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Taking Steps to Curb Financial Crisis; Foreign Central Banks Intervening Also
Aired October 08, 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: Meanwhile, look at this, a parked 18- wheeler rolls down a hill and right into a house. It happened in Alabama. A mother and her son were home at the time, but they were not hurt.
(BEGIN VIDEO CLIP)
INEZ HILL, HOMEOWNER: I'm just shaking all over. I couldn't believe it.
I just thank god he took care of me. Because I was really in that room, and I had just left out of there. So he took me out just in time.
(END VIDEO CLIP)
COLLINS: Yes, that's for sure. The driver of the semi said the accident happened when he pulled over to check his map and his brakes gave way.
So what is going on with the stock market? The Fed and other central banks cut rates. World markets rise, then fall. Our money team explains why this really shouldn't be the only thing that you're watching.
And candidates back on the trail today. Did either get a push from last night's debate. You tell us. I-reports and overnight polls this Wednesday, October 8th. I'm Heidi Collins, you're in the CNN NEWSROOM.
What a way to wake up. Fears of a global recession sweep around the world. And the U.S. and other countries take dramatic action. The move is stunning. Worldwide cuts in interest rates from Washington to Beijing. How is Wall Street reacting? That's the question. There's a look at the big board there for you right there. We're up to the positive territory 126 points on the Dow Jones industrial averages.
We want to quickly bring in our money team here on CNN. Susan Lisovicz is at the New York Stock Exchange. And in New York, senior business correspondent Ali Velshi along with our Christine Romans. Christine, let's start with you. I mean, how wild is this that there has actually been this global bank rate cut?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It's wild. I mean, we've seen in the past three hours now, you know, enough business news, frankly, for about 10years. Let's start with huge losses overseas, and then the British authorities say they're going to step in and have a bailout of their banks. And the Dow futures were down sharply. And then at 7:00 a.m., the Fed came and said it would have a global coordinated rate cut citing recent intensification of the financial crisis.
Then you have people saying look the Fed is going to do everything it can to try to fight this, by cutting rates to 1.5 percent amid all the other things that they've done. The Fed and global central bankers were on top of it. And indeed, why does a Fed rate cut matter? Well, it makes money cheaper to borrow, it allows businesses to expand, to hire more people, save on those lower rates, consumers are able to spend more. That's all you know in a perfect world.
COLLINS: Right.
ROMANS: What we hope those lower rates are going to mean. And then this morning, just a lot of talk about confidence in this market. Will it work? Now there are three things to talk about here. The stock market, talk about the economy as a whole and we'll talk about the credit markets and how they all relate to each other. Credit markets are frozen. Stock markets wildly unpredictable, which had a horrible, horrible five days - actually a horrible year. Let's be honest. And the economy we know is ailing. So those are the things that people are having to deal with this morning.
COLLINS: All right. Ali, I want to ask you, you know, we talk about this Fed rate cut now. What does this mean for people at home? What will be easier for them on a day-to-day basis when we're talking about going down by a half a point?
ALI VELSHI, CNN, SENIOR BUSINESS CORRESPONDENT: Well, I don't know it makes that much of a difference. It means the prime rate which is five percent is now 4.5 percent. Now, many people have loans that are tied to prime, many consumer loans tied to prime. But in this environment the reason people are not taking more credit and not spending is two fold, one is -
SUSAN LISOVICZ, CNN CORRESPONDENT: You have to tell me when I'm going to be on, guys.
COLLINS: Not quite yet. Susan, we get to you in a second.
Ali, go ahead.
VELSHI: Susan wants to get in here. I can hear it. I don't know that you're all go out and spend money because now your interest rate is down by half a percent point. The other problem is a lot of people are trying to get money have not been able to get money. So the credit freeze is still a bigger problem than the credit rate. There aren't a lot of people who thought that you know 4.5 percent or 5 percent prime rate was excessively high.
I should remind you that the rate for a 30-year fixed mortgage is still about six percent. If you have good credit that's not very high. The other piece of news that we've had this morning is that pending home sales, which means homes that are under contract to be sold, we get those numbers on a little bit of a delay. We've got them for August. There's quite a substantial jump, more than 7.3, or 7.4 percent from July. That means people are getting into the housing market. Obviously those are people with good credit who can get mortgages but home prices seem to be low enough now that it's stimulating people to buy.
That's a piece of good news. The other bad news, we had, Heidi, is that we've had reports from America's retailers about their sales in September. Kohl's is down 5.5 percent, Saks is down 10.9 percent, JC Penney down 12.4 percent. In fact, two of the only gains that we have are Wal-Mart and Costco which stands for reason when you're in a tough economy, people sort of gravitate with those places with lower prices. So a whole lot of mixed bag news.
I wouldn't tie that Dow gain necessarily to the Fed cut. We don't entirely know. There's so much news out there, unclear exactly what is driving these markets. But Susan, who is apparently clamoring to get into on this conversation probably has more.
COLLINS: OK. Susan, your turn?
LISOVICZ: I was not. Actually I wasn't sure I was on. I was so deep in this information.
VELSHI: You were. And that comment you made about my hair style was heard of all of America.
ROMANS: She's elbowing her way onto the floor. She's elbowing here way to the TV, right?
LISOVICZ: All I can say is I have whiplash a couple of times, and we're only 35 minutes into trading today. and I think that's one of the things that's going on here is we've never seen these kind of moves before. It's an awful lot to digest. The market is gyrating wildly. We have gotten some good information that Ali just said about the pending home sales. After all, if the economy is going to get back on track, we need some improvement in the housing sectors. And unexpected surge of pending home sales. That's a favorable sign.
We also have some bad news as Ali just mentioned, retail sales, consumer spending obviously key to the economy as well. And the whole psychology of the market right now remains pretty much mired in fear. Right now what we're seeing with this rally is something that would be predicted with the Fed taking such an aggressive stand, an emergency stand. One in coordination with other Central Banks around the world. That's really what a lot of traders had been clamoring for in recent days. They got it. Futures market opened lower. There's still a lot of emotion clearly in the marketplace. And it's reflected by the volatility of what we're seeing.
COLLINS: Absolutely. All over the map, certainly. All right. To the three of you. Susan, Christine and Ali, thanks so much, guys. We'll check back later on. Because obviously we're going to be talking about this for several days to come certainly. The worldwide move to cut interest rates shows how frightening the international crisis has actually become. Here is an example. Hours before the announcement, look at this. Japan's Nikkei average closed down nearly 9.5 percent. That in fact the biggest one day drop in 21 years. Russia's major market lost more than 10 percent. Trading there is suspended until at least Friday. Markets in England, France and Germany have also been deep in the red. But news of the cut sent them inching back toward positive territory.
There was another historic move last night. The British government has followed Washington's lead now and launched its own bailout plan. The emergency rescue plan could pump hundreds of millions of dollars into the nation's main banks. The goal, pumping in fresh money in order to prevent a collapse of the British financial system.
(BEGIN VIDEO CLIP)
ALISTAIR DARLING, BRITISH FINANCE MINISTER: I think it's pretty important, especially when you see right across the world now there's so much uncertainty, so much turbulence. Look what's happening with the share markets at the moment, that we and every other government in the world send out a clear message that we will stabilize the position. We'll help banks restructure so they can rebuild their strength and also do everything it can, whatever it takes to ensure we get that stability and we try and steer our way through a pretty, pretty turbulent period.
(END VIDEO CLIP)
COLLINS: One international banking giant, HSBC says it welcomes the British offer of help but says it has no need to tap into the fund.
Tough times, certainly tough questions, too. What should you do in this scary economy? Well, consumer guru Clark Howard is going to be joining us with some advice, coming up in just a u few minutes from now.
After the handshake, quite a bit of verbal sparring in their second face-off. Senators John McCain and Barack Obama clash over the financial crisis, foreign policy and health care. But voters tell us in fact they don't think either candidate really scored a knockout. A CNN opinion research corporation poll found 54 percent think Obama did the better job. 30 percent say McCain.
In between the jabs, the two presidential hopefuls laid out their visions and front and center for it all CNN's Jessica Yellin. Jessica, good morning to you once again. Any real standouts here?
JESSICA YELLIN, CNN CORRESPONDENT: Well, there were a few moments, Heidi, there were some sharp elbows and a lot of tense moments as the two really jousted over economic policy. The one over-arching theme last night was that the next president is going to have an awful lot to get his hands around. And with no knockout punch by John McCain, the general sense is that Obama comes away with an advantage because it was really pressure on McCain to make some sort of trajectory- changing move last night. It didn't happen. But they did focus very intently on these issues. How is the president going to shape this budget? Will he make major cuts? How will he deal with issues like Medicare, Medicaid, health care? Here is what the candidates had to say.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I'm going to spend some money on the key issues that we got to work on. You may have seen your health care premiums go up. We've got to reform health care to help you and your budget. We are going to have to deal with energy because we can't keep on borrowing from the Chinese and sending money to Saudi Arabia. We are mortgaging our children's future, we got to have a different energy plan. We've got to invest in college affordability. So we're going to have to make some investments, but we've also got to make spending cuts. And what I propose, you'll hear Senator McCain say he's proposing a whole bunch of new spending. But actually I'm cutting more than I'm spending.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I think you can work on all three at once, Tom. I think it's very important that we reform our entitlement programs. My friends, we are not going to be able to provide the same benefit for present-day workers that we are going - that present-day retirees have today. We're going to have to sit down across the table, Republican and Democrat, as he did in 1983 between Ronald Reagan and Tip O'Neill. I know how to do that. I have a clear record of reaching across the aisle.
(END VIDEO CLIP)
YELLIN: Now, campaign aides for both candidates told me last night that they were on each side pleased, Heidi, that they felt their guy did a good job of articulating what clearly are some different philosophical approaches to what the federal government should do and how they would become president or how they would be president if they were to win.
Now a lot more of this is going to go on in the campaign trail. Headed to the battleground states next where Barack Obama feels like he's pulling ahead in some of those polls. And John McCain says huh- uh, it's not done yet. There's plenty of time to change this game. Heidi.
COLLINS: All right. CNN's Jessica Yellin for us this morning. Thank you, Jessica.
So that's the question. Did the debate sway any voters sitting on the fence? We're going to show you how it's playing all across America.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: Senator McCain and I actually agree on something. He said a while back that the big problem with energy is that for 30 years politician in Washington haven't done anything. What Senator McCain doesn't mention is he's been there 26 of them. And during that time he voted 23 times against alternative fuels, 23 times. So it's easy to talk about this stuff during a campaign, but it's important for us to understand that it requires a sustained effort from the next president.
MCCAIN: There's an energy bill on the floor of the senate loaded down with goodies, billions for the oil companies. And it was sponsored by Bush and Cheney. Do you know who voted for it? Might never know. That one. You know who voted against it? Me. I have fought time after time against these pork barrel - these bills that come to the floor and they have all kinds of goodies and all kinds of things in them for everybody and they buy off the votes. I vote against them, my friends. I vote against them.
(END VIDEO CLIP)
COLLINS: Presidential hopefuls have less than four weeks now to convince voters to see things their way. Did they manage to change any minds last night? Our political editor, Mark Preston is joining us now live from Nashville to answer that question. Mark, nice to have you. What do you think? What are the polls showing us on that?
MARK PRESTON, CNN CORRESPONDENT: I tell you what, Heidi, John McCain needed a game-changer last night. Things have been trending towards Barack Obama. He didn't get that in last night's debate. Let's take a look at a poll that CNN and opinion research corporation released right after the debate and we'll see some numbers here. Who did the best job? Barack Obama 54, John McCain 30. A 24-point advantage right there for Barack Obama. And when we drill down into those numbers, Heidi, it shows that Barack Obama not only won women, but he also won men which is a very, very important constituency right now for Barack Obama, seeing that many people think that John McCain has a lock on that.
As we move along, who seemed to be the strongest leader in the debate? Barack Obama, again, by double digits, 54 percent of those who watched the debate said that Barack Obama was the strongest leader. Only 43 percent for John McCain. And really interesting, there was a lot of talk about the tone, compassion, they had to show empathy for people's problems given the economy. When asked who would care more about the problems of the audience numbers, Barack Obama 47 percent, John McCain only 33 percent, not a very good night for John McCain when it comes to the audience members who we polled.
COLLINS: So what do the audience members say about the compelling factor? Do we have a question on that? It seems like listening to a lot of the analysts they said, you know, this was kind of ho-hum.
PRESTON: Well, I think you're absolutely right about that. There was certainly nothing dynamic about last night's debate. Both candidates came into it and guess what they wanted to answer the questions the way they wanted to answer it. We certainly have seen that from the analysis, from just a couple hours afterwards. And really what it comes down to right now is they have 27 days for John McCain. He needs to turn it around. And for Barack Obama he needs to hold this round.
COLLINS: Hey, Mark, do you think it's clear to the people at home the differences between these two candidates by now at this point?
PRESTON: Yes, there clearly has been differences between John McCain and Barack Obama. We saw that on the stage last night, whether it be taxes, whether it be foreign policy, health care. Clearly they have differences. And right now you know John McCain really has a problem with the fact that he's being tied to President Bush. I'll tell you CNN released a poll just a couple days ago, President Bush has a 24 percent approval rating right now. That is what John McCain is contending with as well as this poor economic mess that we're in.
COLLINS: All right. We are watching all of that closely. We'll be watching the next debate as well. We won't make you stand out in the rain any more, any longer either. Mark Preston, thanks, appreciate it.
Well, China is a world away from last night's U.S. presidential debate. But the Asian nation was on the mind of both candidates. CNN's Emily Chang reports from Beijing.
(BEGIN VIDEOTAPE)
EMILY CHANG, CNN CORRESPONDENT: I'm Emily Chang in Beijing. This latest U.S. presidential debate has made it clear that China remains a big issue in the U.S. election, and especially in the midst of this global financial crisis. Both candidates made specific references to China. First, Senator John McCain when addressing problems in the American economy. He pointed out that the U.S. has $10 trillion in debt, more than $500 billion of it owed to China. Then Senator Barack Obama said, "we cannot keep borrowing from the Chinese." The U.S. is, of course, the world's largest debtor. China is the world's largest creditor.
China has pledged to cooperate with the U.S. to help restore financial stability. But it's still unclear how that would work, especially amid recent tensions in U.S.-China relations because of planned U.S. arm sales to Taiwan. There's been no official response to the debate from the Chinese government. But it's safe to say that Beijing will be monitoring how the U.S. candidates position themselves on China issues and how that could shape future U.S. foreign policy.
(END VIDEOTAPE)
COLLINS: We are keeping up with world reaction to the U.S. presidential election and of course a growing global financial crisis. We'll stay on top of all of it for you. Meanwhile, he helps people every day with their money problems. And we're glad he's here today. Clark Howard, consumer's best friend, up next.
(COMMERCIAL BREAK)
COLLINS: OK. We're going to look at it again everybody, Dow Jones industrial average now down to the negative by double digits, just under 60 points or so. and really if you've been able to watch since the market has been open for a little less than an hour now, it has been up to the positive by triple digits, to the negative by triple digits. Really kind of all over the map today. As you know there really is no way to sugarcoat it. The nation's struggling economy has many of us down right scared, but a little bit of knowledge can make a world of difference. So what can we do now to protect ourselves? That seems to be the question. So joining us with some answers, consumer advocate Clark Howard. He's hosting a nationally syndicated radio show now as we all know and also it appears in print on TV right here in Atlanta.
So Clark, --
CLARK HOWARD, SYNDICATED RADIO HOST: Yes.
COLLINS: We want to ask you a bunch of questions today.
HOWARD: Sure.
COLLINS: Most specifically, we want to make this consumer friendly -
HOWARD: Right.
COLLINS: Because people hear all this stuff about Fed rate cuts and the world markets -
HOWARD: Pretty scary stuff, isn't it?
COLLINS: Yes. Especially when you talk about globally now.
HOWARD: Right.
COLLINS: What do you do - and let's talk about age groups.
HOWARD: Sure.
COLLINS: People who are in their 20s, 30s and 40s. It's important to break it down -
HOWARD: Sure.
COLLINS: By age because the plan should be different, right?
HOWARD: Absolutely. People 20 to 49 years old have the greatest opportunity they may have in their life times.
COLLINS: Wow. Did you hear that? That is some -
HOWARD: No question because you're buying everything as if it's distressed merchandise on the clearance rack.
COLLINS: Damaged goods.
HOWARD: Yes. And you know it's like past season goods. You buy something 70 percent off and then later you go back in the store and it's 80 percent off. And you think why did I buy it at 70? Don't worry about that.
COLLINS: That's getting a little greedy. HOWARD: Right. You buy now, pay period by pay period, paycheck by paycheck, in your 401(k), 20s through 40s, and you're going to make a lot more money overtime because you'll end up with more shares as capitalism recovers.
COLLINS: OK. Well, that makes perfect good sense to me. So there are really some good deals out there that we'll talk about in a minute.
HOWARD: Fantastic.
COLLINS: OK. What about if you're a little older, in your 50s or 60s.
HOWARD: If you have a 100 percent of your money in stocks, you're not happy.
COLLINS: Does anybody have 100 percent of their money in stocks?
HOWARD: Yes.
COLLINS: Really.
HOWARD: But if somebody has a balanced portfolio, where you have a significant chunk of your change in bonds and cash equivalents like CDs, in your 50s and 60s, you can rest easy, too. Because markets do recover.
COLLINS: Right. When they go down double digits, don't they -
HOWARD: That's OK.
COLLINS: Is it historically that they go up double digits in the next year?
HOWARD: Well, not in the next year. We're in this for a while. You know we really had a full made-in-america mess off of our economy. It's going to take a while for us to dig out of it. We're having to learn all kinds of terminology that none of us ever cared about or wanted to know.
COLLINS: I think they're actually making up words now.
HOWARD: Aren't they? Aren't they? So we will recover from this. But it's not going to be tomorrow or next year. But over time, we'll recover and that's why in your 50s and 60s, you don't head for the hills. You have to keep a certain amount of money invested just as the younger folks will benefit from the return big time, you'll benefit quite a bit if you hang there in your 50s and 60s.
COLLINS: OK. It's kind of gut-wrenching though for a lot of people.
HOWARD: Oh, yes. Money is never made by the faint of heart. You make money by keeping your cool and not getting psyched out by what you see from us on TV or what you see on the internet. You've got to stay calm. COLLINS: Well, that's right. It's very important. And if you're in your 70s. You're likely in retirement.
HOWARD: Right. You want to have a substantial amount of your money in bonds or cash equivalents anyway, maybe 65, 70 percent. But you still need exposure to stocks, maybe 30, 35 percent of your money -
COLLINS: Really?
HOWARD: Right. Because inflation is going the eat you up overtime. If somebody is in their 70s, they may live into their 90s, a dollar is going to be worth less than half of what it is today two decades from now. That's why even somebody older has to have chips in the stock game.
COLLINS: OK. All right. Let me ask you this.
HOWARD: Sure.
COLLINS: What about some of these opportunities? Because I have heard of a few people who have gone out and said to bite the bullet and buy a new car. They got a great deal on the car. Somebody else who maybe is a first-time home buyer, doesn't have a property to sell, getting a great deal on a house.
HOWARD: Sure.
COLLINS: In furniture. Sure, these are all consumer goods.
HOWARD: There's even a better deal. The entrepreneur. If you are a would be entrepreneur, there is never a better time to start your business than right now.
COLLINS: If you have the capital because you can't really borrow, right?
HOWARD: Somebody starting a business can never borrow money anyway except from that uncle of yours, or your parents, or your friends. Really, when somebody starts a business, it's always family money. So you don't have to worry about the fact that money is not available to borrow because they couldn't anyway before. But the opportunity is so great because anything you want to do now is cheaper. Labor is widely available because of lay-offs, very top quality people available. You have office space, commercial space, rental space, shopping centers that are all begging for tenants. It's much cheaper to start a business right now. You know in the seeds of this destruction is where you can start something phenomenal for yourself.
COLLINS: All right. I'm ready to go into business with you, Clark Howard.
HOWARD: Let's do it.
COLLINS: OK.
HOWARD: We'll start a new television network. What do you think? No?
COLLINS: I don't think so.
HOWARD: New airline?
COLLINS: There you go.
HOWARD: OK.
COLLINS: One of those. Clark Howard, we sure do appreciate it. Some really great tips today. Thank you so much.
Back to the battleground, John McCain hits must-win states after the debate. We'll have a live report for you in just a moment.
(COMMERCIAL BREAK)
HEIDI COLLINS, CNN ANCHOR, NEWSROOM: Another volatile day both on Wall Street and around the world, for that matter, as many overseas markets reeled from breathtaking losses overnight. The Federal Reserve took emergency action and cut interest rates. Other countries did the same thing. How is Wall Street reacting? Here is a live look at the Big Board, incredibly different from just a few moments ago. That gives you an indication of how volatile it is really. Down 27 points right now, for the Dow Jones industrial averages.
This economic mess has quite a few of you, including a lot o our I- Reporters pinching pennies and sharing stories. Let's hear, with more on that is Josh Levs.
Josh, good morning to you. We love to hear what people are doing. And how they're handling all of this
JOSH LEVS, CNN CORRESPONDENT: Yes, we do. We never loose sight here at CNN when we're talking about issue number one. And billions and billions, it boils down to individual, individual families. One story that really struck us was right here at CNN.com, with this photo from an I-Reporter, Kathleen Fallon, who lives in Santa Fe, New Mexico. Who is a single mom. And I think she's with us right now.
Kathleen, do I have you here?
KATHLEEN FALLON, CNN I-REPORTER: Yes, I am.
LEVS: Thanks so much for joining us.
The reason we were so struck -- let's go to a prettier version of the photo. We have that in there, so control room can show everyone. This is you and your beautiful family.
The reason we were so struck by your story, you started telling us some of the things you've had to give up in this economy. Let me show everyone on this next screen. We have the list that you provided to us. You said you're giving up cable and land line phones, texting and allowances and music downloading. How is that going? How is life changing for you? FALLON: It's actually been a gift in some ways.
LEVS: Really, how?
FALLON: Well, we're having more conversation. We're finding things to do as a family that are free. We play basketball, we play tennis. Homework is getting done better, too.
LEVS: It's great to hear the positive side. Let's look to the next screen, too. More of what you're giving up. I don't said you're having to give up the quality of the food, no more eating out, no more movies. You've also given up renter's insurance and credit cards. What's the toughest thing for you in this economy? Of this whole list you are showing us and what you have given up, what was toughest for you?
FALLON: Budgeting food, budgeting food is definitely the most difficult.
LEVS: So, how do you do it?
FALLON: Well, let's see, I go online and go to the two major grocery stores in our area and I check out what's on sale. I buy produce and fruit that's on sale. And then I plan menus a week ahead. The kids and I get together and now we talk about what we're going to have.
LEVS: You plan every meal a week ahead now?
FALLON: Yes.
LEVS: Let me ask you something. We have video from the debate last night. One thing I would love to hear from you is whether you're hearing from either person who might become - who will become the next U.S. president, are you hearing anything that gives you a sense of what might happen in the future? Of what needs to be done and how their economic plans will change as a result of what the country is going through right now?
FALLON: Well, I like what I hear from one candidate more than another. What I hear there, from Barack Obama, is that he understands it's about, to a large extent, people like myself and my family. And that, yeah, we may have to give things up, but I get a sense that we're kind of all in this together. I that - I have faith, I have faith in him anyway.
LEVS: Yes, so you have chosen. You told me that you're volunteering for the Obama campaign. So, you certainly have a position in this race. Have you heard enough from him about how his plans, that have existed for months, need to change now as a result of that? Do you have enough faith that you think we'll figure it out if he wins?
FALLON: Yeah. He talked about what spending cuts he would have to make to implement the tax cut for the middle class and how -- he talked, in fact, last night about health care. That's something I'm very concerned about, keeping the health care for myself is and my children. LEVS: So he's hitting the key points for you. I want to close with this graphic from you, because it is a beautiful quote you gave us. You said, and we have it here, you said, a lot of the time I feel like a failure for my inability to give my children all the things I'd like, but we all love each other, and I guess love is all you need.
I'll tell you, based on the way you're talking to me today, Kathleen, it certainly sounds like you're living by that right now, even in this economy. Thank you so much for joining us today.
FALLON: You're welcome. Thank you, have a great day.
LEVS: We're going to keep following your story. And you can send us your story, right here. Look at all these stories we're getting, more and more people telling us what they're giving up at Ireport.com. We'd love to hear your story. And, of course, Heidi we're going to be bringing a bunch of them to you right here on dot.com - right there on the TV side. There you go.
COLLINS: Whatever it is.
LEVS: Whatever it is.
COLLINS: All right, Josh Levs, thank you. Appreciate that. Getting an idea of what everybody is doing dealing with the economy right now.
Well, that slumping economy is just the latest setback for airlines that were already contending with high fuel prices. As the airlines cut back, some travelers and local officials worry that flights to and from smaller regional airports will soon be grounded. CNNMoney.com Poppy Harlow has our "Energy Fix".
Good morning, Poppy.
POPPY HARLOW, CNNMONEY.COM: Good morning, Heidi.
Well, you know, if you're one of the people out there who has only been to large airports, you'd be surprised to see how easy it is to fly out of the smaller regional ones. When you go there, parking is free. There's only one gate, security lines are incredibly short. Right now there's a huge concern that the good times may be coming to an end. That's something that could really hurt the economies of some smaller communities.
(BEGIN VIDEOTAPE)
HARLOW (voice over): Paul Gaurke is a local businessman in Minnesota who relies on St. Cloud's airport. He flies more than 100 times a year. Having an airport close by cuts his travel time significantly.
PAUL GAURKE, OWNER, RGS FINANCIAL: It's important for me from a family perspective to spend as much time at home as possible.
HARLOW: But Gaurke and the airport's manager have seen airfares take off this year. BILL TOWLE, MGR., ST. CLOUD REGIONAL AIRPORT: We've seen prices in the last nine months going up from, oh, $300 to Chicago, to $600 to Chicago.
HARLOW: And that's not the only change they've seen.
(On camera): Two years ago there were six flights a day. Now there are four. Some are concerned what the Delta/Northwest merger will mean for the future of this and other regional airports.
GAURKE: It is obviously a big unknown. I'm fearful this airport could be closed.
HARLOW (voice over): Delta and Northwest say they're dedicated to these airports and that regional airports are an important part of their strategy. The merger still requires approval by the U.S. Justice Department and some lawmakers aren't supporting it.
REP. JAMES OBERSTAR, (D) CHMN.,TRANSPORTATION CMTE.: It will create the world's largest airline. That cannot stand for long therefore United has to find a major partner and American has to find a major partner. Smaller markets, small hubs, non-hubs, regional facilities will be the ones who lose out.
HARLOW: And it won't just be travelers who lose out, these small airports are important to the local economy as well. They're doing their best to stay afloat.
TOWLE: We're certainly working diligently on trying to attract new air service. This is a very tough climate that we're in right now.
OBERSTAR: We're hoping to cope with this problem so we connect all of America in the nation's aviation system, and not leave rural communities out in the cold.
(END VIDEOTAPE)
HARLOW: You know, it's really a big concern for these regional airports across the country. 140 of them are subsidized by the U.S. government to provide what the government considers essential air service. St. Cloud airport, however, is not one of those that makes it much more difficult, Heidi, for them to attract anymore service. The flights are already down there. They're worried about staying in business - Heidi.
COLLINS: Yes, understandably so. CNN's Poppy Harlow. Sure do appreciate that, Poppy.
Quickly want to get to this story for you. Just in now from Portland, Oregon and our affiliate, KGW. Let me tell you what we know about it at this point.
A home apparently slid about 100 feet off its foundation this morning. No immediate reports of injury, but certainly wanted to show you those pictures. Because it apparently slid down the hill and the rest of the homes surrounding it, perfectly fine. There, now you can see a better shot, there. Boy, not a whole lot left obviously. These are pictures coming the in from the helicopter in the area. Our affiliate, once again, KGW. We will stay on top of this story for you and let you know what's going on.
I'm just reading this now, that apparently power to the homes in this area seem to be knocked out. Not exactly sure if it's because of the home or something else had happened there. That is the latest and we will continue to follow that one. Wow.
During round two of the presidential debates both John McCain and Barack Obama clashed on the issues and took a few jabs at each other. But debate watchers told CNN they didn't really see a knockout. As for who did the better job, they say 57 percent, Obama , 30 percent, McCain. The CNN/Opinion Research Corporation poll was taken right after last night's debate.
John McCain heads to the key battleground states of Pennsylvania and Ohio today. He's hoping his debate performance resonates with the Republican base and undecided voters there. CNN's Dana Bash has been covering the McCain campaign from the beginning. She is joining us now live from New York.
OK, so Dana, how will McCain's performance affect him in these key battleground states? Because, they keep saying, 27 days away, and people will be casting their ballots.
DANA BASH, CNN CORRESPONDENT: If you look at the poll -- one of the polls, at least, that came out last night, you mentioned one just now, I think it's not really necessarily going to help him, particularly with the segment of the population, Heidi, that they absolutely need. That is independents. If you believe the instant poll from last night, independents by far thought Barack Obama , not John McCain, was the most impressive to those who responded to our poll.
What is he going to do? What I'm told by McCain advisors, is he is going to go out and basically have a version of what we heard last night, continue to hit the themes that he does not believe Barack Obama is the kind of person who is really going to reach across the aisle. He's not going to be the kind of person who is really going to get the kinds of things done that he's saying on the stump, trying to separate what the McCain campaign calls rhetoric from reality.
However, again, based on what we saw last night, John McCain tried to do that, tried to do that with Barack Obama by his side. It's really unclear if that resonated. It's a whole different ballgame, however, as you well know, Heidi, doing it in kind of a sedate setting like the debate and going out and having a rally, especially with Sarah Palin by his side, which is what you see on the campaign trail and certainly what we'll see in these battleground states.
COLLINS: Hey, Dana, is there any indication at this point of what the format is going to be for the final debate? Because I did think it was really interesting last night, how even though they had spent so much time on the rules for this last debate, they kept objecting with the rules. I wonder what they have planned next time around? BASH: They definitely had rules. I'm not sure what exactly the rules are. We do know it's not a town hall format. I think it is a lot more like the very first debate. Bob Schieffer. I know, who you talked to several times on this program is going to be the moderator. If he learned from what happened, not just in this debate last night, but the first one, perhaps he is going to be a little bit more of a - maverick, I think we may call him, with regard to just tossing out the rules.
Look, the reality is, these campaigns, Barack Obama and John McCain, they helped create the rules, and then they kind -
COLLINS: That's what I'm saying.
BASH: Yeah, they kind of rolled over them. So I know we were talking last night afterwards, a couple years ago Ted Koppel said, OK, guys, your rules, you don't want them, let's throw them out. It will be interesting to see if Bob Schieffer does that. Maybe to make it a little bit more interesting and to allow these candidates to mix it up despite what their campaigns have negotiated.
COLLINS: Yes, exactly. All right, Dana Bash, appreciate that. Thank you, live from New York this morning.
BASH: Thank you.
COLLINS: Sailing unchartered financial waters. But we have a crew of experts to help you get through the storm. We're checking back on Wall Street.
(COMMERCIAL BREAK)
COLLINS: We have big news out of the Federal Reserve. In an unprecedented and unexpected move the Fed cut its key interest rate. It's not just here in United States. Central banks all around the world are taking action now. Susan Lisovicz is on the floor of the New York Stock Exchange with details on this, and the market reaction.
Which now, Susan, Dow Jones industrial averages down about 130 points.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONENT: That's right. I feel like I'm in the spin cycle of the washing machine, Heidi.
COLLINS: Yes.
LISOVICZ: I mean, we've seen volatile sessions. But this is -- we're just barely an hour and 15 minutes into the trading session. Those are the kind of days we live in, unprecedented times indeed.
The Federal Reserve hinting yesterday it might cut rates. Yes, it did so today with central banks from around the world, specifically with the European Central Bank, Bank of England, central banks of Canada, Sweden and Switzerland. Separately, China and Australia cut their rates over the past day. There are some folks thinking the Federal funds rate now at 1.5 percent could go lower. What I can tell you is that, at the moment stocks, are lower as well. What a wild day we had. Futures turned around abruptly on word of this announcement. We sold off. Then we sold off, then rebounded. Triple- digit moves higher and lower. Right now the Dow is down 131 points. The Nasdaq is down 12. Oil, by the way, down about $3.00, Heidi.
COLLINS: Obviously the Fed has taken some really extraordinary action this week, Susan. We also have the $700 billion bailout. I guess the question now for some people is, is that going to be enough? There are others out there who are saying, boy, we really haven't seen any turn- around, if you will. How long will it take before we start to sort of feel that money that has been injected into the system?
LISOVICZ: Actually we - you know, have so much stuff that is coming at us in both troubling and, in fact, encouraging. I'm just going to start with, you know the pending (ph) home sales which unexpectedly rose nearly 7.5 percent in August. The National Association of Realtors, Heidi, says that people are taking advantage of low home prices with pending home sales up strongly in California, Nevada, Arizona, Florida. These are some of the most troubled places.
The NAR also said that the government seizure of Fannie Mae and Freddie Mac helped. That is exactly what the market wants to see.
Now, one of the guys, one of the veterans that I talked to this mourning said, the good news is that the Fed is doing the right thing. The bad news is that the Fed is doing the right thing because the situation is so dire. But in the same breath he, and other people, have been saying that he thinks the stock market may be at a bottom because of the extreme volatility which can be measured in something Poppy was talking about the other day, the fear index, the VIX?
COLLINS: Yes.
LISOVICZ: Also the prices, price-to-equity, I won't go into it, but prices are so low on stocks, and then the magnitude of the losses that we've seen. So that is good news there, as well as all of these unprecedented moves starting with the landmark legislation on Monday, with the Fed buying commercial paper yesterday, upping the funding it's making available to banks. That was on Monday. Tuesday buying commercial paper. It just doesn't stop. Eventually some of this has to kick in, Heidi.
COLLINS: Yeah, absolutely. We hope it's really soon. All right, Susan Lisovicz, thank you.
LISOVICZ: You're welcome.
COLLINS: Live from the New York Stock Exchange where a whole lot of action is taking place today.
Meanwhile we have action in Portland, Oregon, to show you. Some of these pictures coming from our affiliate KGW. New video, in fact, there is a home, here, that is apparently because of a mudslide -- you can see the aftermath there. It has slid about 100 feet down. And from what we're learning now, apparently some of the other homes in the area have been impacted by this. Power has been knocked out. Earlier we didn't know if that was the cause of the power being knocked out.
Listen to this, too, according to our affiliate there, there was a neighbor of this particular home who had to kind of rescue the woman who was inside. She said she was hearing some noises, and then was going out of her house when it actually began to slide. Again, you can see the mudslide there sort of to the left of your screen. The home fell backwards about 100 feet. They had to use a ladder to get down and get her safely. So, apparently she is OK.
But Rob Marciano is standing by now maybe to talk more about this with me.
Rob, obviously, the question would be what kind of rain are we talking about in this area to have a mudslide like that?
ROB MARCIANO, CNN METEOROLOGIST: They haven't seen a whole lot. They're just getting into the rainy season. They saw a storm a few days ago. But it probably wasn't enough to warrant a mudslide.
COLLINS: Yes.
MARCIANO: This is an area I can tell you that is in the southwest part of Portland, probably five miles from downtown, heavily populated. It's a nice area. You see those are big homes there.
COLLINS: Yes, they are beautiful homes.
MARCIANO: Big beautiful homes built on, quite frankly, some unstable ground. Portland and the surrounding areas -- this is an area called the West Hills or the southern part of the West Hills, that juts out pretty dramatically from the Willamette River Valley. Some of those big homes are built right on, basically, the sides of little cliffs.
COLLINS: Yes, that's exactly what it looks like. Can you imagine if you're the woman inside?
MARCIANO: Yes, no -- I've had friends that have bought houses in that -- out in the West Hills and have had problems. I don't think this is a rain-related incident. But it's certainly dramatic and dramatic pictures. Would not be fun if you were in the house or anywhere below it.
COLLINS: Absolutely. We're hearing from our affiliate that that particular woman living inside the home is OK. She was going out at the time it happened.
Rob, just wanted to check with you on the weather situation there. Thanks for that.
MARCIANO: You got it.
COLLINS: Candidate checkups our Dr. Sanjay Gupta examines health concerns. Today, John McCain.
(COMMERCIAL BREAK) COLLINS: Age and health, an issue in the presidential campaign. That's a worry for the McCain campaign, according to some CNN polling. In fact, look at this, CNN's Opinion Research Corporation poll shows nearly half of Americans are concerned the Arizona senator might not make it through a first term in good health; 19 percent are concerned about Obama's health. Are the concerns valid? Here now is CNN Chief Medical Correspondent Dr. Sanjay Gupta.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: When questions come up about his age, 72-year-old John McCain likes to point to his mother, Roberta.
MCCAIN: People will judge, will judge by the vigor and the enthusiasm associated with our campaign.
GUPTA: According to actuarial tables, a 72-year-old man can expect to live another 12 years. McCain has some advantages, like good health care and good genes.
Dr. Thomas Perls is an expert on aging.
DR. THOMAS PERLS, BOSTON UNIVERSITY: We have found that longevity runs very strongly in families. So having a 96-year-old mom who is in pretty good shape, definitely bodes well for him.
GUPTA: The biggest issue for McCain is cancer, specifically melanoma. This spring I had a rare, and somewhat unusual look, at Senator McCain's medical records.
(On camera): We're going to be sort of ensconced in this room for a period of time, no electronic devices are allowed in. I have my notes, sort of prepared the things that I'm looking for. We're going to see what we find.
(Voice over): They gave us three hours to pour through more than 1,100 pages. They only covered the last eight years, and there was no way to determine what might be missing. That same day, in a conference call with reporters, McCain's lead doctor, John Eckstein gave the candidate an unequivocal thumbs up.
DR. JOHN D. ECKSTEIN, MAYO CLINIC, INTERNAL MEDICINE: I and my colleagues can't find any medical reasons or problems that would preclude Senator McCain from fulfilling all the duties and obligations of the president of the United States.
GUPTA: But that didn't silence critics, including fellow senator and Obama supporter Claire McCaskill, who says McCain's health is fair game as an issue.
SEN. CLAIRE MCCASKILL, (D) MISSOURI: Other people talk about his melanoma. We're talking about a reality here that we have to face.
GUPTA: Just this month, liberal activist group, Brave New Films, ran a full-page ad in "The New York Times." This petition, signed by more than 2,700 doctors. It calls on McCain to release his medical records to the public. Every one, not just a few reporters.
DR. WENDY EPSTEIN, PETITION SIGNGER: This is a skin cancer that can kill people. That's what we need to find out. We need to know did this melanoma spread or didn't it? That can only be answered by an independent group of dermatical (ph) pathologists look at the slides.
GUPTA: McCain's doctors say it didn't spread. The pathology report I saw supports that. The campaign says it's unacceptable for doctors who haven't examined McCain to second-guess his own physicians.
What about Barack Obama? Age 47, he was a long-time smoker, who quit just last year. But when we asked for his medical records, the campaign only handed out a one-page letter. It does say he's in excellent shape. Tomorrow, though, we'll look at we know about Senator Obama's health.
(END VIDEOTAPE)
COLLINS: OK, so we do have much more on the issue of presidential health. Don't miss our special investigations unit presentation "Fit to Lead," the challenges of the president as a patient. Our own Dr. Gupta, Sanjay Gupta is the host, of course, this Saturday and Sunday at 8:00 and 11:00 p.m. Eastern.
A pumpkin not carved for a jack-o-lantern, but a boat. No trick. This guy is paddling to give special needs kids some real treats.
(COMMERCIAL BREAK)
COLLINS: Here is one hallowed-out pumpkin that won't wind up on somebody's front steps. A Wisconsin man turned a 760-pound pumpkin into a boat. He's on a 150-mile river trip that he hopes to finish in eight days. The paddling, though, is more than just a stunt. It is part of a fund-raiser for a group of kids -- a group, actually, that sends special needs children on their own unforgettable trips.
Maybe they'll get to ride in the pumpkin boat. I hope so. I'm Heidi Collins. Join me again tomorrow morning at 9:00 a.m. Eastern.
