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Countrywide Bombing Spree in Iraq; President Obama Plans Iraq Speech; Bank's Post-Katrina Solution; Pakistan's Iron Ore Deposits; New Normals of This Economy; Pakistan Victims Return Home
Aired August 25, 2010 - 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: Good morning, everyone.
Live from Studio 7 at CNN world headquarters, the big stories for Wednesday, the 25th of August.
Iraq -- spasms in violence. Insurgents unleash a countrywide bombing spree. A blunt message for a paralyzed Iraqi government and departing U.S. troops.
A community bank hands up millions of dollars. In the grim days after Hurricane Katrina, five years later, trust pays dividends.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We just made human judgments, and those people that needed help, we gave help.
JEANNE MESERVE, CNN CORRESPONDENT: What kind of help?
UNIDENTIFIED MALE: Cash.
(END VIDEO CLIP)
HARRIS: And Afghanistan's barren landscape. Hidden underneath, enough treasure to make the country very rich one day.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: There's copper, cobalt, lithium and rare metals. Gemstones like emeralds, rubies, sapphires.
(END VIDEO CLIP)
HARRIS: And good morning, everyone. I'm Tony Harris.
Those stories and your comments right here, right now in the CNN NEWSROOM.
And we begin this hour in Iraq.
With U.S. troop levels down, violence shot up in breathtaking fashion today. A wave of apparently coordinated attacks all over Iraq killed at least 48 people today.
CNN's Michael Holmes live now from Baghdad.
And Michael, many of these attacks targeted police officers and Iraqi soldiers, correct?
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Yes, that's absolutely right, Tony.
This is a critical time for Iraqi security forces, because they're trying to assure the public here in Iraq that they can protect them. But at the same time, well, they didn't protect themselves very well today.
You're talking about a very widespread coordinated attack. I think you've got a map that shows it, 13 cities from the north of the country to the south of the country.
We're talking about suicide car bombs. We're talking at unmanned car bombs. There were roadside car bombs.
There were many, many attacks here. The most deadly was in southern Iraq, a police station, 20 killed, 90 wounded. In Baghdad, a police station, 15 killed, 57 wounded.
As you said, the total, 48 killed, nearly 300 wounded. And, of course, just last week at a military recruitment center in Baghdad, there was another attack, 48 dead there, too, and scores wounded -- Tony.
HARRIS: And Michael, the usual suspects at play here, al Qaeda in Iraq?
HOLMES: Well, I can tell you that the prime minister, Nuri al- Maliki, he has already come out and said that he accuses al Qaeda and what he described as remnants of Ba'athist elements for this. There has been no claim of responsibility as yet.
What he did also was call on security forces to stop these sorts of attacks. He described this period of time as critical and sensitive for Iraq. As you said, it's just a day after the U.S. announced that they're at their lowest manning since 2003.
More worrying, perhaps, than the casualty numbers themselves, even, there was an ability by those who carried out this attack to do so on such a broad scale, on such a length and breadth of the country. And it was a very complex string of attacks and it worked -- Tony.
HARRIS: OK.
Michael Holmes in Baghdad for us.
Michael, appreciate it. Thank you.
President Obama plans a major speech on the troop withdrawal in Iraq next week. So how concerned is the administration about the latest violence?
Let's bring in White House correspondent Dan Lothian.
Dan, good to see you. What are officials there saying?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Tony, you know, administration officials all along have been saying that they expected an uptick in violence because al Qaeda in Iraq is trying to disrupt progress there. Overall, though, the president's counterterrorism adviser, John Brennan, says that violence continues to be on the decline, that al Qaeda in Iraq has failed to ignite sectarian violence.
But the big question still remains, what will happen when U.S. troops completely pull out at the end of 2011? If you're seeing this violence now, will things not only reignite once U.S. troops pull out?
And here's what Mr. Brennan had to say about that.
(BEGIN VIDEO CLIP)
JOHN BRENNAN, DEPUTY NATIONAL SECURITY ADVISER: We are going to advise and assist them, but our confidence is strong. Even though there are some elements within Iraq that are dedicated to try and disrupt the security in that country, ,Iraqi security forces, the troops, the leaders, are particularly determined to ensure that peace and security are able to prevail inside Iraq.
(END VIDEO CLIP)
LOTHIAN: And Tony, Mr. Brennan points out that you still have 16 months to go. That's the reason that troops aren't just essentially jumping off a cliff and exiting all at once.
There's still a chance here for adjustments to be made. There'll still be more training that will be ongoing. But ultimately, he believes that once U.S. troops completely pull out at the end of 2011, that the Iraqi forces will be able to hand security there and that that nation in terms of the security situation will not go into reverse -- Tony.
HARRIS: Yes. They have to at some point.
All right. Dan Lothian for us.
Dan, appreciate it. Thank you.
Back home and family and friends, the 4rth Stryker Brigade combat team returned to joint base Lewis McChord near Seattle this morning.
Can't see this enough, huh? The 4th Stryker pulled out of Iraq last week. The brigade deployed to Iraq a year ago, its second deployment of the war.
We want to hear of those of you directly affected by the war in Iraq. If you or a loved one have previously served or are currently serving in Iraq, if you would, share your story. And for more information on how to do that, just go to cnnireport.com. Yes, love that.
And you can see President Obama's Oval Office address on the Iraq troop withdrawal live on CNN. It is set for next Tuesday at 8:00 p.m. Eastern, 5:00 Pacific.
(NEWSBREAK)
(COMMERCIAL BREAK)
HARRIS: Hurricane Katrina barreled ashore five years ago this Sunday, devastating New Orleans and other towns along the Gulf Coast. After the storm, it quickly became a cash economy. But with most ATMs down, how would you get it?
CNN's Jeanne Meserve has more.
Good morning, Jeanne.
MESERVE: Tony, there's an old saying, "The good you do comes back to you." And in Gulfport, Mississippi, that came true.
(BEGIN VIDEOTAPE)
MESERVE (voice-over): Katrina chewed up and spit out much of Gulfport, Mississippi, including the headquarters of Hancock Bank.
GEORGE HAIRSTON, CURRENT CO-CHAIR, HANCOCK BANK: See, this floor was completely trashed. It was 100 percent lost.
GAY TODD, HANCOCK BANK EMPLOYEE: I'm just glad to be here.
MESERVE: Bank employee Gay Todd still tears up remembering not what was lost, but what her bank gave.
TODD: They looked after the community. Sorry.
MESERVE: Without electricity, records, or even all its buildings, Hancock started opening the day after the storm, improvising with trailers, folding tables and faith.
UNIDENTIFIED MALE: We just made human judgments. And those people that needed help, we gave help
MESERVE (on camera): What kind of help?
UNIDENTIFIED MALE: Cash.
MESERVE (voice-over): Waterlogged money salvaged from ATMs and vaults was literally laundered, washed, dried, ironed, and loaned to customers and non-customers alike.
HAIRSTON: And we would write a little IOU on whatever little piece of paper that you had that you could put your hands on -- little yellow sticky pads, piece of a napkin.
MESERVE: Marvin Koury got a few hundred dollars.
MARVIN KOURY, GULFPORT RESIDENT: A lot of people's lives were depending on being able to go buy gas, ice.
MESERVE (on camera): And you needed cash to do it.
KOURY: You needed cash to do it.
MESERVE (voice-over): Hancock bank says millions of dollars of salvaged money was used to make its unconventional Katrina loans. All but $300,000 was paid back. And there were other unexpected dividends.
In the four months after the storm, Hancock's deposits grew 40 percent. And in 2009, George Slogul, the bank chairman during Katrina, was elected mayor of Gulfport with almost 90 percent of the vote.
UNIDENTIFIED MALE: Basically people are honest and want to do the right thing. And they will stand by you if you do the right thing by them.
(END VIDEOTAPE)
MESERVE: The bank wasn't the only Gulf Coast business to do something like this. A pharmacist in Gulfport told me that her store gave medicines to people who needed it without licenses, without I.D., for simple handwritten IOUs. They, too, got 90 percent of their money back and won a lot of new customers.
Katrina may have damaged much of the coast, but it knitted together some communities.
Tony, back to you.
HARRIS: Jeanne, appreciate it. Thank you.
Many Americans are pulling out of the stock market. What are you doing to save money?
We examine the new normal. That's next.
(COMMERCIAL BREAK)
HARRIS: You know, I've got to tell you, with the market reeling from the recent housing report, many of you are wondering, when will things return to normal? On Monday, I mentioned there is a new normal these days according to our friends at "Fortune" magazine and CNNMoney.com.
Patricia Wu is at the New York Stock Exchange with details.
Patricia, good morning to you.
Let me start with this -- we're talking about new normals here. What is the new normal when we are talking about unemployment? PATRICIA WU, CNN BUSINESS CORRESPONDENT: Oh, Tony, it is not what you want to hear.
When it comes to unemployment, it looks like it's here to stay for a while. We actually have got a chart that shows the unemployment rate since 2007, and as you can see, not much has changed over the past year. It's just stubbornly stuck near 10 percent, and economists say that it's likely to stay that way for the rest of the year.
The bottom line is that the private sector is not adding enough jobs. It's adding an average of 90,000 jobs a month this year, but we need double or even triple that to bring down that jobless rate -- Tony.
HARRIS: Wow. And the second new number we want to take a look at here is the idea of renting over owning, and this one, it seems to me, is all about home values.
WU: You hit the nail on the head, Tony. As you know, owning a home has always been the American dream, but for some it's now becoming a bit of a nightmare, because owning a home is no longer a guaranteed investment, with some analysts saying that it may never again be the wealth builder that it once was.
The S&P/Case-Shiller Home Price Index says that home prices fell 32 percent from 2006 to 2009. As a result, many people are renting or moving in with family -- 66.9 percent of Americans currently own their own homes. That's the lowest level in 11 years, and that trend may continue because home prices are expected to keep falling. Why buy if you think those prices are going to keep getting lower, right?
Well, we have three more new normals for you, too, later this hour -- Tony.
HARRIS: Perfect. All right, Patricia. Thank you so much. Can't wait.
President Obama often puts it out this way -- he says small businesses account for two-thirds of new jobs in this country. This Oklahoma couple is now one of his favorite statistics.
Justin and Lauren Orcutt opened an errand service in Tulsa about a month ago now. They'll pick up groceries, drop off dry cleaning, grab a couple of sandwiches, whatever. Delivery starts at just $10.
(BEGIN VIDEO CLIP)
LAUREN ORCUTT, YOU BUY, WE FLY: Some of our calls that we get are, "Can you bring me lunch right now?" or "I've got a meeting in 30 minutes. Can you bring me and my associates Starbucks?"
The time that they have away from work they don't want to spend, you know, running and doing tedious errands.
(END VIDEO CLIP)
HARRIS: OK. The Orcutts call their startup You Buy, We Fly. Find them on the Web Tulsa.
And while we are bring you news from around the world, we are also watching what's hot online.
Josh Levs surfing the Web for us -- Josh.
JOSH LEVS, CNN CORRESPONDENT: Tony, this is interesting. Anne Frank's tree is no more. This is the tree that she looked down on as she wrote her diary while hiding during the Holocaust. It has fallen. Pictures and the story are right here on CNN.com.
You're watching the CNN NEWSROOM.
(COMMERCIAL BREAK)
(WEATHER REPORT)
(COMMERCIAL BREAK)
HARRIS: Let's start with some news about schools now.
The Education Department announces the round two winners in the Race to the Top initiative. Nine states and the District of Columbia will share $3.4 billion in grant money. The states include Florida, Georgia, Maryland, Massachusetts, along with New York, North Carolina, Ohio, Rhode Island and Hawaii. The grants rewards states for their plans to reform schools.
And tune into CNN NEWSROOM all next week for a special series on education, "Fix Our Schools." It will focus on success. And we want you, as always, to join the conversation.
Tell us what you think, some of the small things that are making a big difference in your school. Parents and teachers, tell us what you think it will take to fix our schools. Contact us through Facebook, Twitter as well, or our blog at CNN.com/Tony.
Political outsiders and big money influencing results from the primary elections. One Republican senator wins easily after what had been a strong challenge, but another GOP senator's career is in jeopardy.
Chief National Correspondent John King, host of CNN's "JOHN KING USA," joining us -- we love it -- to talk about politics.
John, good to see you.
First of all, did any big themes emerge from the results last night?
JOHN KING, CHIEF NATIONAL CORRESPONDENT: Good morning, Tony.
You know, that's the hard part. We often want this big national narrative, and some people are saying, well, it was a good night for the establishment, because John McCain withheld and pushed away a challenge from the right in Arizona. Kendrick Meek, with the help of former President Clinton and the Obama administration, pushed off an outsider challenge to win the Democratic Senate nomination down in Florida.
So you could say, ah-ha, see, in this anti-establishment year, finally a good night for the establishment. Well, tell that to Bill McCollum. He was the establishment candidate for Republican governor in Florida. He lost.
Tell that to incumbent Senator Lisa Murkowski up in Alaska. She's losing right now. They haven't finished counting the votes yet, but to a Tea Party challenger who had way less money and way less organization. So, it's hard to have a national narrative to this.
Another big narrative would be money. Senator McCain certainly outspent his opponent. He won.
Rick Scott outspent his opponent down in Florida in the Republican governor's race. He won.
But remember that billionaire real estate investor Jeff Greene? He spent all that money on the Democratic side in Florida's Senate race and he lost to Kendrick Meek.
So, no big national theme on this one. You've got to go state by state, candidate by candidate.
HARRIS: Well, let's do that. Let's do a little bit of that.
In Alaska, I'm just sort of curious. We're still trying to figure out the Tea Party and the Tea Party's influence. Did Tea Party politics and Sarah Palin play a significant role in that state's Republican Senate primary?
KING: Without a doubt. The Murkowski name in Alaska is like the Kennedy name in Massachusetts. Her father was in the Senate for a long time. There's a little blood rivalry between Sarah Palin and the Murkowski family.
She beat Lisa Murkowski's dad, Frank Murkowski, for governor a few years back. And many thought -- remember, Sarah Palin gave up her job early. She resigned the governorship to take her job at Fox News, to write a book, to travel the country. And many thought that, boy, that would spoil her political standing in the state of Alaska.
Well, she got behind this Tea Party candidate, Joe Miller. He had only run for office once before. She did a robocall to turn out the vote, her husband wrote a fund-raising letter, they generated some enthusiasm. And the votes aren't finished counting there yet, but Mr. Miller is ahead at the moment.
He's run a surprisingly strong race, win or lose. And without a doubt, the Palin factor was a big influence there.
HARRIS: All right. Let's move to Florida now. A lot of attention, as you know will be paid, and we will be shining a spotlight in the Sunshine State in November. A big money outsider took on one of the state's most visible insiders right in the GOP primary for governor.
What happened there?
KING: I am fascinated by Florida. I used to say if I could camp out in one state this year I would go to Ohio, because of the big races in the state of Ohio. I might change my mind and go to Florida.
Because, Tony, voters always complain to us. They say they we want more choices, we want people outside of the party labels. You're showing Rick Scott on the right there, he's an outsider, a multimillionaire former healthcare executive. He will now be the Republican candidate for governor of Florida.
The Democratic candidate is the state's chief financial officer Alex Sink. But they have a third-party candidate, too, who is the son of a former governor, Lawton Chiles. You have three candidates in the race for governor.
Look at the Senate race, you have three candidates there, too. The current Governor Charlie Crist, who is running as an Independent. You have Marco Rubio, the Republican, he's a conservative favorite, a big Tea Party favorite. And then you have the winner of the Democratic primary last night Kendrick Meek, an African-American congressman from the Miami area.
It's a big state, it is ethnically diverse, it is economically diverse. It has a mix of industries. It has all the important constituencies that you find all across the country. Florida will now be a national laboratory for both Senate and governor of three-way races and third party choices.
And how can that work? Trust me. Not since the Ross Perot movement have we had a laboratory like the state of Florida this year to watch how people, now the voters say, we want more choices. In Florida, they have them.
HARRIS: Yes. And John, let's circle back to Arizona for a moment here. Senator John McCain fended off a challenge from J.D. Hayworth, right, the former Congressman and talk show host.
At the end of the day, is this result a surprise?
KING: Well, yes and no.
It is not a surprise in the sense that Senator McCain, whatever you think of him, he is a student of the political environment. And he knew he was going to face a challenge from the right, that the Republican Party was shifting to the right underneath his feet, and that he needed to be quick out of the gate. So he spent much more money, I think eight to one, a fundraising advantage, and a spending advantage over J.D. Hayworth.
As you watch what happened, a Republican incumbent senator lost to a Tea Party candidate in Utah. A republican incumbent senator might be about to lose to a Tea Party candidate in Alaska. Why didn't it happen in Arizona? Well, J.D. Hayworth is a former congressman, he has baggage of his own, he's not a traditional outsider, so he couldn't run that, I'm an outsider versus the insider campaign against John McCain. And John McCain went negative very early on, Tony, and essentially disqualified J.D. Hayworth before J.D. Hayworth could disqualify him.
HARRIS: Yes. So smart on all of this. Our chief national correspondent John King, the host of "JOHN KING USA" 7:00 p.m. Eastern every night, right here on CNN.
John, appreciate your time. Thank you, sir.
KING: Thanks, man.
HARRIS: And still to come, a troubled actress back in the spotlight in Los Angeles. Lindsay Lohan is about to find out what her new probation rules are. We will go live to Los Angeles.
(COMMERCIAL BREAK)
HARRIS: New rules for Lindsay Lohan. In a court hearing this hour, a judge is expected to give the actress new probation orders and now word from her father that she is out of rehab. So, dad's the reporter on this?
CNN's Kareen Wynter is at the courthouse in Los Angeles.
Kareen, OK, so what did the judge decide and what is Michael Lohan talking about here?
KAREEN WYNTER, CNN CORRESPONDENT: Well, Michael Lohan, Tony, sent a statement confirming that, yes, my daughter is out. And he hopes now, that according to Michael, that now she'll finally be able to get back on track with her life.
That hearing, we're waiting. It should be starting any minute right now. There's a new judge on the case, by the way. Shawn Chapman Holly, Lindsay Lohan's attorney, she is in court. I actually just saw maybe about a minute or two ago, the prosecutor on this case make her way up. So that will perhaps begin a short time from now.
The judge will basically be ruling the fact that now that Lindsay Lohan is out of rehab, where do things go from here? Will she be required to undergo any outpatient care and also probation? Before rehab and jail, and this was the source of the problem, she hadn't been attending those weekly drug and alcohol screenings on a weekly basis, on a consistent basis, rather. And so that may be brought up.
Another thing that's really interesting, Tony, is when Lindsay Lohan was in rehab, the doctors at UCLA who treated her, who observed her said, you know what, this is the reason for her erratic behavior. She was actually on the wrong meds, she wasn't given the right prescription meds. So that may be something that's brought up today - Tony.
HARRIS: Kareen, help me here. This all stems from a drunk driving case, correct?
WYNTER: Correct.
HARRIS: All right. Now, wasn't she supposed to --
WYNTER: From 2007.
HARRIS: Wasn't she supposed to be in rehab for one, two, maybe three months?
WYNTER: I'm happy you brought that up because let's do the numbers here.
The previous judge on this case sentenced Lohan to 90 days behind bars, in jail, remember and 90 days for rehab. She was out of jail not even two weeks, after just 13 days. And as for rehab, 22 days. So that's a bigger issue here.
Some people are saying, has his young woman learned her lesson? She wasn't in long enough. Now, if you listen to some people in her camp, for example, her mom, Dina Lohan, who did an interview recently on another morning show, she basically didn't put the blame on Lindsay. She's saying there's so many inaccurate reports out here. My daughter is fine, my daughter is fine.
Given what's coming from mom and the fact that she really didn't spend much time in rehab and jail, many wonder, Tony, many wonder, is this someone who's actually been rehabilitated in any way? And what's her life going to be like now that she's out?
HARRIS: OK. So we'll get some new rules of road for Lindsay in rehab, coming up here shortly.
Kareen Wynter for us outside of the Los Angeles courthouse.
Kareen, good to see you, as always. Thank you.
Let's do this. Let's take a look at top stories right now.
The Mexican military says it found 72 bodies dumped on a ranch in northeastern Mexico. The gruesome discovery was made after a gun battle with Mexican troops and suspected drug traffickers. One naval officer and three suspects were killed.
Chile is turning to NASA for help as it tries to rescue 33 miners trapped underground. Freeing the men could take months. NASA is being asked how to maintain the psychological well being of a group crammed into a very small space.
The Catholic Church in Scotland says it has booked "Britain's Got Talent" star Susan Boyle to sing for Pope Benedict during his visit to Scotland next month. Boyle says it is something she's always dreamed of and she calls it an honor.
(COMMERCIAL BREAK)
HARRIS: Afghanistan is a nation rich in resources. So far, largely untapped. Our Jill Dougherty says that's about to change.
(BEGIN VIDEOTAPE)
ATIQ SEDIQI, SENIOR GEOLOGIST, AFGHAN MINISTRY OF MINES: A huge deposit. This is the beginning and it continues in that direction.
JILL DAUGHERTY, CNN CORRESPONDENT (voice-over): We're in the mountains of Bamyan Province, 80 miles from Kabul. Atiq Sediqi, senior geologist for the Afghan Ministry of Mines is showing the Hajigak Iron Deposit, said to be the largest undeveloped iron ore deposit in the world.
(on camera): So that's it?
SEDIQI: It is a piece of Hajigak. And it's 62 percent iron. Let me break it.
DOUGHERTY: That's all pure iron ore.
(voice-over): In the mountain range that stretches 15 miles, almost two billion metric tons of amazingly pure iron ore. This September the government of Afghanistan will offer a tender of mining rights here, hoping to attract international companies.
SEDIQI: That's a magnet that tracks into it.
DOUGHERTY (on camera): So that's definitely iron?
SEDIQI: Right, right. And then you break it a little bit more. Oops. And that's the oxide of iron from the surface but this is the (INAUDIBLE).
DOUGHERTY: Can I feel that?
SEDIQI: Yes.
DOUGHERTY: Oh, my, God, it really is heavy.
(voice-over): Iron ore is one of a vast array of minerals Afghanistan has. Hidden under breathtaking mountain ranges formed 140 million years ago.
There's copper, cobalt, lithium, and rare metals. Gemstones like emeralds, rubies, sapphires, lapis lazuli, topaz, and a recent discovery, 1.8 billion barrels of crude oil, plus natural gas.
Based on Soviet studies from the 1960s, the U.S. Geological Survey estimates the potential value of Afghanistan's mineral wealth at a $1 trillion. The Minister of Mines says, it could be as much as $3 trillion.
And only 30 percent of the country has been explored.
(on camera): So that could be really the economic future of your country? WAHIDULLAH SHAHRANI, AFGHAN MINISTRY OF MINES: Great potential for this country. The major source of our economic growth has been the international aid (INAUDIBLE) of Afghanistan. And in the future five to seven or ten years, the contribution from the mining sector would be a major factor in the sustainability of our economic growth and future.
DOUGHERTY: But there are two huge challenges: a lack of security and infrastructure. Right now, Afghanistan has only about 50 miles of railroad. The government plans to build much more tying railways, highways and energy supplies together so those minerals can be exported.
(on camera): So you've got all of these places you want to go, east toward Pakistan, India, China. And then north, central Asia -
SHAHRANI: Indonesia and Russia.
DOUGHERTY: And then Iran?
SHAHRANI: Yes. And hopefully (INAUDIBLE) toward the south of Pakistan.
DOUGHERTY (voice-over): Near the Hajigak iron ore deposit the villagers are hoping the development -- if it comes -- will bring jobs and money.
This 14-year-old boy tells me there's no danger from the Taliban here.
UNIDENTIFIED MALE: Here there is not any insurgents. And the people can provide you with security, too. And you don't need a security guards. (INAUDIBLE).
DOUGHERTY: But can the government assure the village elder that corruption won't siphon off the potential benefits to his people? The government promises everything will be public and transparent. These Afghan citizens hope that's true.
Jill Dougherty, Kalu, Afghanistan.
(END VIDEOTAPE)
HARRIS: Did you travel for your summer vacation? Many of you chose to stay at home and visit local attractions and that is becoming a new trend.
(COMMERCIAL BREAK)
HARRIS: Come on, Joe, walk this way, walk this way. Let's get everyone to CNNMoney.com, you're source for financial news, the best site on the web and the Money Team doing a terrific job for you each and every day.
You see that lead story, right? "New Home Sales Hit Record Lows," subheading, "Sales plunged 12.4 percent to the lowest level since 1963 as the housing market reels after the home buyer tax credit expires. " Let's leave that for Patricia Wu to talk about in a little more detail in just a couple of minutes.
Looking for another headline here to draw your attention to -- "100 Tax Breaks That Could Die." But anyway, it's all here at CNNMoney.com.
Let's see here, we're almost 90 minutes into the trading day, let's look at the numbers. Big Board, New York Stock Exchange, we're still trading down, but I believe off session lows, down 22 points. Nasdaq is -- where's the number here? -- let's just call that flat.
Earlier this hour, we told you about two new normals of this economy when our essentially culture goes through a major change -- long-term employment and renting instead of owning. Let's get back to Patricia Wu, she's at the New York Stock exchange with the details of the last three new normals -- Patricia.
WU: Well, Tony, you know, this next one is related to long-term unemployment and falling house values. If you don't have a job or you don't see your house as a piggy bank, you will probably keep an eye on your spending.
So the third new normal, saving instead of spending. And we have a comment from one of our viewers that sums it up quite nicely. He says, we lived beyond our means for decades. A reality check, America.
And it looks like people have learned their lesson. We have got a chart that shows the personal savings rate which is now at 6.4 percent of the disposable income. Compare that to just 1 percent in 2005.
Now, of course, the cautious consumer does hurt the economic recovery in the short term, but becoming more responsible spenders will save us more pain down the road, Tony.
HARRIS: And, Patricia, the idea of not going on vacation is the idea of the staycation, that's another example of Americans trying to save a little bit more, isn't it?
WU: Absolutely. It means staying close to home for a vacation, not splurging for that big trip overseas. And it's become so popular as soon as the recession began, that it's actually become part of the Merriam Webster Dictionary. They actually added that word to their dictionary last year.
And you know, this idea is here to stay as a new normal, because the "USA Today"/Gallup poll says that 27 percent of people plan to travel less this summer compared to last year.
And we do have a hint about the final new normal, Tony. You'll have to go to CNNMoney.com for it, but it has to do with taxes.
And if you've got time, I'll give you a final market check.
HARRIS: Yes, yes. Let's do it, let's do it.
WU: All right. Well, the Dow is down 24 right now, so it's off the session lows at 10016. The Nasdaq down 1.5, and the S&P down 4 -- Tony.
HARRIS: And before I let you go here, anything that -- any big takeaways in the new home sales numbers?
WU: Well, you know, the takeaways, I think, is just A, it's worse than we expected --
HARRIS: Right.
WU: -- which is not good for the market, because it's uncertainty again. Also, prices falling, which drives up inventory.
HARRIS: Right.
WU: And you know what happens when inventory goes up.
HARRIS: Yes.
WU: Prices fall some more.
HARRIS: Terrific.
WU: So overall, not a rosy picture.
HARRIS: OK, Patricia, see you next hour. Thank you.
WU: Sure.
HARRIS: Some hotels are offering to pay for those checked bags, the fees associated with checked bags. According to "USA Today," Intercontinental Hotel Group, which owns Holiday Inn, will pay bag fees up to $50 for customers booking two straight weekend nights. The offer runs from September 1st to December 30th. Kempton Hotels has a similar offer.
And there is another rally today over the proposed Islamic center and mosque to be built close to where the Twin Towers came down. In the next hour of the CNN NEWSROOM, family members of 9/11 victims rally for it.
Plus, a man vacationing in Connecticut finds out from his iPhone someone is breaking into his home in Texas. Can you believe it? At the same time, burglars find out the hard way there is an app for that.
(COMMERCIAL BREAK)
HARRIS: You know, when times are bad, there is one thing you can always count on in Washington -- the blame game. The first to point fingers for the dismal economy? The top republican in the House.
(BEGIN VIDEO CLIP) REP. JOHN BOEHNER (R-OH), MINORITY LEADER: President Obama should ask for and accept the resignations of the remaining members of his economic team, starting with Secretary Geithner and Larry Summers, the head of the National Economic Council.
Now, this is no substitute for a referendum on the president's job-killing agenda. That question will be put before the American people in due time.
JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Very constructive advice, and we thank the leader for that.
(LAUGHTER)
BIDEN: But let's take a look at the rest of the -- his advice. But first, let's reveal a little bit of history here.
For eight years before we arrived in the West Wing, Mr. Boehner and his party ran the economy and the middle class literally into the ground. (END VIDEO CLIP)
HARRIS: Vice President Biden says that despite the latest bad news, the economy continues in, quote, "the right direction."
The death toll from flooding in Pakistan has reached almost 1,600. The U.N. has made an urgent plea for helicopters. Hundreds of thousands of people can only be reached by air, but some of the victims are making the difficult journey back to their shattered homes.
CNN's Kyung Lah from Pakistan.
(BEGIN VIDEOTAPE)
KYUNG LAH, CNN CORRESPONDENT (voice-over): They come back in slow waves by tractor, by bicycle, and sometimes bare feet like Gos Chachar (ph) and his family.
(on camera): Everything is gone?
UNIDENTIFIED MALE: Uh-huh.
LAH : Everything?
(voice-over): That's the question they can't answer, and what they're trying to find out -- what happened to the home and town they fled when Pakistan's historic floods hit three weeks ago.
Carrying what they can, they wade through the receding floodwater until a tractor empty enough to carry them passes by.
On the tractor, we meet Sumri Banglani (ph) and her 4-year-old daughter. This is tough on them, she explains, but she wants to go home. We have no choice, what can we do? It is a dangerous trek with contaminated floodwaters and uncertain ground that claim this tractor and a precious cage of chickens.
Everywhere along this journey, water. Though it has partially receded, it still laps at doorsteps.
The water now too deep for the tractor, so Gos Chachar and his wife, Nasavan (ph), board a boat for the final leg home. I need to see this, says Chachar, I need to see what's left of my house.
(on camera): You can see how hard it is for these families just to try to return home to see what is happening to their houses. But this is one of those communities that got flooded 16 days ago, they have yet to see any aid.
Some of the locals here say that they did see some food airdropped right into their community, but it missed and it landed in the water.
(voice-over): Nasavan's face tells us we've arrived at her house. The house and their town unspared. A pair of scissors and drawer salvaged, the rest lost.
UNIDENTIFIED MALE: My home is broke.
LAH: Despair descends. The question about his home answered, now what to do next?
Kyung Lah, CNN, Korampur, Pakistan.
(END VIDEOTAPE)
HARRIS: Boy, that is tough to see.
