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Judge to Rule on Lifting Stay on Prop 8 Ruling; Economy Ups and Downs Explained

Aired August 12, 2010 - 13:00   ET

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

ALI VELSHI, CNN ANCHOR: Good to see, you my friend. Have a fantastic afternoon, Tony.

I'm Ali Velshi. Here's what I've got on the "Rundown."

Everyone is asking me about the economy this week, and that is usually not a good sign. What is going on in the economy and in your personal economy? I'll break it down for you.

Plus, it has become the centerpiece of the battle over gay marriage. California's Proposition 8. A crucial court ruling expected at any moment could change history.

Also, imagine all the information created by mankind since the dawn of civilization, all of it. Now consider this. That same amount of information is being created every two days. The main driver is social media.

It's been eight days since a federal judge in California struck down that state's Proposition 8, which prohibited marriage between people of the same sex. And the same people who were celebrating then are on the edge of their seats right now, because the same judge is about to decide whether to lift a stay on his watershed ruling. A stay, which would allow the ruling to go into effect, allowing marriage licenses to once again be issued to same-sex couples before the appeal can be heard. These appeals will likely go on for years.

CNN correspondent Dan Simon is in the district courthouse in San Francisco, the U.S. District courthouse, awaiting Judge Vaughan Walker's decision. I've got him on the phone right now for our "Two at the Top" -- Dan.

DAN SIMON, CNN CORRESPONDENT: Hey, Ali, as you said, this could really come down at any moment, so if I drop off, forgive me. It's just because the ruling has come down.

Basically, what it comes down to is this: we know how the judge ruled on the marriage Proposition 8. He basically said that there were no marriage (ph) to it, that same-sex marriage could resume here in California.

The question is, when it will occur. The judge put a temporary stay on that ruling, meaning that no marriages could take place until he decided at a later date, which is today, what's going do happen. There are three rulings that could take place. The judge could say, same-sex marriage could resume right away and that you suddenly could have same-sex marriage couples going to various courthouses or city halls throughout California and getting married as early as today.

The judge could issue a long-term stay and say no marriages while the case goes through the appeals system.

There is a third option here, and this is a bit more nuanced here, Ali. And that's the judge could say that marriages could take place, but then, then he could do what he did here and issue another temporary stay and allow Proposition 8 sponsors to appeal while this goes to the Ninth Circuit.

So three different options here. Obviously, as you mentioned, a lot of anticipation. And again, we're expecting this to come down at any moment -- Ali.

VELSHI: We'll hear from you when they do. One quick question, very quick question for you, Dan. What happens if -- if the judge does lift that stay? Can people go and get married today?

SIMON: If the judge lifts the stay, people could conceivably go get married today. And we know that at San Francisco city hall, for example, where you have a shout out, that there are numerous couples ready to do so. And the clerk there at the city hall says he will issue those marriage licenses if, in fact, the judge lifts that stay.

VELSHI: All right. That's the latest on it, Dan Simon in that courthouse. We will hear from him as soon as there is a decision in this landmark case on Proposition 8. Thank you, Dan.

Now on Tuesday, the Federal Reserve said that the economy that we're in, well, the recovery is sputtering. Things are not OK. Well investors took that message to heart, and things got ugly on the stock market yesterday. Our "Sound Effect" from yesterday's closing bell says it all.

(BEGIN VIDEO CLIP)

(BELL RINGING)

(GROANS)

(END VIDEO CLIP)

VELSHI: All right. They're trying to put a brave face on it, but stocks have been down three days in a row now.

Let's take a look at where they are right now. The Dow is off about 28 points. It started the day almost 100 points lower. So there's been some recovery on the markets, but boy, they sure are jittery.

When we come back, I'm going do tell you where we stand in this economy, how it connects to you.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE (singing): Never did I want to be here again. And I don't remember--

VELSHI: We don't want to be there again. I'm talking about the tough times we saw at the end of 2008, the beginning of 2009. We are almost two years away from that. We should be done with this recession. We should be done with this bad economy, but we're not. So I want to talk about where we stand in this economy right now. And I want to talk about where the economy touches you specifically.

First of all, let's talk about your savings. The money you've saved up for retirement. Well, we've been talking about the stock market for the last couple of days. It is not doing so well. If you invested a dollar at the beginning of the year, it's now worth less than a dollar. So that's where a lot of people were hoping to make up some gains.

The other thing is if you want to save your money, put it in a bank account, well, take a look at that interest rate. The average interest rate you get for a savings account, which doesn't really restrict you, is not even 1 percent. So you're not doing well on savings.

Where's the other place that the economy touches you? Your home. Let's take a look at what's going on with housing prices. You measure housing. We talk about the median price of an existing single-family home. That's a used home, existing homes. The median price is the price where half the homes sold are sold for more, half are sold for less. The median price is $176,900. That is a smidge above where it was last year.

So we're not going down any further. Why is the housing price not doing better? Well, foreclosures. Every time a house goes on the market as a foreclosure, it affects the price of your house. It keeps that price lower.

The thing helping the housing market? Check out those interest rates. A 30-year fixed mortgage, if you have good credit, can be had for about 4.5 percent. That is as low as we've seen since they've started keeping records about mortgages.

OK. So we've got the money you save, the home you live in. Those are all really important touch points for you and the economy. The most important one? The one everyone needs? A job.

Take a look at the chart that shows you how many jobs have been lost since the beginning of this recession. Let's go back to January of 2008. It was just a little bit then. Take a look at what happened in 2009. That was the worst of it in the middle of 2009. Look at all those job losses.

Then we move into 2010, and things start to get better. You can really track that, and things start to get better. In the beginning of this year, we really started to see some growth. And then look what happened. Look right at the end there, those two red bars. We shouldn't be losing jobs. We should be gaining jobs.

And that's what's got everybody worried and confused, because this is a consumer-based economy. Unless we are feeling strong, like we're going to have a job in six months or a year, we don't spend the money that's in our pocket. Maybe we pay off our debts or we, we pay off some credit cards. We just keep it there in case things go south again.

Remember, back at the end of 2008, people were not being -- they weren't able to borrow money. Companies couldn't borrow money. We were at a standstill in this economy, and that is what has people worried right now.

A lot of debate as to whether or not we are going forward or backward in this economy. But that is what's causing the uncertainty that you've seen on the markets in the last few days.

We'll talk more about the economy later on in this show. But if you want to have a bigger conversation about it, you can always tune in on the -- well, let me just tell you about the jobs, by the way.

I showed you that big chart of job losses. The unemployment rate is 9.5 percent right now. A lot of people had assumed that it was going to be, you know, about 7 percent by this time, but it's not.

Fourteen point six million people are unemployed and looking for work. And the number of people filing for first-time unemployment benefits last week, 484,000. Four hundred and eighty-four thousand people went to an Unemployment office, phoned them or went online, looking for benefits. That's the other part of the jobs story.

If you want to talk more about this, we always talk about it every weekend on "YOUR $$$$$," Saturdays at 1 p.m. Eastern, Sundays at 3 p.m. Eastern. We'll have a good, long conversation about it, but we'll talk about it later in this show, as well.

Well, a week and a day after a monumental court ruling in California, we are about to find out whether Proposition 8 is actually going to go into effect, whether same-sex couples can actually get married. Our senior legal analyst, Jeffrey Toobin, is on the case, and we're going to talk to him in just a moment.

(COMMERCIAL BREAK)

VELSHI: All right. A few moments ago we talked to Dan Simon, who's in the courthouse in San Francisco, waiting for a ruling on Proposition 8. This is the voter-passed proposition that was going to ban gay marriage in California. Well, a judge issued a stay, saying that that couldn't go into effect. He stated his reasons for it. And basically, he said it didn't make sense and it wasn't -- wasn't legal. He issued a stay.

Well, he struck it down. And then he issued a stay, because opponents of his ruling had said that he -- they don't want people going and getting married if this thing could collapse on appeal.

Now he is ruling on that stay, deciding whether it's going to stay in place, whether it comes off, whether people can go and get married. It's a bit confusing, but there's -- we have an expert who can straighten it all out. He's our legal analyst, Jeffrey Toobin. He is in Anchorage, Alaska.

Jeff, good to see you out there. Boy, you look rugged.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Hi, Ali.

VELSHI: This is -- people complain about the impression they get of Alaska when guys like you stand out there in the rugged wilderness, as if there are no buildings in Alaska.

But let's talk about Prop 8.

TOOBIN: There are buildings.

VELSHI: There are buildings. Let's talk about Prop 8 for a second. And I'm sure it's not confusing to you, but this is the same judge who ruled that this is not valid. He then put a stay on his ruling, and now he's ruling on that stay that he put on his ruling.

TOOBIN: Correct. Basically, what he's doing is he's giving the supporters of Prop 8 a chance to argue that it would just create chaos to allow marriages, same-sex marriages to go forward while this case is still before the courts.

Now he's going to decide, in a matter of hours, whether that argument has any merit, as he sees it, whether same-sex marriages can start today, this afternoon, while the court proceedings continue, the appeals continue. Or put the whole thing on hold and let all the appeals resolve itself -- resolve themselves and then have the marriages go forward or not.

VELSHI: OK. Is that weird for a judge to issue a ruling, then issue a stay on his own ruling, then rule on that? I mean, does this not normally go to a different level or a different court?

TOOBIN: No, this isn't all that unusual. Because I mean, I think Judge Walker is proceeding cautiously. He understands the stakes are very big in this case. And this is an unusual case in many respects.

You know, one of the issues that judges always talk about when they talk about issues on appeal and stays, is will there be irreparable harm? That phrase, will there be irreparable harm if the decision is allowed to go forward?

And the interesting legal question here is, is a marriage that is later ruled to be not allowed, irreparable harm? Is letting people get married, irreparable harm? That's an unusual, difficult question. That's what the briefs address. And obviously, the -- both sides have different views of that. But it's an interesting way to think about the issue that the court has to decide. VELSHI: What does the -- what does legal history say about that? If this judge lifts this -- this stay, people start getting married, same-sex people start getting married today, tomorrow, and then a few months from now, on appeal, that gets changed. Are those people who got married, are those legal marriages?

TOOBIN: Well, actually, the California Supreme Court dealt with that exact question. Because if you recall a couple of years ago--

VELSHI: Yes.

TOOBIN: -- before Proposition 8, there was a brief period in California when same-sex marriages were legal.

VELSHI: Right.

TOOBIN: They were then declared illegal through Prop 8. And then the legal question came up, what about these same-sex folks who got married while it was legal? And the court ruled that those marriages are valid.

And that's what -- and that's a very strong argument in favor of lifting this stay, that the fact that, if the law is later declared unconstitutional -- if the law is later declared constitutional, if Prop 8 is upheld, it's not that big a crisis, because we've essentially dealt with this problem before.

VELSHI: Judge Vaughan Walker, in his initial ruling -- let me just read this to our viewers -- said, "Proposition 8 fails to advance any rational basis in singling out gay men and lesbians for denial of a marriage license. Indeed, the evidence shows Proposition 8 does nothing more than enshrine in the California constitution the notion that opposite-sex couples are superior to same-sex couples."

For those of us who aren't exposed to propositions -- voter- sponsored propositions and the effect that they have, how does this compare to legislation that's passed by a legislature? I mean, if the voters have voted on this, where does the court come in, in terms of determining whether it's fair or not?

TOOBIN: You know, as a legal matter, it makes no difference whether a law is passed by voter initiative or through the votes of legislators. The law is either constitutional or it's not. So the fact that it came from the voters really doesn't have legal significance.

Now let me put a little caveat around that. Judges are well aware of the political ramifications of their decision. And Judge Walker certainly was aware that he was telling seven million Californians who voted for Prop 8 that their action was irrational and unconstitutional. Any judge would pause before doing that.

Now, it didn't stop him from striking it down. But as a technical, legal matter, it makes no difference what the origin of a law is. It's either legal under the Constitution or it's not. And he said Prop 8 was not. VELSHI: All right, Jeff. Good to see you, as always. Thanks very much. We'll check in with you a little later on.

TOOBIN: All right.

VELSHI: As you know, this judge has said he'll pass his ruling by 3 p.m. Eastern. Dan -- Dan Simon is in the courthouse.

I want to just take you over to the wall here for a second and show you the states that permit same-sex marriages in the United States: Vermont, New Hampshire, Massachusetts, Connecticut, Iowa and the District of Columbia.

Now, there are some states that grant spousal benefits to unmarried couples. Those are California, where this is going on, Oregon, Nevada, and the state of Washington. New Jersey allows what they call civil unions.

By the way, a Gallup poll recently taken asking should same-sex marriages be recognized by law? Forty-four percent said they should; 53 percent said they should not.

We'll continue to cover this story, with Dan, with -- with Jeff Toobin as this ruling comes out.

Storms -- storms making for a pretty messy morning in the D.C. area, getting all the way to the White House, in fact. For some people, power is going to be out for days. Reynolds Wolf is with me here with the latest after this break.

(COMMERCIAL BREAK)

VELSHI: All right. Reynolds is here. He's a man who knows how to rock a vest. We don't see each other all that much. He's been out in the field on the Gulf Coast for a long time, but he's back with us right now.

We have had some crazy weather. Washington, D.C., power outages--

REYNOLDS WOLF, AMS METEOROLOGIST: Absolutely.

VELSHI: -- storms, even the White House affected?

WOLF: The place got jack-hammered by some very strong storms. Right now most of those moving out into the Atlantic. But you're going to see an area south of Washington, D.C., shaded in I guess a yellow box. That's where you have your severe weather possible. In fact that is a severe thunderstorm watch in effect until 6 p.m. local time.

But let's go back in the past and show you some of the rough video that we have for you that shows the tree damage, just of it just really extensive. This is in Maryland we're seeing first. Much of it has just been -- knocked out some apartment buildings, a lot of roof damage. Knocked out power to thousands of people, in fact. And it wasn't just in parts of Maryland, but also over at the White House. Take a look at some of the tree damage that we have there. Again widespread damage. What we have is very shallow root systems, very tall trees. And when the wind hits it, it just topples them over pretty quickly. One of the first things to go is the power.

Well, one thing we're seeing, speaking of power, some strong storms developing now not only on the East Coast but the remnants of Tropical Depression No. 5, now moving through the French Quarter, back over towards Grand Isle. Also, a couple of rumbles of thunder also detected near Mobile, on parts of the Gulf Coast. And another big storm we're dealing with, Ali, not just the strong storms but the intense heat.

VELSHI: Which is what I -- when I first heard about the power outages, I thought is it just -- is it the system overloaded by air conditioning? They're used to pretty hot in Washington. But--

WOLF: Absolutely. But this has been insane.

VELSHI: Yes.

WOLF: Not only had some 90s along the East Coast. But also, believe it or not, some cool temperatures out towards the west. Tonopah, Nevada, 38 degrees the high. El Cajon, California, 54 degrees. Fifty-four also out towards the West.

So we have a big ridge--

VELSHI: Yes.

WOLF: -- in the eastern half, a trough out towards the west. And it looks like this hazy, hot, humid weather is going to stay in place.

VELSHI: The ridge and trough, are they meeting somewhere, causing problems?

WOLF: They're meeting right here where we have this boundary, this stationary front. And right where they intersect, that's where you have another chance of stormy weather, especially over the next couple of hours.

VELSHI: All right. Reynolds, thanks very much for that. Great to see you here. And you, of course, are going -- are you going back to the Gulf?

WOLF: Back to the Gulf Coast tomorrow.

VELSHI: See this thing done. You're going to be there when -- when they do that bottom kill and that well is shut?

WOLF: Absolutely.

VELSHI: All right. Good. We'll stay with you on that. Listen, a car bomb went off early this morning in Colombia. It didn't cause a lot injuries, but it did send a very clear message. I'll tell you what it is, when we come back.

(COMMERCIAL BREAK)

VELSHI: There was an explosion early this morning. I want to take you globe trekking. That's what I'm doing right now. We're going to go to Colombia.

There was an explosion early this morning in Bogota. It was a car bomb that exploded, 5:30 a.m. their time. That's 6:30 a.m. our time. Eastern Time, I'm sorry, not "our time." We have lots of time zones in this country.

Nine people were wounded in this. It caused damage to the -- to a main radio station's headquarters and some nearby building windows were blown out. Some street-level storefronts were destroyed.

Kind of interesting that it happened at that hour of the morning. Obviously, it seemed more targeted at sending a message than injuring people at that hour.

Karl Penhaul -- do we have a report from Karl Penhaul? All right. All right. Karl Penhaul is covering that. We'll -- we'll hear a little more from him in a little while.

I want to take you now to Pakistan, where we are following the continued massive flooding in that country. Let me tell you a little bit about what's going on right now.

The president, Asif Ali Zardari, has now visited the areas. That's what he was doing today. He got a firsthand look at the destruction. You will know that he came under massive criticism inside Pakistan because he was on a trip in Europe and Great Britain while all of this flooding was going on. He said the trip was there to drum up support, economic support for Pakistan. It was very, very important. That's him on the second from your left. But a lot of public disapproval.

The death toll there now topping 1,343. And officials are fearing a second wave of death from contaminated water.

Let me bring you a map here. I'm going to give you a Google map of the Indus River. There, you can see it there, the Indus River. And that's -- they're concerned about a second crest moving through and hitting on Friday, which is going to prevent people from getting to their homes, cause further stress on structures like dams.

You can see that this flooding starts in the north of the country and goes all the way to Karachi. You can see that on the bottom left of your screen. Karachi is a port city; that's the end of the country. This is massive.

Let me give you a sense of how massive it is. We want to show you another map, comparing the Mississippi River on the right to the Indus River in Pakistan on your left. The Mississippi is about 300 miles longer than the Indus. Now keep in mind, almost all of the Indus is -- is flooding.

The Mississippi carries a little more water, but imagine if it were the entire length of the Mississippi. Let's show them that map on the right. Entire length of the Mississippi from Iowa to the Gulf Coast, to the Mississippi Delta and Louisiana. And then ten miles wide. Just widen the whole thing by ten miles. That is how much flooding is going on in Pakistan right now.

A big problem, because government is having -- the government is having trouble getting aid to everybody involved. But groups that support fundamentalists and Taliban groups are apparently having an easier time of getting aid to people. In that -- in that way they might be strengthening people's sentiment toward the Taliban as opposed to the U.S.

So this has much bigger implications than just a flood across the world.

All right. Developing news in the case of the serial stabber you may have heard about. I'm going to bring you details about it. We know who the stabber is. I'm going to bring you the details right after this break.

(COMMERCIAL BREAK)

VELSHI: A suspected serial stabber is now in custody. It's a remarkable story. Customs officials arrested him last night in Atlanta as he tried to board a flight to Tel Aviv, apparently with an expired Israeli passport. You can't make this stuff up. Five of his victims -- his alleged victims died.

Susan Candiotti is in New York now with details of this complicated story. What have we got?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: With each passing moment, we're learning we're learning more and more. CNN has now confirmed the name of the suspect through authorities in Flint, Michigan. That is where an arrest warrant has been issued. The charge so far is assault with intent to commit murder. And the name of the suspect is Elias Abuelazam. He is 33 years old. And according to two sources, he is an Israeli citizen who is 33 and about to turn 34 later this month.

Now, we understand that, according to law enforcement source, that he was traveling on an expired Israeli passport. And as we've been reporting all morning long, the arrest went down at about 10:00 last night when he was taken into custody at the airport there in Atlanta.

But here's the latest information. And we just got, Ali, this incident report from the Atlanta Police Department with more details about what happened at the airport itself. I'm going do read to you from it. It says that once they got the name, and they were looking for this man. They heard he was at the airport. It says that a police sergeant responded to the gate area of a Delta flight that was about to take off for Tel Aviv. And it says that they had the suspect paged over the intercom system and that he was detained when he approached the ticket counter. So, that's how he was taken into custody.

Now here's what we learned about what happened earlier in the day on Wednesday. Things came together very, very quickly. Michigan police said that they had an anonymous tip phoned in to them from someone who thought they recognized this individual from the composite sketch that had been issued. That led them to a business in the Flint, Michigan area. And that person, in turn, helped authorities -- apparently said they recognized the person -- that name was plugged into the national crime system. And they discovered his name was on a passenger manifest for this flight, this Delta flight heading to Israel. And apparently they got to him just in time.

VELSHI: Tell us a little, for anybody who hasn't been following this, what police think this suspect has been responsible for?

CANDIOTTI: They're looking at him in connection with a series of 20 stabbings. That started back in May in three states. In Michigan, in Ohio, as well as in Virginia. And most of the -- and five of the stabbings, we should indicate, were fatal attacks.

Now, most of the suspects -- or rather, the victims in this case -- were African-Americans. Some Hispanic. And a few white. But the majority of them, African-Americans.

It seems that in talking with some of the victims who survived this, they seem to be random attacks. Someone they said who would stop and ask them for directions or some assistance of some kind. Minor points. And when they stopped to give it, that's when the attacks occurred.

VELSHI: What a strange story. Susan, thanks very much for bringing us up to speed. Let us know if you get anything new on this. Susan Candiotti on this remarkable story.

OK. Let's look at that number. I talked to you earlier about a number -- about the amount of information -- that's produced every couple of days. Five quintillion bytes -- don't ask me what a quintillion is, because I don't actually know. But the point is, information overload. Most of it is from the Internet. In fact, most of it is from social media.

We've got somebody with us who can tell us a little bit about this. Let me just back up. Shelly Palmer, let me introduce Shelly Palmer to you, you probably know -- there's the number! Hold on, don't take Shelly, look at that number on the wall over there. That's five quintillion bytes -- one, two, three, four, five, six -- six groups of zeros, OK? So, that's a lot of bytes.

That's all the information from the beginning of time until very recently. You know, we're duplicating that every couple of days, Shelly. This is a number that Google put out the other day.

What's going on? What is all this information? Is it really new information? Or are we just copying each other's stuff?

SHELLY PALMER, MANAGING DIRECTOR, ADVANCED MEDIA VENTURES GROUP: Hey, Ali, how are you? That is a big number, isn't it?

VELSHI: It's huge! I don't even know -- I can't even tell you how many multiples that is of something. But that's apparently all the information -

(CROSSTALK)

PALMER: You know what? We are. The body of knowledge of mankind is doubling about every year now. And some of the information that they were talking about with the Google release is in fact copied information. Just ones and zeros.

Remember, Ali, information is not knowledge. Knowledge is knowledge. How do we make knowledge? We contextualize it, we editorialize it. There's some facts involved. Just bits of information are not knowledge. We're creating a frighteningly large amount of information every day.

VELSHI: Are there implications to this? does it matter that we are? Is it dangerous? Are we going to run out of places to store it all?

(LAUGHTER)

PALMER: OK. We're not going to run out of places to store it all because storage is relatively cheap. But what we are finding is that we have an attention deficit going on. There's only a finite amount of time each day you spend doing anything. And you just run out of time.

What's becoming more and more important in our world is filters. CNN does a nice job of filtering the news, so people can trust what you're telling them. That's a filter. We all put all kinds of filters on the news that we consume or the information we consume, and that gives it context and makes it valuable to us. The most important thing in the information age now is filtering and some people have a different word for it, it's called curation.

VELSHI: Curation. Like a museum. Deciding what you get to see, or at least creating an environment in which it's cataloged and dealt with. Here's -- I don't know if this is a related issue with all the extra information that's out there. There seems to have been a remarkable increase in malware - is it malware? Mala-ware? What do you call it? Bad stuff that shows up on your computer.

PALMER: Malware. Bad stuff.

Malware. it's a catch-all phrase for bad things like computer viruses. The most recent data is that McAfee, the virus protection people, said that there had been a gigantic uptick in the second quarter of malware or viruses out on the Internet. From about 4 million files freefloating to about 6 million. And they attributed this to the FIFA World Cup, where people were being tricked into clicking on things to allow them to put viruses on to their computers.

Here's some really important safety tips. First thing, get some decent virus protection from a name-brand company and use it. And you can take off all the un- name brand stuff.

Two, don't share jump drives or those little USB drives with anybody you don't know. Try really not to share them with anybody. In fact, be very careful whose camera SD card you take and put in your computer, because that's another way that these kinds of things travel.

And then also, I think it's an old thing, but we've got to keep saying it, keep saying it. Don't click on something that -- from someone you don't know. You're going to get into trouble every time.

VELSHI: Let me ask you about this, talking about clicking on things. If you use Firefox, you can, they've set up something where there's an alarm that warns you if Google is collecting information --that you're doing. Tell me how this looks like, it sounds like a spying thing. Google -- we talked to them, by the way. They said it's not spying, they're collecting information. It's kind of how the Internet works.

PALMER: Well, first of all, Google is always collecting information. They store every search that you do. It's anonemized, but it's every search that you do. They pretty much know every key click. You want Google not to spy on you? Make sure you go into Google History and turn it all off.

If you want to know what Google's doing, forget the Firefox alarm, that's actually a little bit of a parlor trick. You can go to Google Analytics and look at the kind of information that Google cares about.

What they care about is your value to an advertiser, to someone who is going to have an ad word or ad sense ad that you might click on. They want to deliver the right audience to that ad and the right ad to that audience.

So, if that disturbs you or if you feel like you're being abused in some way, you have a lot of redress. Google will help you protect yourself. Is Google spying on you? Ali, let's be clear about this. They're spying on everybody. Is it really spying --

VELSHI: Let me play -- Let's listen to that alarm for a second.

(SOUND OF SIREN)

VELSHI: That's pretty serious. We did ask Google about it. They said what you said. But this is funny, what Google told us. "We'd like to think there are less ear-splitting ways of being transparent with users. That's why we've created tools like Google Dasboard, which show users what information they share with us and provides direct links to control their personal settings and opt out for Google Analytics." I guess to my point, to that point, Shelly, that's, whether it's spying or not, you said it's anonymized. Do I care if somebody is collecting anonymized information about my habits?

PALMER: A lot of people do care, and I think this is one of those areas that people just sensationalize. Let's face it. If you know you're being watched, you're going to act differently than if you don't know you're being watched.

So, there's a whole problem with that, right? You're not going to be watching, oh, Cinemax at 2:30 in the morning. You know who you are, you know what's on. If you knew that your set top box was going to record what you were watching, every keyclick that you made, you'd probably be watching National Geographic or History Channel or CNN or something else.

You know, it's sort of like, are you at choir practice or are you at the bowling alley? I mean, that's the question we're asking here.

So, people get upset about this. But guess what? Nobody cares. I mean, don't be so arrogant, nobody cares what you personally are doing. What they care about is what the population of people like you are doing -

VELSHI: What the trend is. Yes.

PALMER: Exactly. And they're trying to serve you ads that are very relevant to you.

VELSHI: Right. All right, Shelly, good to see you. Thanks for breaking it all down for us. I'll see you next week in New York on your show.

PALMER: I'm looking forward to that, Ali. It's always great to be here. Thanks.

VELSHI: All right. Shelly Palmer in New York.

Listen, market forces and your money. We are laying out the important numbers for you: jobs, homes, your savings, what is going on in the economy and how it affects you, when we come back. Stay with us.

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VELSHI: I spent ten hours a week here bringing you the news during the day. My other job is that I'm the chief business correspondent for CNN, which means people ask me about the economy, and I sort of notice my own trend. There's been an uptick in the number of people asking me what's going on in the economy.

So, I want to tell you a little bit about what's going on in the economy. And really, the economy as it affects you.

There are three places that the economy touches you. One of them, let's call it savings. This could mean money that you save, it could mean money that you invest. Now, we've seen the stock markets since the beginning of the year basically take a bit of a tumble. If you invested a dollar in the stock market at the beginning of the year, it's worth less now. The S&P, which is a broad sample of the market, the S&P 500 --it's actually down, January to now, by about 3 percent. We don't want our money to go down in the stock market. So, that's a bit of a problem.

The other thing is if you were just saving your money. If you were putting it into a bank account, what would you get out of there? The average savings account gives you three-quarters of one percent. So, that's not a great alternative. You're not getting rich off the stock market or off of just putting your money in a bank.

Where's the other place you could feel a little wealthier? Your home. The price -- median price of a single-family home -- median price. That means half of all homes sold for more, half sold for less -- $176,900. That's a smidge higher than it was a year ago. So, home prices seem to have stabilized, but not by much. Why? Because there are foreclosures. Every time there's another foreclosure, it means that your house -- there's a lot of supply and not as much demand. However, interest rates are really low. The rate for a 30-year fixed mortgage right now, about 4.5 percent. That's lower than it's been since they started keeping record of these things.

Now the big one -- I talked about homes, I've told you about the market. Jobs. Everybody needs a job. Take a look. Let's go all the way to the back of the recession. The beginning of the recession, January of 2008. We just saw a few job losses that month. And then look what happened, all the way through 2008; by January of 2009, look where we were, more than 700,000 jobs lost in that month. Then it starts tracing upward basically until the beginning of 2010, where we actually start seeing jobs created.

Not the most even, though. See? Lost and then created. Now it looks like we're cooking with gas until a couple of months ago, we start to see job losses again. Now, we're not supposed to be seeing job losses at this point in the economy.

Let me give you a picture of the job environment right now. The unemployment rate right now is at 9.5 percent in this country. Take a look over there. The number of people unemployed and looking for work, 14.6 million people. And the number of people filing for unemployment benefits for the first time last week, 484,000. For the first time, calling up, going online or going to an unemployment office saying, "I'm out of work, and we need to get benefits." That's a problem.

And that's what's making people worry about this economy. Because if you don't have a job, you're not spending money. You're saving money. You're paying down your debt. You're paying off your credit cards, you're worried about losing a job. So, you're hoarding a little big. You're doing it, companies are doing it. And it's not kicking the economy up.

It's understandable that you're doing it because you're worried about what this economy is going to look like. We'll talk more about it later. We'll also talk more about it this weekend as we do every weekend on "YOUR $$$$$," Saturdays at 1 p.m. Eastern. And Sundays at 3 p.m. Eastern.

All right. If you're diabetic, you know about this business about having to check your blood on your fingers. What about if we could tell you about systems to save your fingers and wallets? Blood sugar testing without the blood. That's today's "Big I," and it's next.

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VELSHI: Well, we're closing in on 20 million Americans diagnosed with diabetes. The centers of disease control say that about two- thirds of them do not follow their doctor's advice on managing the disease. Now, a big reason for that? Out-of-pocket costs. And the biggest chunk of costs is the cost of the blood glucose testing strips. And then there are folks who don't want to be pricking themselves and drawing blood multiple times every day.

So, today's "Big I" addresses both of those issues. Researchers at M.I.T. have developed a device that measures blood sugar with light.

Joining us from Cambridge, Massachusetts, Ishan Barman and Chayreone Kong. They're with the M.I.T. Spectroscopy lab. They're grad students in Cambridge, Massachusetts.

Guys, thanks very much for being with us. I know we're always in dangerous territory when we get M.I.T. grad students from a lab I can't even pronounce to come here and tell us about what you've developed. Tell me about the development, the need for it and what did you come up with -- whichever one of you wants to start.

ISHAN BARMAN, MIT SPECTROSCOPY LAB GRAD STUDENT: Sure. So, as we know, diabetes is a global problem of massive proportions. Right now, people with diabetes need to draw blood using finger-prick testing because they have to tightly control the glucose levels, right? Now, think if you can measure the same levels of glucose using light shining on skin tissue, right (ph)?

So, what we're trying to build up is a completely noninvasive glucose monitor by having a (INAUDIBLE) laser beam shining onto the tissue and then collecting it and analyzing it to get the signal. And, what the technology entails is we're trying to harness a light spectrometer (INAUDIBLE) used for this purpose.

VELSHI: Now, where is this used elsewhere - yes, go ahead.

CHAE-RYON KONG, M.I.T. SPECTROSCOPY LAB GRAD STUDENT: As a side benefit, this technology does not require any test strips, so you don't have to buy supplies of test strips.

VELSHI: What are you buying? what is it that you are buying if this were to be marketed?

KONG: So, we're thinking in terms of marketing in terms of two stages. The first stage we're imaging that we can target the hospital clinic where we can -- you can -- we can design an instrument that can cost maybe on order of $15,000 to $20,000. And then -- but the alternate goal is to make it even more affordable so that it will be affordable for the home users -

(CROSSTALK)

VELSHI: So then, people would have a device in their home?

KONG: Right. Right. And the good thing is unlike the conventional glucose meters available in the market today, once you have the device, which has a shelf life of typically more than five years or up to ten years, you don't have to buy any supplies to keep it -- get this to work.

VELSHI: Ishan, where has this technology been used elsewhere?

BARMAN: So, this technology -- we started it (INAUDIBLE) glucose monitoring about 15 years back. Since then, we have tried it on animal models, on single human subjects and we're now starting clinical studies on a larger population over a longer period of time. (INAUDIBLE) spectroscopy has also been used for detection of breast cancer, cervical cancer, (INAUIBLE) sclerosis and even for malaria detection.

VELSHI: Chae-Ryon, what's the time line for this? What has to happen? What sort of testing does it have to go through, and what sort of approvals before we might see something like this being used first in hospitals and possibly in people's homes?

KONG: Currently, we have do a working prototype, which is about the size of a shopping cart and we're working for the approval -- we're planning a clinical study this fall, actually, on human subjects. And at the same time, our laboratory is developing a miniaturized instrument about the size of a laptop. And we're hoping that we can come up with a prototype within about two years. And eventually we would like to reduce it down to the size of an iPhone.

But it is hard to determine exactly when we can enter the market because of the concerns about financial factors as well as the time it takes for FDA approval. But given the current pace of development, we can estimate that within about five to seven years, we can probably expect to see one in the market.

VELSHI: Well, that's good., given the number of people affected by diabetes in this country. Guys, thanks very much. Congratulations on the great work that you're doing. It's been a pleasure talking to you.

BARMAN: Thank you so much for having us.

KONG: Thanks for having us.

VELSHI: For more information for these guys, go to our blog, CNN.com/ali. Well, coming this close to a shock would be a nightmare for most of us. But one surfer actually calls it a dream come true. You've got to see more of this. We'll be back in a minute.

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VELSHI: Some people are simply brave, and then there are those who are daring. Very daring. Maybe a little bit too daring. Like the surfer got this close to a shark and lived to tell about it with no limbs lost. Chuck Patterson says he was paddle board surfing earlier in the week with sharks circling around him for nearly 15 minutes. He didn't have a camera with him then, but the next day he did, so he went back and that's how he got all of this video that we're looking at right now.

Wow. That's crazy. He calls it a dream come true. After spending most of his life in the water. He's going to be on "RICK'S LIST" later on today. I would be interested to hear his thinking.

All right. From carnivores to currency, a rare gold coin. Researchers from the University of Michigan and the University of Minnesota found it in Israel in June. It dates back to 191 BC A top Israeli antiquities person says it's ranked in the top five of the rarest finds in the country's history, which in Israel has to be pretty rare. The head of the coin portrays Queen Arsenoae (ph). The other side symbolizes to brotherly love. That's because the queen was married to her brother.