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U.S. in Recession; President-elect Obama Announces National Security Team; Condoleezza Rice Demands Cooperation From Pakistan; After the Siege: Coping With Tragedy

Aired December 01, 2008 - 11:59   ET

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

TONY HARRIS, CNN ANCHOR: And hello again, everyone. I'm Tony Harris in the CNN NEWSROOM. And here are the headlines from CNN for this Monday, the first day of December.
It is World AIDS Day.

A grand hotel in ruins. India links Pakistan to 60 hours of terror. The U.S. secretary of state works to calm the nuclear rivals.

A Republican and a rival in his cabinet. President-elect Obama unveils his high-voltage national security team.

Meet the players -- in the NEWSROOM.

We start with new fallout from the terrorist attacks in Mumbai. A second Indian official has now resigned. This comes as India's Foreign Ministry summoned Pakistan's top diplomatic envoy to inform him that elements from Pakistan carried out last week's attack. Pakistani authorities say they have not received any evidence that militants from within its borders carried out those attacks.

One hundred seventy-nine people were killed in the three-day siege, including six Americans. Some 300 people were wounded. Nine militants also killed, one captured.

CNN's correspondents are all over this story. Paula Newton is in London with the investigative angle. Matthew Chance is in Mumbai talking to survivors, while Ed Henry is covering the security angle for Americans. Later, Reza Sayah joins us from Islamabad with Pakistan's side to this tragedy.

He hasn't taken office yet, but the terror attacks in India already on President-elect Obama's mind. He referred to Mumbai's attacks as he introduced his national security team just a short time ago.

Ed Henry is covering the Obama transition.

And Ed, already a crisis the president-elect is dealing with.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Yes, to a point, Tony. The president-elect revealing this very morning he's already pulled this new team together for an ad hoc national security meeting to try to get a handle on the situation from India, on the ground there. And what a team he has pulled together when you see, as you mentioned, sort of these high-powered, high-wattage individuals, Senator Hillary Clinton as secretary of state, the current defense secretary, Robert Gates, confirming what we've known for days now, staying on as defense secretary. And you see there retired Marine General Jim Jones will be the president's national security adviser, the principal security adviser within the White House itself.

But the president-elect stressed that he will not interfere with President Bush's words and actions right now, though he made clear that these attacks in India will strengthen the resolve of his team to root out extremism all around the world.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: This is one of those times where I have to reiterate, there's one president at a time. We're going to be engaged in some very delicate diplomacy in the next several days and weeks. So I think it would be inappropriate for me to comment, but what I can say unequivocally is that both myself and the team that stands beside me are absolutely committed to eliminating the threat of terrorism.

(END VIDEO CLIP)

HENRY: Now, the big question though coming out of this so-called team of rivals is, will they be working together as a team of rival, or will it be a dysfunctional group? Asked by a reporter about that, the president-elect basically said he believes they share a core vision in terms of rooting out terrorism around the world, starting in India, but all around the world. And also, that he believes that they will function effectively -- Tony.

HARRIS: All right. Our Ed Henry in Chicago for us.

Ed, appreciate it, as always. Thank you.

And Secretary of State Condoleezza Rice taking quick action following the terrorist attacks in Mumbai. Rice is demanding cooperation from Pakistan as she prepares to head to India. Rice is in London right now.

Let's go there live now, and to our Paula Newton -- Paula.

PAULA NEWTON, CNN CORRESPONDENT: You know, it was interesting here. Condoleezza Rice meeting with David Miliband, the British foreign secretary. The focus here, Tony, at all times remains the investigation. I think it's safe to say both British and American officials very disappointed about the pace of the investigation so far. At the same time, though, it is time for Condoleezza Rice to do some diplomatic heavy lifting, and that's why she's on her way to India on Wednesday. She said that, really, what needs to be done is the terrorists need to be brought to justice.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: We will be working with India. We intend to work with Pakistan as well. The people who perpetrated this must be brought to justice. And ultimately, the terrorists have to be stopped, because they will keep trying to bring down the civilized values and the civilized world as long as they are not challenged. And that means that challenging them and resolutely going after them is the only choice that we have.

(END VIDEO CLIP)

NEWTON: You know, and challenging them means, again, bringing that fight on the war on terror once again squarely to Pakistan. At least that's what India wants to see done.

At the same time, you're seeing from Pakistan, look, there is no proof certainly that state-sponsored terrorism from Pakistan's end not happening, they say. And in terms of the actual extremist elements, Pakistan saying it wants proof from India.

Condi Rice will be there to make sure that there is some kind of message, some kind of conduit so that these two countries can speak to each other and get down to brass tacks on this investigation. And Tony, it will be about time. By Wednesday, it will be almost a full week since these attacks started, and still no clear map, direction of where the investigation is going -- Tony.

HARRIS: Well, there is also word that Pakistan clearly is denying that the attack was perpetrated from its soil, but here's the other thing. I'm curious -- there is a conversation now, I understand, between India's Foreign Ministry. The Foreign Ministry has summoned Pakistan's high commissioner. What is this all about, Paula?

NEWTON: Well, what they're saying is that they want to see Pakistan do something about this now. What that exactly means the Indians haven't said. But they want to see clear examples of how Pakistan is going to make sure that these extremists do not attack India anymore, and they also want some kind of lead in terms of trying to bring any justice to some of the people that might have been involved in helping these terrorists carry out the attack in Mumbai.

Tony, the problem is there's never been much of a relationship between Pakistan and India where intelligence is concerned. They have been enemies for a very long time. They have a very, very delicate cease-fire ongoing right now. This is where Britain and the United States come in, and as I said, systematically, it's going to be a really tough job on the ground there.

HARRIS: Paula Newton in London for us.

Paula, appreciate it. Thank you.

And we will take you live to Pakistan later this hour for more on the accusations that militants there were involved in the Mumbai massacre.

CNN's Matthew Chance has been talking to survivors of the horrific attacks. He joins us live from Mumbai with their story -- Matthew.

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Thanks very much, Tony.

Well, so many harrowing stories of survivors, people who have maybe escaped the bloodshed but have lost family members, loved ones, and friends in the nine coordinated attacks that rocked India's financial capital of Mumbai. Over the past few days, we've been focusing our efforts, our reporting on one 13-year-old boy with a particularly heartbreaking story, because he was caught up in the violence that took place at Mumbai's main train station.

He was badly injured by a grenade attack and gunfire, but when he woke out of his unconscious state in hospital, he found that his parents, other family members, had been killed. The thing is, he hasn't been told yet by the doctors or his surviving loved ones about his orphaned state.

Here's his story.

(BEGIN VIDEOTAPE)

CHANCE: Is he making a good recovery?

(voice-over): His shrapnel wounds are slowly healing, but this 13-year-old survivor of the Mumbai attacks is still shielded from the awful truth. He's been reunited with his older brother now, but no one wants to tell this fragile teenager he'll never see his uncle, his three cousins or his parents ever again.

UNIDENTIFIED MALE (through translator): I feel that if we tell him, he's so young, he will be terribly affected by it. He's badly injured now, and there might be problems.

CHANCE: But the brother who's 30 agreed to take me back to the scene to relive his family's nightmare.

(on camera): Well, this is Victoria Terminus in the heart of Mumbai, the bustling train station where one of those coordinated attacks took place. And in fact, he was telling me it was exactly here where so many members of this one family lost their lives.

They were just standing here, waiting to get on a train, when the gunman burst in, firing automatic weapons, hurling grenades. The mother, the father, the uncle, the cousins all lost their lives here.

(voice-over): As the days in hospital have passed, the boy is asking difficult questions. Where's the rest of his family, why mom and dad haven't visited? It's forcing his doctors to reluctantly lie.

DR. B.M. SUBNIS, DEAN OF J.J. HOSPITAL: We have told him that, "We are locating your parents and they shall soon come back and meet you." But the way I see him over the days now, the child is very smart, intelligent, and has (INAUDIBLE) that his parents are no more. Everybody's hiding from him that they are no more. CHANCE (on camera): Do you think the knowledge that his parents no longer with him, do you think that will affect his recovery in any way?

SUBNIS: That's what we earlier thought, but now this hiding is affecting his recovery.

CHANCE (voice-over): And no one wants that. The time for honesty, no matter how painful, is drawing near.

(END VIDEOTAPE)

CHANCE: Well, just one heartbreaking story in a city now, Tony, where there are hundreds, if not thousands, of similar tales of hardship.

HARRIS: Matthew, just a quick question. I understand the stated reason for not informing the young boy of his parents fate, but the kid obviously has to be told at some point here. Is there psychological counseling available to this young boy and other children who might have been impacted by this?

CHANCE: Yes, it's a great question because, in theory, yes there is, of course. But in practice, this young boy is an extremely poor -- comes from a very poor family. The fact that his parents are now dead is going to make him even more impoverished. So that's very sad, indeed. It seems that any psychological counseling will be down to his doctors at this stage in the hospital, and we've heard from that in that report, and also his surviving family members, particularly his older brother.

HARRIS: Matthew Chance for us in Mumbai, India.

Matthew, appreciate it. Thank you.

Georgia's tight Senate race runoff. Can Sarah Palin turn the tide for the Republican candidate? Implications go far beyond the state's borders. High stakes runoff.

(COMMERCIAL BREAK)

HARRIS: Thirteen minutes after the hour. And welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

How about this? A familiar face from the general election hops back on the campaign trail. Alaska Governor Sarah Palin is helping out Georgia's Saxby Chambliss as he tries to hang on to his U.S. Senate seat.

CNN's Sandra Endo has more on Palin's power in her party.

(BEGIN VIDEOTAPE)

GOV. SARAH PALIN (R), ALASKA: ... governed with strong executive experiences. SANDRA ENDO, CNN CORRESPONDENT (voice-over): If there was any doubt that Alaska Governor Sarah Palin remains popular with conservatives, just look where she's been and where she's headed. Palin was called in as the closer for Georgia's incumbent senator, Saxby Chambliss, who's facing a tough runoff against Democrat Jim Martin.

It's a race that has potentially huge implications for the balance of power in the Senate. If Chambliss loses and the Democrats win the still-to-be-decided Minnesota race, the Democrats would have a filibuster-proof majority.

PALIN: The eyes of the nation are on what happens here tomorrow, what direction our country will go. Much depends on the vote that is taken here in Georgia.

ENDO: If Palin is successful helping her colleague in a red state like Georgia, it could help pave the way for a future presidential run in 2012.

PALIN: I'm not going to close any doors of opportunity that perhaps are open out there in the future.

ENDO: She has already revved up the conservative base...

UNIDENTIFIED MALE: We just wanted to say...

UNIDENTIFIED PEOPLE: Thank you, Sarah Palin!

ENDO: ... and is generating an early buzz.

SEN. JOHN MCCAIN (R), ARIZONA: I think she has a very bright future in a leadership position in the Republican Party.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: As fast as she has learned to become a great governor, that's as fast as she would have learned to become a great vice president, and also if there is an emergency, to become president. I think she's a fast learner.

ENDO: But is it much too soon to be talking about Palin, the future Republican nominee?

JOHN FEEHERY, REPUBLICAN STRATEGIST: She's got to get more experience and she's got some more things under her belt if she's going to be a real leader of this party.

(END VIDEOTAPE)

HARRIS: Let's get to Sandra Endo now. She's live in Augusta, Georgia.

And Sandra, good to see you.

Tell us about the importance of Palin stumping for Senator Chambliss. ENDO: Well, Tony, it's a tight contest here, and the stakes are very high. So Governor Sarah Palin is stumping hard for her Republican colleague and urging all Republicans to come out and vote tomorrow.

Now, it's a favor she could possibly cash in later down the road, depending on what she decides to do in the future. Now, after a rally here this morning in Augusta and Savannah, she has two more stops with Chambliss later today. And the Chambliss campaign says these are the largest crowds they've seen with a big-name supporter -- Tony.

HARRIS: All right. Sandra Endo for us in Augusta, Georgia.

Sandra, appreciate it. Thank you.

Longtime Democratic strategist and political analyst Donna Brazile has been advising former Georgia state senator Jim Martin in his runoff campaign against Saxby Chambliss. She joins us now by phone.

Donna, good to talk to you.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Great to talk with you, Tony.

HARRIS: So Donna, look, this is an important scene here in Georgia. Why didn't the president-elect make at least one stop in Georgia? I believe this race is still within the margin of error in most of the polling of the state.

BRAZILE: It is a virtual dead heat. And as you well know, turnout is very important.

The president-elect kept his team on the ground, experienced organizers who are helping Jim Martin get out his vote. Governor Palin's presence today will not only energize conservatives, but Independents and Democrats alike, to come out and support Jim Martin.

I think President-elect Obama made the right decision in deciding to, of course, conduct robo-calls, make some radio spots. And he is focused on his transition, and that's important.

The American people elected him on November 4th to get this country moving in the right direction. And Senator Jim Martin will help to put together an agenda for change that will help the people of Georgia. I think that's important priority right now.

HARRIS: Yes. And the reason I'm going to push this is because of the kind of campaign -- and you'll recall this -- Saxby Chambliss ran six years ago when, in part -- you'll recall this -- he ran an ad featuring the likeness of Osama bin Laden and Saddam Hussein, while criticizing then-Senator Max Cleland, a triple amputee from the Vietnam War.

I would think, Donna, that the Dems would be all over this race. BRAZILE: And they are. Bill Clinton campaigned last week. Al Gore, my former boss, campaigned. There's been several members of the Congressional Black Caucus who went down to Georgia to help get Jim Martin's vote out.

So, I think that Jim Martin has run a very good campaign. It's a strong campaign. He's not relying on smears and attacking Saxby Chambliss in the way that Senator Chambliss attacked then-Senator Cleland. Instead, Jim Martin has a positive campaign focusing on the economy, focusing on the people of Georgia. He is going to be a senator that puts Georgia first and not national politics.

HARRIS: Donna, great to talk to you. Let's do it again soon.

BRAZILE: Always. Thank you.

HARRIS: All right, Donna. Thank you.

The party with the most seats in the Senate controls the Senate leadership. Democrats now control 58 seats, winning races in the states shown in blue here.

Republicans have 40 seats after holding on to the states in the red states. The states in white -- there we go -- did not hold Senate races this year. Those two gray states, they represent races in Georgia and Minnesota, still up in the air, and the two seats the Democrats need to win a filibuster-proof majority.

Election officials in Minnesota busy recounting ballots in that state's U.S. Senate race. Before the Thanksgiving weekend, Republican incumbent Norm Coleman had a 292 vote lead over Democrat Al Franken. Friday is the deadline to count those remaining votes.

Two races with huge implications for the Obama administration. For that and all things political, log on to CNNPolitics.com.

Holiday shopping for millions of you today, it is a simple matter. Just point and click.

(COMMERCIAL BREAK)

HARRIS: Some breaking news that won't come as much of a surprise to you. But it is official. The U.S. economy is now in recession.

Let's get to Christine Romans, live in New York -- Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Is in recession, Tony, and has been there for some time.

According to the National Bureau of Economic Research -- this is the official think tank, the arbiter of whether or not we are in a recession -- they have gone back and dated the beginning of the recession to December 2007. They're looking at economic growth, they're looking at income statistics, they're looking at jobs growth more than anything else. They take a look at all these different indicators, all these different economic numbers. They put it all together, and they decide when expansion ended and recession began.

They had a conference call -- the committee that decides these things had a conference call on Friday. They weighed all of the economic data. And they say that December 2007 was the peak in economic activity, ,and the period since then has been officially a recession.

We all feel it, Tony. We all know it. We've been talking about it and guessing about it for some time.

HARRIS: Yes.

ROMANS: The reason why the stock market has had such a hard time here lately is because we don't know how long it will last, we don't know how far it will spread. We don't know, as they say, the depth and the duration of a global recession, what it will look like, when we'll be out of it. But we do know now that the official arbiter of recessions in this country has determined that the recession began and has been under way for some time. It began in December 2007.

The expansion before that was 73 months. This economy was expanding after 2001. That expansion was 73 months long.

Put this in perspective. The expansion of the 1990s was 120 months. So, for some people, it was a very short economic expansion after the last recession in the early 2000s. And now, here we are again, in recession again -- Tony.

HARRIS: Well, let me just sort of backtrack just a bit.

ROMANS: Sure.

HARRIS: December 2007, the classic definition -- correct me if I'm wrong here -- it's two consecutive quarters of negative economic growth. But didn't we see some small growth in the GDP, particularly since December 2007?

ROMANS: Yes, we have. And the committee goes on to explain in its Q&A -- it says the press often likes to use two consecutive quarters of negative GDP as a thumbnail.

HARRIS: Oh, nice. Yes.

ROMANS: That's true. That's one of the things that economists look at as sort of the starting point.

But the committee goes on to point out there are a lot of other things that they are taking into consideration, and every recession is a little bit different. And this one, they're really zeroing in on the job situation.

They're saying the peak in economic activity in terms of jobs was definitely in December, 2007. And in terms of factory output and production in this country, they note a flat period actually beginning all the way back last September.

So you saw a flattening out starting in September, then you saw sort of this peak in economic activity in December. And since then, it has been a recession.

So, you're right, Tony. How many times have we said that? But it is one of the reasons why just because there's two quarters in a row we can't say it's officially a recession.

HARRIS: Right. Right.

ROMANS: Because sometimes there are so many other things that go into it. We leave it to the people at the NBER, these sort of like middle of the road...

HARRIS: Smart...

(CROSSTALK)

ROMANS: Yes, the geniuses. We'll let them figure it out.

HARRIS: All right. I'm in so much trouble. All right. Good to see you. Thank you, Christine.

ROMANS: You're welcome.

HARRIS: Some troubling news, but again, probably not much of a surprise to folks who have been living this and watching their jobs disappear.

Let's figure out how you get through an official recession now. Let's talk to our Personal Finance Editor Gerri Willis. And Gerri is in New York.

Gerri, good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi there, Tony.

HARRIS: Give us some thoughts and some tips on, now that it is official, look, it's been official for a lot of folks for a long time now. How do we sort of get through and survive this recession?

WILLIS: Well, Tony, as we've been talking about, the biggest threat to you right now is losing your job.

HARRIS: Absolutely.

WILLIS: That's what happens in recessions. Jobs get cut, staffs get downsized. So you really want to think about, how can I raise my profile at work?

Get on the most important projects at work. Your boss needs to see you, know what you're doing.

You need to keep records of the things you're doing for your company. Maybe you're saving him money. That's a big thing right now. Bosses out there are trying to grow revenues, trying to have good returns, good results. If you can help with that, you're definitely ahead of the game.

And you also, of course, even as you're trying to protect your job, make sure you're reconnecting with people you've worked with in the past, expanding your circle even outside your own office, ,you also want to protect your money. One thing you can do now -- it may be a little more difficult than it's been in past years, but if you own a home and you have a lot of equity, you might want to get a home equity line of credit.

HARRIS: Wow.

WILLIS: This is something that you can tap if you get in trouble. If you can't pay your mortgage, you can turn to that HELOC and pay down your mortgage, pay your monthly mortgage, not lose your house because you're out of work for one, two, three months, whatever happens to you.

So you want to make sure if you don't have a HELOC that you have some savings available to you, some money on the sidelines.

HARRIS: That emergency fund that you talk about all the time.

WILLIS: Right.

We talk about three months, six months, nine months worth of savings. I know that's hard to put together right now, but to have some money available to you would be the best thing possible in case the worst happens.

So you want savings, maybe a home equity line of credit. And just so you get the big picture here -- Christine was talking about this as well -- you know, the report says that we've actually been in a recession for about a year now.

HARRIS: Yes. Yes.

WILLIS: That's actually good news. The last two recessions we've been in lasted roughly eight months. So, you know, we are well into this, and it could be ending sooner rather than later. That's definitely going to be good news for people. But you've got to protect your flanks here.

HARRIS: Yes.

WILLIS: Make sure that you're doing everything you can to hold on to your job. Make sure your boss knows who you are. And protect your money. Make sure you have some savings in case the worst does happen.

You know, in some parts of the country, Tony, people can lose their homes in as little as a month, two months, three months. You want to make sure at the end of the day that your biggest assets are protected. HARRIS: Well, one more quick one. You've been following this with us for so long now, I'm just wondering, as you take a big step back and take a look at all of the data that's coming in here, we're talking about a recession for about a year now that doesn't feel like classic V. It feels more like a U.

Does that sound about right to you?

WILLIS: Well, I have to tell you, Tony, every economist I talk to says that this is going to be a long, deep recession. It will last for a while.

You definitely want to take some precautionary measures. Make sure you and your family are safe. It definitely is longer than eight months, that we've seen in the last two recessions.

HARRIS: Yes.

WILLIS: So it's definitely longer than that already.

But you know, the good news here -- and I'm always trying find good news...

HARRIS: We appreciate that.

WILLIS: ... in these numbers, Tony. As you know, the stock market usually rides ahead of this news. So, you know, the stock market goes into a funk well before the recession even gets under way and it stays there. That's what we'll see again. It will turn around, move higher even before we get out of this recession, so stop worrying about that 401(k).

HARRIS: Yes. Yes.

WILLIS: There could be light at the end of this tunnel at some point, and we'll certainly report that to you as soon as we see it -- Tony.

HARRIS: And as we say, that it's been a difficult day so far for the Dow, as you can see, down 337 points.

WILLIS: That's right.

HARRIS: Gerri, as always, great tips. Thank you.

WILLIS: My pleasure.

HARRIS: The investigation into India's deadly terrorist attacks. Was Mumbai's grand old hotel forewarned? The latest on this investigation after the siege.

(COMMERCIAL BREAK)

HARRIS: The National Bureau of Economic Research, the official arbiter of recession, has weighed in, officially declaring that a recession began here in the United States in December of 2007. This on the heels of what's been a pretty tough morning, early afternoon so far for the Dow, as you can see, down 426, 427 points. Susan Lisovicz is at the New York Stock Exchange.

I guess the Nasdaq is down pretty steeply as well, Susan. You know, in talking about the United States economy being in recession, many folks have felt it's been in a recession for a while. If you've been struggling, if you lost your job, you watched your home value tank, it's been a recession for you. But in listening to you, I sort of understand now that you can have a couple of kind of recessions. You can have a short, shallow one or a long and deep recession. Why is there concern, amongst the people that you talk to on a regular basis, that this could be a long and deep recession?

SUSAN LISOVICZ, CNN CORRESPONDENT: Tony, well the simple reason is because so many of us have been really feeling the cause, the root cause of this recession, and that is the meltdown in the housing market. When you look at what happened in the aftermath of dot com, we did have a short, shallow recession. It was from March to November of 2001. Dot com bust, stock market bubble. And, yes, a lot of us were exposed to that.

But when you think about your home, your primary investment, a lot of people got into the housing market and a lot of people got in over their heads and a lot of banks and mortgage brokers were involved and took great losses and thus corporate earnings were affected. And then, because they took such losses, credit seized up. And it's just had a very big and broad affect on the economy. Much, much broader than say the last bubble, which was, again, the dot com bubble.

And I think that's why there is such concern. That this one could be a much longer, more painful lasting one. It already is. NBR says it's a year rolled (ph). The last one, remember, lasted eight months. Because, you know, it created a second crisis. That is, the credit crisis. And that is still ongoing. And that is why you're still seeing, whether it's the TARP or TAP (ph) or AIG or Fannie Mae, Freddie Mac, Bear Stearns, Lehman Brothers, you know, these are extraordinary times. And it speaks to the root cause of it, which began in the housing market.

HARRIS: Well, let's bring in your colleague, Ali Velshi. Is Ali ready? Oh, there he is.

ALI VELSHI, CNN CORRESPONDENT: Yes.

HARRIS: Ali, good to see you. What are your thoughts on this?

VELSHI: All right. Well, first of all, as you and Susan have widely pointed out, it's academic to those people who have been feeling the problems in the economy. But what is important, our good friend Lakshman Achuthan makes this point all the time, that the sooner you acknowledge how serious the situation is in the economy, the sooner you can acknowledge that you have to do something about it. That's really not an issue any more because everybody who could possibly be doing something to help this economy has thrown their weight behind it. But, you know, a year ago, in November of 2007, our polls were indicating that Americans considered the economy issue number one. A few months before that, we first saw retail sales starting to dip. So we knew that the American consumer was feeling it because of a couple of things -- the decrease in real estate value, the increase in inflation. You remember oil prices that were getting higher and higher -- corn, soybeans, food prices.

But again, the most important thing in being able to get out of this, is that people begin to be able to consume again. Without the ability to get credit, and potentially without an income, you don't start consuming. So what it comes down to, Tony, is the number one problem that has to be solved in this economy is the -- is to stop the bleeding of jobs and to start job creation again.

We have lost 1.2 million jobs so far in 2008. You could -- for a lot of people, that's when the recession starts, when you lose your job. We need to stop that because until people have an income and they can pay taxes and they are contributors to the economy, we don't -- there's no way to see this recovery.

Now the typical global recession has lasted 16 to 18 months. We're 12 months into this, 13 months into this, which means we are still several months -- if this is a typical global recession -- from the end. And it could be deeper. That's what we have to look at -- jobs. Everything else falls into place if people have jobs.

HARRIS: I wonder . . .

LISOVICZ: And . . .

HARRIS: No, go ahead. Go ahead.

LISOVICZ: You know, and, Ali, you know, of course, you know, jobs -- we have the jobs report on Friday for November and the estimate here is 300,000. A loss of 300,000.

VELSHI: Which is massive.

LISOVICZ: Massive. And, of course, especially massive when you consider it would be the eleventh consecutive month of job loss and that the job losses are escalating.

We also got a couple other economic reports today on construction spending, which fell more than expected. And on manufacturing, which was at a level. And the index there showed it at a 26-year low. So we're still in the throws of this. And the market is selling off. It was already selling off. This is sort of a duh moment, I think, on Wall Street. Everybody knows this.

VELSHI: Right. Nobody on the stock exchange is sitting there saying, oh, my God, it's a recession. Let's bailout. If they're selling stocks, if the Dow's down 450 points right now, it's down for a lot of other reasons.

But the trick now for our viewers and for those folks on Wall Street is do -- is to now start to think about where the opportunity lies. Where does this change around? Is it because of this new administration and an economic program? Is it because at some point these are cycles and they correct themselves? So at some point stocks come down to a point where, at least in some cases, they are bargains.

One has to start to understand that a recession has always ended. No matter how deep and serious it has been, it does end. And when that ride starts on the other said, you can actually do very well in that.

LISOVICZ: And also you can start to see, also in the housing market as well, some properties are starting to move. If you can get a mortgage . . .

HARRIS: If you can get one, yes.

LISOVICZ: You are starting to see home prices at very attractive home prices.

HARRIS: Terrific to both of you. That's wonderful.

Just something to think about. I know you'll talk about this with Betty, sitting in for Kyra in a just a couple of minutes, reaction from the White House to this news. The White House saying what's important is what is being done about the recession. The most important things we can do for the economy right now are to return the financial and credit markets to normal and to continue to make progress in housing. And that's where we will continue to focus.

Ali, good to see you. Susan, as always, thank you.

And still to come in the NEWSROOM, ribbons and remembrance. The White House joins people around the globe in observing World AIDS Day. The president cites progress.

(COMMERCIAL BREAK)

HARRIS: The terror attacks have undermined an already fragile relationship between India and its neighbors. CNN's Reza Sayah takes a look at some of the evidence Indian officials say links the terrorist to its neighboring country.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN CORRESPONDENT, (voice over): Investigators in India say the loan gunman arrested in the Mumbai attacks is from Pakistan. This mobile phone belonged to one of the attackers, they say. Records show calls made to Pakistan. Investigators have also told our sister station in India, CNN IBN, some of the gunmen came from Pakistan by boat. This picture, they say, the boat's captain, murdered by militants. The dramatic pictures have made headlines and fueled accusations against Pakistan.

REHMAN MALIK, PAKISTAN INTERIOR MINISTRY: So far, whatever is shown, it is unjust. SAYAH: In an interview with CNN, Rehman Malik, head of Pakistan's interior ministry, said he's heard the accusation. What he hasn't seen is the evidence.

Has India shown you any evidence?

MALIK: So far, nothing. Only what we have heard on the television.

SAYAH: They haven't made any contact with you?

MALIK: They have not made any official contact for an investigation or see of any information.

SAYAH: They say they've detained a person. Everyone's seen his picture. Do you know about him? Have they told you his name?

MALIK: Well, the pictures don't speak. In record speaks. We are interested in the evidence.

SAYAH: They say they may have come with a boat from Karachi. Do you have any information about that from the Indian government?

MALIK: No, not at all.

SAYAH: Malik says the accusations, in the absence of direct communication, have not helped the fragile relationship between the nuclear neighbors. Still, the Pakistani government has repeatedly offered its support, while denying any links to the attacks.

MALIK: If anybody has used our side, I give assurance and I assure my friends and people from India that we will take action.

SAYAH: But before any action, say Pakistani officials, they'd like to see the evidence first.

(END VIDEOTAPE)

HARRIS: And live now to Reza Sayah in Islamabad, Pakistan.

And, Reza, good to see you.

You interviewed Pakistan's prime minister. What did he have to say?

SAYAH: Well, Tony, the prime minister wants to see some sort of proof from India, hard evidence, that the Mumbai attackers are linked to Pakistan. But he has yet to see that evidence. Instead, he's still seeing accusation from high ranking government and security officials.

But the prime minister, earlier, very understanding and tolerating. Basically said, this is coming. These accusations coming at an emotional time, in the heat of the moment, from India and he hopes that they will stop. He described this moment right now as the dust has settled. But I've got to tell you, Tony, the accusations continue through the two countries foreign ministries. So still we are seeing a lot of dust.

HARRIS: And, Reza, there was a promise, wasn't there, that the Pakistani government would send its country's intelligence chief to India to assist in the investigation and then the offer was rescinded. What happened there?

SAYAH: Yes, a bit of a flip-flop on the Pakistani government. Initially they said we're going to send a spy chief and then they backed out. The president's office described it as a miss communication. The prime minister's office said they withdrew the offer because of the accusations coming. Analysts say it's an indication that this is a weak civilian government and perhaps the military and the intelligence agency is still in control here. This is a military and intelligence agency that in the past has had some links to militant groups.

Tony.

HARRIS: Reza Sayah for us in Islamabad, Pakistan. Reza, good to see you. Thank you.

The chosen ones. Barack Obama unveils a national security team that includes a former political rival and a member of the current administration. The president-elect unveiled his team about an hour ago now. He chose Senator Hillary Clinton for secretary of state and Defense Secretary Robert Gates will stay on as Pentagon chief.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENT-ELECT: I assembled this team because I'm a strong believer in strong personalities and strong opinions. I think that's how the best decisions are made. One of the dangers in a White House based on my reading of history is that you get wrapped up in group think and everybody agrees with everything and there's no discussion and there are no descending views. So I'm going to be welcoming a vigorous debate inside the White House.

(END VIDEO CLIP)

HARRIS: Obama chose retired General Jim Jones as national security adviser and Arizona Governor Janet Napolitano as his nominee for Homeland Security secretary.

You know, it's beginning to feel like the holidays. Particularly the big one there, Christmas. Snow all over the place. Chad Myers up next with the winter weather.

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HARRIS: Are you ready for winter? Look, you can't avoid it. It is coming. An early appearance from the Great Lakes to the Northeast. Detroit had been expecting as much as 10 inches of snow. But temperatures right at or above the freezing mark have curtailed snowfall amounts. Some good news there. Snow is expected to fall all day in the Indianapolis metro. Police say traffic accidents ran about the usual for a Monday morning rush hour. The wintry previews slowed holiday travelers eager to get back home.

(BEGIN VIDEO CLIP)

JAMES WILSON, TRUCK DRIVER: It is like all these motorists our here see all the snow and ice and go, oh, my God, I got to get out here and drive.

(END VIDEO CLIP)

HARRIS: Maybe that's not the reaction. I guess that's what he's suggesting there. Denver's southern suburbs got about a foot of snow this weekend. It will melt, though, with temperatures, Chad, what in the 50s later today?

(WEATHER REPORT)

HARRIS: Ribbons and remembrance. The White House joins people around the globe in observing World AIDS Day. The president citing progress.

(COMMERCIAL BREAK)

HARRIS: Today marks the 20th anniversary of World AIDS Day. But fighting the epidemic isn't a one-day concern. It is an everyday battle. CNN's Jill Dougherty reports on one woman who is changing a generation of thinking by telling her HIV story.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN CORRESPONDENT, (voice over): Belinda Cunningham (ph) is on her way to tell her story again.

BELINDA CUNNINGHAM: Going right here.

DOUGHERTY: It's not a particularly happy one. A mother at 17, infected with HIV 26 years ago, in treatment for cancer last year. But her experience, she hopes, can help others.

CUNNINGHAM: If you have a boyfriend and he wants you, well, let's have unprotected sex because that's the way I like it. And if you don't do it the way I like it, I'm going with someone else. And there goes HIV, there goes the STDs.

DOUGHERTY: It all started the day Belinda was diagnosed with HIV.

CUNNINGHAM: Then this woman came in and she was like, oh, hi. And I was like, oh, do you have it? And she was like, yes. Yes, I do. And she said, look at me. You know, you can do it. You're going to be all right. And then I cried for a minute. Then I said, OK, let's get it together here, Belinda.

DOUGHERTY: Belinda now volunteers in schools, community and senior centers. Sometimes she takes her granddaughter, Tierra (ph), along.

CUNNINGHAM: One day she told me, I said, well I'm not going to take you for this one. She said, grandma, you'd be surprised what kids know. And I'm like, oh, my gosh.

DOUGHERTY: Today, she's at a planned parenthood center.

CUNNINGHAM: And I know it's really hard for teenagers to come out and ask questions. Sometimes you can't talk to your parents, right?

DOUGHERTY: Belinda lives in the epicenter of the AIDS epidemic in Washington, D.C. African-American women account for 90 percent of all new female HIV cases. These girls don't want it to happen to them.

UNIDENTIFIED FEMALE: It's very real out there because I (INAUDIBLE) being young females, you can catch it like that. So the more educated you are, the better it is you can protect yourself better.

DOUGHERTY: Belinda is an artist. She donated this painting to an auction for charity. The buyer sent it back to her with a note.

CUNNINGHAM: Take this picture and show it to the world so that you can help somebody else.

DOUGHERTY: Belinda calls it "Traces of Faces in Family Vases." Two members of her family and several friends died of AIDS.

CUNNINGHAM: My cousin, Scarlet (ph). This was one of my friends in one of my jewelry classes. This is my cousin. This is a friend of mine who is a preacher. This is a friend of mine, she's a full- blooded Indian and this is how they dress her when she passed. And that's another friend of mine.

DOUGHERTY: She put the lemons down at the bottom to show the bitterness she says, but at the top, she added bright flowers.

Jill Dougherty, CNN, Washington.

(END VIDEOTAPE)

HARRIS: Kyra Phillips has the day off. The next hour of CNN NEWSROOM starts right now.