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Financial Shock Waves; Elizabeth Smart Wraps up Testimony in Kidnapping Trial; Bomb Timed to Explode Over U.S.; Flash App for iPhones

Aired November 10, 2010 - 14:00   ET

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

ALI VELSHI, CNN ANCHOR: I'm Ali Velshi. I'm with you for the next hour.

We're watching three major stories happening around the world right now.

A frightening new revelation in that plot to smuggle bombs out of Yemen onto planes headed to the United States. One of them timed to explode over U.S. soil.

In Florida, 300 Broward County schools were in lockdown until moments ago, as police chased down a threat from a possible gunman.

And chaos in London as tens of thousands of angry students take over the streets. They're protesting a government move that could send their tuition fees skyrocketing.

All of that is happening right now, and we're on top of all of it.

But elsewhere on the global stage, financial shock waves from a summit that hasn't even started yet. No matter how much money you have, or how little you have, you want it to be worth something. You want that money to hold its value.

But right now the two biggest economies on the planet are accusing each other of driving their own currencies down. And that means rough times ahead at the G-20 economic summit getting under way tomorrow morning, which is just a few hours from now, in Seoul, South Korea.

The group of 20, the G-20, it includes the world's biggest economies. It also includes some of the world's fastest emerging economies.

Together, they represent 85 percent of the world's economic output. So, trust me, you have a stake in what the leaders at the G- 20 decide.

This year all eyes are going to be on the contenders, U.S. and China. China has long been accused by the United States and others of keeping its currency, the yuan, particularly low, artificially cheap, in part by buying up currencies from other countries. China has so much money, that when it buys the dollar, it buys the euro, it creates demand and makes those currencies go up relative to its own. What's the point of that? Well, if the Chinese currency is worth less, Chinese products can be sold less abroad and, for that matter, in China. Sure enough, it works.

Chinese exports have been off the charts for years. Just this morning we got the numbers. We learned that last month alone, China exported $27 billion more to the world than it imported.

The U.S., by the way, does the opposite. For years, we have imported far more than we've sold to other countries. We also got the numbers for September this morning. The U.S. imported $44 billion more from the world than it exported.

Now, the Obama administration thinks that the ultimate answer for all countries is economic growth -- more producing, more consuming, more buying and selling. Everybody wins that way.

To that end, the Fed decided last week in what we have been calling QE2, the second round of quantitative easing, to pump more money into the U.S. economy by buying up treasury bills. Guess what? The expected impact of that is to lower the value of the dollar.

When you put more of something of value out there, it becomes worth less. That makes U.S. exports cheaper to the world and gives the U.S. the very edge that everybody complains to Beijing about.

Christine Romans follows very closely -- she follows all of this very, very closely. She joins me now for her take on what all of this means.

On the eve of the G-20, very different world than it was two years ago, where the world was coming together, working in concert to solve this global economic crisis. And now it seems tomorrow will mark them going in different directions.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's absolutely right. And we're told that behind the scenes, the deputies of the finance minister of the countries that are there, the 20 countries that are there, and some guests, are all running in and out of rooms with their cell phones on their ears trying to figure out exactly what language to hammer out for the communique about what other countries are doing.

And the United States would like to be talking about global imbalances, Ali. They'd like to be talking about those trade deficits and those current account deficits that you were just showing there. But instead, the U.S. is getting a lot of flack about the Fed, and the Fed injecting money into the system and driving the dollar down.

Ironically, the Obama administration, Ali, the position they're trying to take is, look, if this helps the U.S. economy get stronger, that helps our currency get stronger, and that helps everyone, when the U.S. is a strong engine of growth. But right now people are mostly just complaining about the Fed's move there -- Ali. VELSHI: So, the bottom line is a short-term drop, what the president and administration are saying is a short-term drop in the currency, should result in long-term gains if there's economic growth. That was the point behind QE2, the Fed deciding to put $600 billion into the economy.

ROMANS: That's right. But here's another twist on that, too.

You're seeing all these commodity prices going up, right? Because all of this money is now expected to come into the system. There's a lot of speculation moving into these big commodity prices.

At what point does economic growth, being a little more robust because of QE2, at what point is that blunted by the higher commodity prices that have occurred at the same time? So, all of this is very intricate, quite frankly.

And you have the German finance minister saying that U.S. policy is "clueless." So, there are a lot of opinions about what the Americans are doing, but I think what we can say for sure is that speaking with one voice a couple of years ago has given way to a lot of countries pursuing their own domestic policies here because they're under incredible pressure at home to get people back to work. Especially here.

VELSHI: All right, Christine. We'll continue to follow this very, very closely. We'll do it here, we'll do it on the weekend as well.

You can catch Christine with me on "YOUR $$$$$," Saturdays at 1:00 p.m. Eastern and Sundays at 3:00 p.m. Eastern. This weekend we will talk about commodities. We'll talk about gold. We'll talk about currencies. We'll talk about the G-20.

We'll give you an understanding of this that's going to help you make some decisions for yourself.

Also, Christine is the author of a new book called "Smart is the New Rich." It's available on bookshelves now.

Today was the third and probably last day of testimony for Elizabeth Smart in the federal kidnapping trial of the man who abducted her eight years ago. Smart has been composed on the stand recounting that horrific ordeal.

Jean Casarez is a correspondent for "In Session" on our sister network, truTV. She was in the courtroom today.

(BEGIN VIDEOTAPE)

JEAN CASAREZ, CORRESPONDENT, "IN SESSION," TRUTV: I sit in that courtroom and I watch her eloquence, her classiness, but her honesty as she turns to the jurors and says some of the most humiliating, degrading things that could happen to anyone. But she is recounting it. She has to recount it. She is a surviving victim. And today -- she just got off the stand, by the way. It was a short cross-examination, but it was pretty pointed.

VELSHI: Right.

CASAREZ: But in the direct examination today, they seemed to try to want to anticipate what the defense was going to do, so they asked her about his preaching, about that he was the Davidic king, that he was the one chosen to have seven wives. "Did he ever talk about this in public or just to you?" She said, "He never mentioned it in public. It was just to me."

(END VIDEOTAPE)

VELSHI: And that was a way for the prosecution to show that Brian David Mitchell was manipulating Elizabeth Smart.

As Jean said, the cross-examination was pretty short. At one point, Smart actually thanked the defense attorney for reminding her of a violent outburst by Mitchell. She's not expected to be called back to the stand before the end of the trial.

OK. A frightening revelation about the plot to smuggle bombs from Yemen onto planes headed to the United States. Just how close were we to a major tragedy? Closer than you think.

I'll tell you about it when we come back.

(COMMERCIAL BREAK)

VELSHI: Susan Candiotti is following the story of these bombs that got onto planes in Yemen and were headed for the West. One of them was discovered in East Midlands Airport in England, and we have found out that -- authorities are telling us, Scotland Yard is saying, that if that bomb had carried on undetected, it might have blown up above the United States, maybe as a plane was landing in the United States.

Susan Candiotti has more on that. She's been following it very closely -- Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Ali, it's chilling new information that is now being revealed to us in part by a U.S. counterterrorism official, as well as a statement from Scotland Yard.

First, that counterterrorism official tells us that that plane, the cargo plane carrying the printer bomb, if it had been on board that plane, would have exploded six hours after the cargo plane took off from the U.K. and headed toward the United States. Now, Scotland Yard, in a statement, goes on to say that that would have meant that the plane would have exploded somewhere over the Eastern Seaboard of the United States.

Now, this information is coming to us, Ali, 12 days after that initial crucial tip from Saudi intelligence passed on through various channels that allowed the British, in this case, to nail down one of those two cargo planes that had originated in Yemen and was stopped, in this case, in the U.K. That's when authorities discovered the package that eventually led to the discovery that that printer contained some 300 grams of PETN, an explosive that could have blown up, officials say, that cargo plane.

We also know, Ali, from German intelligence that the cargo plane was originally meant to go from the U.K. to Philadelphia, and then on to Chicago. The question, of course, that we cannot answer right now -- and we don't know whether authorities can -- is whether that plane was meant to blow up in the air, as it was landing, or exactly where over the Eastern Seaboard of the United States.

VELSHI: Here's the thing. I was talking to Paul Cruickshank about this earlier, and you know this. This was determined by a tip.

This wasn't some scanning device. PETN can't be scanned. These components look like cell phones or printer cartridges. So the onus here is on intelligence, an d great job for the intelligence community.

But the fact is, without tips and without intelligence, there was no amount of detection that was going to figure this out.

CANDIOTTI: That's exactly right. And authorities are the first ones to tell you that. And they say it goes to show that people who want to do harm to the United States and other countries are always looking for a way to break the system, to test the system, and they found another way to carry that out. If it were not for that intelligence tip, this plan would not have been thwarted.

VELSHI: And al Qaeda in the Arabian Peninsula has said that -- they say that you should expect more of this.

CANDIOTTI: Absolutely. And authorities here and across the world know that the system will be tested. So they're constantly trying to beef up the system in the best way they know how. But they do know that intelligence is the most important key to try to break up these plots.

VELSHI: Yes, no kidding. All right, Susan. Thanks very much for continuing on this story. We'll stay with you on it.

Susan Candiotti, working hard to get more details about this.

OK. Next, you're going to meet one of our Top Ten CNN Heroes. His mission is to make sure that our wounded warriors have a place to call home without a mortgage.

Stay with us. That's on the other side of this break.

(COMMERCIAL BREAK)

VELSHI: We're counting down to our big event on Thanksgiving night when we honor our Top Ten CNN Heroes chosen by you. One of them is Dan Wallrath. The retired homebuilder started a program to build free homes for wounded veterans. Wallrath says it's his way of saying thanks for the sacrifices they've made.

(BEGIN VIDEO CLIP)

DAN WALLRATH, CNN HERO: One of the most important things for a family is a home.

I want you to read a sign for me.

UNIDENTIFIED MALE: "Future home of Sergeant Alexander Reyes (ph), United States Army."

WALLRATH: Congratulations.

Giving these folks a new home, it means the world.

UNIDENTIFIED FEMALE: Just, thank you. That's all I can say.

(END VIDEO CLIP)

VELSHI: Dan Wallrath joins me now from Houston.

Dan, thanks for being with us. Congratulations on being named a CNN Top Ten Hero.

Tell me a little about your story. We got some sense of it from what we just saw. Tell me how you came to start building homes for veterans.

WALLRATH: Well, Ali, it was about six years ago I had a call from a friends that had a son that had come back from Iraq, and he had severe head injuries, and went over and visited with the family. And he was showing me pictures of Steven (ph) and what he was before he got injured, and then afterwards.

And it just broke my heart, and of what these young men are going through and the families that they have to come back to, and it was just -- it was incredible. And I just knew that after building homes for 30 years, it was something I could do.

VELSHI: How does it work, Dan? Tell me, how do you get the land? How do you end up building this? Where does the money come from?

WALLRATH: Well, being in the building industry for 30 years, I was part of -- I was on the board of directors of the National Homebuilders Association, the board of directors for the Texas Association of Builders, and Greater Houston Builders Association. And so I had a lot of contacts.

And so what we do, I had this idea of going back to those builders organizations and tapping into the resources, and trying to get all the builder associations across the nation to start building these homes. And we just did it one at a time, one association at a time. And now it's really taken off, and it's growing, and we're building homes all over the United States now. So we're very pleased.

VELSHI: How many have you built so far and how many are you hoping to build?

WALLRATH: Well, we have done 12 homes right now, and we have another 10 that's either in the permitting stage or different plans. And -- but we have 38,000 wounded heroes. And we feel like that we're not going to be complete on this mission until we build 38,000 homes.

VELSHI: And is this helping? Is the exposure from being a Top Ten CNN Hero going to help you out?

WALLRATH: Oh, it's been incredible. It's been incredible.

I've gotten e-mails from Iraq and Australia and New Zealand. I mean, just all around the world we've gotten support and donations, and it's just been incredible.

And I just -- you know, I just can't thank CNN enough for the exposure, because the American public and around the world, they -- people want to help. And we're just giving them an avenue and a way to do that.

VELSHI: Dan, what a pleasure to meet you, an honor to meet you. And you're living proof that sometimes the good guys wear black hats. I love the hat and I love what you continue to do. We'll look forward to seeing you on Thanksgiving night.

Be sure to watch "CNN Heroes: An All-Star Tribute," on Thanksgiving night, right here, 8:00 Eastern, on CNN.

(NEWSBREAK)

(COMMERCIAL BREAK)

VELSHI: Chad, "Off the Radar" time. This is as off the radar as it gets.

Put me out of my misery about this, because I've been hearing about this for a couple of days, this vapor trail in California.

CHAD MYERS, CNN METEOROLOGIST: Yes.

VELSHI: And all sorts of speculation -- missile, rocket launches.

How does it happen that we don't -- I mean, we didn't know when we designed this segment called "Off the Radar" that we were actually going to be -- how does this happen and nobody knows?

MYERS: We hope this was on the radar. Literally.

VELSHI: Right. Nobody seems to know what it is.

MYERS: OK. This is a long shot. KCBS took this shot from their helicopter. And it looks like the shuttle is going off. VELSHI: Right.

MYERS: It looks like you're in Orlando watching a long-distance shot of the shuttle taking off.

VELSHI: Except nobody who would otherwise be launching something like a rocket or a shuttle says that they were doing that at the time.

MYERS: Right. Not me. Not me. Not me. Not me. All the way through.

And so there have been speculations from people that are very smart. MIT saying, yes, we think it is some kind of a rocket, we think it's some kind of missile. Other scientists going, you know what? It's just a contrail. It's a regular jet engine that's in there making this, and it appears that it's turning to the right.

VELSHI: That could be the way it was taken. Right.

MYERS: It's the sunset. Yes.

Let's go to the next slide.

VELSHI: OK.

MYERS: This is the one that I find to be a little bit more significant. A different shot. But why is it bright right there? Right there? Why is it bright?

VELSHI: Right, because that looks like an engine. That looks like a rocket engine, something that we see flames coming out of. You don't ever see that out of a plane.

MYERS: I've never seen it out of a plane.

VELSHI: Maybe not Qantas A380, when that engine problem happened. But that doesn't look like an airplane.

Now, again, it could be the sun, but I don't know.

MYERS: I don't believe it's the sun. It could -- at some point you can get a reflection off of the fuselage and it looks like --

VELSHI: Right, but that's very bright.

MYERS: And it's there for a long time. And the plane is turning. And if you were --

VELSHI: Right. So it would be a glint.

MYERS: It would have been gone, correct.

But, now, what else could do that?

VELSHI: Well, it is 2010. I mean, the fact is people do launch things like rockets more often than -- not the shuttle, but California is full of people making rockets.

MYERS: Pretty big.

Now, my concern is that we don't know what it is yet. And no one knows, and no one is taking responsibility.

The only jet that I know that could make that would be a military jet, something with the afterburner on, and the Blue Angel could make that type of light from the bottom. And so maybe some pilot was doing a maverick, going up, let's do Mach 2 with my hair on fire, and doing that. But nobody wants to take responsibility yet.

VELSHI: So at the moment we still don't know what that is.

MYERS: No idea.

VELSHI: But there's lots of theories out there, lots going on. All right. Well, you know what? That is "Off the Radar." That is "Off the Radar" as it's ever been.

Chad, thanks very much.

Coming up on today's "Big i," amazing technology to help paralyzed people stand up and walk. You can see it happen for real in our studios, right here, coming up.

(COMMERCIAL BREAK)

VELSHI: OK. Earlier in "The Big i," I had the most fantastic conversation with a woman named Amanda Boxtel, who calls herself a test pilot for something called eLegs. I also spoke to the CEO of the company that designed it, a gentleman named Eythor Bender.

They've created -- I mean, there's no other way to describe it. They're like bionic legs that can take people who have been stuck in a wheelchair like Amanda was for 18 years and give her mobility. Take a look.

(BEGIN VIDEOTAPE)

VELSHI: Amanda Boxtel is with me right now, and Eythor Bender. He's the CEO of the company that we're about to talk about, eLegs. Amanda is wearing the eLegs.

Amanda, you have been paralyzed for how long?

AMANDA BOXTEL, TEST PILOT, eLEGS: I've been paralyzed for 18 years. It was a freak skiing accident that rendered me a paraplegic. And just in a split second, I shattered four vertebrae and I felt an electric current that zapped through my legs. And then there was nothing, no muscle power, no movement, no sensation.

VELSHI: And that's it? And you have been confined to a wheelchair or some sort of device to get you around. You lost your mobility? BOXTEL: Well, yes. I lost my mobility instantaneously, and life changed for me. And I had to look at the world from four foot tall, to look up all the time. And now that's not the case.

VELSHI: Amanda, 18 years in a wheelchair.

BOXTEL: Shall we go for it?

VELSHI: Let's do it.

BOXTEL: OK. Here we go.

Now, keep in mind this is to be used in a completely safe medical situation for someone to learn how to walk. But now there's no excuses, Ali, for a doctor to ever say again you will never walk again, because we've got bionic technology right in front of us and this is happening right now. The future is now.

VELSHI: Did you ever think you'd walk again?

BOXTEL: You know, I never believed in my lifetime that I would be able to walk and here I am, walking with you, side by side, eye to eye. And it's the most beautiful thing that, you know -- it just triggers emotion in me to this day. And it's a natural step because I'm bending my knee in the most natural step that I've had in 18 years.

VELSHI: How does it know? I hear some hydraulics or something, a motor happening. How does it know what you're trying to do?

BOXTEL: Oh. I think it's -- I'm not the technology expert. I'm a test pilot. Do you want to answer that question?

BENDER: Yes. Basically, what you do is that you are moving your crutch forward and with simply the arm gesture you send the signal to the device to make the walk.

VELSHI: And you've got some sensors on here.

BENDER: Yes.

VELSHI: And that's how it's sensing it. I mean, I can just see the joy in your face. You see a whole new life in front of you.

BOXTEL: Absolutely.

VELSHI: What are the things you're going to do when you're able to use this on your own and freely? What does this mean for your life?

BOXTEL: When this is available for in-home use, I see myself using this every day as a rehabilitative device --

VELSHI: Let's, by the way, walk and talk because not many people have said that to you in the last couple of decades, right?

BOXTEL: Let's walk and talk. I can do that!

(END VIDEO CLIP)

VELSHI: That was truly amazing. If you want to see more about it, go to my blog, CNN.com/ali.

Listen, Americans are generous. That's a fact. It's true in good times and in bad. But bad times make generosity all the more important. And right now, one of the most important charities in the country has high hopes for a very generous holiday season. We call that "Mission Possible." It's coming up next.

(COMMERCIAL BREAK)

VELSHI: Every day on "Mission Possible," we try to raise up an ordinary person who does something extraordinary and inspires the rest of us. Today, the rest of us are the story. What we do year in and year out and what we perhaps can do more of.

We told you yesterday that 2009 was a rough year for the nation's charities for a number of reasons. Of course, including the economy. Donations to the 400 biggest charities dropped 11 percent. That's the most by far on record. United Way worldwide fared somewhat better. The drop there was 4.5 percent. The Salvation Army made do with 8 percent less. But let's check out Food for the Poor. That's a group that took a hit of 27 percent. The American Cancer Society was down 11 percent. And the Y, formerly the YMCA, received 17 percent less in donations last year than the year before. Safe to say all charities are hoping for a better 2010.

But for the Salvation Army in particular, a lot depends on the next few weeks. It wouldn't be the holidays without Salvation Army bell ringers standing by. Kettles at malls and on street corners. Joining me to talk about this year's campaign is Major George Hood. He's in our studios in Washington.

Major, thanks for being with us. How is it looking so far?

MAJ. GEORGE HOOD, SALVATION ARMY: We're cranking up and we're getting ready to put the kettles on the streets. Actually, some kettles in many communities that have been hard hit already have those bell ringers out. So, we're looking forward to a very robust Christmas season.

VELSHI: What affects how much money people put into those kettles?

HOOD: There's lots of things. It's an emotional give. Many people walk by and they can think of a neighbor or a relative who may be struggling and having a difficult time and they'll want to put money in there.

In many cases, it's a traditional give. People look for the red kettle, and parents with small children want to teach their kids what it means to give back to charities and to help other people. And they will bring their children actually to the red kettle to allow them to make their first contribution.

VELSHI: So, that's a good plan. That's a good way to think about it. What kind of money do you normally raise and where does it usually go?

HOOD: Last year, we set an all-time record. We were actually stunned by the amount of money that we raised in the red kettle. It was $139 million. That's a lot of quarters and dollar bills from the American public. And that money, wherever it is raised in a local community, will stay in that community to meet the needs of people who are hurting in that town.

VELSHI: What do we -- what sort of needs are you finding that have increased? Have things changed in the last couple of years? A lot of us talk go about how we're out of the worst of the financial situation, but in fact for a lot of people with their employment situation or their housing situation, their food situation, it's actually a little bit worse.

HOOD: There are still 14 million people who are unemployed across America. And that plays down into foreclosures with homes, the inability to keep utility bills paid, to have proper food on the table, to get clothing for their children.

And what we try to do at Christmas is to raise as much money as we can, first of all to make sure that children who come from underprivileged families are able to celebrate with toys under the tree. And all of the money that's left over in those local communities is then used to fund our sustained social service program throughout the next year.

So, it's very important that we raise as much money as we can during these last two months of the calendar year so that we know going into January what kind of funds we have to work with throughout 2011.

VELSHI: Major George Hood, thanks for joining us. We wish you the best of luck this holiday season.

HOOD: Thank you.

VELSHI: All right.

President Obama working on a big deal -- a big deal ahead of the G-20 summit. This is a deal that could have a big impact on American car companies and on American consumers. Ed Henry, I think we've got him back live. Ed Henry checking it out on "The Stakeout" as soon as we come back.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

(MUSIC PLAYING)

VELSHI: Where is he? Where is he? I miss him live and in person. "The Stakeout" with Ed Henry. Every day we do it at this time, but he's been traveling ahead of the president. Been on planes. He has not deserted us. He kept coming back at us. He taped things. He looked for my relatives in India, didn't have a whole lot of luck.

But he is -- are you on the phone or with us in person?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT (via phone): Yes, I'm on the phone so you can't see how sharp dressed I am, although it's 4:00 in the morning here. We're about 14 hours ahead, so I'm actually dressed --

VELSHI: You're in your jammies! Hey, listen, Ed --

HENRY: No.

VELSHI: I don't even want to think about that anymore.

Listen to this. The president was in India. He was in Indonesia. He's reaching out to all of these big democracies in Asia. Is this meant to sends some sort of a signal to China, which really is becoming the U.S.'s main economic adversary these days?

HENRY: It certainly is. And obviously the U.S. is walking a fine line. On one hand, the president is sending a not-so-subtle signal at all. He's visiting four countries here in the region, as you mentioned, that are democracies all around China. Not stopping in China, although, of course, he was there one year ago this month. Not like he's ignoring China altogether. But yes, he's hitting four right in the region.

It's a signal to China that we've got other trading partners here in the region. We don't have to just deal with China. I think while there are a lot of people expecting as the G-20 summit gets ready to go here in Seoul, hosted by South Korea that maybe there will be this big fight between the U.S. and China on currency manipulation, et cetera.

What the U.S. is trying to do is raise its points with China but not have a big brawl here, in part because some of the new information we're picking up is that the president will probably announce he's going to host a state visit with the Chinese president in January back in Washington. So, in just over a month-and-a-half or so, you'll see the Chinese president. They're hoping to do a lot of business. So, they're hoping to avoid a big, big fight here.

VELSHI: Ed, you sound like you have a little sleep in your voice. I picture you in an easy chair in your hotel room wearing a Snuggie, but enough about that.

G-20 is in South Korea. The president is going to try to nail down a trade deal that apparently has the -- has some fans in the U.S. auto industry. What is this, and what can it mean for Americans?

HENRY: Yes. I mean, it's got summit sort of mixed in the auto industry because you have folks like Ford running ads saying, look, maybe this could be a good deal but why is it that for every -- they have this ad saying for every 52 cars Korea brings to the U.S., U.S. can only export one into South Korea. So, they're saying, look, if this trade deal will lower the barriers so that a lot more U.S. cars can go in, these U.S. car companies may be interested in doing that, and it may mean more U.S. jobs for them back home. But if it only allows some products in and not others and leaves a lot of barriers in place, they're not going to be for it.

And I think what's interesting is to step back from this particular deal. You have the chamber of commerce president, Tom Donahue, who's been battling with the president on health care and a whole bunch of issues. He's in South Korea right now, talking up this trade deal trying to give the president some rare support. Something he doesn't do often because he believes -- the business community more probably believes this will mean a lot of jobs back home if you bring a lot more U.S. products into this market.

What I finds interesting is the president all of a sudden is talking up trade in India. He's talking up trade down here in South Korea. He hasn't done that a lot for 22 months. Why? He had a Democratic-run House with Nancy Pelosi that probably wasn't going to move any of these trade deals with South Korea, Colombia and Panama, three pending from the Bush administration. Now, all of a sudden the president is talking them up more.

If he gets the deal -- it's not done yet, but if he gets the deal on South Korea trade -- free trade agreement, for example, that could maybe open the door to some deals with John Boehner in the months ahead and some of these other trade deals might mean some jobs back home and might open the doors to these guys working together on some other things.

I think pay attention to where this free trade agreement goes. It might signal that the president can do some business with John Boehner down the road.

VELSHI: Hey, Ed, real quick, with the volcano in Indonesia we've been talking about, is causing some problems in the president's travel plans, made him, you know, adjust some travel plans. How did you get around?

HENRY: We had a somewhat comical scene. We were on the tarmac in Indonesia yesterday and we were trying to get out ahead of the president because we were told by officials if Air Force One took off before us, the window was so short because of volcanic ash, we'd probably be stuck in Jakarta. So, we rushed to the airport. We were ready to go, but the catering truck hadn't arrived. So, the folks at Delta were waiting for it to arrive, waiting for it to arrive, and we were getting to this comical scene where we were staring out at Air Force One wondering when the president's motorcade is going to pull up and leave us here.

So, the decision was finally made, look, if you want to get out of here, the only way to do it is leave without the catering truck. So, we left for a six-hour flight without any food or alcohol, I should add.

VELSHI: I'm telling you.

HENRY: Maybe that's not a bad thing for the White House press corps (INAUDIBLE).

VELSHI: Ed, I'm glad to hear you and your voice live. Look forward to seeing you live. Ed Henry on the president's trip in Asia.

It's time now for your CNN political update.

The next phase of the Senate election in Alaska is getting under way today. But, first, let's talk about the deficit. This is huge news.

CNN chief national correspondent John King brings it to us now from Washington -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Ali, when you get that guy Ed Henry and the president of the United States back from the international trip, we're going to get a test of whether Washington is really serious about an issue huge in the midterm campaign, spending and deficit reduction. You remember he was all over the country in the campaigns, the president says it's a priority. We'll have a new Republican Congress. Well, his own debt commission, the president's commission, has just put out its recommendations and they call for some very tough choices here in Washington.

They want to cut spending in 2012. Immediately, right out of the box, they want to cut spending. They want to bring spending down to 21 percent of what the government -- the gross domestic product, essentially the size of the economy. They want to cut a lot of spending, including a 15 percent cut for the White House budget, a 15 percent for the congressional budget, a lot of programs across the board, Ali.

And they also say we should reform the tax code. They want to lower rates.

But here's where Republicans will probably get mad: increase revenues in the end, meaning some taxes -- overall tax revenues to the government would go up some.

So, spending cuts, some tax increases. We'll see if Washington will get serious about this big challenge.

You also mentioned one of the undecided races still from the midterm elections, and that's that Alaska Senate race. And we saw pictures of this count earlier today reminded me of Bush versus Gore in Florida decade ago.

Right now -- right now, as they count the votes the preliminary total unofficially says the write-in are 92,528 and we presume most of those write-in votes are for the incumbent Senator Lisa Murkowski. And the Republican candidate Joe Miller had 81,195 in the election. A lot of lawyers involved here, Ali. We'll see how this goes as we watch the count under way now in Alaska. The Miller campaign says it plans to challenge some of those ballots. We'll see how that plays out.

And tonight on "JOHN KING, USA," Ali, a fascinating conversation with a woman who is about to make history on two fronts, Susana Martinez will be New Mexico's first woman governor. She'll also be the nation's first Latina governor.

Now, she's tough on border security, but she says she doesn't want to copy the Arizona immigration law and she has a message on the immigration issue to national Republicans as well. It's her first national interview since winning that election in New Mexico. We're looking forward to it right here tonight.

VELSHI: I like the anchor of that show, "J.K., USA" tonight. By the way, your tie looks like it matches the "CNN Equals Politics" stuff. It's like you picked a tie to match the colors of "CNN Equals Politics."

KING: Preston and Steinhauser give us this. These are uniforms.

VELSHI: John, pleasure to see you. We'd be looking forward to watching this interview tonight.

There's a huge problem, by the way, we've been talking to you about with iPads and iPhones. You can't see anything that uses flash player. Adobe and Apple are not playing nice with each other but there is a solution. We told you about it before.

Here's a question for you. How many iPhones are sold every day? Look at these numbers: 10,000, 80,000, 100,000 or 500,000? How many iPhones are sold every day? The answer after the break.

(COMMERCIAL BREAK)

VELSHI: OK. Before the break, I asked you how many iPhones are sold every day. Is it 10,000, 80,000, 100,000 or 500,000? The answer is "B," 80,000 iPhones are sold every day. Lots of people use them.

On many levels people love them -- except so much video that you watch on Internet or on mobile devices is provided by a flash player, Adobe. And that's something that Apple has not been able to work out.

So, we told you about an app that was introduced a couple of weeks ago. Well, I don't know how long it was. It was a few weeks ago -- called Skyfire. It was launched to be able to -- basically, it would convert the technology. It would convert flash to HTML 5 which the iPad or iPhone could read and would do it internally.

Well, guess what? It was released as an app for Apple and it sort of sold out very quickly and they couldn't really deal with it over at the company.

So, we've got the CEO of Skyfire with me now, Jeffrey Glueck. He's here and he's here to tell us what the future is for this.

This is very popular, Jeffrey. What happened?

JEFFREY GLUECK, CEO, SKYFIRE: Well, we were thrilled to be the top-grossing app within hours on the Apple app store. We had so much demand that we made a decision to call the app sold out. We reached number one app on the Apple app store as I said in hours. And we wanted to make sure those users who bought the service were getting a great customer experience.

The demand was so high that we went out and in 36 hours, doubled our bandwidth and capacity, and we have been back up for sales since Friday without interruption, and going strong as the top selling app on the Apple app store.

VELSHI: Now, does this solve the problem? Because Apple and Adobe couldn't really come to any agreement on this. You sort of got in the middle and converted it over to a format that the iPhone could read. Is that -- I mean, is this a good business model or are those two going to come to some agreement and cut you out of the picture?

GLUECK: Well, it's a bigger picture, Ali. Mobile video consumption is growing by 6,000 percent to 2014. It's going to be 70 percent of the data on wireless carriers like Verizon and AT&T.

Our technology doesn't just enable flash on devices like iPhone that can't otherwise support videos designed for flash. It is a broader technology designed to help everyone have a better user experience with all of this explosion of video and make it play more efficiently over wireless network. So, we have a much broader vision than this.

Now, we'll have to see what happens between Apple and Adobe. Skyfire has played the role of Switzerland. We don't favor any technology. We simply can translate video designed for Adobe flash player into a language that the Apple media player can understand, and we do that, thanks for computing approach.

VELSHI: And at this point, you've got enough servers to make this work as far as you can determine?

GLUECK: We're very glad that we're a cloud approach, that we have a bank of servers in the data farm, and we've been able to rapidly as a cloud service to double our capacity. We are open now as the top-selling app and the top-grossing app in the Apple app store in the U.S. without interruption. We're feeling great. It's been performing well.

Over the next couple of weeks, we'll add even more capacity and we're getting requests from around the world from iPhone owners when is it coming to their country, and over the next few weeks, we will open up additional countries.

VELSHI: Very good. Jeff, good to see you. Thanks for joining us and telling us a little bit more about this and thanks for playing the role of digital Switzerland.

Jeffrey Glueck is the CEO of Skyfire.

Airport security a necessity obviously in today's world, but does it go too far when it comes to religious traditions and practices that it can't observe carefully? That's next in my "XYZ."

(COMMERCIAL BREAK)

VELSHI: Time now for the "XYZ" of it.

Today, I want to talk a little about security screenings at airport.

All of you who travel, I'm about to travel to the airport, know a thing about security checks. Transportation Security Administration personnel demand you to take your shoes off, empty your pockets, X-ray your coats and hats.

But hats, head gear, that can probably cause problems for some religious communities. Observant Muslim women sometimes cover their head with scarves. Catholic nuns were head pieces. But observant Sikh men wear elaborate turbans as an article of faith. In fact, Sikh civil rights groups complain that their community is unfairly targeted for extra screenings by TSA personnel who often order Sikhs to remove their turbans.

Sikhs being sensitive to thorough screening measures at airports is understandable. Since the 9/11 attacks on America, many Sikhs have been targets of violence in this country because the turbans and beards they wear to express their faith are mistakenly associated with what some Americans think an al Qaeda terrorist should look like. That hostility from the public informs Sikh perceptions when dealing with TSA screeners in airports.

Sikh American activist Amardeep Singh sums up -- summed it up very well when he says once you start pulling Sikhs aside for extra screening, it sends a message that the government is suspicious of them for the same reasons that other passengers are suspicious of them.

Sikhs had been hopeful that the introduction of full body scanners in airlines would eliminate the need for some of those screening measures like pulling passengers aside to remove headgear for extra scrutiny. The TSA insists that those measures need to stay in place, but will only be done at a discretion of screeners on a case-by-case basis.

Now, for its part, the TSA acknowledges that Sikhs have concerns and it wants to accommodate passengers who may not want to remove things like head gear for religious or other reasons.

The ironic thing, of course, is that the TSA and other airport personnel are deploying stricter security procedures largely in response to the 9/11 attacks and things that have happened since. A terrorist attack, by the way, that didn't involve a single member of the Sikh faith in this country or anywhere else in the world. And it's an event that continues to scar that faith nonetheless.

That's my "XYZ."

Brooke Baldwin takes it away from here.