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Palin Investigation Continues; Wall Street Worries

Aired September 18, 2008 - 15:00   ET

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

(BEGIN VIDEOTAPE)
RICK SANCHEZ, CNN ANCHOR (voice-over): Coming at you now: Sarah Palin in her own words.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: Principle and political independence mean a heck of a lot more than just the party line.

SANCHEZ: The latest on her alleged abuse of power investigation.

John McCain and what he did for did not say about the leader of Spain.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Honestly, I have to look at the relations and the situation.

SANCHEZ: We have the interview that is causing an uproar in Spain and has the country's prime minister reacting.

Meanwhile, both John McCain and Barack Obama reach out to Hispanics in America. But look who Obama is tying McCain to.

And, in L.A., a deadly train crash, was it caused by text- messaging?

The news, direct to you, interactive, right now.

(END VIDEOTAPE)

SANCHEZ: Hi, everybody. I'm Rick Sanchez.

We're going to begin with breaking news. I am being told that we have the attorney general of the state of New York on the line regarding some practices on Wall Street that he is trying to nip in the bud.

Andrew Cuomo joining us now live from New York.

Attorney General Cuomo, what are you doing, sir?

ANDREW CUOMO, NEW YORK ATTORNEY GENERAL: How are you, Rick?

Well, we announced today that my office is going to be doing an investigation that we are going to commence immediately into what is called illegal short selling, which would be companies, individuals who spread false information for the purpose of driving down the price of a stock, so they can profit on the short selling.

Short selling in and of itself is not illegal. A lot of companies just decide or investors decide that they want to short a stock.

SANCHEZ: Yes.

CUOMO: That is fine. But if you are spreading false information and you are in a conspiracy to drive down the price of a stock, that is not fine.

SANCHEZ: Well, short selling essentially means you are betting on a loss. You are betting that you will make a profit from somebody else's loss in a company. That is in and of itself is a practice that has been going on for some time.

What I hear you saying, though, and maybe you can amplify this somewhat, is actually causing the stock to fall, right, and then betting against it.

CUOMO: That's exactly right, Rick.

It is one thing if you are just betting that the stock goes down. You can look at the information. You look at the market. You make a determination that a stock may go down and then you invest that it goes down, and that is called shorting a stock. That is not illegal. Many people argue that it is actually a good thing for the market and keeps companies honest.

What is illegal is if you are spreading false information, rumors, you join a conspiracy to purposely drive down the price of a stock, and you are profiting from the decline. That is illegal. You cannot manipulate the price of a stock with false information. That is a securities fraud. And we have jurisdiction in that area, and that is what this investigation is about.

SANCHEZ: Are you ready at this point, Attorney General, to name some of the companies that you are going after or at least give us a sense of who they are?

CUOMO: Well, I can name, Rick, the companies that we are looking at to see whether or not there was short selling in connection with these companies.

And our main motivation is to try to stabilize the market, right. And to the extent that there is illegal short selling, we want to stop it. And we want people to know if you are engaged in illegal short selling, you better stop and you better stop now.

But companies like Lehman, companies like Morgan Stanley, companies like Goldman Sachs, who are seeing these rapid declines, we have complaints that there are episodes of illegal short selling. And that is what we are investigating.

SANCHEZ: But the information about what was going on with the company, do you allege that that was coming from officials within those companies?

CUOMO: No.

Basically, these are hostile acts towards the company. You are trying to drive down the price of a company. And the way that you do it is, you spread false information. The stock is dropping, you are shorting, what they call shorting the stock, so you are profiting as the stock goes down.

(CROSSTALK)

SANCHEZ: But who is going to be named in these complaints or are you not ready to release that information yet?

CUOMO: We are in the midst of that investigation now.

SANCHEZ: All right. Attorney Andrew Cuomo from the state of New York announcing that in fact there will be an impact from what has been going on, on Wall Street.

Attorney General Cuomo, thank you, sir, for taking time to join us on this information. And we will continue to get reaction on this from our own correspondents who has have following the numbers.

As you could see there, the numbers right now, 229, up, at least on the Dow on this day.

Now, some exclusive information about a John McCain interview that is getting plenty of air play today on the blogs, in the Latino community, and particularly, interestingly enough, in Spain. This is an interview that John McCain did recently with a Caracol radio station in Miami. Caracol is the symbol for most of Venezuelan radio stations and throughout parts of Latin America.

Now, the interviewer asked McCain if he would meet with Spanish Prime Minister Jose Zapatero and invite him to the White House. She asks the question repeatedly. We are going to be talking to the reporter, Yoli Cuello, in just a moment.

And I'm are going to share with you what is being said and what is being written in Spain right now.

But, first, what I want you to do is to hear this exchange between the reporter and John McCain for yourself. Here it is.

(BEGIN AUDIO CLIP)

YOLI CUELLO, REPORTER: Senator, finally, let's talk about Spain. If you are elected president, would you be willing to invite President Jose Luis Rodriguez Zapatero to the White House to meet with you?

MCCAIN: I would be willing to meet with those leaders who are friends and want to work with us in a cooperative fashion.

And, by the way, President Calderon of Mexico is fighting a very, very tough fight against the drug cartels. And I am glad we are now working in cooperation with the Mexican government on the Merida plan. And I intend to move forward with relations and invite as many of them as I can of those leaders to the White House.

CUELLO: Would that invitation be extended to the Zapatero government, to the president itself?

MCCAIN: I don't -- I -- you know, honestly, I have to look at relations, and the situations, and the priorities.

But I can assure you I will establish closer relations with our friends, and I will stand up to those who want to do harm to the United States of America. I know how to do both.

CUELLO: So, you have to wait and see if he is willing to meet with you, or you will be able to do it in the White House?

MCCAIN: Well, again, I don't -- all I can tell you is that I have a clear record of working with leaders in the hemisphere that are friends with us and standing up to those who are not. And that's judged on the basis of the importance of our relationship with Latin America and the entire region.

CUELLO: OK, what about you? I'm talking about the president of Spain. Are you willing to meet with him if you are elected president?

MCCAIN: I am willing to meet with any leader who is dedicated to the same principles and philosophy that we are, for human rights, democracy, and freedom. And I will stand up to those that do not.

(END AUDIO CLIP)

SANCHEZ: Jose Louis Zapatero is basically saying, as the president, or prime minister, of Spain, that he will work with whoever is elected the president.

But Spain's media is casting the McCain answer as a major slight to their leader. As a matter of fact, let's go up, if we can, Robert, and take a look at some of the papers that are coming in now. This is "El Pais." "El Pais" is one of the main newspapers there in Spain. It says on the top here McCain (SPEAKING SPANISH). McCain fails to say whether he is willing to meet with Zapatero and bring him to the White House.

So, obviously, it's a huge story over there. Let's look at this now. This is a direct comment now. The prime minister of Spain has reacted to McCain's comment.

He says, Zapatero considers normal, normal, that McCain has chosen to pronounce whether -- has chosen not to say, or pronounce there is the word that they use, whether he will be received in the White House. So, it is a big story over there, obviously, across the pond.

The McCain campaign for its part has reacted to this as well. They released this statement on the remarks. They say they were intentional, and that he stands by them, this per McCain foreign policy adviser Randy Scheunemann, who says -- and we quote here -- "The questioner asked several times about Senator McCain's willingness to meet Zapatero and I.D.'ed him in the question. So, there is no doubt that Senator McCain knew exactly to whom the question referred," this because on the blogs there are questions as to whether McCain knew who Zapatero was.

"Senator McCain," it goes on the say, "refused to commit to a White House meeting with President Zapatero in this interview. In this week's interview, Senator McCain did not rule in or rule out a White House meeting with President Zapatero, a NATO ally. If elected," this goes on to say -- we received this just about 10, 15 minutes ago, by the way -- "he will meet with a wide range of allies in a wide variety of venues, but is not going to spell out scheduling and meeting location specifics in advance."

Let's look at this last part. He then says: "He is also not going to make reckless promises to meet America's adversaries. It is called keeping your options open, unlike Senator Obama, who has publicly committed to meeting some of the world's worst dictators unconditionally in his first year in office."

To be fair, the McCain's campaign response references Obama's position on talks with foreign leaders, as you know. So, we took a look at exactly what Senator Obama's position was on foreign leaders. Senator Obama's own Web site is what we will quote here.

Let's go to that. "Obama and Biden are willing to meet with the leaders of all nations, friend and foe," it says. "They will do the careful preparation necessary, but will signal that America is ready to come to the table, and that he is willing to lead."

All right. As we give you all that information, let's do this now.

Let's bring in Yoli Cuello. She's the reporter who interviewed John McCain. She has given us this exclusive interview to try and debrief or at least go through this.

Yoli, thanks much for joining us. Are you there?

CUELLO: Yes, I am here, Rick.

SANCHEZ: Are you surprised, first of all, by all the attention this has gotten? It's making front-page news in Spain. And the McCain campaign has been responding to it throughout the day.

CUELLO: Actually, I am, because I have been answering questions all morning. I didn't know it was going to have this reaction, honestly.

(CROSSTALK)

CUELLO: Because I was just asking the question and he just was failing to answer, but I was still trying to get a yes or no answer. That is why I keeping asking the same question. SANCHEZ: Let's go through this part by part, because the blogs seem to be intimating that McCain didn't know who Zapatero was or that he maybe didn't understand your question, while in Spain, what they are saying is that he may have snubbed their president publicly.

So, let's go through this. What specifically did you ask him?

CUELLO: The question you just put on the air. I was asking him if he was willing to meet with President Zapatero if he was elected to the White House. I just wanted him to tell me yes or no.

SANCHEZ: Do you your question was clear? Do you think he got it, he understood it?

CUELLO: I think, yes, but I think he didn't want to give me a straight answer or commit to an answer yes or not.

(CROSSTALK)

SANCHEZ: What do you think his response was?

CUELLO: Well, he was just trying, as a politician, to don't give me a straight answer. That is what I think. That why I keeping asking the same question.

SANCHEZ: So, you don't think -- so, basically, you think he was doing what a lot of politicians do. He was dodging you? He was dodging you?

CUELLO: Yes, that is what I think he was doing, yes.

SANCHEZ: But, just to clear up your own sense of it, because you were there. A lot of the blogs are saying he probably didn't know who you were talking about. Do you think he know who Zapatero was?

CUELLO: Yes, because I told him also in the beginning. Of course, Senator McCain knows who Zapatero is.

(CROSSTALK)

CUELLO: I think the confusion is because he is talking about Mexico.

But the thing was that, at another part of the interview, I was talking him (INAUDIBLE) Latin American countries, but I didn't ask for Mexico. I guess he wanted to say something about Mexico.

SANCHEZ: OK.

(CROSSTALK)

CUELLO: ... just to get it in the interview.

SANCHEZ: No, no, I get it, I get, because you do did a shift there. You were talking about Latin America. Then you started talking about Spain. That is why there was some question as to whether or not he was confused. And, certainly, it has gotten a lot of attention so far.

Yoli Cuello, muchas gracias. Thanks so much for being with us.

CUELLO: OK.

SANCHEZ: We appreciate it.

Well, this McCain interview comes at a time when both campaigns are actively reaching out to the Latino community in new advertisements. We are going to a look at some of those with CNN.com's political editor Mark Preston with "Preston on Politics." That is coming up in just a little bit.

But, next, we talk to Sarah Palin -- or we hear the conversation. We don't talk to her specifically -- protesters, endorsements, and that investigation in Alaska that keeps pushing along, with our own legal lawyer.

We will be back.

(COMMERCIAL BREAK)

SANCHEZ: We welcome you back. I'm Rick Sanchez coming to you here from the world headquarters of CNN in Atlanta.

Republican vice presidential candidate Sarah Palin finding the campaign trail is not the most accommodating of places today. At a joint rally with Senator McCain in Cedar Rapids, Iowa, a handful of protesters made their presence known again. Palin took an opportunity to take a jab at her Democratic opponents. Listen to this one.

(BEGIN VIDEO CLIP)

PALIN: To them, raising taxes -- and Joe Biden said it again today -- raising taxes is about patriotism.

(BOOS)

PALIN: To the rest of America, that is not patriotism. Raising taxes is about killing jobs and hurting small businesses and making things worse.

(APPLAUSE)

PALIN: This isn't about anyone's patriotism. It is about Barack Obama's poor judgment.

(APPLAUSE)

(END VIDEO CLIP)

SANCHEZ: Meanwhile, back in Alaska, Palin supporters are trying to stop or at least slow down an investigation that could jeopardize her role as McCain's potential vice president. At issue, whether she allowed a family matter to interfere with her job as governor. Specifically, did she fire her state director of public safety for refusing to fire this guy, her ex-brother-in-law, an Alaska state trooper?

CNN senior political analyst Jeffrey Toobin is joining me now from Washington for more on the story that seemingly will not go away.

Jeffrey, latest news, according to the Alaska attorney general, is that Palin's staff now says they will not testify. What is going on here?

JEFFREY TOOBIN, CNN SENIOR ANALYST: Well, Rick, I think, given where we are in the campaign, it is much more useful to see this as a political story than a legal story, because, with six weeks to go, this is not going to be resolved as a legal matter.

The issue of why the director was fired, what the motivation was will certainly not be resolved. The question is, does Sarah Palin get credit for standing up to a politically-motivated investigation, according to her view, or is she stonewalling a legitimate investigation of the possible abuse of power because she has got something to hide? That is the debate that we are going to have.

SANCHEZ: Well, so what it -- it appears this is a classic stall tactic. I mean, you throw enough paper and you throw enough lawyers at it, and you drag it past the election, right?

TOOBIN: Absolutely.

That is why it is a political story, because it is not going to be resolved. The question is, are voters, A, going to care about this at all, and, B, are they going to view it as a stonewall, as a stall, or are they going to view it as Sarah Palin standing up to a politically-motivated investigation?

The question really is motivation at this point, not the result, because we are not going to get a result by November 4.

SANCHEZ: Let me ask you one final question, because I am just thinking people out there probably might be wondering something like this. Why, instead of this, not just come forward and say, yes, you know what? I love my sister and I didn't like what this guy was doing and I was mad at him, and I did this, and so be it. I'm a family person and maybe I let it get the best of me.

TOOBIN: Well, because I think that really, if that is true -- and it is possible that is true -- that would really cause her judgment to be called into question, because there are procedures for firing people in government. And there is an issue of fairness.

And she has not said that is why she fired the director of public safety.

SANCHEZ: Yes.

TOOBIN: So, if she were to turn around and say now, well, I was doing this for a family matter, I think that would be a big problem for her, not just because she is changing her story, but because that is not how we expect public officials to behave. We expect them to follow the rules.

SANCHEZ: Yes. No, you're right. You're right.

And, yet, somehow, I think, in the court of public opinion, there's a lot of people who would say, I get that. I might actually act like if I was mad enough, if somebody messed with my family. So there's a lot going on here. And there are a lot of decisions that need to be made.

Jeffrey Toobin, as usual, thanks so much for being with us. We appreciate it.

TOOBIN: Good to talk to you, Rick.

SANCHEZ: All right.

If Senator McCain thought Sarah Palin would get the blank check support from women, think again. The National Organization for Women is endorsing Barack Obama for president, doing so without even mentioning the Alaska governor, McCain's vice presidential candidate, a woman. The organization had previously supported Senator Hillary Clinton's presidential campaign.

This is the first time, by the way, in 24 years that NOW has weighed in on a general election candidate. Back in 1994 (sic), NOW backed the Democrats' Walter Mondale/Geraldine Ferraro ticket, which of course was the first election that included a female vice presidential candidate. Interesting.

In most elections, it all comes down to the swing states. Well, we have got some new numbers that we are going to be sharing with you of just how close several of those states sudden are. Which ones are moving in which direction, toward whom, and what would a terrorist do to destroy the American economy? One lawmaker says we are already doing what terrorists could do to us.

That's ahead. Stay with us. We will be right back.

(COMMERCIAL BREAK)

SANCHEZ: And here we go with the immediate responses. Welcome back. I'm Rick Sanchez.

A lot of folks are getting in on the conversation. In fact, here it comes from Here It Comes. He wrote to us just moments ago, right after we showed that videotape of saying Sarah Palin, saying, "Why does Palin keep hammering on Obama for raising taxes for the middle class?" alluding to the fact that he has explained that position in the past, questions that keep being repeated throughout this campaign.

We will be checking back on what you are saying to us at Twitter.com/ricksanchezCNN.

Meanwhile, we are now in an out and, yes, there is movement for Barack Obama and John McCain, at least when it comes to some of the polls. We are going to be looking at Indiana, North Carolina, Wisconsin, and Florida, as far as polls go. Florida has a large population of Latinos. And that is why both candidates are releasing these new ads today.

Take a look. We have got some of them for now. All right, time now for "Preston on Politics" and CNN editor political Mark Preston as he listens to those (SPEAKING SPANISH) commercials. That would be Spanish, or, as my friends call it, yes.

Mark, these comments made to a TV reporter has the Web buzzing over what he knew, but the Spanish press seems to be treating it as a snub. Does this fall into the be careful what you say and how you say it column?

MARK PRESTON, CNN POLITICAL EDITOR: You know, it is a tough question to answer, Rick, because I am not necessarily sure I know what John McCain was trying the say when he made those comments.

Of course, if you are a Spanish reporter, if you are from Spain, you can interpret them however you want, but at this point, I'm not quite sure what John McCain was trying to say. Now, as his campaign has issued a statement and they said that he knew exactly what he was saying, and that he is not going to have an absolute open-door policy for every leader in the world to come in, so I guess, at this point, we have to take him at his word.

SANCHEZ: Let's get to those swing states we were talking about just moments ago. I understand you have got Wisconsin, you have got Ohio, you have got North Carolina, you have got Florida, and you have got Indiana. Take us through them here if you could at your leisure of course.

PRESTON: Sure, sure. Of course.

Well, let's look at Florida of course because that is where John McCain had made those comments to that radio reporter. Right now, what the CNN/"TIME"/Opinion Research Corporation poll shows, Rick, is that it is 48/48. It is all tied up.

I can tell you that both campaigns are working very hard in this state. In fact, in the last two weeks alone, Barack Obama has spent about $1.9 million on television advertising. At the same time, John McCain has spent about $1.8 million, so they are pouring a lot of money in.

And, then as we move northwards up to Indiana, you know, good poll for John McCain, at least from what we can see from our numbers right now. John McCain has spent no money, Rick, in this state, but, yet, according to our poll, he has a six-point lead. There are some other polls that will show something a little bit different. Barack Obama is fighting for the state.

And, in fact, when he talks about a 50-state strategy, he is talking about Indiana. I expect that he will keep on trying to fight in there. The city of Gary is right on the Illinois border. He is hoping to get a lot of votes out of that city. But then again, as we keep moving on throughout the country, let's move over to North Carolina.

You know, this is a state now that Barack Obama has talked a lot about as a state that he could pick off. This is a state that George Bush won in 2000 and 2004. Now, our poll shows that it is about even right now. One point separates them, but we are looking at a CNN poll of polls as well and it shows that John McCain has a 10-point lead.

I will tell you, whenever we see discrepancies like this, CNN likes to put the polls together just to make sure that we are all accurate, so we are going to keep a close eye on North Carolina, but then again, as we're moving west now to Ohio, which is perhaps the battleground state so-to-speak in middle America, we are showing that the race is all but tied up there. Barack Obama has a two-point lead.

Just to show you how much they are fighting it up in this state, John McCain has spent $1.4 million on TV ads in two weeks alone, Rick. At the same time, Barack Obama has spent $1.2 million. And of course everyday as we talked about where the candidates on, it is either Barack Obama, John McCain, Joe Biden, or Sarah Palin will be camped out in Ohio.

And as we keep on moving throughout the Midwest, we close it down into Wisconsin. Right now, John Kerry won it in '04. Gore won it in 2000. Barack Obama has a three-point lead, but John McCain is spending a lot of time and a lot of money on this state.

SANCHEZ: Yes. We are going to have to see how this financial situation affects Barack Obama. Most people are saying it is one he should be able to hit out of the park, but it is not done yet as you see by Mark Preston's analysis there.

Thanks so much, Mark. We appreciate it.

PRESTON: Thanks, Rick.

SANCHEZ: Coming up, incredible images from a prison in Mexico where inmates for a while were literally running the place.

Also, if John McCain were president, there is one person he would probably fire today. Who is that? We will tell you.

(COMMERCIAL BREAK)

SANCHEZ: Yes, as you know we try to continue an interactive conversation with you as we do this newscast everyday at 3:00 Eastern Time. About the John McCain interview, and what he was trying to say, we received several responses from you. And let's go to the "Twitter Board" if we can.

Maryland said: "What he seemed to be doing was trying to talk about his great friendship with Mexico to influence potential voters in the U.S."

And then, this one, Basykes, says: "John McCain knows that Spain is not in Latin America, right?"

All right. Let's move on. A prison in Mexico is melting down again. I want you to watch, and listen, to this videotape.

(BEGIN VIDEO CLIP)

(GUNSHOTS, CROWD SHOUTING)

(END VIDEO CLIP)

SANCHEZ: Yes, those are gunshots. Guards in Tijuana are struggling right now to get the rioting prisoners under control. That was yesterday. Here are some of the latest images. We are told that the guards are again in control of the prison after the second straight day of clashes behind those walls. At least 19 prisoners are dead. Let's bring in Harris Whitbeck, now. He's who is the Mexican City bureau chief.

Harris, what is going on there?

HARRIS WHITBECK, CNN BUREAU CHIEF, MEXICO CITY: Well, Rick, at this point, authorities in Tijuana say they have retaken control of the Le Mesa Prison, which is right across the border not far from San Diego, California. As you said 19 prisoners died, another 45 were injured and more than 200 were moved to other prisons in Baja, California in a attempt to quote, "depressurize" the situation there.

Authorities in Tijuana I spoke with this morning said that they acknowledge that the prison is grossly overcrowded and has a population of 8,000 people. And they say that the latest riot was started by rival drug gangs that were vying for control of the drug trade inside the prison. Not only was there involved in the drug trading inside the prison, but apparently, according to state officials, some prison officials and guards were involved in instigating that riot and that they are now in custody - Rick.

SANCHEZ: That's amazing. Well, I'll tell you, we have been watching these pictures.

Look at that! Look at that! We have been watching these throughout the course of the day. Unbelievable. And the gunfire in and of itself! I mean it makes you wonder, how did they get the guns? Where did they get the guns? How were they able to do this? We will continue to keep on top of this. Harris Whitbeck, reporting for us there, out or Tijuana, Mexico.

We brought you the story of the deadly train collision in California last week, but today there are some new 911 tapes that have been released from the accident. We are going to let you hear those for yourself when we come back.

(COMMERCIAL BREAK)

SANCHEZ: All right. Here we go. Let's look at what the market is doing today. Apparently up, certainly compared to yesterday and may get back some of the stuff it lost yesterday. Susan Lisovicz is standing by.

And leave me some room, Susan, to ask you about this Andrew Cuomo thing.

SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: OK. We have plenty of other stuff to talk about.

First of all, what traders are calling this a 1-2-3 punch -- amounting to turn into, translating into an explosive rally. First, there were reports that markets in the United Kingdom were restricting short selling of financial shares for the rest of the year. Short sellers are the opposite of you and me, Rick. They are not saving for retirement, or for the kids' tuition, or for your dream home -- none of that. These are people just trying to make a quick profit. And the UK severely restricting that for the rest of the year. I am not sure if that has ever happened before.

Then coming into the U.S., CalPERS, the largest pension fund, saying it is no longer lending out shares of Goldman Sachs and Morgan Stanley, which have totally been under pressure this week - so that there would be availability for short sellers for them. And, finally, the biggest one of all, a report of Secretary Paulison, the Treasury secretary, is working on a plan to take back bad debt from institutions in order to prevent a worsening global crisis.

The comparisons here - it's unconfirmed - to what happened in the aftermath of the S&L crisis, the resolution-trust type of solution, Rick.

SANCHEZ: What kind of reaction have you gotten? I mean, Andrew Cuomo came on with me at the beginning of this newscast and essentially said he is going after people who try and intentionally deflate stocks so they can try and do a short on them. Did he -- did this send shock waves? Did people get worried, are they naming names? What is the going on with this?

LISOVICZ: Well, you know, I mean, this is all part of this kind of effort to stop this. But I mean, in fact, where CalPERS, the largest pension fund said we're not going to loan out these shares of these financial institutions that are so - that are under such pressure. And the UK market saying, we're not going to allow any short selling in financial stocks for the rest of the year. It is something that is the here and now, and that contributed to the rally that we are seeing. And it is an extraordinary rally, but these are extraordinary days, Rick.

SANCHEZ: They certainly are. Susan Lisovicz, thank you so much.

We are going to take a look at this man. All right, let's put him up. I want to show you who I'm talking about. Huh, that's a big head shot. He is the man in the hot seat. President Bush's man in charge of dealing with the mess on Wall Street. Is he the one who should be blamed for all of this? We will tell you what John McCain says, and it is stern by the way. This is in Iowa today, when McCain lowered the boom on Chairman Christopher Cox.

(BEGIN VIDEO CLIP)

JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: The chairman of the SEC serves at the appointment of the president and in my view has betrayed the public trust. If I were president today, I would fire him.

(END VIDEO CLIP)

SANCHEZ: Coming up, not the first time that the family of Casey Anthony has clashed with protesters outside their home. Oh, my goodness, it is happening again. The latest on this mystery, this summer mystery that has captivated the country.

Next though, we head to California where our own Thelma Gutierrez takes us on a train ride. Sounds like fun, but this one is deadly serious business. We will tell you what happened there. We will be right back.

(COMMERCIAL BREAK)

SANCHEZ: Welcome back, I'm Rick Sanchez. There is a lot of comment that I am seeing over here on the "Twitter Board" on the John McCain interview we brought you at the top of the show.

Before we do that, for days, we have been talking about that head-on train collision in Los Angeles. For the first time we hear the tape with the call about the accident. This is the 911 call. Somebody made it right after the collision took place; 25 people killed and more than 130 others injured. Listen to how calm, though, and how collected this shocked witness is while describing what is going on in front of them.

(BEGIN VIDEOTAPE)

911 OPERATOR: Somebody is unconscious?

UNIDENTIFIED MALE: I cannot tell you and I cannot tell you anybody is unconscious right here. I do see one who might be.

911 OPERATOR: OK.

UNIDENTIFIED MALE: I see one who might be.

911 OPERATOR: Try not to move anybody around unless it is absolutely necessary.

UNIDENTIFIED MALE: Right, right. We are telling them to stay still.

911 OPERATOR: OK, if there is anybody bleeding with a clean cloth or a towel --

UNIDENTIFIED MALE: Yes there are several people bleeding.

911 OPERATOR: Have a clean cloth or a towel and apply firm pressure, directly on the line - I mean, on the wounds until we get there.

UNIDENTIFIED MALE: OK.

(END VIDEOTAPE) SANCHEZ: Amazing scene. The big question, of course, is what really happened? A lot of talk about what the Metrolink train engineer was doing. Federal investigators say that he sent text messages while he was on the job. Live now to Sacramento, California. CNN's Thelma Gutierrez is following the story. She is at a major rail (ph) training facility.

Go ahead, Thelma, take it away. A lot of people are curious to know what happened here.

THELMA GUTIERREZ, CNN CORRESPONDENT: Well, Rick, you know, there is a temporary ban on cell phone use in California, on the railroad, all a result of this very terrible accident.

The locomotive where I'm standing right now is used to train engineers and conductors. It is part of the Modoc Training Academy. And this is the only nonprofit hands-on school for engineers and conductors in the country. Behind the controls here, is Dave Rangel. Dave, is a former conductor and instructor and he runs the school.

Now, Dave, you said that this was a very terrible accident that deeply affected you as someone who has been on the railroad all of his life?

DAVE RANGEL, MODOC TRAIN Yes, it is totally unnecessary and that is what is disturbing. It is 100 percent preventable. Now, the reason I say that is that there is technology today that could have prevented that collision. I mean by having another person in the cab of that locomotive to make sure that that would not happen.

GUTIERREZ: Now you are talking about a second set of eyes, another engineer, but everybody is talking right now about this positive train control system that would cost billions of dollars and take time to implement. You're saying that is not the answer?

RANGEL: We don't need to spend that type of money. It is very simple to put another person in the cab of the locomotive. The locomotives are configured for that. Right now, we could do it this afternoon, and have the needed protection that is necessary to protect the traveling public.

GUTIERREZ: On top of that you say that the trains are equipped with safety devices. There is an alerter system, and I have heard it go off every few seconds. Tell me about it.

RANGEL: The alerter is an automatic device that cannot be overridden by the locomotive engineer. It requires me to -- when the lights start flashing and the horn starts beeping, I have to press a button here on the locomotive control stand that will reset the device. If I do not reset the alerter, it will automatically stop the train. It is designed that way so that in case the engineer was incapacitated, if he passed out, or for whatever reason, the train would come to a stop.

GUTIERREZ: Right. There goes to alert right now. Rick, I can tell you that we have seen it go on every 20 seconds, and this would stop the train if that engineer doesn't interface with the locomotive. And Dave says that is probably very good thing, because if the engineer becomes incapacitated for whatever reason or distracted, then the train would stop if he is not hitting that button.

Now, this academy has graduated 500 engineers and conductors. And Dave says they are operating safely across railroads across the country. Back to you, Rick.

SANCHEZ: That is great stuff, Thelma. It really gives us a sense of what actually goes on. The thing that you come away with, which is frustrating, is how easy this would have been to avoid, but sometimes it is all about human error. Thank you so much, Thelma, for catching us up on that. >

Take a look at this now. It looks like the police officer in this video is choking this guy, right? Well, we get into the details of these pictures and what really was he trying to do? And was he in the right? Important question as you watch this. We will be right back with this .

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BEGIN VIDEOTAPE)

JOSH LEVS, CNN CORRESPONDENT (voice over): Here is a hard pill to swallow. According to the World Health Organization, 1 to 2 percent of all prescription drugs in the U.S. are counterfeit.

DEAN HART, EXEC. V.P. NANO GUARDIAN: In 2006, there were 3.4 billion prescriptions written. If you take 1 percent of that, that is 34 million potential prescriptions that were filled with counterfeit prescriptions. That's a big problem.

UNIDENTIFIED MALE: A problem that researchers at Northeastern University have been working to solve. They developed a unique way to encode individual pills and created the company Nano Guardian to do just that. Even though you cannot see it with a naked eye every one of these pills is embedded with layers of information.

HART: And unlimited amount of information, including place of distribution, place of manufacturing, date of manufacturing, location, expiration dates, strength.

UNIDENTIFIED MALE: The key, he says, is the size.

HART: Three hundred and fifty nano codes can fit into the width of a human hair.

JOSH: Adding nano signatures would cost just under a cent a pill. Difficult to forge, the coding is designed to catch counterfeits before they end up in a customers' medicine cabinet. While drug companies are still considering this technology, Hart anticipates the date when nano coding will be used to separate the real from the fake on any number of items, from medicine to high fashion, to airplane and automobile parts.

Josh Levs -- CNN, Atlanta.

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SANCHEZ: So many comments on the John McCain interview. Let's take one before we move on with this. This is MikeTRose, he says: "It's one thing to be confused the first time he's asked. The problem is, she told him three times and he still didn't get it."

That seems to be the sentiment being shared out there. Let's go to Glenda Umana. She is from CNN Espanola, with more reaction on what some are calling a snub. Others are calling confusion, when it comes to this John McCain interview everyone has been talking about.

Your take, Glenda? What you're hearing in Latin America.

GLENDA UMANA, CNN ESPANOL CORRESPONDENT: Hey, Rick. Como estas? Buenos tardes.

This story's gotten a lot of play in Spain, the newspapers, radio, TV that are closer to the prime minister of Spain, Jose Luis Rodriguez Zapatero, are going with the official line that McCain must have been prudent in not committing.

But the conservative leaning media, which don't like Zapatero, have played it another way. That, McCain didn't know who Zapatero was and that McCain's comments may have been sending a message that the cool U.S.-Spanish relations under Zapatero could well continue.

SANCHEZ: That's interesting. This has gotten so much attention and it was just one little interview being taken so many different ways. Glenda, thanks so much.

UMANA: Bye.

SANCHEZ: Appreciate the information. Let's go to Wolf Blitzer now. He's checking in with us now from Washington. Wolf, what you got?

WOLF BLITZER, CNN CORRESPONDENT: One thing that's coming up, Rick, we're waiting for Barack Obama. He's getting ready to speak in New Mexico. We're going to go there live.

Earlier, John McCain came out swinging on the economy using some very fighting words. He called Biden's tax policy, for example, dumb. And he says if he were president, he would fire the chief of the Securities and Exchange Commission. We'll see what Barack Obama has to say on the sensitive issue coming up.

Also, the billionaire Donald Trump throws his support behind McCain. I'll ask him why. I'll also ask him if he has any advice for us about the ailing economy. >

And both campaigns without with new tough TV ads. McCain says Obama is a big spending liberal. Obama says McCain is anti-immigrant. We're checking the facts for you.

All that, Rick, an exciting THE SITUATION ROOM, coming up at the top of the hour.

SANCHEZ: You bet it will be. Thanks so much, Wolf Blitzer. Meanwhile, we're going to continue to follow some of the information that you're sending. Man, there's a lot of it. Coming up, another ugly scene in the Florida neighborhood where protesters are squaring off with the family of Casey Anthony. Yes, it's happened again.

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(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Come on! Come on!

(CROSS TALK)

UNIDENTIFIED MALE: All right, calm down!

(CROSS TALK)

UNIDENTIFIED MALE: Get your hands off her!

(END VIDEO CLIP)

SANCHEZ: Another day, another fight in front of Caylee Anthony's grandparents' home. This is amazing. This story has so captivated people. People go out of their way to get into these scuffles there. Mike Brooks joining us now. What is going on with this thing? Why it so relentless?

MIKE BROOKS, CNN CORRESPONDENT: You know, Rick, I've got three words for those people out in front of the house, who keep beating on their door. Get a life! What good is it doing for anybody to come up there, yes, OK, you've got your First Amendment right to protest. When you start going up and beating on their garage door, going on to their property, someone needs to get locked up.

SANCHEZ: And it's not them. Maybe her daughter may have done something bad, but it's not them.

BROOKS: Right. And they think, oh, you saying Caylee is still out there either in Texas, Puerto Rico. But - it just disgusts me the way these people are acting, the way they're treating these people.

SANCHEZ: We're going to keep an eye on that. Meanwhile, let's go to another story we're following. This isn't the first incident like this one for this Tennessee policeman. It's a firm grip, you're going to see, he's got on the suspect's throat. And he's not letting go. Is he choking him? Well, apparently there's already some repercussions that have come out of this. Apparently he's trying to get him to spit out a marijuana cigarette. Is that right, Mike?

BROOKS: That's it. He thought he - he went up to the car, a traffic, smelled what he thought was burning marijuana and thought he had some drugs in his mouth. Then he started - he got him out. And it looks like he's handcuffed and he's choking the guy, he says to keep him from overdosing. His story was to keep him from overdosing on possible drugs. Nothing was found inside of his mouth.

SANCHEZ: Had two incidents in the past, on this?

BROOKS: With another police department, in 2003, he had a night stick incident where apparently he got overzealous with a nightstick; and in 2005, it was a DUI that was thrown out because the dash cam didn't match-up with the paperwork.

SANCHEZ: In fairness to him, we hope to get a response from him as to how he's pleading on this and what his response is going to be.

BROOKS: He was fired from the department on Wednesday.

SANCHEZ: Thanks as usual.

BROOKS: Yes.

SANCHEZ: A final check of the market, up, down, looks good today, unlike yesterday. We'll be right back.

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SANCHEZ: Take it over to Susan Lisovicz now, she's going to take us out as we go to the closing bell. But look at this that we just got in from somebody a little while ago. If somebody's got that, let's put that up on the Big Board.

"Cox,", K Michael writes: "Cox, Bernanke, wrong, yes, but also scapegoats."

Interesting that somebody would have that kind of take on the situation because most people are nonetheless angry.

Susan Lisovicz, how are they treating Mr. Bernanke and Mr. Cox there on Wall Street today?

LISOVICZ: Well actually pretty favorably. Because there are reports that the Treasury secretary's working on setting up a government facility to take on bad debt in order to prevent a worsening of the global credit crisis.

Unconfirmed reports, CNBC is out there with this report. But CNBC is saying it would be something similar to the Resolution Trust Corporation, which was set up after the S&L crisis, which took a whole lot of banks down as a result of that will particular crisis. And take a look at the Big Board, Rick.

I mean, we're coming off of two of the worst selloffs of the year and we're going to end with one of the best rallies of the year.

Just a profound change in sentiment today - Rick.

SANCHEZ: And we close as we hear the bell up 382. I think is what it's going to settle on. Thanks so much for that Susan Lisovicz.

Let's go now to Wolf Blitzer. He's in THE SITUATION ROOM -- Wolf.