Return to Transcripts main page

CNN Newsroom

Japan Reconstruction Minister Resigns; Race for Debt Ceiling Solution; Jurors Weigh Anthony's Fate; Royals in Canada; Murder Suspects Taunts Police

Aired July 05, 2011 - 10:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: All right. Checking top stories. A tough wait for Casey Anthony and everyone invested in her murder trial. She's accused of killing her two-year-old daughter Caylee. The jury is in its second day of deliberations.

Former IMF chief, Dominique Strauss-Kahn facing a new sexual assault complain. A French writer says he tried to rape her 8 years ago. Her lawyers filing the charge with prosecutors.

And Japan's reconstruction minister has resigned after nine days on the job. He was responsible for rebuilding after the earthquake tsunami disaster four months ago. He has been blasted at tone deaf and insensitive over many things he said to local officials.

Well, get ready for spending cuts maybe even tax hikes. Time is running out on a possible deal to raise the debt ceiling. In other words, no deal, the government cannot pay the bills and we pay the price.

CNN'S Brianna Keilar at the White House. So, Brianna, are we any closer to nailing something here in the negotiations?

We apologize, and we will try to get connected Brianna there, obviously an issue with her audio. We'll get back to that in just a second.

All right, let's talk about the fact that it's day two now in the deliberations, in the Casey Anthony trial. Jurors, as you know, weighing seven charges against including first degree murder.

Our David Mattingly is following all the developments for us in Orlando as the anticipation builds. David, what do we know at this point?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, Kyra, what we know is what we see, and today when Casey Anthony walked into court, she appeared to be agitated a bit today involved in a very animated conversation with her defense attorneys.

We really don't know what that was about at all. Some other observations today people inside the courtroom telling us that the jurors normally come in and they are usually dressed for comfort or being able to sit there in court all day long. Some of them came in today and addressed for business, one man actually wearing a tie, collared shirts, and some of the women wearing dresses and jewelry. We haven't seen that before.

Some are suggesting that that could be a sign that they are thinking they are going to wrap up today and they were possibly dressing to appear in front of the cameras afterward, again, all speculation today. Again, we only know what we see and that is not a lot, Kyra.

PHILLIPS: OK. Stay tuned, as we say. David Mattingly live in Orlando. Thanks.

OK, we get reconnected to our Brianna Keilar now. Let's get back to the White House. As I was saying, Brianna, and I know you could hear me, and let's get the answer now, are we any closer to negotiating a deal here on the debt?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Hi, there, Kyra. Very good to talk with you. I think the answer is we're still a long ways from it. We're going to be waiting for the details of this for some time to come.

Right now, we know that there are staff level discussions going on between the White House and Congress, Democrats and Republicans in Congress. But actually, even though the House and Senate, yes, they are in this week.

I have to tell you, there are no meetings as far as we are aware that are publicly scheduled between the White House, between the principles, and top Democrats and Republicans on the Hill. That said, the president's schedule is pretty open this week.

So it would certainly allow for some time to sort some of these details out, but the impasse at this point has to do with tax increases. Republicans are saying absolutely no tax increases. They say it will hurt the economy to have any sort of tax increases.

But Democrats are demanding them, and they have really been ratcheting up the rhetoric ever since the president's press conference last Wednesday trying to paint Republicans as being unbending and unreasonable.

And we saw a little bit of that from Vice President Joe Biden on Friday. Take a listen to this. This is when he was talking to labor supporters in Las Vegas.

(BEGIN VIDEO CLIP)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES OF AMERICA: These guys actually believe -- they're not making up, it's not just protect their wealthy friends, they really believe that a strong U.S. economy rests upon a never increasing concentration of wealth and power in the hands of a relatively few enlightened guys that they think are smarter than we are.

(END VIDEO CLIP)

KEILAR: Some pretty tough words there, Kyra, and just to put it in perspective, the vice president is the one who is leading these talks that went on for weeks between congressional Democrats and Republicans.

You had Democrats and Republicans alike who are crediting him with creating a really respectful tone, and here you have him ratcheting up this rhetoric. This is a really kind of hard line the White House is taking and you are seeing it right there, Kyra.

PHILLIPS: OK, a hard line indeed, and we'll see what happens before August 2nd. Brianna, thanks.

Coast Guard crews and the Mexican Navy searching off the Baja Peninsula for at least nine people missing after a ship wreck. More than 40 people were aboard the chartered fishing boat when it went down on Sunday. More than half of them Americans. Coast Guard Lieutenant Bill Burwell filled us in on the search effort just about an hour ago.

(BEGIN VIDEO CLIP)

LT. BILL BURWELL, U.S. COAST GUARD (via telephone): Kyra, we have a C1-30 on scene that's conducting a search. They are able to use a multitude of centers to look through the Sea of Cortez and near the debris field.

And then we're also plotting the drift throughout the night, through this morning to see if we can find anything. We have had two crews thrown out with the rescue helicopters, and there are multiple Mexican boats, airborne and surface assets to see if there are any survivors.

PHILLIPS: Jacqui Jeras has been watching the weather for us in this area. How are the conditions right now

JACQUI JERAS, AMS METEOROLOGIST: Much better today. You know, the storm that caused the boat to capsize has now some of the area and they're looking at some much calmer conditions. You could see some thunderstorms to the south there and a little bit of redevelopment hat could happen later on today.

But in the meantime, the seas are much calmer. The sun is out. It's a very good visibility for search and rescue, but the temperatures are extremely hot. We will zoom into the area and show you where this is.

This is the Island of San Luis and this is a very remote area. There are really no cities here. It's basically just some beach, and we'll show you another map there as that one seems to be going a little crazy.

I did want to tell you that the water temperatures themselves, about 84 or 85 degrees, and that's good in terms of survivability. No risk of hypothermia there, and so the concerns are if they are able to stay afloat and possible dehydration.

Now, there could be winds with more chop to the region, and that's something we will watch for more closely in the next day or two with those thunderstorms expected pretty much every day for the rest of the week. Kyra --

PHILLIPS: Jacqui, thanks.

A drawdown of troops from Afghanistan begins this month, and not only does that mean less troops on the frontlines, three heavy hitters in the Afghan are moving on as well.

Pentagon correspondent Chris Lawrence with the impact of those leaders. Hi, Chris.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Hi, Kyra. Yes, you're obviously right. I mean, obviously, you know, David Petraeus moving over to the CIA, and the retirements of Defense Secretary Bob Gates, and soon, you know, Admiral Mike Mullen.

It's sort of a changing of the guard as well as Ambassador Karl Eikenberry leaving. You know, these names might not all resonate with American city at home watching, but these are basically the men in the room.

These are the people who have the president's ear when it comes to time to make decisions like do you go for a surge, or how many troops do you surge in and how many should come out. Now there will be new faces around that table when these decisions get made.

The war in Afghanistan is really going to take a turn as the new figures come into play, because the war which has been primary concentrated in the south for the last year or two, is now -- you will see a lot of shift to the east.

Not so much with U.S. troops, but a lot of assets, surveillance and recognizant, intelligence, a lot of it moving to the east. That's that rugged mountainous part of Afghanistan where a lot of insurgents were closes to Al Qaeda operate.

So the decisions that will be made over the next year or two, very important to see what happens in that east. Kyra --

PHILLIPS: Chris Lawrence from the Pentagon. Chris, thanks.

There's a lot of things that we hate paying for when we fly, but how about paying to speed through the security line? Some players are saying sign me up.

And lawyer for a French writer going to court today. She alleges former IMF head, Dominique Strauss-Kahn tried to rape her eight years ago.

(COMMERCIAL BREAK)

PHILLIPS: Stories making news cross-country. In California, a bus carrying firefighters to battle a blaze in the Angeles National Forest just outside L.A. crashed last night in Palmdale.

Police say at least nine people were injured. Some were actually trapped inside that bus.

In Iowa, a teen run over by a train lives to tell about it. The 17-year-old admits that he was drinking heavily and blacked out between the tracks. When he woke up the train was passing over him. The railroad wants to press charges.

In Michigan, a prison inmate suing the state because -- are you ready for this? He can't have porn in his cell. He says a lack of raunchy reading material has left him with a poor standard of living and sensory deprivation. A local sheriff isn't too sympathetic.

While one attempted rape case against former IMF Chief Dominique Strauss-Kahn maybe falling apart. It looks like he could be facing another. A French writer says that Strauss-Kahn tried to rape her eight years ago and today her lawyers are going to court.

Joining me to talk about this, criminal defense attorney, Holly Hughes covering so many cases for us today, appreciate it. Let's go ahead and start with the fact that this happened eight year ago.

HOLLY HUGHES, CRIMINAL DEFENSE ATTORNEY: OK, on rape or attempted rape, which is what's being alleged here is going to be 10 years, Kyra. Now this is just the sexual assault.

We've been looking at five years and she would be a stop from going forward. But based on the facts that she shared with her lawyer, they are seeking to go under that extended statute of 10 years with attempted rape.

PHILIPS: OK, let's talk about those facts. What kind of evidence does she need in order to go forward with it?

HUGHES: Well, again, and we've talked about this with the earlier charges. Rape is a he said, she said, unless you have DNA, and even then it's not always definitive.

Here we have no DNA, but we have something called immediate outcry. When somebody is attacked or sexually assaulted, if they go and tell immediately tell someone, you know, within a day or 24 hours, we call that an immediate outcry.

And basically it's kind of like an excited utterance where you are telling the truth because you are so emotionally upset about what happened to you. We do have that here in Tristane Banon's complaint.

She called her mother immediately. She ran out and locked herself in a car after this alleged attack and sat there for an hour and a half until her mother showed up. What we also have is when her mother showed up, the mother could testify that there was a broken heel on her shoe.

But, she looked like, she have been roughed up. She can talk about her demeanor. How upset she was, but again, we are back to unfortunately, he said-she said, because the assault, thankfully did not get far enough to produce DNA at this point.

PHILLIPS: So could these new charges impact the other case at all, or could the other case impact this case?

HUGHES: It is possible. Now, it's possible it would affect the New York case, because in the United States we have something called similar transaction law. Essentially in criminal cases, you are not allowed to tell the jury something bad that defendant has done in the past.

Because you don't want it held against you, and 20 years ago he did this and therefore he must be guilty now, but under the similar transaction law, we can ask the judge for permission. The prosecution could go and say, Judge, it's so similar, another sexual assault attack.

And at sexual cases, the courts are very wide open and lenient, and they let prior assaults come in. but here is the glitch with that. David Coobey (ph) who is the attorney that represents Banon over in France who wants to file the complaint

Has indicated that even if the United States wants to bring the two cases together, they have no interest in cooperating, which I find a little odd if you want to take a sexual predator off the street, does it matter if they do it here or there.

So that's an interesting turn of events that may prevent the use of the French case here in the United States.

PHILLIPS: Interesting. Holly, thanks.

When it comes to flying, fees are a way of life. Now there is a proposal that would allow you to speed through security for an extra fee. Alison Kosik at the New York Stock Exchange with the details. My guess is a lot of people would pay to be able to do that, Alison?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Kyra, you guessed right. The U.S. Travel Association says almost half of all flyers who were surveyed would pay if it meant that they could get through the security a lot faster.

You know, it's not the majority flyers, but I think about it. It's a large chunk, especially when you look at the proposed fee, up to $150 a year. Some people think it's worth it. So this would be called the Trusted Traveler Program.

Now here's how it would work. You could go through the government background check and that would store your information and that would let you go through a new, faster, different security line than everybody else.

And of those who are business travelers, guess how many say they would pay, 75 percent, of course, because they fly more frequently than the leisure travelers. Kyra --

PHILLIPS: So what are the odds of this plan actually being implemented?

KOSIK: You know what? The TSA is definitely backing it and hoping to give it a trial run a little later this year. True, we did have similar programs in the past without much success, but the travel association says you know what.

Something has got to be done, because we are carrying on more bags to bypass airline fees, and that's costing the TSA more money, and this is a good deal especially if people are ready to pony up $150 a year.

All right, talking about money, let's look at stocks right now. We are flat with the stocks. We got a decent report on factory orders, and things turned positive for the factory orders, but you will not see movement for stocks this week until the end of the week when we get the big government jobs report. Kyra --

PHILLIPS: Alison, thanks.

Problems for the boy wizard, Harry Potter. We're going to tell you what Daniel revealed to "GQ" magazine after the break.

Let's countdown to liftoff. We'll take you live to Kennedy Space center where preparations are being made for history.

(COMMERCIAL BREAK)

PHILLIPS: Showbiz headlines for you now. The boy wizard reveals a dark side. We all watch Daniel Radcliffe grow up, playing Harry Potter and all those movies. Now Radcliffe admits he became secretly reliant on alcohol to fuel the long hours on the set. Radcliffe now 21 said he has sober last year and is enjoying life a lot more.

The Black Eyed Peas expected to release a new video game later this year that will let you sing along and bust all their moves. We'll break new ground and give you real time feedback on how well you are singing and dancing.

Actor Will Smith reportedly putting together a team to do a remake of the movie "Annie." Smith reportedly talking to "Men in Black 3" co-star Emma Smith too about writing the screenplay.

Three days and counting until the historic, last shuttle lift off. CNN John Zarrella, veteran of 80 shuttle missions by the way. Joining us from Kennedy Space Center now not a better person to be talking about this, John, so what do you think, will the weather hold for the launch?

JOHN ZARRELLA, CNN CORRESPONDENT: Fingers crossed, Kyra, fingers crossed. NASA is in the middle of a briefing right now, and everything is looking really good as far as the shuttle vehicle is concerned. The issue is, of course, it's summer in Florida, and that means the weather, and the weather officer just said that there is only a 40 percent chance of favorable weather on Friday morning.

There's a tropical wave moving this way, et cetera, et cetera, et cetera. We have heard it before. So it could be a day or two, and hopefully off the ground Friday morning, but it's not looking real, real good right now. Everything else is looking very good.

The crew, in fact, led by Commander Chris Ferguson arrived here yesterday afternoon on their t-38 training aircraft. They landed a few miles away at the landing strip. It was quite a moment there yesterday.

As the crew arrived, they, of course, are ready and excited to have been selected, and feel very privileged that they are the ones that will be flying this last flight in the space shuttle program.

And in just about 2 1/2 hours from now, NASA is going to resume and pick up the countdown and the clock will start to countdown for the final launch coming up hopefully on Friday morning. Kyra --

PHILLIPS: A lot of butterflies going in the stomachs of space fans. John, also a lot of excitement for some folks on Twitter that will get a chance to come and see this final launch?

ZARRELLA: Yes, you know, this is like the third time NASA has done a tweet up here at the Kennedy Space Center, and they send out a notice and all the other twitter folks there flock on TO NASA's site and register, and 5500 people signed up.

And from that 5,500 people, they selected randomly 150 lucky folks to come here. They'll be arriving here sometime tomorrow from 44 states, about a dozen different countries around the world.

So what an honor for them, I cannot wait to talk to some of them and ask them how they feel about witnessing history. That's what it will be whenever the shuttle gets off the ground. Kyra --

PHILLIPS: Thanks, John.

Stay with CNN for the live coverage this Friday starting at 10 a.m. Eastern as the space shuttle "Atlantis" takes off for the very last time.

Coming up, Leon Panetta officially meets with President Obama today as the new secretary of defense. What should be number one on the agenda?

And back to work for the jury in the Casey Anthony trial. We will get an inside look at what is going on inside the courthouse, on day two of deliberations.

(COMMERCIAL BREAK)

PHILLIPS: Checking top stories. The search goes on for as many as nine people after a tourists boat capsized off California Baja's Peninsula. One American now confirmed dead.

The new head of the International Monetary Fund officially takes over today. Christine Lagarde is a former French finance minister. She was chosen to lead the IMF after former chief Dominique Strauss- Kahn was arrested on rape charges.

Meanwhile, another sexual assault complaint will be filed today against Strauss-Kahn. French write, Tristane Banon says that he tried to rape her eight years ago.

After seven weeks of questions, answers and arguments, a different kind of drama for Casey Anthony. She's sitting in the Orlando courthouse as the jury deliberations for a second day on murder and child abuse charges.

Holly Hughes joining us once again, a criminal defense attorney and former prosecutor knowing how both sides are feeling right now. Your guess is today, possibly early tomorrow, we will know her fate?

HUGHES: I think we will. I think this is a very serious, and very mature jury. They have been taking notes and paying very close attention and they're - you know, they don't make a lot of expressions.

We've been hearing our reporters who are actually in the courtroom, David Mattingly piped in and he said they don't make expressions or they don't talk to each other, and they are focusing in on the evidence and watching what is going on.

Remember, Kyra, these folks have been sequestered for all of this time. We're talking about eight weeks away from their family, away from social media and TV. They are ready to focus and get the job done.

If you think about it they have more restrictions than the defendant, Casey Anthony, and she's in jail. She can watch TV and listen to the radio.

PHILLIPS: You have been watching the testimony and watching the lawyers at work. What do you think is going to happen here? Maybe I don't want to put you on the spot there totally, but the options, most likely where do you think it will go?

HUGHES: Based on the closing arguments, which of course, is the grand finale of any trial. We say a trial is a search for the truth, but it's also kind of a show. We're watching to see what the players are going to give us, and when they did their final closing arguments today, Jeff Ashton and Linda (inaudible) who are two with the prosecutors in this case, they really brought it home and they brought it back around to who else, but Casey Anthony Casey Anthony could be responsible for the child's death, and who benefits from it.

If you saw the last chilling image that the prosecutor put up. She put up two pictures, one of the defendant, Casey Anthony, with the tattoo, "a beautiful life," and then she asked the jury, whose life was made better by the death of this child.

I don't think they will get the death penalty. This is a young woman. An attractive woman to some people and the bottom line is she comes from a very dysfunctional family. We have seen that play out.

PHILLIPS: Lots of sympathy for her.

HUGHES: There's going to be a little bit. They're going to say she's not wholly responsible for turning out as kind of nutty as she did.

PHILLIPS: OK, Holly. Let's see what happens today or tomorrow.

HUGHES: Absolutely.

PHILLIPS: Well, straight ahead, a drive in North Carolina gets a police escort to the hospital at least that's what he thought, until cops blew out three of his tires.

Plus, the Duchess gets her hands dirty, but looks good doing it. The latest on Will's and Kate's visit to Canada.

(COMMERCIAL BREAK)

PHILLIPS: All right. Time for "Political Buzz" -- your rapid fire look at the hottest political topics of the day. Three questions today, and 20 seconds on the clock.

And playing: Democratic National Committee member Robert Zimmerman, political analyst Kelli Goff, and Republican strategist Ron Bonjean.

All right, guys. First question: Leon Panetta officially meets with President Obama today as the new secretary of defense. What should be number one on the agenda?

Robert?

ROBERT ZIMMERMAN, DEMOCRATIC NATIONAL COMMITTEE MEMBER: Certainly, on the macro, Secretary Panetta has to focus on producing $400 billion of defense cuts while maintaining U.S. military strength and troop morale. And then in the micro, it's new strategy to fight al Qaeda in the post-bin Laden era. We're lucky to have him in this position. He's uniquely qualified.

PHILLIPS: Ron?

RON BONJEAN, GOP STRATEGIST: Yes. How do we keep America safe while facing these budget constraints and not engaging in a strategy of taking a knife to the Pentagon to satisfy those budget constraints. I think that would be the number one issue.

PHILLIPS: Kelli?

KELLI GOFF, POLITICAL ANALYST: I don't even know that I need 20 seconds here. It's going to be Afghanistan, Afghanistan, Afghanistan. At least that should be the focus. But, you know, to echo Bob, he has $400 million in cuts to face from the get-go, even though his predecessors Donald Rumsfeld and others are saying that that's going to be too deep for our troops.

PHILLIPS: All right. Question number two, the political rumor mill churning again. This time, it's talk that New York Governor Andrew Cuomo could replace Biden on the 2012 ticket. So, does the V.P. choice really matter?

Ron?

BONJEAN: Yes, it matters a lot. It matters symbolically where President Obama wants to take the country, and it also matters about who the person is. I mean, if the person is unqualified, that would be pretty scary to have that person take a president's place. But I'd also like to see a different president as well.

PHILLIPS: Robert?

ZIMMERMAN: Kyra, this topic is a great source of fascination to the media and political pundits. Then there are people with real lives and they vote for president, and they vote on the issues that impact their lives and their family.

PHILLIPS: Kelli?

GOFF: Well, look, as a political blogger, I'm going to love nothing more than a whacky rumor as much as the next person. But as far as whacky rumors go, this is pretty high on the list. Why would the president replace one brash guy from a blue state with another brash guy from a blue state?

If he were to replace the vice president, it would be, as I've written about before, with a woman because the GOP is certainly going to have a qualified woman on their ticket because they got nine governors.

PHILLIPS: All right. The buzzer beater, 10 seconds on the clock.

Vice President Biden known, I guess, we should say, for his verbal gaffes, now joining Twitter. So, what do you think -- will a 140-character limit be a good thing for this vice president?

Robert?

ZIMMERMAN: Absolutely not. I love Vice President Biden's candor. I love his intellect and his personal history. And no sound bite can reduce it.

PHILLIPS: Ron?

BONJEAN: Yes. I'm really worried about the 140-character limit, actually because any sequence of numbers now that Vice President Biden gives could be the nuclear launch codes. We don't know where it's going. Four numbers could be the numbers to his ATM.

PHILLIPS: Kelli?

GOFF: Doesn't the media are obviously excited? Because in terms of gaffes, the vice president is a gift that keeps on giving. The other person that's excited, my mom. She has a little bit of a crush on smilin' Joe Biden as he called him.

PHILLIPS: Smilin' Joe Biden. Kelli's mom in love.

All right. Robert, Ron, I'm sorry, but Kelly gets an extra 10 seconds a day to plug her book. I promise when you guys are out with a new book, you get an extra 10 seconds.

Go ahead, Kelli.

ZIMMERMAN: I'll start writing now.

GOFF: My first novel is about what happens to a group of friends when one of them runs for president. It's called "The GQ Candidate." And by sheer coincidence, the candidate is African-American, charismatic, and in his 40s. So, who would have thunk, right?

PHILLIPS: Who would have thunk? Who could she be talking about?

All right. Robert and Ron -- oh, there you go. Robert and Ron, we're waiting for your books, too. OK? You got about a week. Bye, guys.

GOFF: Appreciate it.

PHILLIPS: You bet. No problem.

All right. Checking stories now cross country.

A barge used to set off fireworks for Boston's Fourth of July celebration actually smolders in the Charles River. The fire broke out early today but it was quickly put out.

In North Carolina, Robert Robertson taught that he and his some workers were being given a police escort to the hospital. You see Robertson was taking his wife there due to suffering from a heart attack. Well, it turns out the police were actually on their tail for speeding. Robertson now faces his reckless driving charges.

And in Colorado, new hypes for some disabled war veterans. The group was taken tandem skydiving for the Fourth of July. The event was organized by Operation Rebound, a nonprofit group that helps to save war veterans.

Take a listen.

(VIDEO CLIP PLAYS)

PHILLIPS: Right.

OK. Well, they continue to charm Canada. Will and Kate, they have cooked, they boogied, they've cruised, and now, they've rode this time in Prince Edward Island.

Nikki Pennie says she bets Kate was pretty thrilled to get into that dragon boat. Nikki knows firsthand that Kate has waited years to do that. We'll have more on that in just a minute, Nikki.

But, first of all, you're about style and image, so let's take a look at some photos of the couple here on this trip, OK? This one really stood out to me.

You spent a lot of time with Kate. So, I want to run this by you. Here she and Will are.

They went to visit these -- this group of homeless youth in Canada. And it's just -- it's amazing to see them, you know, talking with these young kids. It seems so different from them, obviously, growing up in a totally different environment.

What's your take -- actually, let's go back to that photo. Let's go back to the homeless youth there. There we go. What's your take on this? What does this say about Kate?

NIKKI PENNIE, FMR. KATE MIDDLETON SYTLIST: She -- hi, Kyra. She -- Kate is just the loveliest, most down-to-earth person. And I just think she would have enjoyed meeting all of these people, and that's why the whole world is falling in love with Kate, or has fallen in love with her, because she is just so down-to-earth, and just so natural, and, you know, such a natural beauty and such a kind, generous person.

PHILLIPS: But, Nikki, not only that, but quite the athlete. Now, let's roll the video of her and her husband yesterday getting pretty sweaty in the dragon boat. You know, she even looks amazing in this scenario.

PENNIE: I know.

PHILLIPS: She could be wearing anything, and you're paying attention to Kate here, right?

PENNIE: I know. I know. And that was a great thing. I mean, even in 2007, she was taking part in a dragon boat competition as well which she trained for with this team called The Sisterhood. And she was, you know, very excited about that. But, unfortunately, because of the high publicity that she brought with her to the competition, she had to back out at the last minute.

So, I know she would have been so excited about doing the dragon boat race yesterday, and I love that even came across in her fashion. And she was nautical all day from her chic, you know, Sarah Burton McQueen dress to when she was in the boat in those Capri pants and boating shoes. She looked just sensational.

PHILLIPS: And it's amazing. I mean, finally, because you have such great insight here. It's -- yes, we are noticing her fashion, and they have been talking about this as the Kate affect, right? And people are buying whatever she is wearing and it's selling out immediately. But there is so much more behind the dress. These two really are a really down-to-earth special couple.

PENNIE: Couple.

PHILLIPS: Yes.

PENNIE: And that's the thing, Kyra. And this is why she's having this affect in the world, and becoming the biggest commodity in fashion, to sell a dress, you know, in seven minutes and having Web sites crashing because she literally is such an amazing person and that's why she's having this phenomenal effect, and people, you know, want to copy her look, you know, not because of the fact that she's a style icon, but because they love her as a person.

And the great thing with her is she can express her personality through her clothes. And that's why, you know, she's even been recycling a couple of dresses on this trip that she's worn before at previous events. So, she's not just a single serving fashionista. But that's very un-Hollywood.

PHILLIPS: Yes.

PENNIE: I mean, not many actresses do that here. But, you know, that's the great thing about Kate. She's just -- you know, she's just herself, and that's why the world is mesmerized by her.

And she's having such a phenomenal effect on fashion and just inspiring people and you know, just with that group of people that she met. You know, just would have -- she would have inspired them and I'm sure that made their decade.

PHILLIPS: Yes, no doubt. And I encourage people to go online and take a look at those pictures. I love it. She's mingling with these people with Mohawks and tattoos and piercings, and it's like they've known each other for years.

And we can't wait to see your playing field hockey today. That will be a whole another set of pictures to talk about. Nikki, thanks for getting up early.

PENNIE: And I can't wait to see her looks.

PHILLIPS: Yes, of course. Thanks, Nikki.

Well, he's out of police reach in a Mexican hideout. Now, the suspect in the murder of an American University professor appears to be taunting them as well. We'll have that story coming right after the break.

(COMMERCIAL BREAK)

PHILLIPS: Well, Derek Jeter is back. He returned after missing 18 games with a strained right calf. He didn't get a hit last night, though. He did reach base on an error in the Yankees' 6-3 loss to the Indians. Jeter, by the way, is six hits away from 3,000.

And super fielding from the Phillies-Marlins game. The Phillies' Vance Worley hits the ball at the middle, bounces off the gloves, shortstop Hanley Ramirez. Second baseman Omar Infante makes the barehanded catch, and turns to first and gets the out. There you go.

Phillies won the game, one-zip.

And a welcome home party for Wimbledon winner Novak Djokovic. Tens of thousands of people showed up at the square in Belgrade. Djokovic called it the greatest day of his life. He sang and danced to his favorite Serbian band; even his girlfriend and family got up there on stage and joined him. Don't forget the white suit, by the way.

All right. He's wanted for murdering an American University professor. But the murder suspect has fled across the Mexican border and is out of police reach. Not only that, he seems to be taunting them from his Mexican hideout.

CNN's Brian Todd investigates.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Jorge Landeros is known as a stock trader, yoga teacher and poet. Investigators say he had a relationship with a popular accounting professor at American University named Sue Ann Markham, made lucrative investments with her and was the sole beneficiary of her $500,000 life insurance policy.

They also believe he did this.

CAPT. PAUL STARKS, MONTGOMERY COUNTY, MARYLAND, POLICE: She was hit with some force somewhere on her body. She was also choked to death, according to the medical examiner.

TODD: That was last October at Markham's house outside Washington.

(on camera): At first, the case had all the signs of a burglary gone bad. Police say there were signs of forced entry at this window, signs of a struggle. A teenager was arrested later in Markham's stolen vehicle. But police say as the evidence built, it led them away from that teenager, who's no longer a suspect and straight to Jorge Landeros.

(voice-over): According to an affidavit obtained by CNN, Landeros gave a DNA sample to police in El Paso, Texas, a sample that matches one on what's believed to be the murder weapon. But then, investigators say, he skipped across the border to Juarez, Mexico.

There's now an Interpol arrest warrant for him, and the FBI has filed a criminal complaint naming Landeros as the only suspect in Markham's murder.

Landeros has not only refused to come back to the U.S., but it appears he's taunting police. "The Washington Post" obtained a recent e-mail from Landeros to an El Paso detective who'd asked to meet with him.

"Of course, you are cordially invited to cross the same bridge in the opposite direction and meet me at Sanborn's, a great cafe and restaurant here in Juarez, and we can talk shop all you want. It's best if you come on a Sunday. We can have brunch. It will, of course, be my treat. Yours, Jorge."

(on camera): How frustrated are you at that?

STARKS: It's causing some delay. We believe he's using the shield of an international border to delay and slow this process. We'd like justice to start; we'd like him to return and have his day in court.

TODD (voice-over): Dan Morse of "The Washington Post" obtained those e-mails and spoke with Landeros over the phone. Morse says Landeros even corrects the detective's grammar when he answers the e- mails.

(on camera): Is this a game to him?

DAN MORSE, "WASHINGTON POST": I don't know if I'd characterize it as a game. I think he is a confident person. Confident when he's talking to me. Professor Markham's friends who met him said he seemed confident, and, you know, that's certainly the posture he's taking with the detectives.

TODD (voice-over): We've tried to contact Jorge Landeros over the phone, with e-mail and Facebook messages. We've not heard from him. His attorney won't comment on the complaint or the affidavit.

(on camera): In his conversations with the "Washington Post," Landeros denied killing Sue Ann Markham, saying he wasn't in the U.S. at the time of her murder. Police here won't say much about any extradition deal with Mexican authorities, only that they're working through the process.

Brian Todd, CNN, Bethesda, Maryland.

(END VIDEOTAPE)

PHILLIPS: A retirement savings nearing record highs. We'll have the details, next.

(COMMERCIAL BREAK)

PHILLIPS: Positive economic news few and far in between these days, but here are some good news for you -- retirement savings near record highs.

Alison Kosik at the New York Stock Exchange.

So, Alison, put it in perspective for us.

ALISON KOSIK, CNN CORRESPONDENT: All right. How is this for perspective? Eighteen trillion dollars -- that's how much we tucked away into our retirement accounts. I'm talking about IRAs, 401(k)s, pensions. And just take a look at this. I want to show you how much our retirement savings have been growing for the past two years. In fact, our savings is getting close to the record high that we hit in 2007, but, then, of course, we saw those savings plummet during the recession.

Now, here's why we're seeing the improvement in these retirement accounts. First of all, the stock market, it's had a strong rebound, whether we want to believe it or not. Also, the reality is, people are setting aside bigger chunks from their paychecks.

You know what, Kyra? It could really be a lesson that we learn from the recession but we have to also remember, you can't try and time the market -- Kyra.

PHILLIPS: All right. Well, we keep hearing that wages are stagnant. So, how are people able to save more?

KOSIK: Well, there are a few reasons for this, and you know what? They're not all good. The sad reality is, people -- they're delaying retirement, because they have to make up for what they lost during the recession, their nest eggs really took a hit.

Also, we're finding that people are being more conservative. They're shifting their investments to bonds. Now, keep in mind, those stocks are still number one, but some people are moving their money to less volatile investments.

Also, we're benefiting from this rise in stocks. You look at the S&P 500. It's risen 5 percent in the first half of the year. It's not a lot, but it really give a nice boost to our investments. And you have to remember, our 401(k)s really mirror that S&P 500 -- Kyra.

PHILLIPS: Alison Kosik from the New York Stock Exchange -- Alison, thanks.

And here are some stories developing later today:

NASA's final shuttle launch countdown begins at 1:00 p.m. Eastern. Atlantis lifts off Friday morning.

Will and Kate, duke and duchess of Cambridge, take part in the tradition and activities in the Northwest Territories on their Canadian tour. That's at 1:40 Eastern Time.

And Michelle Obama will be at home plate and the child of a military service member throws out the first pitch for the Washington Nationals-Chicago Cubs game. That's at 7:05 Eastern.

Mitt Romney is setting up a sharper tone on the campaign trail. We're going to hear what he's saying about President Obama and the economy, next.

(COMMERCIAL BREAK) PHILLIPS: The Republican Governors Association says it set a new fundraising record, taking in 22 million bucks in the first half of the year.

CNN's Jim Acosta from Washington now.

So, who's getting the credit here?

JIM ACOSTA, CNN CORRESPONDENT: Well, you know, you might see some of the credit going to Rick Perry, the governor of Texas. We've been talking about him over the last several months, curious whether or not he's going to jump to the race for 2012.

He is the chairman of the RGA, and yes, this is good news for the Republican Governors Association. There have been all of the stories in recent months about what Republican governors are doing in their various state houses across the country.

And Rick Perry, obviously, is on the minds of a lot of conservatives right now. A lot of conservative Tea Party activists would like to see him jump into the race. So, this is good news for all of the buzz that is swirling around Rick Perry these days.

And if he does get into the race, he is going to make it more interesting for people like Mitt Romney, who is basically the frontrunner right now. And earlier this morning, Mitt Romney had a town hall meeting up in New Hampshire. He is crisscrossing the state. It seems like almost every day these days, Kyra.

And, you know, there was a bit of a dust-up last week, when Romney was in Allentown, Pennsylvania. He was asked by a reporter, well, hasn't the economy gotten better since President Obama has been office. And Romney said, well, I didn't say things got worst. Well, he has said that President Obama has made the recession worse in recent days and weeks out on the campaign trail.

And he repeated that this morning at this town hall meeting.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: So, at a time when wanted small business and entrepreneurs to step forward and to get the economy going again, what he did caused them to pull back. And so, he made the recession deeper and made it last longer and the recovery more anemic. He made things worst.

(END VIDEO CLIP)

ACOSTA: And, Kyra, that is going to make hairs stand up on the backs of necks all over the DNC here in Washington. But the rhetoric is getting ratcheted up, and it is getting into the summer months and we're going to hear a lot more rhetoric like that as the days go on and this campaign heats up, Kyra.

PHILLIPS: Jim Acosta, thanks so much. ACOSTA: You bet.

PHILLIPS: We'll have your next political update, of course, next hour. And reminder, for all the latest political news, you can always go to our Web site, CNNPolitics.com.

That does it for us. We'll be back here tomorrow morning, bright and early.

All rested up. Had a good holiday.

SUZANNE MALVEAUX, CNN ANCHOR: I did.

PHILLIPS: Went home in New Orleans?

MALVEAUX: Well, over the weekend, for the festival. That was fantastic.

PHILLIPS: OK.

MALVEAUX: Yes. And, of course, July 4th.

It's nice seeing you as well.

PHILLIPS: Fun and barbecue. Have great show

MALVEAUX: Thanks. You, too.