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Stocks Down Again Overseas; Big Three Submit Recovery Plans; Gas Prices Down, Surcharges Still There; Mounting Tensions: India Blaming Pakistan; Quick Thinking Nanny Saved a Toddler in Mumbai; Revote Happening in Georgia

Aired December 02, 2008 - 09:00   ET

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

T.J. HOLMES, CNN ANCHOR: All right. Thanks, guys. We will turn away from juice boxes like you all were just talking about. We're talking about the economy here off the top.
Yes, it's still "ISSUE #1." The numbers confirm what a lot of folks are knowing we had a long time ago. A recession. How will the markets respond today?

Also, fuel prices keep on dropping. So why is your money still going to those airline fees?

Yes, it is Tuesday, December 2nd. Hello to you all. I'm T.J. Holmes in for Heidi Collins. And you are in the CNN NEWSROOM.

The worries continue on Wall Street. So are your stocks in store for another beat-down today? Minutes from now the Dow opens. After yesterday's staggering loss of 7.7 percent, here is the measure. A grim one. Year-to-date, the Dow down more than 38 percent.

A brutal night in overseas markets as well. Japan's Nikkei index lost nearly 6.5 percent. The Hang Seng index in Hong Kong plunged more than 5 percent. And the dismal world economy may be a silver lining, at least for some consumers. Oil futures fell to the lowest level in three years, dipping below $48 a barrel.

Also today, the big three automakers submit their recovery plans to Congress. You remember that homework assignment that Congress gave them.

Kate Bolduan is on Capitol Hill with that homework assignment we're talking about. Also Christine Romans looking ahead to the markets. They are, of course, part of the CNN money team.

We do want to begin with Christine.

Christine, hello to you. What, what now? You know? "Duh" was the answer when a lot of people heard about we're officially in a recession. But are people glad that we finally have that behind us now? Are the markets happy at least, OK, we got that out of the way?

CHRISTINE ROMANS, CNN CORRESPONDENT: I think it's something that everyone had expected. Remember all the way back to November last year, November 2007, our own polls were saying that you were saying that the economy is "ISSUE #1." So it's something that Americans have felt for some time. The question, though, T.J., is how long will it last, how deep will it be? And how painful will it be? And we don't know the answers to those questions. And that's why the stock market is sort of so unglued.

Yesterday was a very tough day. There was more economic news that was dismal. We heard from the nation's Fed chief that, you know, it's uncertain what -- how much longer this is going to last and what it's going to look like. And we know that times have been tough. More job losses in just about every kind of -- every kind of industry you can imagine.

The Dow yesterday down 8 percent in a day. I mean that's really remarkable. This is the new normal. I mean, think of it, an 8 percent move in one day. The NASDAQ down 9 percent. The S&P 500 almost down 9 percent. Asian markets following overnight as well.

This is what I want to show you. I want to show you the ten- year, the five-year and the one-year performance of the S&P 500, because this is what really matters to a lot of investors.

Over the past year, the S&P 500 is down 45 percent. Over five years, it's down 24 percent. Over 10 years, it's down 31 percent.

HOLMES: Wow.

ROMANS: What that means is if you have saved money for four years of college for your kids and you are heavily invested in stocks, it's in a 529 plan, a college plan heavily invested in stocks, you might have to save for a whole another year of college.

If you are close to retirement, you might have to work another couple of years. If you have saved money over, say, a ten-year working history, working professionally for 10 years, you haven't saved -- gotten any returns on those investments.

HOLMES: Wow.

ROMANS: In fact, what you have put in, you have lost in some cases. So this is where we're facing right now. We know that this has been a really tough time. And that's why when you look at those, those stock numbers, that's why, T.J., it matters so much to so many people.

HOLMES: Oh my goodness. Just the way you put it in those terms. All those places -- I mean those are way people can relate to.

ROMANS: Right.

HOLMES: But to think people saved all those years, you're right, ten-years-plus, and see all those wiped out.

Christine Romans, thank you so much, as always, for the update.

Another big deal today about the economy will be about the big three automakers. Will their road to recovery begin today in Washington?

CNN's Kate Bolduan is on Capitol Hill.

And Kate, like I was saying just a moment ago, Congress essentially gave them a homework assignment with no specifics necessarily. Had a general outline. So are we going to get some of those specifics and details finally today?

KATE BOLDUAN, CNN CORRESPONDENT: Well, they sure hope they're going to get some of those specifics today because today is the deadline. The automakers are set to present their proposals trying to, once again, make the case for why they should get an emergency loan -- bailout from Washington.

Now while many of the details are being pretty tightly held at this point, we do know that each company will be presenting its own individual business plan. And CNN has learned from one Ford executive that at least for Ford's part they plan to submit the proposal via e- mail.

It will be about 20 to 30 pages long with heavy emphasis on plans for advanced technology and that really speaks to the whole idea of viability that lawmakers were really focused on. They say they don't want to just throw the money into problems. They want to see plan.

And CNN has also learned that the Ford's CEO had said we'll agree to work for $1 a year if the government agrees and gives them this $25 billion bailout.

So those are some of the details. But as you said, they had a homework assignment here, T.J. This comes just about two weeks after Democratic leaders here pushed off the decision on whether to bail them out, sending them -- sending automakers a letter, laying out some of the answers that they are really looking for.

And those things include along the lines of how much money these companies have, as well, how much money they need to continue operations, and how a loan will ensure long-time viability.

They also want the automakers to provide specific measures to safeguard taxpayer money and also offer a plan on how the companies plan to address health care and pension obligations of their workers.

So those are some of the specifics that lawmakers are going to be keeping an eye out for and those plans could be submitted any time starting this morning late into the afternoon today -- T.J.

HOLMES: OK. They get them at any time like you just said there. Once they get them, what do they do with them? Can they possibly send them back home with -- and say hey, make these corrections? Is there a deadline for when Congress wants to give the automakers an answer?

BOLDUAN: Those are some very good questions. What I can gather, what I have been able -- been able to gather so far, as I'm told by a Democratic leadership aide, as these proposals are going to be submitted to the two key committees that are really going to be taking up these plans, the heavy lifting here, as well as Democratic leaders will be taking a look at these proposals.

They're going to scrub these proposals. They're going to look at them quickly in order to kind of formulate these hearings that we have later this week. And as we know, the big three executives, as well as the union leader, will be coming back making a return trip to Capitol Hill for hearings again Thursday and Friday, and they are hoping to do a better job and making the case and selling the fact that they need some help than they did last time around, which made some news -- T.J.

HOLMES: All right. Kate Bolduan for us on Capitol Hill. Let us know when the homework comes in.

BOLDUAN: Of course.

HOLMES: We will see you again soon.

Of course, later today the auto industry expected to release its sales figures from last month. The November sales are likely to be a bit better than the month before but there won't be any champagne popping in Detroit.

Overall, the numbers are expected to still be down 28 percent from November of last year. Also adding to this gloomy news, incentives, note those increase incentives that were trying to get people to come in and buy those vehicles, well, those failed to overcome the one-two punch of tight credit and dismal consumer confidence.

We will turn now to the terror attacks in Mumbai. Killed in Mumbai, but eulogized in Israel. Thousands gathered to remember a rabbi and his wife who were gunned down by the terrorists last week.

Meanwhile, back in Mumbai, confirmation that the U.S. had warned India not once but twice that an attack could come from the sea.

Liz Neisloss is in Mumbai for us.

Liz, how is this information now being received by people there? And if they were warned once, warned twice, did they do anything about it?

LIZ NEISLOSS, CNN CORRESPONDENT: Well, this is a big question. We are just now in the midst of a press conference by Mumbai's police commissioner, T.J. And what he is saying is that the city did receive a warning, a general warning.

They said that they received a warning that something like the attack on the Marriott in Islamabad a few months ago could happen in this city but the problem they're saying is there was nothing specific. They had no specific information.

Now they are describing a little bit more about what they know about the attacks. They say each attacker, the 10 attackers were well armed. They each had an AK-47, they each had grenades, they each had 300 rounds of bullets. They managed to commandeer, control five different taxis. There were five bombs placed around the city, all live bombs which they believe were all detonated. They all had detailed maps of all the hotels.

Now all of us have been talking about one terrorist, one terrorist in custody from the group. But the police commissioner did say there are many suspects that are also being questioned, T.J.?

HOLMES: All right. And Liz, we have heard from the beginning here, a lot of fingers immediately pointing towards Pakistan, saying that they're responsible or possibly these terrorists came from Pakistan.

Pakistan's government has come out and said they wanted to help. They've been saying this from the beginning and that they would cooperate. They're taking new steps now to possibly help.

Is that help being received?

NEISLOSS: Well, it remains to be seen. There are some slow steps being made by each side. What the Indians have said is OK, Pakistan, we have a list of 20 suspects. 20 people we have wanted for a long time.

If there were ever a moment you were going to hand these people over, now is the time. Make good on your promises to improve the relationship with India. That's what the Indian side saying.

Pakistan, as you say, has offered some joint efforts with India on terrorism. So far India is saying let's take it slow, we'll see it. May not be the right time for that yet.

But, you know, T.J., there have been efforts together between India and Pakistan in the past. So this is not something completely new -- T.J.?

HOLMES: All right. Liz Neisloss for us with the very latest from Mumbai.

Liz, thank you so much.

And what about Pakistan's point of view? Tonight on "LARRY KING LIVE." Larry has an exclusive interview with Pakistan's president. That is tonight 9:00 Eastern, 6:00 Pacific. Again, right here on CNN.

And of course, here we are now just less than a week really away from those Mumbai attacks where they took place. Well, another deadly terrorist act to tell you about in India. This one actually about 1500 miles from Mumbai.

Police say a bomb exploded in a train car. Killed at least three people. 29 are wounded at least. Two of them we know of critically injured. And the bomb reportedly was left in a bag stuffed in an overhead bin.

Investigators say it went off shortly after the train pulled into the Diphu station.

We told you about the rabbi and his wife killed in Mumbai. Now hear the story of how the couple's nanny saved their little boy.

(COMMERCIAL BREAK)

HOLMES: Barack Obama getting out of Chicago today. He is meeting with the nation's governors. He's hearing their pleas for help with their troubled state budget.

CNN's Suzanne Malveaux joins us live now from Philadelphia where this meeting is happening.

Suzanne, they are looking at him like he had a big white beard, a big belly and saying ho, ho, ho, because they have a Christmas list and they are --going to sit on his lap and they are going to say this is what we want for Christmas.

SUZANNE MALVEAUX, CNN CORRESPONDENT: That's a great way to explain it, to describe it, T.J. Santa Claus.

HOLMES: Yes.

MALVEAUX: Well, you know, it's funny because they are anticipating there's going to be an economic stimulus package that's going to pass, at least they hope so, in January in the tune of $500 billion. And the governors, they simply want a piece of the action. They want a piece of the pie, about a third of it or so, $176 billion.

And what they're saying is that they're going to build roads and bridges, sewer and water projects. This will create lots of jobs. Even Pennsylvania governor Ed Rendell saying for every $1 billion spent will be about 40,000 new jobs created.

And the problem that the governors are having here is unlike the federal government, they have to balance the budget here. And so they're faced with very difficult choices. Do they raise taxes? Do they cut social programs? And that is why they are coming to Obama with, yes, that wish list, the Santa Claus wish list -- T.J..

HOLMES: All right. Well, Santa makes a lot of kids happy. Is Barack going to be able to give them what they want?

MALVEAUX: Well, something else that they want is that they want more money from the federal government for Medicaid. Money for the poor in terms of their health costs. That kind of thing.

The last time that Congress had a bill, an economic stimulus package, that had an increase in that, it died. It actually failed. There are some people who believe, however, that this time around they're going to get a better shot at this.

So it's still an open question. But there is a sense of optimism that at least they're going to get a good portion of that -- of that money, T.J.

HOLMES: All right. Suzanne Malveaux for us in Philadelphia. Always good to see you. Thank you so much.

All right. Jacqui Jeras in the weather center. We're using that graphic that says severe weather with the lightning and the destruction, and -- so what's going on out there?

JACQUI JERAS, CNN METEOROLOGIST: Maybe that's a little overplayed.

HOLMES: I'm sorry.

(LAUGHTER)

HOLMES: Oops. Sorry about that. Didn't mean to point it out.

JERAS: Yes, well, it is severe, you know, not tornadoes and lightning kind of severe. But it's very cold, it's very snowy in a few locations. And also very windy. So those are going to be -- you know, the big three weather stories for today.

(WEATHER REPORT)

HOLMES: Sorry. It's a fine graphic, though.

JERAS: Isn't it fantastic?

HOLMES: It is. Thank you, Jacqui.

JERAS: Got to play it.

HOLMES: Thank you so much. We'll see that graphic and see you again here shortly.

All right. We got some image for people to check out here. An interplanetary hookup won't happen again for more than four decades. So get a look at it. Venus, Jupiter, and the moon aligned in a rare celestial triangle last night fascinating a lot of star gazers across the globe.

Again, these objects about millions -- not about, but they are millions of miles away from each other. Have a picture that was taken here by iReporter Michael Black. He's an amateur astronomer and a science teacher.

According to astronomers, the next time you'll be able to see this is November of 2052. So I'll be doing this story again right here in 40 years.

You can send us your iReport to ireport.com.

Now you remember oil prices have been skyrocketing. So the airlines said hey, we got to hike the fees. We got to hit you with this, hit you with that, charge you for your bags. They tacked on a lot of fees.

Well, the oil prices, gas prices have been dropping for a few months even now. Why are you still paying all those fees? (COMMERCIAL BREAK)

HOLMES: Well, we saw Defense Secretary Robert Gates with President-elect Obama just yesterday being introduced as part of that national security team. Well, we are going to see Robert Gates again today.

Kathleen Koch at the Pentagon for us. He wants to have a little sit-down with you guys.

KATHLEEN KOCH, CNN CORRESPONDENT: He does, indeed. The Pentagon announcing just a few minutes ago, T.J., that the defense secretary will join reporters for a round table at 3:00 this afternoon.

And, you know, you might think that this is an inopportune time for the defense secretary to basically open himself up to questions, one and all, from the media, because much has been made about some of these areas where he disagrees with the president-elect such as the hard and fast timetable for removing troops from Iraq, something that Gates has long opposed, something that President-elect Obama supports.

Now the two -- the two do see eye to eye on other very important matters such as the need to begin to transition some U.S. military resources out of Iraq and into Afghanistan.

Yesterday, at the event, the defense secretary who is serving this position now for nearly two years said that he was honored to be asked to continue to serve. He called this, quote, "the most gratifying experience of his life."

So what, T.J., though, we are expecting some tough questions from myself and other reporters this afternoon about how he's going to be resolving these points of conflict with the incoming president, how they're going to proceed.

HOLMES: Well, we know as always you will be asking him tough questions, Kathleen. Don't scare him off. All right? We'll see you...

KOCH: We won't be.

HOLMES: ... here -- we will see you back here in a little while. Thank you so much.

Well, we have another airline merger on the horizon to tell you about. This one, the British Airways confirming it's exploring a partnership with Australian rival, Qantas Airlines.

Now what does this is going to mean for you, the flying public?

CNN's Jim Boulden is with us from London now.

And Jim, tell us why should consumers, those who are going to be flying, why do they need to be paying attention? Why this matters?

JIM BOULDEN, CNN CORRESPONDENT: This matters because British Airways are already in discussions with American Airlines. Now they're not allowed to merge because of legal reasons in the U.S. but they're asking the Justice Department for a waiver so they can actually be very tightly controlled.

So that's American Airlines and British Airways. Now British Airways is in merger in talks with Qantas out of Australia and with Iberia in Spain. Now Iberia is very big in Central and South America. Qantas very big in Asia. So you see what British Airways is trying to do here. It's trying to create a truly global airline.

And there's so many implications for that. There is no other airline that's even come close to this, if regulators allow all this to happen, T.J. That's why it's going to be very interesting for passengers.

Will it affect costs? Will it affect the number of flights? Will it mean more control by British Airways in Heathrow Airport, for instance?

HOLMES: One more thing here before we let you go. When might we hear more about it? More word on how far along or these are just talks right now? But (INAUDIBLE) before we hear another update?

BOULDEN: Well, they only told us today, frankly, because there was rumors in the markets that British Airways share was up. So they had to tell us. So they say that they are in exploring talks.

You know, American Airlines, they've already looked very closely what they're going to do. Iberia, they're already deep into merger talks. It's a lot for this company to digest. So it may be some time before we actually hear if, in fact, British Airways can actually take over Qantas Air.

HOLMES: Jim Boulden for us from London. Thank you so much for that update, Jim.

Now these are anti-government protesters we're looking at in Thailand erupting in cheers this morning. They're reacting to a court ruling that dissolved the ruling party after finding it guilty of electoral fraud.

The court also banned the prime minister from holding any office for five years. Anger over the government led to demonstrations over the weekend, we saw, and over the past week, these demonstrators occupy both Bangkok's main airports.

That stranded as many as 350,000 tourists. Many are still -- excuse me -- trying to find a way out. It was announced today that the main airport will remain closed to passengers for two more weeks.

Well, we're coming up on that time. You know, the drill, Wall Street moves big one day, now it's back, up and down and up and down. We will follow that same script today. Probably not. You just can't predict this thing.

Opening bell about to ring, stay here. (COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, T.J. Holmes.

HOLMES: Whiplash on Wall Street. The Dow adds 1200 points in five days then sheds more than half of it in one session. And that session came on the day that we learned that the U.S. is officially in recession. Well, duh, a lot would say.

Today stocks are set to reverse course yet again and rally back.

Susan Lisovicz at the New York Stock Exchange keeping track of it all.

Susan, how do you keep track of it all?

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, I'll tell you, with the help of a very good chiropractor because...

(LAUGHTER)

LISOVICZ: That is the person who is busy from all these, these whiplash sessions that we've seen, T.J. Yesterday 680-point drop was the fourth biggest point decline ever. It sparked a sell-off at Asian markets. But the market is expected to bounce back in the early going.

Some answers on the fate of the big three automakers could help ease volatility. Ford, GM, Chrysler set to report (INAUDIBLE) in auto sales for November and submit to Congress specific plans on what they would do with a $25 billion bailout if it is approved.

And there is the opening bell.

Later on in the week, the CEOs of GM, Ford and Chrysler will testify yet again on Capitol Hill.

All of this comes as the recession continues to hammer corporate earnings. General Electric which makes everything from light bulbs to movies, warns its results to low end of expectations.

Home builder, Beazer, says its quarterly loss more than tripled from a year ago. Sears swung to a quarterly loss. And the "Wall Street Journal" says Goldman-Sachs could report a loss as big as $2 billion. That would be five times worse than Wall Street is expecting with Mark Goldman's first loss since going public in 1999.

But we are not seeing losses in the first 30 seconds of trading. The Dow industrials right now up 65 points or 0.75 percent. The Nasdaq is up two percent. So, we do have a little bit of nibbling in the first minute of trading. And that would just be predictable, right?

HOLMES: You know, I like your optimism. 30 seconds in and we are up. Let's celebrate.

LISOVICZ: Yes. Let's close it right now.

HOLMES: All right. Susan Lisovicz, I know we will be talking to you again later. Take care of that neck and that back. We will see you again, soon. Well, today, of course, as you were just mentioning, the deadline for the big three automakers to present their recovery plans to Congress. Skeptical lawmakers had said they would not approve taxpayer loans until Ford, Chrysler and GM presented details on how they will avoid going under.

The separate plans could include executive pay cuts, debt refinancing, union concessions, even sell-off of some of their brands. Congressional hearings are scheduled for later in the week. But head to the big three say they will not use their corporate jets. Good idea. That drew the ire of lawmakers in the last month's plea. Even Ford's head said he would actually take a Ford Hybrid Escape, a road trip when he heads to Washington later in the week.

Well, relief at the pumps. Gas prices fall for the 76th straight day. Again, 76 days in a row. Today's national average just over $1.81 a gallon. That's a drop of 0.8 of a penny per gallon. This is the lowest price since January of '05. Yes. That's about four years now.

For those falling gas prices help our wallet at the pump, but what about the airline check-in counter? You remember, they said they had to raise those fees. Had to hit you here, had to hit you there because they were being hurt by the high fuel prices. Well, gas prices have been going down, while those surcharges still there.

Christine Romans, they told us they had to do this. And, you know, some people might have even understood. You know what, yes, gas prices are high. Maybe a fee here or a fee there, maybe I will understand. But you know what, gas prices have been going down for a while now.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And you know, the one silver lining of this recession is, T.J., lower fuel prices. You see it at the pump, right? But you won't get a break on that if you fly.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Gas prices are down. They should turn it around.

ROMANS (voice-over): You'd think lower jet fuel prices would mean a break for passengers. Think again. Jet fuel is down 58 percent since record highs this summer and well below last year's price. But the airlines are quietly making their fuel surcharges permanent, folding them into their regular fares. Even ramping up checked bag fees.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: Well, you know, it's just -- it's just really outrageous.

ROMANS: Senator Robert Menendez complained in a letter to the airlines' CEOs.

MENENDEZ: One of the things that they can do is lock in their prices now and be able to achieve all that savings. Now, is any of that savings going to get passed on to the consumer?

ROMANS: Not so far. Record high fuel costs earlier this year justified fuel surcharges and checked bag fees. $15 for the first checked bag, $25 for the second. The fees skyrocketed after that. The theory the more you carry, the more it cost to fly you. Not surprisingly, fuel surcharges are highest on international flight. According to farecompare.com, a flight from Denver to London carries a fuel surcharge of $366 plus tax.

Frankly, the struggling industry can't afford to lose the revenue. The industry says the airlines are trying to keep flying in a global recession. Besides, fuel prices just started coming down.

JOHN MEENAN, COO AND EXECUTIVE VP ATA: They didn't really compensate the carriers for the amount they were paying for fuel. The fact is that this year, we expect the airlines to lose between $4 and $6 billion.

ROMANS: As for those add-ons, industry analysts say customers may grumble but most only want to pay for what they use, whether it's a checked bag or a snack or a movie or a blanket and pillow. But it's paying for high fuel prices when fuel prices are falling that infuriates many travelers.

UNIDENTIFIED MALE: It's just a way for them to keep money in their pockets. But what are you going to do? We got to travel and they got us.

(END VIDEOTAPE)

ROMANS: That they do. They got you. But the good news here is fares have been coming down lately for the holidays. Even with the fuel surcharge folded in there.

T.J.

HOLMES: Well, Christine, I think that last guy said it right. They got us.

ROMANS: That's right.

HOLMES: And nothing we can do about it. Christine, thank you so much once again.

We'll turn now to India, those attacks there. And India is blaming elements from Pakistan for the terror siege on Mumbai that killed nearly 180 people and injured more than 200. Here is what we know right now.

India has renewed demands for Pakistan to hand over wanted militant leaders. India says the lone gunman captured in the attacks was trained by a Pakistani terrorist group blamed in a previous attack on the Indian parliament. India has confirmed that American intelligence warned of a possible attack just weeks before the massacre.

And a quick thinking nanny being credited with saving the life of a toddler in Mumbai. CNN's Drew Griffin with that story.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): This scene came just moments after the attack, Wednesday. An Indian nanny, Sandra Samuel is clutching a baby boy whose parents had just been murdered. 2-year-old Moshe Holtzberg crying, but unhurt. The terrorist killed his parents, Rabbi Gavriel Holtzberg and his mother, Rivka, and four others. According to a family spokesman, it was the quick-thinking nanny in the moments of the attack who acted to save herself, then the child.

ROBERT KATZ, EXECUTIVE DIRECTOR AND VICE PRESIDENT, MIGDAL OHR: As the siege upon the Chabad House began, the nanny locked all the doors and -- when she heard the commotion and went to hide. They broke in to the house. And she heard them running upstairs. And she heard Mrs. Holtzberg, Rivka, screaming "Sandra, Sandra, help. Sandra."

GRIFFIN: The gunmen reportedly were going room to room searching for targets. Sandra unlocked her door and according to Kats dared the terrorists to stop her.

KATZ: Sandra, the nanny, came out of her hiding place, ran upstairs right away, to where Rabbi and Mrs. Holtzberg were, and found them shot dead in cold blood. The baby was standing there screaming hysterical, crying. And she literally picked him up and made a dash for the exits, almost daring the terrorists to shoot her while carrying a baby.

GRIFFIN: With both parents gone, his grandparents are now caring for the toddler. But eventually, his great uncle is expected to take over. He is Rabbi Yitzchak Grossman. And he founded the Migdal Ohr Orphanage. It is said to be the largest Jewish orphanage in the world -- 7,000 children live at the orphanage's 100-acre compound in northern Israel. And soon, one more.

Drew Griffin, CNN.

(END VIDEOTAPE)

HOLMES: And thousands gather today to remember the parents of that little boy. So many came that the funeral was moved outside the headquarters of their Orthodox Jewish Movement. CNN's Paula Hancocks joins us now from Jerusalem.

Paula, this was an amazing outpouring.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: That's right, T.J. It was certainly a very emotional funeral service. That's Chabad Village near Tel-Aviv. One of the Rabbis we spokesman to is from New York Chabad Movement. They said that all they had done was to go over and try and help someone. They were dedicated to helping anybody who needed them.

Now we understand the bodies are on their way here to the Mount of Olives in Jerusalem. They will be buried here just very shortly. And we are expecting thousands more to turn up here as well.

There were members of the Chabad movement from all across the world, from New York, from Moscow, China, South Africa. All of them had wanted to congregate in that village to pay their last respects to the couple. And of course, this has devastated many people in Israel. The fact that there is that little 2-year-old boy who has been orphaned, in such a dramatic escape by the nanny and the boy, and certainly had has tugged at many heart strings here.

T.J.

HOLMES: All right. Again, Paula Hancocks for us on the story there in Jerusalem where that burial is taking place. Paula, we appreciate you.

We will turn back to the election here in the U.S. There are a couple of races still haven't been settled. One is a recount. Another is a revote. It's happening here in Georgia. The key piece of the puzzle that Democrats would love to fill in.

(COMMERCIAL BREAK)

HOLMES: You are listening to the U.S. Marine Band as they play at the Capitol Visitors Center. It is opening today in Washington. This facility is located underground the capitol so it doesn't distract from the appearance of the capitol building itself.

The center includes an exhibition hall with historic documents and artifacts. (INAUDIBLE), two gift shops, and a large restaurant area. The thing is suppose to be spectacular. The final cost was a bit spectacular as well --$621 million. That has more than double the estimated cost had it been completed on schedule, three years ago.

Well, we got an election going on in Georgia today. Voters going to the polls in a runoff election that has pretty big national significance here. This is the challenger Jim Martin. You see him there on your left. He's going up against Republican Senator Saxby Chambliss. One of two Senate races still to be decided if the Democrats win both. They will have that Senate supermajority.

CNN's Rusty Dornin joins us now live from Loganville, Georgia.

Rusty, this is a pretty important runoff election here. And you know, it's a runoff. Not a lot of people expected to turn out.

RUSTY DORNIN, CNN CORRESPONDENT: Well, you know, that's funny you say that, T.J. And, of course, one is here right now. But she should have been here a few minutes ago, because in this precinct in rural Georgia, people take this runoff seriously. They have very brisk business. In fact, there was a line around the building apparently when the poll workers came to open the building in the morning. And of course, the race is all about Saxby Chambliss, the Republican incumbent and Jim Martin. It's been a very nasty race between the two, former fraternity brothers from the University of Georgia.

They both been calling it the big guns, who are happy to show up because it is a very important national race, and of course, John McCain, fresh off his presidential bid, showed up in Georgia for Saxby Chambliss. But the big crowd pleaser, of course, Sarah Palin.

When she stumped in Georgia, Sunday night through Monday, several stops in Georgia during Monday, she drew thousands of people to her rallies in support of Chambliss.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: With one party in control right now of the House and the Senate and the White House, we need now public servants who will think for themselves and faced with a steep Democratic majority Congress, Saxby isn't going to be an easy yes vote or an automatic no vote. He's going to vote his conscience. He's going to do what's right for Georgia and what is right for the United States.

(END VIDEO CLIP)

DORNIN: And of course, the Democrats called out their big stars, former President Bill Clinton and Vice President al-Gore who has been on the campaign trail with a number of other, of course, Democratic dignitaries. And sort of an odd pairing. We had the hip hop artist Ludacris in Atlanta last night appearing with Jim Martin who said get out the vote for the Democrats.

(BEGIN VIDEO CLIP)

CHRIS "LUDACRIS" BRIDGES, RAPPER: I definitely feel like we need a senator who's going to work with Mr. Obama, Mr. President Obama to fix our economy as opposed to someone who is -- his message is just to block Obama's agenda.

(END VIDEO CLIP)

DORNIN: Speaking of the big man himself, President-elect Barack Obama, he did not come to Georgia. Many say that appeared too risky for him to come and case the Democrat's loss. It might look good for the new president-elect and turn out traditionally favors the Republicans in a race like this. And in this particular precinct, Republicans did -- were favored in the general election. So, we will have to see what happens. Certainly, there has been a diverse group of people coming in to vote here this morning.

T.J.?

HOLMES: Yes. Diverse -- very diverse group of people and diverse group of supporters. And, Rusty, we always like when you can throw a little Luda in some of your packages. We appreciate the -- we appreciate that report. We will see you again soon.

All right. Jacqui Jeras, I just get tickled now when I see that graphic. There is some serious weather going on. And a little snow and a little this and a little that. Tell us what's happening on that map.

(WEATHER REPORT)

HOLMES: All right. We will see you again next hour. Jacqui, thank you so much.

Well, are you looking for the next Lebron James, maybe the next Michael Phelps? There's a genetic test that may let parents look ahead and know if you have a superstar in that bassinet or if you burst the next athletic underachiever? Some are not sold on this science just yet though. Stay here.

(COMMERCIAL BREAK)

HOLMES: Well, are you saving enough for your kids to go to college? A new survey says, not really. 43 percent of parents haven't saved anything. That's up 16 percent from last year. The report from the College Savings Fund found nearly 2/3 of parents are counting on their kids getting student loans. But they say there is some good news here. 35 percent of parents started saving for college when their children were born. Many of them are relying on automatic savings plans.

Well, if that won't work, you can't pay for your kid to go to school, maybe they will get an athletic scholarships.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Cross your fingers, right?

HOLMES: Are you raising the next Jordan, the next Phelps? There is a company that says we can help you find out if your kid is going to be a stud, all right?

COHEN: Right. Exactly.

HOLMES: A stud athlete.

COHEN: Exactly.

HOLMES: Our medical correspondent Elizabeth Cohen here. Sounds good. How this thing work?

COHEN: It sounds good. Right. It's sounds like a great thing. You have your -- you know, you have your toddler running around and you think, oh gosh, could Jimmy be a star football player. Let's swab the inside of his cheek and find out?

This company called Atlas, they say that that's what they can do. They can help predict whether your child will grow up to be a great athlete or not. So let's take a look at how this works. What they say is that this genetic test works for children ages 1 to 8. You take a cheek swab so it's easy. You just swab the inside of their cheek and you send the company $149. That's an important part of it, too.

HOLMES: Of course.

COHEN: They say they will look at this gene, which sort of predicts how muscles will produce certain proteins. And they say based on that, it help predicts if your child will be a great athlete or not.

HOLMES: OK. You can't just look at the kid and see if he had a six-pack at the age of 2.

COHEN: Right, right, that will tell you.

HOLMES: All right. All right. There's got to be a scientist, a doctor, somebody out there who looks at this and say, hmm.

COHEN: I would put that into plural.

HOLMES: All right.

COHEN: I would say scientists and doctors who say huh-uh, this doesn't work. They used words when I ask them about this test. They said, what do you think? They use words like snake oil. They use words like balderdash. They use words that I can't say on television.

HOLMES: Oh, wow. Give us one of them. Just one. This is cable.

COHEN: I can't. I can't. They said that there are so many things that go into making a great athlete that no one gene that predicts how your muscle is going to make a protein is going to dictate how well your kid is going to do in sports. I mean, is he going to be big and tall and have huge feet like Michael Phelps. Is she going to have great eye-hand coordination? Is he going to have mental toughness? I mean, all of that is so important that this one thing they say really just doesn't cut it.

HOLMES: Now, I assume the company has been aware of some criticism. They know the scientist don't back them. Are they standing by their product?

COHEN: They are absolutely standing by their product. And this is what the company had to say when we called them. Actually, this is on their Web site.

But what they say is "Atlas is a leading edge athletic talent identification test. This gene may determine the type of athlete you were born to be." And when we talk to them, they said, look, it's not a crystal ball. It can't 100 percent predict, but it can help predict.

HOLMES: Maybe they will all come up with a more expensive team that will be more accurate. COHEN: Right.

HOLMES: All right. Elizabeth Cohen, thank you so much. Interesting story there.

All right. Now, we just got through looking into whether or not your kid is going to be a stud athlete. If not, maybe your kid will just be a stud. One 8-year-old trying to help out.

(COMMERCIAL BREAK)

HOLMES: All right. A lot of you out there need relationship advice. I could use some of it now and then. But for those of you, of course, who do need that advice, there's a new self-help book. I've actually read this one. And it's good for you if you don't mind getting advice from an 8-year-old.

Kim Christiansen with affiliate KUSA introduces us to the pint- sized love doctor.

(BEGIN VIDEOTAPE)

KIM CHRISTIANSEN, KUSA CORRESPONDENT (voice-over): It's all about communication, whether you're learning a second language or you're learning the language of love.

ALEC GREVEN, AUTHOR, "HOW TO TALK TO GIRLS": Girls are everywhere. It's not hard to find a girl. The trick is how do you find the right girl for you.

CHRISTIANSEN: It's a language, all right, about girls, boys and first crushes.

GREVEN: Most girls don't really like bugs and gross things. And most boys don't like things like Hannah Montana and stuff like that.

CHRISTIANSEN: Stuff like that has turned Alec Greven into a relationship guru.

GREVEN: Sometimes you get a girl to like you. Then she ditches. Tip: About 73 percent of regular girls ditch boys. 98 percent of pretty girls ditch boys. Life is hard. Move on.

CHRISTIANSEN: Nine months ago, 8-year-old Alec wrote his book, "How to Talk to Girls." Back then, the handwritten version was only available at his school, Soaring Hawk Elementary. Days after we met Alec, he became a sensation, appearing on the Ellen DeGeneres show and hundreds of radio shows. Harper Collins is now his publisher.

GREVEN: Well, I started screaming and I went kind of crazy, because it was -- like it's awesome.

LAURA BRINKMAN, PRINCIPAL: It was so entertaining and it was so true. And I thought, and to come from this little 8-year-old mind, you know, just saying this is really how you should talk to girls, even if the girl is 46. This is how you should talk to a girl. And I just thought, this just -- there was so much innocence in it and just truly entertaining.

CHRISTIANSEN: Alec bases his advice on observations he makes at recess. Such as --

GREVEN: Pretty girls are like cars that need a lot of oil.

CHRISTIANSEN: His book has led to other observations.

GREVEN: Like I don't know if every girl is interested in authors, but I know a lot are.

CHRISTIANSEN: And now he's speaking the language of an educator.

(END VIDEOTAPE)

HOLMES: Alec is not done yet, working on another book, "How to Talk to Moms."

Well, we are riding the rollercoaster on Wall Street. The heavyweights, and the back cars, the recession. Will it drag down investors again or can they climb back up?

Plus, live this hour, Barack Obama addressing the nation's governors. What they want to hear from the president-elect.

Hello to you all. It's Tuesday, December 2nd. I'm T.J. Holmes sitting in today for Heidi Collins. And you are in the CNN NEWSROOM.