show. Why not?

KING: You just endorsed him.

TRUMP: I endorsed him.

(END VIDEO CLIP) LEMON: Breaking news on "LARRY KING LIVE" last night.

OK. Well Republican presidential candidate, John McCain, and running mate, Sarah Palin, are stumping in Cedar Rapids, Iowa. They are doing that today, and we're awaiting a live event. McCain and Palin are set to address a rally noon Eastern, just a couple minutes.

Our White House correspondent, Ed Henry, is covering this event for us. Ed joins us now live.

Ed, for a while there we were seeing smaller crowds when it came to the McCain campaign. And judging from just looking at the crowd here, looks like that has re-energized and they're drawing much larger crowds now.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Absolutely. Sarah Palin, whenever she travels with John McCain, I can tell you out here on the road, the crowds are much larger. They are also much louder.

And this is one of those swing states with seven electoral votes that -- where the voters are very familiar with John McCain after those hotly contested caucuses at the beginning of the year. But this is really the first introduction of Sarah Palin to this state. And John McCain may really need her to turn out Republican voters in particular.

The latest CNN/"TIME" Opinion Research poll just a couple of weeks ago showed Barack Obama with a 15-point lead here. Now keep in mind it's two weeks old, it can change. And also, both campaigns believe this race will tighten in Iowa. President Bush only Iowa by one point in 2004. Al Gore won this state by one point in 2000.

What the McCain/Palin ticket is trying to do -- they were together in Michigan last night -- is really focus on the economy, the crisis on Wall Street, and they are trying to hammer Barack Obama and say that he wants to raise taxes on the wealthy. That's only going to make things worse.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Michigan's unemployment went up to almost 9 percent. If you like what tax increases have done to the economy here in Michigan, you're going to love Senator Obama's tax increases, and we won't do it. Governor Palin and I will not raise anyone's taxes.

(END VIDEO CLIP)

HENRY: Don, they were also, the McCain camp, trying to harp on the fact that Senator Obama has been indecisive about whether he really supports the AIG insurance bailout. But let's not beat around the bush. Senator McCain himself has had some trouble with his own message on the economy. You remember a few days ago when he said the fundamentals of the economy are still strong. He had to sort of back pedal on that. I thank it's fair to say that both campaigns are really sort of groping, trying to figure out exactly what to say about the crisis on Wall Street. They realize it's issue #1 for voters, but they're having a hard time figuring out exactly what to say and what to do about it, Don.

LEMON: Yes, and he had to back pedal -- I believe within 24 hours after saying one thing, he had to say another. But it was very interesting as we were watching the plane land and John McCain and Sarah Palin get off the plane there near Cedar Rapids.

And also, we were talking about those crowds. You know, listening before to Van-Halen at a John McCain rally and then you mention that these rallies are loud, and the shouting is going on right behind you in the background.

HENRY: Absolutely. You know, a few moments ago they were playing the song "A Highway to The Danger Zone." I was thinking, it's probably not a great song, given the economy that's going on right now. But in all seriousness, absolutely. In Ohio a couple days ago I was as a McCain/Palin rally. And it was quite interesting because the crowds, you can hear them right now, saying, "we want Sarah, we want Sarah." They also want John McCain, but they chant, "we want Sarah." And in Ohio a couple days ago, when Sarah Palin was done finishing -- finished speaking, they actually ended up, some of the crowd, was walking out while John McCain was speaking.

A lot of these crowds want to see Sarah Palin a little bit more than John McCain now.

LEMON: Yes, it's going to be very interesting to see the draw at this point from the bottom of the ticket rather than the top of the ticket.

Ed Henry, appreciate your reporting. We'll check back with you in just a little bit once this event gets under way.

Ed Henry reporting from Cedar Rapids, Iowa.

The next hour of the CNN NEWSROOM starts right now.