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String of Tornadoes Hit Arizona; Betting on Stocks, or Not; Up in the Air Finally; Wrongfully convicted man sues prosecutors; Pressure to Freeze Foreclosures; "Still on Fighting the Fight; One Man's Trash, Another's Treasure

Aired October 06, 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: We're going to pick up right where you left off. You and Chad were talking a little earlier. Some breaking news. A string of tornadoes have hit Arizona. We're hearing at least seven people were injured. Chad's tracking it all with us.

You've talked to a sheriff down in the county.

CHAD MYERS, AMS METEOROLOGIST: Yes.

VELSHI: Just tell us what's going on.

MYERS: Well, we have a number of tornadoes, some that have already happened; some I think just happened we don't even have reports for them and some that probably still will happen today because the tornado watch goes all the way to 5 o clock.

VELSHI: OK.

MYERS: So the potential continues forever ever here, I think at least until 3:00, 4:00 tonight. The deal is Flagstaff, Sedona. OK. The valley of the sun, phoenix, way down here, so far not involved but there are storms that could get down there. They are tracking to the northeast but they are building further south and then tracking over the same area. One that we knew earlier today actually took a train and pushed it off the tracks.

VELSHI: Unbelievable.

MYERS: Twenty-eight cars on the train. The train stopped because it knew there was a tornado.

VELSHI: Right, right.

MYERS: And then it got in the way.

VELSHI: That's unbelievable. The sheriff was telling us about a couple of tractor trailers on I-40.

MYERS: Yes.

VELSHI: That had been overturned by the tornado and they had to close the highway down for a while. MYERS: Right. The highway is open and close, open and close depending on where the tractors are. And you know you have to get the equipment in there, then when they turn it over, they have to stop the flow of traffic, so I-40 west of flagstaff, don't even try it at this point in time. I want the show you, and it's the colorful part of the map. Flagstaff. These are very small words; I understand I just can't make them bigger. Sedona, cottonwood. Sedona, if you've ever driven from the valley of the sun through Prescott and on up towards Sedona, beautiful, picturesque -

VELSHI: Yep.

MYERS: Red rocks, mountainous - you don't expect to see tornados in mountainous areas, but there was a cell here and there was the color right there. It was headed again for the same location that already had a tornado. But in the last couple of minutes, it gusted out.

VELSHI: OK.

MYERS: No longer rotating but that doesn't mean it's over because you saw what happened in New York city with the 80 and 90- mile-per-hour straight-line winds, and that's what's heading through Flagstaff right now. Maybe it's not a tornado on the ground, but damage can still occur and you can get hurt.

VELSHI: And some damage has occurred, which means anything that comes through now can blow that debris around.

MYERS: Just like when we had hurricane Charlie and then Gene and then Frances. I was in Frances and gene, they were over the same area, and we were in trouble as a crew because there was plywood lying around all over.

VELSHI: Right.

MYERS: And we had to get out of the way of hurricane gene even though it wasn't as big of a storm as Frances was for the area, but because of the stuff that was in the way, stuff flies if not nailed down.

VELSHI: And we were speaking to the sheriff who said he's in front of a house that's been destroyed so we know that there's damage out there.

MYERS: We absolutely know there is damage. Mainly west of flagstaff, Belmont is the town right there. I assume that there's been a tornado on the ground west of Sedona. It was this cell here; it was on the ground but in an unpopulated area. There are homes every quarter mile, beautiful homes that people buy, they build them Prescott. They build them in phoenix and Scottsdale. People they come up here for the mountains, for the seclusion. They will, they're going to come and find some surprises.

VELSHI: OK, you'll stay on top of this - we have a few more hours of these tornado watches. The environment is ripe for them. We'll keep an eye on it. Chad will keep an eye on that.

This is one of those days, by the way, when the go-to gauge for stock markets is a big, round number. 11,000. We are not there right now, by the way. We are many points away from it. We are about 70 points away from it. But earlier today we were within striking distance. Now, this number 11,000 doesn't mean a lot in itself. That's where we are right now - 10,926 on the Dow.

But it is -- I think it's a great opportunity to take stock of how far we've come in a short time. And what people are watching for. Now, this is the Dow, we know that already. What we need to do is discuss why this is important for you. After yesterday's 2 percent surge, the Dow is approaching 11,000.

What if you are invested on -- in blue chips? What if you were invested in blue chip stocks on the first trading day of 2009 and you never put another penny into the market? Well, you would have yourself a tidy profit in the neighborhood of about 21 percent. That's outstanding if you happen to snap up some ultra cheap stocks at the low point of last year. Your profit would be closer to 70 percent.

But millions of small investors, regular people, either out of necessity because they needed the money or sheer panic have fled the markets since the start of the great recession and have not gone back. In fact, more than $30 billion have flowed out of mutual funds, that's how most of us invest, some of you might invest in stocks individually, but about $30 billion have flowed out of mutual funds so far this year.

Now, your investment decisions are your business. It is my business to give you a full and balanced picture of what's going on in the U.S. economy. A balance sheet has assets and it has liabilities. Let's start with the good news and there is lots of it.

First of all, stocks. That's the good news. We have seen a remarkable surge in the stock market and that's really why we're talking about this. This 11,000 that we might get to, might not get to any time soon to just serve as a reminder to you that something is going on in the right direction. Stocks are on a roll because corporate profits have been OK. Sometimes even good. Big investors are betting big.

Corporations are using some of those profits; some of the money that they have stored up to buy other companies because they think those other companies is on sale. They expect that those other companies that they're buying these mergers and acquisitions will be more valuable in the future.

Something else that's going well in the world - china, brazil, India, you've heard about the brick countries, Brazil, Russia, India, China, other markets for U.S. exports are booming. China is going to have growth around 10 percent this year. Take the rest of -- the rest of Asia without china; you're looking at 8 percent. Take India, you're looking at 6 percent. So that is an opportunity for Americans. On the downside, boy, this is a big downside. U.S. unemployment still very high. Businesses are still leery of adding staff because they don't know if there's going to be demand right here in the United States. And despite these rock-bottom interest rates, small -- there we go - unemployment is still there. Small businesses are still finding it hard to get loans. And that's the balance that we are looking at.

The so-so area of our economy, by the way, is the housing market. Home prices are trying to crawl out of the cellar but there is still a lot more supply than demand but as you know we have those low interest rates, so might be an opportunity, might be a problem for some people. We still have foreclosures going on.

On the jobs front, we are getting news of hundreds of laid off workers being recalled in an unlikely industry. American Airlines says it's bringing back 250 pilots and 545 flight attendants in the wake of new alliances that it's formed with British airways and the Spanish airline Iberia. American says it has a pending deal with Japan Airlines, as well.

My good friend and colleague Richard Quest sat down today with the head of American Airlines parent company, AMR --

(BEGIN VIDEO CLIP)

GERARD ARPEY, CEO, AMR: One of the toughest things you do in business and in this job is furlough somebody so it's really, really a good thing to bring people back to work.

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: There must be an improvement in business to justify bringing people back on to the books.

ARPEY: Well, clearly, our financial results are a lot better this year than they were a year ago and the third quarter will be even better still when we announce here in a few weeks so, yes, business is a lot better. I mean, we went through the oil crisis and then the financial crisis and things have definitely stabilize and improved but I called it fragile because we continue to be dependent on economic activity and to the extent economies are fragile and I think most people think economies around the world are still fragile today then the airline recovery is by definition fragile.

(END VIDEO CLIP)

VELSHI: As the CEO of AMR, the parent company of American Airlines we always talk about how airlines are indicators of what's going on in the economy.

My good friend Richard Quest now joining me from London after that interview -- Richard.

QUEST: The AMR American Airlines Gerard Arpey there and the 800 jobs that he is bringing back, he says it's largely because the recovery is taking place, traffic and numbers are up, but for American Airlines itself, what they announced today or at least consummated because this deal, Ali, you and I have talked about this years, 14 years, since American and British airways - yes 14 years since American and British airways first got engaged. They finally made it to the altar and now they have consummated the deal. Their alliance is designed to beat the new United and the gigantic Delta.

VELSHI: Richard, what do we think happens to passengers as a result? Great news that they are hiring back pilots and flight attendants in a market where we still worry - I just finished saying that we're worried about jobs. What do we think -- how does the passenger benefit?

Reporter: OK. The core question, now British airways, and American are going to be one across the Atlantic. What happens? Because they're no longer dueling against fares. What the airlines say is there will be one fare that will be offered by all the airlines, BA, AA, and Iberia.

Now when you ask them, "isn't that anti-competitive? Doesn't that mean a restriction in the number of fares?" They say, no, because the competition now is not between individual airlines, it's between the alliances. One World, Sky Team, and Star Alliance. And as long as the big carriers are in those alliances, well, you pay your money, you take your choice. That's the fighting ground for the future.

VELSHI: All right. For all of us traveling, we have seen fares go up. We will have to see how it plays out over the course of the next few years. A lot of change in the airline industry, it's going to look very different a few years from now than it did at the beginning of this year.

Richard, my good friend, good to see you, thanks so much for bringing us that. You can see Richard on his show every day on CNN International, "QUEST MEANS BUSINESS"

A Louisiana man came within a month of execution. Now he hopes the nation's highest court will side with him in a multimillion dollar lawsuit against his prosecutors. I'll tell you about this interesting story. The Supreme Court is dealing with it, when I come back

(COMMERCIAL BREAK)

VELSHI: 18 years in prison. 14 of those years on death row. All that time a Louisiana man proclaimed his innocence. Now, he wants the Supreme Court to side with him in a lawsuit against his prosecutors who knew he wasn't their man. Josh Levs is focusing on this fascinating case, one that the Supreme Court is dealing with. First week back, first week with Elena Kagan --tell us about this, this is a fascinating case --

JOSH LEVS, CNN CORRESPONDENT: It's fascinating - you can't sue prosecutors.

VELSHI: I did not know that. LEVS: If they purposely hide evidence that could exonerate you, you still can't sue them. If they break all sorts of laws, you cannot sue them because of something the Supreme Court decided more than 30 years ago it's basically stuck that way. Right? And what they're going to be looking at today is this really interesting case.

We have some pictures of this guy - this is his case we're going to be hearing today. It surrounds this man; his name is John Thompson who is wrongly convicted of murder and carjacking in New Orleans. He was on death row and then a month from his execution, his attorney's find that that the prosecution had hid evidence that proved he was innocent and everyone admits this - this is not a secret. Prosecutors today say it's true.

These guys did this back then - it was ultimately overturned. So what the case -- the Supreme Court is going to be hearing now is what he did that's unusual. You can't sue prosecutors, right? So he went after the district attorney's office. People know the name Harry Connick. His son -- it was D.A. Harry Connick at the time - he filed suit against him and against his office because they employed these prosecutors.

VELSHI: Oh. You can sue the D.A.?

LEVS: Well, that's the question?

VELSHI: Or that's what the question is --

LEVS: A jury gave him $14 million. And the test now is whether he gets to keep it or not.

VELSHI: Right.

LEVS: And I want to tell you, because I know we are in a rush. This is from "USA Today", they did a great job. Take a look at what they found when they looked into this. Two hundred one cases since 1997 judges have found federal prosecutors broke laws or ethics rules. You would think prosecutors maybe don't need to sue them because you could take them to - legally they have to answer to law.

Look at this --zero of the prosecutors were disbarred, one was tried and then acquitted, so the idea here, what their side is saying, you know what? The legal system isn't chasing these prosecutors. You need to be able to sue them to scare them off. The other side says wait a second; they might not go after some of these tough cases if they know they can be sued. That is the big question for the Supreme Court.

VELSHI: OK, so this is the case the Supreme Court is hearing oral arguments in today, it'll obviously be some time --

LEVS: It'll be months --

VELSHI: sometime before we get any results on that --.

LEVS: It will impact the whole country -- VELSHI: But at least we wanted you to know about that. Josh, great explanation on that - thank you so very much for that one.

We're going to take a quick break, but I have a quiz for you first. How many homes went into foreclosure this August? A - 381, B - 13 and C - 3,000? Which one is it? We have the answer on the other side.

(COMMERCIAL BREAK)

VELSHI: All right. We asked you before the break, how many homes went into foreclosure this August: 381, 13, or 3,000?

You know the answer to this?

JENNIFER WESTHOVEN, HLN'S "MORNING EXPRESS": One in -- I do.

VELSHI: One in -- I asked the question wrong. I asked the question wrong. One in how many homes wept into foreclosure in August.

You know, our job is not that demanding. All they ask us to do is get it right. My apologies to everyone.

That changes the answer entirely.

WESTHOVEN: Right.

VELSHI: It is A -- one in 381 in August alone. Foreclosures affect lots of Americans.

Right now, there's a freeze on foreclosures in 23 states by a number of banks. There's pressure on banks right now to halt foreclosures even in more states because of allegations that banks rubber-stamping foreclosure applications without verifying all the necessary legal stuff therein.

Jennifer Westhoven is here with me. She works with our sister network, HLN, an old friend of mine, a great old colleague of mine.

And I saw you making this understandable so I wanted you to do that for us.

WESTHOVEN: This is -- this is a huge deal. This is something that state prosecutors all across this country right now are looking at. I mean, I'm guessing there are some right now in their office who are looking at this. We just learned -- "Reuters" is reporting that the U.S. Justice Department says they're looking at it, too. And it's all about allegations of basically sloppy service by some major loan- holders and, you know, servicing companies.

So, the deal is that hundreds of thousands of loans may have been rubber-stamped, like you said. Nobody looked at the details. Some documents may have actually been faked. These are three major firms and there's sign that it is not just three firms.

VELSHI: Right.

WESTHOVEN: There's a lot more that we don't know about.

VELSHI: OK. The fact that it's three firms, there's sense that people were just -- because there were much volume in the foreclosure world, they were just signing off the documents. We all know how complicated home mortgage documents. So, foreclosure documents are as complicated.

WESTHOVEN: How on earth do you get a fair hearing if you're asking for a modification if they're not even looking at your documents? This is a really big deal.

So, we were just -- I think we got a map where we show you 23 states that you mentioned.

VELSHI: Yes.

WESTHOVEN: That's where they're frozen. They're only frozen because that's wherefore closures have to be approved by a judge.

VELSHI: I see.

WESTHOVEN: Meaning, in the other states, there isn't even anybody who's going to look over their shoulder.

VELSHI: Right.

WESTHOVEN: But these places, they know a judge is going to look. So, they're kind of going, hmm, let's go back and make sure that we got everything right.

VELSHI: But as you said, we're hearing reports. We're going to try and confirm those that the Justice Department is now going to look into this.

WESTHOVEN: Right.

VELSHI: And for some people, this might mean some changes. But -- but in many cases, the implication isn't that people are going to save their homes from foreclosure.

WESTHOVEN: Right. You're not going to get your home back, but if you're in your home right now and you haven't been paying for a long time --

VELSHI: Right.

WESTHOVEN: -- you're probably going to be in there for a much longer time.

VELSHI: OK.

WESTHOVEN: You're probably going to hold on for far more months, but it also means more disarray in the mortgage market --

VELSHI: Yes.

WESTHOVEN: -- for months, maybe years to come.

VELSHI: Jennifer, great to see you. Thank you for explaining this. It's a bit complicated. You did a great job of doing that, which you do every morning on HLN. So, good to see you here.

WESTHOVEN: You, too.

VELSHI: Jennifer Westhoven from our sister network HLN.

Listen, you want more information on things to do with your money? Every weekend, Saturday at 1:00 p.m. Eastern and Sunday at 3:00 p.m. Eastern, join our mutual friend Christine Romans and me on "YOUR $$$$$" right here on CNN.

OK. Sobering words from an Afghan parent, "Our sons cannot go to school because bombs and suicide attacks." That's cogently sums up the Afghanistan of today. Tomorrow marks the ninth anniversary of the start of the war.

We're going "Globe Trekking" right after this break.

(COMMERCIAL BREAK)

VELSHI: A lot of happiness in Chile at the site of the mine where 33 men are trapped about half a mile underground. A cage specially built to haul the men one by one to the surface arrived at the mine. The steel capsule will be sent down a rescue shaft once drilling is completed.

The relatives of the miners not only had a firsthand look at the capsule, they were allowed to get into the narrow cage, which is a little more than 20 inches wide. I'm still having trouble understanding this fully. I mean, I don't know a lot of people who are 20 inches wide.

It's expected to take between 20 and 30 minutes to pull each miner up from their shelter. So, you can imagine, this is going to be -- wow, they're going to be so close to freedom and, yet, it's going to be so harrowing.

They've been trapped down there for more than 60 days and I suppose waiting a few hours to be pulled out once that capsule goes down is OK. But the ride up, can you imagine in that little capsule?

Chile's president said they could be pulled out as early as next week.

When the miners first got trapped, the government expected the rescue effort to last through December.

Look at that. That's what it's going to look like. Those men are going to be in that capsule and it's going to be called "The Phoenix" capsule. It's going to have oxygen in it. It's going to have communications equipment in it. It's going to have an escape hatch, although I'm curious about where they're going to escape to and it's going to shot up to the top.

I don't think it's going to go at that speed. It's going to take 20 to 30 minutes to do that. One by one, these guys are going to get to the top and we are going to cover it for you when it happens.

OK. Time for "Globe Trekking" now, our focus is the war in Afghanistan. Tomorrow marks the ninth anniversary of the start of that war.

When President George W. Bush launched the invasion back in 2001, October 7th, 2001, most everyone was confident that the Taliban would be defeated. Everybody was stunned by how quickly American and NATO forces toppled the militant regime.

Nine years later, American servicemen and women still fighting the war, still being wounded, and still being killed.

What went wrong? How did the Taliban go from defeat to being a powerful enemy today, controlling a vast area of Afghanistan?

Let me show you a timeline showing how a war that seemed to have been won nine years ago seems to now have no end in sight. After nearly nine years of civil war, the Taliban seized control of Afghanistan back in 1996. They had been fighting with the Russians, as you recall. They forced the Russians out. Nobody has ever successfully defeated Afghanistan.

Back then, they controlled about two thirds of the country. Now, the hard-line Islamic rulers, the Taliban, began their oppression of women. They banned music. They held public executions. You know these stories.

By 1998, two U.S. embassies in Africa were bombed, in East Africa. The U.S. said that al Qaeda and Osama bin Laden were responsible for that.

In retaliation, the U.S. launched missile strikes at bin Laden bases in Afghanistan.

OK, 1999 to 2001, the U.S. imposed sanctions on Afghanistan. It was a bid to force the Taliban to surrender bin Laden to the United States. They didn't do that.

And then they blew up those two giant Buddha statues. It was a sign to the world that they don't care about anything outside of their own culture. These were ancient statues. The move was condemned around the world, but it was a real symbol of what the Taliban meant.

September 11th, 2001, the attacks on the World Trade Center, the Pentagon. The U.S. blamed bin Laden for the attacks that killed 2,752 people. That was September 11th. By October 6th, the U.S. and NATO forces had invaded Afghanistan. President Bush ordered the action after the Taliban refused once again to hand over Osama bin Laden.

November 13th, 2001, two months after the attacks of 9/11, the Taliban were driven out of Kabul. They flee to the south, to neighboring Pakistan. That border area that we talk about so much these days. Coalition forces take control of the Afghan capital.

By December of 2001, three months after 9/11, there were seemed to be a bunch of missed chances to get Osama bin Laden. The battle of Tora Bora on the Pakistan border, well, that was a bid to capture bin Laden. It didn't work.

After fierce fighting, bin Laden and Taliban leader Mullah Omar -- they escaped, apparently again for those border areas in Pakistan.

Taliban birthplace -- the Taliban birthplace: Kandahar. That's their spiritual center. It fell finally to coalitions forces. That seemed like an attack at the heart of the Taliban.

Hamid Karzai was sworn in as the head of an interim government in Afghanistan. By 2003, NATO had taken over command of security in Kabul.

Now, NATO, it was the first time that they had an operational command outside of Europe. The U.S. invasion of Iraq began then and the focus started to shift to Iraq. The Taliban took that opportunity to regroup.

By 2004, a new Afghan Constitution was adopted. Hamid Karzai now becomes the first democratically-elected president of Afghanistan.

By 2005, Afghans go to the polls for the first time, first parliamentary and provincial elections that were held in more than 30 years. The Taliban continues to gain strength, however, in southern Kandahar province.

In 2006, NATO takes over security operations throughout Afghanistan. Heavy fighting erupts in areas that the Taliban still controls and Osama bin Laden is still alive and believed to be hiding in Pakistan.

2007, opium production soars in Afghanistan. The Taliban control much of the opium production. They use the money from the sale of opium to buy weapons. Pakistan strongly suspected of aiding the Taliban, including planning some of the Taliban military operations.

Well, 2009, Barack Obama sworn in as the president of the United States. Thirty-six thousand American troops are in Afghanistan at that time. In February, President Obama adds 17,000 U.S. troops to the combat zone.

Counterterrorism expert, General Stanley McChrystal, is named the commander of U.S. forces in Afghanistan. Elections were held. Taliban attacks continue. And there are charges of widespread fraud in those elections.

In October of 2009, President Obama increases U.S. troop presence by 30,000 in Afghanistan. Now, 100,000 troops in Afghanistan. President Obama announces he will start troop withdrawal by July of 2011 -- almost a year from now.

2010, this year, the American death toll in Afghanistan soars. By the end of the summer, 1,015 American troops have been killed in the war. McChrystal -- Stanley McChrystal was fired over controversial remarks he made about the Obama administration in an interview that appeared in "Rolling Stone" magazine. General David Petraeus takes over command of U.S. forces and the war now continues with no end in sight.

The Taliban are far from beaten. They attack yet another supply convoy that's headed for U.S. forces in Afghanistan. We've been reporting on this for a week. There have been at least six reports -- six attacks in six days and there are reports that the Afghan government either wants to talk peace with the Taliban or is involved in talking peace with the Taliban. Where do we stand right now? Where do we go here nine years in? When we come back I'll talk to Ivan Watson about it.

(COMMERCIAL BREAK)

VELSHI: All right. I'm going to show -- just talking about the Taliban's level of control of Afghanistan. They have gradually and steadily expanded their influence over the past several years. This first map, for 2007, let me just advance to the next one. This area here shows you the area that was of heavy Taliban province. I told you, in the southern Kandahar province, but other areas. This is what the Taliban largely controlled. The area in green is what they had some substantial presence in. This area in blue is really what they didn't control. Only eight percent of the land back in 2007.

Let's advance this over to the next map and show you what it looked like in 2008. They've gone from controlling this area to controlling all of this, as well. Taliban presence has increased to 72 percent of the country, and 21 percent is the area that they're in substantial control of. The part that they're not in control of, just seven percent.

Let me go to the last map and show you what it looks like in 2009. Once again, we've gone from 72 percent to 80 percent substantial control, 17 percent with some presence. Only three percent of the country is absolutely and certainly not controlled by the Taliban.

Let's get to Ivan Watson. He's in Kabul. You have been following this with great detail, Ivan. Let's talk about where we are. From the outside world, we see NATO and U.S. troops continuing to be in danger. We see a government that is not effectively functioning and then we see this map that says that the Taliban -- do they really control that much of the country?

IVAN WATSON, CNN CORRESPONDENT: Well, I think that may be a stretch because the Taliban can roll in and out of a village when a NATO or a U.S. Military armored convoy of armored vehicles rolls into the village, the Taliban will run away in many cases very quickly. But it says something about the extent of the authority of the Afghan government, which is limited at best and the serious challenge of the Taliban presenting.

Ali, you did that historical course basically in the last decade of history. After the Taliban was overthrown in 2001, it really, as a fighting force, it was a joke. It couldn't really amount much resistance in the first few years. But I've watched the sad and tragic decline of security around the country over the past nine years. Provinces in the north of the country that I could safely drive to two years ago, one of those according to a governor now some 40 percent of that province is now controlled by Taliban insurgents.

And it just shows a very sad decline despite the fact that U.S. and NATO dramatically ramped up not only troops but also aid money to Afghanistan, especially over the last two years.

VELSHI: Ivan, let me ask you this real quick, because I just don't know what the truth is or not about this. We had heard reports that the Taliban negotiating with Afghan government, with NATO troops, with U.S. troops. Then we heard they weren't. Then we heard they were.

Are there talks, peace talks going on between these enemies?

WATSON: There's certainly an initiative by the Afghan government right now. They want to talk peace. They see that things are not going well right now. The Taliban is denying claims, both by the U.S. Commanding General here David Petraeus, and most recently today, from a senior government official of the Afghan government to me, that some high-level Taliban figures have reached out to the Afghan government. Taliban denying that.

One of the problems that the Afghan government says is they don't know who exactly is in charge of the Taliban right now. It's believed Mullah Omar is across the border in Pakistan, but they realize that a lot of the fighting units here in Afghanistan aren't necessarily working in a strict hierarchical structure and may not follow the orders of exiled senior leadership across the border in Pakistan.

VELSHI: All right, Ivan, thanks very much for your great coverage of it. We'll talk to you again tomorrow.

Ivan Watson, in Kabul, Afghanistan.

The future of being connected. I want to talk to you about something entirely different now. It's all about video and it's today's "Big I." But first, here's a question I want you to ponder.

What country has the highest percentage of wired citizens? Is Iceland, Japan, the United States, or Canada? Take a hard guess at that. I'll tell you when I come back.

(COMMERCIAL BREAK) VELSHI: OK. When we left I asked you which country by far the most connected by percentage, the number of people who are connected to the internet. I offered you Iceland, U.S., Japan, and Canada. Guess what? Iceland, 97.6 percent of the people connected to the internet. It might be that it's a little bit isolated from the rest of the world. Who knows. Guess where the U.S. is? 22nd. We rank 22nd. I would have guessed that. I might have guessed third, I might have guessed fourth.

Let's talk about the future of connectivity. Everything depends o it. This is like talking about the future of electricity 100 years ago. The future of phones 50 years. Carlos Dominguez is a senior vice president at Cisco, a company at the center of connectivity in the world. He joins me right now because this is what you do. You need to understand what the world is going to look like. It's not as simple as saying, there are going to be this many more connections to the internet.

What are we going to be doing differently ten years from now, give years from now? What can my viewers decide they want a part of the future to either get educated or to make sure they're buying the right things.

What's going to change?

CARLOS DOMINGUEZ, SENIOR VICE PRESIDENT, CISCO: I think we're at a point where everything is changing. Seen the dramatic change social networks has brought from the internet into consumers. What the next wave -- it's going to be all about video.

VELSHI: Right. This is what I keep hearing. Why? I don't care to download a whole lot of video and watch things that I could have watched --- but you're not talking about me watching video.

DOMINGUEZ: No, I'm not talk -- no, I think that wave has come and will continue and the quality will continue to improve. What I'm talking about is real-time communications. I'm talking about you being able to communicate with your loved ones in a remote area from your home and having an experience like it's being there.

VELSHI: So the way I could interview you from anywhere in the world. But people, individuals can have that degree of connectivity the way we make phone calls now, the way we use Skype?

DOMINGUEZ: Absolutely. The differences are the quality is going to be much more immersive. When you see the detail, when you look at communications and face-to-face communications, 55 percent is body language. A lot of it is going to be able to be able to see exactly your grandson or your daughter or having, you know, I travel a lot. So for me being able to connect back to family while I'm on the road and being able to do it in a really immersive way, that's priceless.

VELSHI: All the important -- I can talk to anybody I want on Skype. The important thing, though, I don't have a doctor who is going to diagnose me over Skype. I don't have the ability to tell a potential employer in San Francisco, hey, can we do did interview via video.

What will make that happen? Because that's when it becomes effective. When I don't have to go on a plane to go somewhere. Or I'm too sick to go to the doctor but they can talk to me through some video connection in my home. I assume it has to be secure, it has to be inexpensive, and it has to be ubiquitous.

DOMINGUEZ: Oh, absolutely. All of the above. One of the key things with technology -- technology in itself is not that important. The real important thing is, what are the applications, what can you do differently to really change the paradigm?

When you bring video in the home, it's going to change everything. You brought up some very good applications from a health care perspective. And when you marry video with other applications that can detect a person's walk and determine whether they're feeling good or not, that is invaluable. Right? So all of these things are going to evolve. There's going to be stuff around education. Who says that I need to be tutored for my guitar lesson in person?

VELSHI: That might be the biggest gain. Whether it's guitar lessons or whether it's your actual degree or it's your high school courses.

DOMINGUEZ: Absolutely, absolutely. All of those things will be enabled through video. And it doesn't only have to be in the home. It'll be on your handset, it'll be while you're traveling on other devices that are tablet-based. In home is just one of the other mediums.

VELSHI: I love it. This sounds so exciting and I love the fact you believe it's going to happen and it's going to happen soon.

DOMINGUEZ: It's going to happen now. We're actually announcing a brand new product today called UME that actually brings video of this high quality into the home.

VELSHI: Let's hope it gets to the point where it's affordable and easy for everybody to use. Carlos, good to see you, thank you very much. Great to have you. Cisco's Carlos Dominguez is a Cisco senior vice president.

Listen, why is that your house so trashy? That's a real compliment, by the way, to one Texas couple. They design and build homes from things you normally just toss out.

Ed Lavandera takes us to the Edge of Discovery.

ED LAVANDERA, CNN CORRESPONDENT (voice-over): License plate roofs. Picture frame ceilings. Wine cork floors.

UNIDENTIFIED FEMALE: It feels really good. It's really cushy.

LAVANDERA: Those are a few of the quirky in-home treasures Dan Phillips is designing from trash. DAN PHILLIPS, FOUNDER, THE PHILLIPS FOUNDATION: I had always suspected that one could build a house out of whatever went into the landfill.

LAVANDERA: Now Phillips is turning that hunch into a business.

UNIDENTIFIED FEMALE: I think it's definitely worth trying.

LAVANDERA: His wife Marsha, a retired art teacher, lends a creative hand. But clients don't have much say. The designs grow primarily from the building materials. It's a creative equation that keeps costs way down. Phillips who has to have all his projects approved by state inspectors builds exclusively for artists, low income families, and single moms. And he encourages many of his tenants to be to help construct their future homes.

PHILLIPS: You protect it because you know how many times you hit your thumb and how dirty and sweaty you got.

LAVANDERA: Christie Stevens and her two sons helped renovate this 900-square foot home. Now living in it paying $368 a month.

UNIDENTIFIED FEMALE: I'm very, very proud of this work. It's probably the hardest work I've ever done.

LAVANDERA: Ed Lavandera, CNN.

(END VIDEOTAPE)

VELSHI: Pinned down by the Taliban. The youngest guy in the company steps out to draw fire so his brothers in arms can escape. Staff Sergeant Robert Miller was 24 years old, killed in action. Saving others. In minutes, his parents will accept his Medal of Honor.

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VELSHI: All right. I want to show you -- we're waiting for a presentation by the president of the United States -- the family of Staff Sergeant Robert Miller. He was killed in action on January 25th, 2008. He'll be receiving the Medal of Honor.

He was born in Harrisburg, Pennsylvania, grew up just outside of Chicago. He was 24 years old when he died. He was the younger member of his company. His team came under fire from Taliban insurgents in a village near the Pakistani border. Staff Sergeant Miller's commander said that they were fish in a barrel when the shooting started.

Now, Miller deliberately left safe cover to engage his attackers and he drew fire from more than 100 enemy fighters and kept firing, he kept throwing grenades even after he was wounded. He's -- he's said to have saved the lives of fellow Green Berets and 15 Afghan soldiers who were fighting with them.

He's the seventh service member from the Iraq and Afghanistan campaigns to receive the Medal of Honor, which is the nation's highest military honor. It is given for, and I'm quoting here, "conspicuous gallantry and intrepidity at the risk of a service member's life above and beyond the call of duty while engaged in an action against any enemy of the United States."

There have been 3,400 awarded since the medal's creation during the Civil War. It is presented by the president on behalf of the Congress of the United States. We will bring you that as soon as it begins.

Meanwhile, as you know, we are 27 days away from the midterm elections. President Obama is the face of the Democratic Party. Is he living up to the billing to carry his party through?

Well, on CNN's "PARKER/SPITZER" noted film director Oliver Stone talked about how the president has done until now.

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OLIVER STONE, DIRECTOR: It was that hope that he would be -- breathe a new spirit and take on the corporations and take on the oligarchies that run America and say, look, new way of doing things. He would have had the people behind him and I think he could have gotten out of Afghanistan and Iraq and been quicker about it and attacked the Wall Street issue faster and so forth.

ELIOT SPITZER, HOST, "PARKER/SPITZER": And so, I sense more than some minimal disappointment in the sense that he has pulled the punches as it were.

STONE: Yes. No one's -- that's not surprising. On the other hand, I'm still rooting for him. I haven't -- you know, it's either him or McCain and or Palin or Bush. You know, I don't think there's a choice.

KATHLEEN PARKER, HOST, "PARKER/SPITZER": Could you see making a movie about Sarah Palin? Is she movie fodder? I would think she's --

STONE: I think it's a bad idea, because I think you're already empowering her. She is a moron in my opinion and she doesn't say anything and she's very colorful, but you give her more power like Father Coughlin in the 1930s or -- you know, she's an Andy Griffith character.

(END VIDEO CLIP)

VELSHI: You can see "PARKER/SPITZER" nightly 8:00 p.m. Eastern right here on CNN.

How are we doing with the Medal of Honor? Is the president -- ? All right, I understand that the president is moving his way into the room. We will take a quick break. When we come back, he should be starting to speak and we'll bring you right there.

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