Return to Transcripts main page
CNN Newsroom
Water Main Break in Maryland; Santa Delivering Sack Full of Bad Economic News; Stranded for Three Days
Aired December 23, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: It is Tuesday, December 23rd, two days till Christmas, 28 days until inauguration.
And here are the top stories in the CNN NEWSROOM.
Frightening hours in frigid winter weather. A man-made flash flood traps motorists in Maryland leading to dangerous rescues.
Somebody is going to get a white Christmas. Another major winter storm is taking aim at the heartland, making holiday travel very, very tricky.
Barack Obama losing his shirt in Hawaii, raising questions about his safety. Did a paparazzo get too close to the president-elect?
Good morning, everyone. I'm Tony Harris, and you are in the CNN NEWSROOM.
Want to show you some live pictures now from the developing story we have been following all morning. Dramatic and dangerous rescues unfold after a huge water main break in suburban D.C.
The break sent a wall of water gushing down a road in Cabin John, Maryland, stranding 12 to 15 vehicles in all. Here is a look at one of the rescues just a short time ago as two people were plucked from the frigid raging water.
A rescue helicopter lowered a basket to the vehicle and the two people were able to climb. Man, that -- boy, that always looks tricky, and it was. Montgomery County fire officials say at one point the surge was four feet deep and 60 to 70 feet wide.
In another rescue effort, crews maneuvered a boat close to one of the stranded vehicles to get the person out. About 15 people have been rescued.
One woman described the ordeal to our affiliate, WJLA.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: All of the sudden, just a gush of water came along with boulders and parts of trees, and I tried to turn to get out of it, and that was it. I couldn't. My car just got blocked in and the water was going over the top of the car, and then the fire department finally came and got me out. ROBERT KATZ, RESCUER: We had people trapped from the moving water. Quite a number of people that were suddenly trapped in their vehicles. They were in danger of their vehicles being washed away, washed ashore by the swift-moving water, and then being overcome.
We executed a boat-rope rescue from the shore. We set up rigging to assist the boat. The water was so strong that the boat couldn't support itself in the water, so our super water rescue team, in coordination with rope assets from the shore, set up a rigging system to be able to go across from bank to bank to be able to coordinate and support the boat as it got the people and rescued them literally from the rooftops of their cars.
(END VIDEO CLIP)
HARRIS: Boy. At least three people were taken to the hospital with hypothermia. Local authorities tell WJLA they were not able to shut off the water at the source of the break. They are trying to turn it off at another point in the line.
We will keep you updated on this developing story.
And how about this? Snow, sleet and ice. Also, combine that with bone-chilling temperatures, making trouble coast to coast one day before Christmas Eve.
Motorists beware. We are seeing multiple crashes on slick roads and interstates all across the country.
You air travelers need to pack your patience. We say it all the time here, the winter weather is causing flight delays, long lines and a whole lot of frustration at major airports. Despite -- a bit of good news here -- despite the harsh weather, many shoppers are getting out to wrap up their last-minute Christmas shopping.
(WEATHER REPORT)
HARRIS: You know, perfect segue. That's why I brought it to you, because Nate Wheelock is on the line with us. He's a sergeant with the Maryland State Police, he's a paramedic.
And my understanding -- Nate, is this correct here? You were the hoist operator that lifted a couple of people, rescued a couple people who I believe were trapped in that SUV? Is that correct?
NATE WHEELOCK, MARYLAND STATE POLICE PARAMEDIC: Sir, yes, I am a flight paramedic, and as well as a hoist operator.
HARRIS: Well, Nate, if you would, would you describe your effort there? I think we can actually loop in some of the pictures of the rescue that you had a hand in effecting here. As you describe the situation, what you were up against and how you deployed.
WHEELOCK: Sure, sir. When my pilot and I came up overhead, it was noticed the swift water coming down the road. There were multiple vehicles that were trapped in the area. There were two groups that had people trapped inside. And the pair to the southeast, which was a green and a blue or black vehicle, had three people combined trapped inside; one in one and two in the other.
The overhead area was power lines on each side of the road and a canopy of trees that was pretty close by. My pilot and I made the decision, along with in talking with Montgomery County, the command, that the aerial rescue was the best option because it would have endangered the lives of the firefighters and their rescue teams too much to try to get into that swift water.
HARRIS: Yes.
WHEELOCK: So we deployed the basket, and on two separate evolutions were able to effect the aerial rescue of three victims.
HARRIS: Boy, Sergeant, you haven't described how difficult it was in navigating the basket to the people, as we see here, who were able to climb into that basket, the people there in the SUV, because it took a lot of work, it appeared in watching it, for you to get that basket in the perfect position.
WHEELOCK: Yes, the downwash from the rotor system and the altitude that we were at was pretty difficult with that basket swinging back and forth, and at times was swinging off the shoreline. And then it would pass back by the vehicle and cross off to the driver's side. And it made it rather challenging to try to get it around, because the victims had opened the door. And I was trying to get it right into the doorway so they could get a hold of it and drag it close, and they were able to actually get it in.
HARRIS: Sergeant, it seemed like a curious choice to me at the time. I remember watching Coast Guard rescues during Hurricane Katrina, and whenever that basket was dropped, there was usually a Coast Guard member in the basket. That seemed to be a pretty small basket you were operating this morning, to have someone in that basket as you were lowering it. But I'm curious as to why that was the choice, to lower the basket without a member of your department in that basket.
WHEELOCK: The way the Maryland State Police and our aviation command train, we typically don't deploy personnel with a rescue device. That's, I guess, the difference between us and the Coast Guard.
We do have aerial rescue teams, teams of people that we can deploy down, and then they assist in getting in the basket. And those teams had been activated, but they just weren't on station yet. And it may have actually been dangerous for them as well to try to drop them onto the roof of some of these vehicles.
HARRIS: At some point did you decide to call off the aerial approach to rescues?
WHEELOCK: No, sir. There was one car that had one more victim left in it that we simply couldn't get to because of the canopy of trees. And they had to go in by boat, the Montgomery County Fire Department.
HARRIS: Sergeant, great rescue, obviously. We love the success in this operation. We had an opportunity to watch it on television.
You were certainly on the hot seat and you performed wonderfully. Absolutely wonderfully. Congratulations.
WHEELOCK: Well, thank you. Thank you very much, sir.
NGUYEN: Sergeant Nate Wheelock, he's with the Maryland State Police.
Terrific rescue. You saw it live on our air this morning.
Just days before Christmas, and Santa is delivering a sack full of bad economic news.
First, the nation's gross domestic product -- that's the total of goods and services -- shank half a percent in the third quarter. On the housing front, the National Association of Realtors says existing home sales plunged 8.6 percent. In November, the Commerce Department reports sales of new homes down almost 3 percent from the same period.
Consumer sentiment still battered and bruised. A survey from the University of Michigan and Reuters indicate shoppers are in a slightly better mood, mainly because of falling energy prices.
These figures mean more hard days ahead for Americans.
CNN's Christine Romans at the business desk in New York for us.
And Christine, taking a look at the housing numbers for us first, what are the numbers telling us?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: The numbers tell us the value of most of our largest assets continues to decline here. There's just no way around it. I mean, if this is your big asset, it's getting cheaper. And we know that it's hard to sell an existing home -- that's the kind of home we live in, an existing home -- these are town homes and co-ops and condos. And new homes sales are even worse.
I mean, the new houses on the market are having a real tough time finding buyers here. And that's trouble for these developers. Wow, people who've got land that they've just been waiting to develop. You know, I mean, they're just not selling.
So here we go.
Year-over-year existing homes down 10.6 percent. It was almost unthinkable even a few years ago, Tony, when there was a huge housing boom. And now new home sales down 35.3 percent.
Here is the value, the price of our home. The median price now $181,300. That is down 13.2 percent from the same period a year ago.
Think of that. The same home in the same neighborhood that you're living in, your big asset, down 13 percent in price over the past year. That's according to the National Association of Realtors.
There has been a big price run-up in a lot of places. And there are some parts of the country that they're not seeing as big of a decline.
You know, all real estate is local. You hear that all the time.
HARRIS: That's right.
ROMANS: So there are different parts that haven't been able to weather it and other parts that have been even worse. But the bottom line for you is that, gosh, this is just the latest indicator that the housing market continues to be in trouble.
I will put in a little caveat there. You mentioned about the consumer sentiment number that showed that people were feeling a little better because the prices of things were going down, gas prices. But also, mortgage rates are coming down. They really are. And there's a little bit of hope that maybe if mortgage rates come down enough some next year, that that's going to help start the bottoming process in this whole thing.
HARRIS: Hey, Christine, third quarter contraction to be sure in the GDP, but in a real sense that's history.
ROMANS: Right.
HARRIS: I've been listening to you this morning. The fourth quarter, that's the quarter that we're in right now, and I guess you're seeing some bright, bold red flags all over the quarter?
ROMANS: Yes, red flags, red arrows, red ink. Call it -- it's red. It's red. Happy holidays, right?
Yes, the fourth quarter -- you know, what I'm hearing from my sources and some economists is 6 percent contraction. So this is the economy. The economy is shrinking 6 percent in the fourth quarter, maybe 7 percent in the fourth quarter.
It's very rare. I mean, the third quarter now we know the economy shrank half a percent. Right? That was the summer, July to September.
HARRIS: Right. Right.
ROMANS: Tony, that's before the real guts of the whole credit crisis hit. So we know that it's probably going to be a lot worse in the quarter.
And so I tried to run some numbers to figure out how that compares with other recessions, because it's just hard to get a grasp of what these numbers mean. So the last recession in 2001, Tony, the economy, at its worst, shank 1.4 percent. In 1990, the one of the '90/'91 recession -- remember that one? The economy shrank about 3 percent at its worst.
And then you look in the '80s, remember that?
HARRIS: Yes.
ROMANS: You had interest rates that were like mortgage rates, above 13 percent. You had inflation that was a real problem. You had the Fed really slamming on the brakes and trying to fix things.
So you had kind of a -- just a real ugly situation in the '80s. And that's -- in terms of slowing growth, that looks like that's the best comparison right now.
HARRIS: Awesome. All right, Christine. See you next hour. Thank you.
A line in the stand doesn't stop one photographer from getting the picture-perfect snapshot of the president-elect. Why his employer says he didn't do anything wrong.
(COMMERCIAL BREAK)
HARRIS: Some Greyhound passengers out West are desperate to go anywhere. They have been stranded for three days at a bus station in Sacramento, California. Can you imagine that?
Let's go there live now to Darsha Phillips of CNN affiliate KTXL.
Darsha, three days in some cases? What's the latest here?
DARSHA PHILLIPS, REPORTER, KTXL: Well, actually, the latest is they've actually put everyone on the bus and they're heading out. But three days.
It was a holiday nightmare for a lot of folks here. Take a look.
Right now, the Greyhound bus station pretty empty, but earlier it was a much different story. You had people sleeping on the floor with blankets and pillows, getting the food out of the vending machines, getting coffee out of the vending machines, because they've been here three to four days.
A lot of people just trying to make it home for the holidays the day before Christmas Eve. It's a complete nightmare for a lot of people. Many people frustrated.
One of the most harrowing stories I heard was a soldier trying to get home to see her kids. She hasn't seen her kids for months and months and months, and was stranded at this Greyhound bus station for several days, not knowing when she'll be able to get back on that bus.
But if we can move over this way, I can show you actually where the buses were. We actually just have one bus heading to Los Angeles right now. But the main problem were the buses that were going to Seattle, Portland, and Medford, Oregon. Because of the snowstorm and the ice storm, Greyhound had stopped routing buses up to Seattle and routing buses down from Seattle.
So a lot of people were just stranded here at the Greyhound bus station, not knowing where to go. Some people had their Christmas presents with them in their luggage, not knowing if they were going to ever actually be able to pass them out.
But fortunately, about 7:00 this morning our time, they were able to put out five buses to all those people that were heading up north. So they're going to have a good holiday hopefully.
HARRIS: Yes, a little delayed, but they'll have a good holiday. It sounds like they'll get there for Christmas.
So does that essentially clear the station? Is the station clear now, Darsha?
PHILLIPS: Exactly. The station is clear of all those people that were delayed. Five buses did head back up north to where they needed to go.
HARRIS: All right, Darsha. Appreciate it.
Darsha Phillips with our affiliate KTXL.
Thank you.
Vice President-elect Joe Biden getting an update this morning on the country's financial crisis. Biden is meeting with the Obama money team. He is getting a briefing on new economic developments and plans for a recovery package. The economic stimulus plan proposed by the Obama team is projected to cost anywhere -- somewhere close to $775 billion.
Now to the president-elect and the paparazzi.
A photographer captured a picture of a shirtless Barack Obama walking along the beach in Hawaii, where he is, as you know, vacationing with his family. How did the photographer get so close? And what about the security concerns?
On CNN's "AMERICAN MORNING," John Roberts talked with the co- owner of the Bauer-Griffin photo agency, Frank Griffin.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR: The White House press corps had been told no photos. And I'm just wondering how your photographer got in.
FRANK GRIFFIN, CO-OWNER, BAUER-GRIFFIN AGENCY: He walked along the beach. He was told not to cross a line in the sand which was literally drawn by the security detail. He didn't do that. He took the pictures and left.
(END VIDEO CLIP) HARRIS: By the way, Griffin says the Obama photos won't bring in as much money as pictures of Brad Pitt or Angelina Jolie.
We will have more of that pretty testy interview next hour for you.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I was not going to buy anything. I decided at the last minute that I had a change of heart.
(END VIDEO CLIP)
HARRIS: Maybe it's the deep discounts or just the holiday spirit. Some shoppers who decided not to spend this season are changing their minds, but it's still shaping up to be a pretty disappointing seasons for retailers.
Two shopping days left until Christmas. Are stores seeing a last-minute surge of shoppers?
Our Atika Shubert, live from London's Selfridges department store.
Atika, good to see you.
The pattern in the states seems to be a lot of shoppers, not a lot of spending.
Is the story the same in London?
ATIKA SHUBERT, CNN CORRESPONDENT: It's pretty much the same. You can see that whatever it is the stores are doing, it's working in the sense that it's bringing the shoppers out.
There are literally hundreds of thousands of people here on Oxford Street. This is the main shopping area.
We're in front of Selfridges department store, and I just want you to see some of these fantastic window displays behind me. We have Santa coming out of the London underground, the tube station on my right. Over here on my left, Santa in a barbershop.
And these are just some of the ways stores are really trying to pull out all the stops this year, distinguish themselves. Others are taking a different tact, slashing as much as 70 percent off their prices. That's unheard of here in London just before Christmas.
We talked to a few shoppers to see what they think, are they buying? Here is what they said.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: A little bit more careful. Spent a lot on the Internet, and shopped and got the best deals, and things like that. But it's great today because they've got all the sales. I didn't realize.
UNIDENTIFIED MALE: I think there might be sort of a little less buying than previous years. But I don't think it's a big problem. Yes, I think it's just people waiting to buy rather than doing it straight away.
(END VIDEO CLIP)
SHUBERT: Now, people certainly are buying. It's just that they're buying less and they're being more selective.
And plus, they're waiting for those prices to come down. A lot of these stores say that they're going to be open Christmas Eve, and some will be open the day after just to make sure and try and get all of this stuff out there, get the shoppers out back and buying again.
The question is, is it going to work? We're not going to know until January when those figures come out -- Tony.
HARRIS: Well, Atika, I guess the question should be, did you get your shopping done and did you take advantage of some deep discounts?
SHUBERT: I have to admit that I did. I'm trying to restrain myself, but it's pretty hard with all the sales going on, you know -- Tony.
HARRIS: She is not a procrastinator.
All right. Atika Shubert for us.
Atika, good to see you.
Getting a grip on your finances means you need to know what you have and what you owe. Our Personal Finance Editor Gerri Willis has your top tips. That's next.
(COMMERCIAL BREAK)
HARRIS: Gerri Willis time. Gerri Willis. Gerri Willis.
End of the year, an excellent time to get your financial house ship shape. That requires some organization, Gerri.
There she is. Personal Finance Editor Gerri Willis has the tips for you.
Gerri, what's step number one here?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: You've got to track your income and your outgo. You've got to know what you owe and what you own, because otherwise you're never going to figure out your financial situation.
Software like Quicken and Microsoft Money can help you organize yourself when it comes to saving and spending. And the good news here, Tony, you're going to love this. Quicken currently has a free -- yes, I said "free" -- online version where you can track all of your money on one page, one page. You see retirement, you see your checking accounts. The program will calculate where you spend your money, how you're progressing against goals.
Also, the software tells you how much cash you have until your next paycheck so you're in less risk of writing a check that's too big on your account. It will also e-mail or send you a text message by phone on balances. So it's a really easy way to get the situation under control so you feel like you know what you have and what you've got to pay.
HARRIS: So Quicken has help that's free online. If it's free, it's for me. I guess that will be the first stop for me.
WILLIS: You can test drive it. At least you get a sense of how it works.
HARRIS: Yes.
How can you cut down on all of the clutter involved in this kind of organization, Gerri?
WILLIS: Yes. You know, like all those old bills that are -- you maybe have them all over the House.
One way to get rid of that clutter, opt out of credit card solicitations, and here's the number: 888-5-OPT-OUT. You can also opt out of mail from companies for five years when you register with the Direct Marketing Association.
Mail preference service. Your name will be put in a delete file. It costs you a dollar, which is worth it, believe me.
To register go to DMAchoice.org.
And here is a guide to what you should toss and what you should really, really, really hang on to. Check this out.
Tax returns, you've got to keep those for seven years. Birth certificate, marriage license, you never throw that away. Old 401(k) statements, keep them a year. Old credit card receipts, about a year.
Expired insurance policies, obviously you can ditch them right away. Don't forget to shred documents that you won't need. This way you'll help protect yourself from I.D. theft. It's an investment that really makes sense.
HARRIS: I want to keep the old 401(k) statements, because I just want to remember the good old days.
WILLIS: What it was like, yes. Forty percent down is the new reality.
HARRIS: That's right. That's the new normal.
How do we streamline our bills, Gerri? WILLIS: Well, OK. The easiest thing to do, cut down on clutter and ensure you don't have to pay any late fees, pay online either through your bank or through individual service providers like your credit card issuer or your utility company.
The easiest thing really, to pay through the bank. Go to the bank's Web site. You just need a copy of the bill. Set up a new payee on the Web site, provide info like the address of the company, the account number.
This way, any time you want to pay, you just enter the amount that you owe and the bank will pull the money out of your account electronically and magically pay them. You can also set up payments to make them automatic, meaning you don't even have to click through. It will happen same day of the month every month so that you're sure you're on top of your budget and you really cover your bills, because this is critical in this economy, that you pay on time, you make sure you know where your money is.
And if you have some good ideas for organization, we want to hear from you. Send them to me at gerri@cnn.com. We love to hear your good ideas and we love to help you solve your money problems.
HARRIS: All right. Gerri, I think we're going to talk again next hour. We're going to talk about housing numbers that are in this morning.
WILLIS: That's right.
HARRIS: OK, Gerri. Appreciate it. Thank you.
WILLIS: Thank you, sir. See you soon.
HARRIS: CNNMoney.com has advice and answers. Check out our special report, "America's Money Crisis." Again, that's at CNNMoney.com.
Stranded drivers plucked from a raging torrent after a water main break in Maryland. Want to show you the latest pictures here.
More than a dozen stars were stranded when a 66-inch waterline ruptured. Crews used boats and helicopters to get to the people trapped in their vehicles. One woman described how quickly the frightening situation unfolded.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: All of the sudden, just a gush of water came along with boulders and parts of trees. And I tried to turn to get out of it, and that was it. I couldn't. My car just got blocked in and the water was going over the top of the car. And then the fire department finally came and got me out.
(END VIDEO CLIP)
HARRIS: CNN's Brian Todd is on the scene. And he will join us next hour right here in the CNN NEWSROOM.
And new hope now for some holiday travelers. Snowy weather in the west starting to clear a bit. Officials at Seattle's airport say all stranded passengers should be on their way by tomorrow. The weather has left thousands stuck at airports, train and bus stations since the weekend.
While some worry about getting home for the holidays, others worry about getting out of their front door. In Geneva, Ohio, the snow is blowing so hard you can barely see. Many in Massachusetts are still without power, 11 days after an ice storm there. Utility officials say today could be the day that almost everyone will finally see the light again.
Difficult situations to be sure. Various spots across the nation. Let's get a check of weather conditions across the nation. There he is, Rob Marciano, in the severe weather center -- Doctor.
ROB MARCIANO, CNN METEOROLOGIST: Hey, Tony.
We've got some cold air on the East Coast. That's going to change. We've got changeable precipitation that's going to change across parts of the Midwest, from snow to freezing rain, and rain and then back to snow in a lot of cities that are affected by this next batch of wintry weather.
Here it is on the radar scope, Pittsburgh, back through Cleveland, Toledo, Detroit. We are getting light and in some cases moderate rainfall -- snowfall, I should say, coming down at a pretty good clip. St. Louis to Louisville is where we have the pink, so freezing rain and sleet potentially in here, and then changing to rain as we go towards Memphis.
Notice that the rain mix line is moving a little bit farther to the north. We're getting an influx of Gulf of Mexico moisture, yes, but also some heat content. So temperatures are going to be changing just a little bit.
Chicago, you're still in the snow. It's been snowing for a good several hours, and it is probably piling up in spots right along the Magnificent Mile for sure. Two to four inches potentially, five to six in local areas. Certainly just outside of Chicago that's a possibility. The freezing rain is an issue from Indianapolis back through St. Louis, and through Springfield, Missouri, also.
All right. Where do we expect to see the bulk of the nastiness? It could very well stretch all the way towards Cleveland and Toledo. I don't think we'll see much more than a quarter of an inch of ice with this freezing rain event before it changes to rain which may help melt some of it, then changes back to snow.
You want a white Christmas? Here are your odds. Marquette, Michigan, usually you can bank on that. Obviously Vermont has got a good chance, Minneapolis, three quarters; Denver, 50/50, thought it would be more than that; Chicago 40 percent chance, I think you'll be -- no problem with that. And New York City, 10 percent chance. There's snow on the ground there now. Will it stick around? I don't know, Tony. It's going to get from the mid to upper 40s tomorrow across New York City.
HARRIS: Yes, and some of those areas that you point out there, there's already snow on the ground. So maybe it's a slushy brown kind of --
MARCIANO: I think this year the probabilities are definitely higher.
HARRIS: All right, Rob, appreciate it. Thank you, sir.
More now on that terrifying Denver runway accident. Investigators say the landing gear, wheel and brakes on Continental Flight 1404 appeared to have been working properly. But bumping and rattling were heard seconds before the aborted takeoff. Right now, they're analyzing the flight data recorders for clues on what caused the accident.
(BEGIN VIDEO CLIP)
ROBERT SUMWALT, NTSB: The recorders, the black boxes if you will, as you know, these have been taken to Washington, and I understand that there is good data on those recorders. And when I mean good data, as it relates to a cockpit voice recorder, we have -- the crew conversations are audible.
(END VIDEO CLIP)
HARRIS: Well investigators say they still need to interview the captain. He's one of the 38 people injured in the crash.
President-elect Barack Obama and the Illinois governor investigation. A new report due out today. Will it shed new light?
(COMMERCIAL BREAK)
HARRIS: Barack Obama's transition team releasing its report today on the staff contacts with Illinois governor, Rod Blagojevich, the governor accused of trying to sell Obama's vacant Senate seat. Senior White House correspondent, Ed Henry, live from Honolulu where the president-elect is vacationing.
Ed, you have been working over the Obama camp for information on this report due out later today. What are you learning?
ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Well Tony, we've got a little bit of new information this hour. The actual report itself that you're talking about will be coming out about 4:30 p.m. Eastern time later today.
But this past few minutes, Vice President-elect Joe Biden was talking to reporters about the economy. And he got a question about this Blagojevich report, exactly what kind of contact there was between Team Obama and Team Blagojevich. And he was asked specifically: Will this report that the Obama team is putting out, their internal investigation, exonerate the transition team?
And he said he didn't think exonerate was the right word precisely. But that the important thing is he believes this report will show that there was no inappropriate contact between the Obama team and the Blagojevich team.
And that does square with what I've been hearing from other Democratic officials close to the situation, basically saying they believe this whole controversy has been much ado about nothing. It's going to show that Obama aides, like Rahm Emanuel, had a little bit of contact with the Illinois governor, that they had a little more contact with Blagojevich staffers, but that in the end there was nothing inappropriate, nothing that suggests that Team Obama was involved in this so-called pay-to-play scandal.
That's why it's significant. We're trying to find whether any of this contact shows that any Obama aides were involved in the potential auctioning off of the president-elect's former U.S. Senate seat. That's why it matters.
And you also have to wonder why is Team Obama putting this out during Christmas week, when most people are not paying attention. A lot of people, politicians, try to bury bad news on a week like Christmas week, when people are not paying attention. But Democratic officials insist the timing has been driven by the prosecutor in this case, Patrick Fitzgerald. He did not want an early release of this report to interfere with his criminal investigation.
In fact, we're also learning today new information that basically Patrick Fitzgerald, the prosecutor in Illinois, has urged Illinois lawmakers not to delve into some of the criminal aspects of this investigation of the Illinois governor in their impeachment probe because he's concerned, again, that it could interfere with his open, on-going criminal investigation, Tony.
HARRIS: Yes, OK. Ed, let me pivot just quickly here. Shirtless Barack. Lots of buzz, but here is the serious question here. Yes, we had some fun with it a little earlier, and then we started to think about it a little more closely.
How can photographers get this close, Ed?
HENRY: Well, in Hawaii, I'm standing right now on a public beach in Waikiki Beach. This is public, anyone can walk on it, whether the president-elect is here or not.
But then there's another section belonging to a hotel that's a more private beach, where the president-elect is staying on another part of this island, without getting into too much detail for security reasons --
HARRIS: Sure.
HENRY: -- Bottom line is that the home that he's at has a little bit of a private beach. But right next to it is public beach. There's an area where the Secret Service essentially cordoned it off, but paparazzi photographers can get up to that check point and use the long lenses that they use to chase down Britney Spears and Paris Hilton, I guess normally is who they are shooting, and take pictures of the president-elect and his family.
Obviously news organizations have to make decisions about exactly what they want to show with these kind of photographs, and whether or not it violates the privacy of the president-elect, Tony.
HARRIS: And -- but to be clear here, there was a more private area of the beach available to the president-elect. And it sounds like he ventured to a more public area. Is that correct?
HENRY: No, no, no, no. What I'm saying is that there is a division on these beaches so that there is a public part and then there's a private part. With a paparazzi camera --
HARRIS: Yes.
HENRY: ... you know, the camera lenses that they use...
HARRIS: Everything's public. Yes.
HENRY: ... you can stand on the public beach and take a shot of somebody on a private beach a couple hundred feet away.
HARRIS: Yes, good point.
HENRY: And I think that's what's going on here.
HARRIS: All right, Ed, appreciate it. Ed Henry in Honolulu, Hawaii.
A short time ago, Iraq's parliament approved a measure making it OK for all non-U.S. troops to stay in the country after the United Nations mandate expires.
Home sales are tumbling, home prices are plunging and the economy is shrinking. How is Wall Street dealing with all this? Let's check in with Susan Lisovicz at the New York Stock Exchange.
Hi, Susan.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hi, Tony. Unfortunately, we've heard these kind of reports over and over and over. So, the market's not doing much, and considering the alternative, Tony, that's not such a bad thing.
In the meantime, let me give you the bad news. Sales of newly built homes plunged in November to the slowest pace in nearly 18 years. Sales for October, meanwhile, were worse than originally reported. So, they were revised down. Meanwhile, sales of existing homes, which make up the biggest part of the housing market fell more than 8.5 percent.
Even low prices didn't help because people couldn't get mortgages. That's the credit crisis. The median sales price, $181,000, 13 percent lower than last year, the largest drop on record. Fortunately, we're not seeing a huge drop with the three major averages. Right now, the Dow is down just three points, and the Nasdaq is up two. It's a quiet day, Tony.
HARRIS: Susan, if the housing market is still sick, the economy can't improve either.
LISOVICZ: That's exactly right. It's the epicenter, just a huge, huge portion of the economy when you think about it, and it's where it all started. And if you look at what happened, today we got the final look at third-quarter GDP with gross domestic product, the broadest measure of the economy. It matched the earlier read and showed the decline of half a percent.
But analysts say the worst is yet to come. Many projections for this quarter GDP are for a plunge about 6 percent. So, it will really show the ugliness that we've seen with the credit crunch and as well as the pullback with consumer spending that's come with mounting job losses.
The big problem, or one of the big problems for the housing market is the glut of unsold homes, more than four million of them. In a sign of the times, a large chunk of the homes that did sell last month were distressed properties, meaning foreclosures, short sales or homes that people simply walked away from. In any case, that is a problem that still needs to be addressed, one of those problems, Tony. Back to you.
HARRIS: Yes, one of many. OK, Susan, appreciate it. Thank you.
You know, tough times for banks and businesses as the government loans billions to help out. But who is going to pay for it ultimately?
(BEGIN VIDEO CLIP)
HARRIS: Do any of you believe that the debt that has been accumulated in this country right now, that the responsibility for that debt is going to fall on your shoulders?
UNIDENTIFIED GROUP: Yes. Absolutely.
(END VIDEO CLIP)
HARRIS: Well, I posed the question to the next generation, and boy, did they give me an earful. Stay tuned next hour in the CNN NEWSROOM.
Well, everyone loves popcorn, but profits aren't exactly popping this holiday season. A family-owned business shares its story. That's next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: The kids are making a couple presents for Grandma and Grandpa, and our holiday party had a little more potluck to it than usual. But overall, I think we're not cutting back as much as we thought we would. I mean, everybody's feeling it. People are shopping less and spending less.
(END VIDEO CLIP)
HARRIS: A lot of fruitcakes this season, the return of the fruitcake. Maybe popcorn. Shopping less and spending less. Not what small business owners want to hear. Erik Claesson, I'm sure you remember Claesson. He owns a popcorn business called Madly Pop'n in Oak Park, Illinois. Madly Pop'n's been in the family for nearly 25 years. And Erik is struggling to keep it open during this recession.
We checked with him a couple months ago. Maybe it was last month. Let's do it again. Erik, good to see you.
ERIK CLAESSON, OWNS SMALL BUSINESS: Nice to see you, too.
HARRIS: Thanks for your time. Let's play a sound from our visit last month, and then let's get an update on the business. All right?
CLAESSON: Mm-hmm.
(BEGIN VIDEO CLIP)
CLAESSON: Quit really isn't in my vocabulary here. I think it's going to be a hard holiday for everybody. I think that we're certainly going to get impacted. You know, my guess is that our corporate sales and our Internet sales will be off maybe 25 percent or something like that.
(END VIDEO CLIP)
HARRIS: All right, Erik, boy, were you a predictor, a prognosticator? Talk about your Internet sales. Talk about your corporate sales. How are you doing this holiday season?
CLAESSON: Well, Tony, for us it is -- it's sort of exactly where we thought it would end up. Our corporate sales is always our bread and butter. And we do a lot of corporate gifts, employee gifts for big companies.
And a lot of our biggest customers did nothing this year. They really cut back. A lot of our medium and small-sized businesses still did things but tried to do them on a smaller budget. And about the 25 percent is probably just about right. Our Internet business probably 20 percent down.
Our retail, interesting, our retail is probably only down about 15 percent. And I think some of that is a lot of people walk into our store, and they say that they're really trying to make a concerted effort to spend more money locally versus shopping at the big boxes and things like that to support small businesses.
HARRIS: So Erik, how are you doing?
CLAESSON: You know, it's a struggle, Tony, and I think it's going to continue to be a struggle for the next year probably. But we had a nice boost here at the holidays. Our sales are certainly off, but so are our expenses.
We hired less people, brought in less product. Our costs have certainly gone up, you know, things like corn and cheese and our raw materials have gone up. Shipping prices certainly went up this year with the gas spike, and we haven't really seen those come down yet.
HARRIS: I'm just sort of curious. Last time we spoke, you said you hadn't paid yourself in I believe it was three or four months. Are you able to pay yourself again? That's not sustainable, obviously. And are you paying yourself, if you are, a full salary or something less than that?
CLAESSON: Well, you know, I don't think we're going to be able to go back and get the money that we left on the table those last few months. We'll certainly get a check here in December, which will make things easier for us at home, and my wife's been very supportive of the efforts in support of the business. That's a good thing because support on the home front's really important in tough times.
And so, we'll certainly get paid here in December and into January, February. We have some projects that we're working on, trying to do some wholesale and some private-label things for companies to try and boost our business going into the year. A little less focused on the gifts, which I think that market's going to be tight for a long time. A little bit more on maybe like retail, wholesale fundraising kind of activities.
HARRIS: The credit crunch. I know -- I remember you saying that you were in a bit of a significant credit crunch.
Is that improved at all for you?
CLAESSON: Well, you know, with our influx of business and cash and capital that comes in here in November and December for us, will put us back into the, back into the better side of our bank accounts, I guess.
So, you know, for the next four, five months we'll be good with the boost we get from the holidays, but it's going to be more important than ever for us to really jump on the sales bandwagon here. Get things going into the first quarter, whereas before it was sort of, wipe your brow, regroup after the holidays. Now it's going to it be right into sales and trying to find some new markets.
HARRIS: So, at least at this point, you're in no danger of shutting down the business?
CLAESSON: We're in no danger of shutting down the business now. You know, certainly after the summer when our slower months are, things will get tight again for us. HARRIS: Erik, keep us posted. It's always great to talk to you. Small business in America. And, boy, your story is so emblematic of so many others who trying to run small businesses these days in difficult times.
Erik, Happy Holidays to you and your family.
CLAESSON: Same to you, Tony.
HARRIS: Good to talk to you.
Just two days before Christmas and our i-Report e-mail box is full of your seasons greetings.
(COMMERCIAL BREAK)
HARRIS: Is that you Santa Claus. Our i-Reporters -- sorry about that -- always pulls through with some, some striking videos. Now we have a holiday one that we believe is about to go viral.
Our Josh Levs joins us with that.
What do you have, Josh?
JOSH LEVS, CNN CORRESPONDENT: It's going viral. OK, can we just tell everyone I said in the morning meeting today that this i-Reporter sent us a great rap. A great Christmas rap. There were some skeptics out there. Right now I'm proving them wrong, check it out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (singing) Could this be. Oh, it's a package and it was addressed to me. I should be (INAUDIBLE) and put my ears to it. My mom works hard and Santa Claus threw her. Why? I can't wait another minute, can I please open this so I can see what's in it? She said go ahead. I frantically ripped it open, I'm hoping, I'm hoping, I'm hoping.
Oh please, Santa. Oh, please Santa. Come -- Come on.
(END VIDEO CLIP)
LEVS: Not bad?
HARRIS: It has a little Eric B and Rakim feel to it.
LEVS: OK. I'm going to trust you on that one.
HARRIS: Hey now. Oh, You're not down?
LEVS: Oh, no. I'm not there with you. But I know that I like it. Doesn't that still count? John Collins. Tampa, Florida. I'm telling you, he's got some talent.
HARRIS: That's good. Love it.
LEVS: If we play this thing enough, it's going go viral. I give it 2 million hits within a week.
HARRIS: All right, so it's up. And folks can click on it and find it.
LEVS: They can click at ireport.com. And while you're there you might want to check out something that maybe won't go as viral, but the silly hat video that I think is kind of crazy. Let's take a look at this guy. Let's bring that one full.
This one comes to us from Barbara Rademacher (ph) in Rodgers, Arkansas. Yes. It kind of has a life of its own.
HARRIS: You know, it reminds me of the beer goggles, that -- that's sort of what it reminds me of. Just different.
LEVS: Yes. It's kind of like you think you must be having beer goggles, if that's what you're seeing at the moment. All right, we got seconds left, so I'm going to let you enjoy the ugly Christmas sweater special. Let's get in on that really quickly.
We have a bunch of ugly Christmas sweaters that people sent in. They're celebrating the beauty of the ugly at this time of year. So, I guess, it's beautiful for about a week and then you have hide it and pretend you don't own it.
HARRIS: Oh, look. Oh! Sweater vests.
LEVS: You got anything like that, Tony?
HARRIS: No way. I have one sweater, and just one sweater. No. Oh! It gets worse.
LEVS: Oh, man. Well, we got to go. That's a wrap, speaking of which. Check out that rap! So happy for that guy.
HARRIS: All right. See you next time.
Sub-freezing temperatures frigid water and people stranded in their cars. We're showing you the pictures of this morning's dramatic rescue.
(COMMERCIAL BREAK)
