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Stock Markets Plunge: Blue Chips Falling More Than 300 Points; Pressing President Obama on Jobs
Aired August 18, 2011 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: All right, top of the hour. I am Fredricka Whitfield. Let's get you up to speed.
Stocks are in a tailspin today, take a look. The Dow blue chips are down 388 points. A number of new signals out today point of a growing risk of a new recession.
CNN's Alison Kosik is at the New York Stock Exchange.
Alison, what is the grooming news that's driving this selloff? And you have a trader with you as well, maybe he's got some insight.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: I do, and we're going to talk with him in just a second; this is Teddy Weisberg of Seaport Securities. And you're right, it's new fears, those new recession fears that really sparked this selloff today.
You know, we've heard of economists already, they've been upping their forecasts for the possibility of a recession. What makes what Morgan Stanley said so different?
TEDDY WEISBERG, PRESIDENT, SEAPORT SECURITIES: Well, yes. I mean, you said actually lowering, right?
KOSIK: That they have been upping their odds.
WEISBERG: Oh, upping the odds of the recession, but lowering their growing forecast. And I think Morgan Stanley, this morning, lowering the growth forecast for Europe, just reinforces the negative.
I mean, it just reinforces what we already know, and clearly that's not priced into the market. As a result, you know, we see this not so bad at the moment, on a relative basis, but we were down over 500 points soon after the opening this morning.
KOSIK: Many people have asking, is this panic selling that you are seeing?
WEISBERG: Well, I don't know if it's panic selling because, you know, we have this whole issue of high-frequency trading and computer- driven trading, which is not based on fundamentals, but is based on some mathematical formula. It has nothing to do with fundamentals, and it can represent as much as 60 or 70 percent of our daily volume.
But there is no question that we have a confidence problem. And when there's a confidence problem when it comes to investing, people basically move to the sidelines, they move to the agents. So, I don't know if you want to call it panic selling, or if it's just an abundance of high-frequency trading based on the negative momentum. It's hard to know what's driving the train here, but the end result is down 400 points or 500 points clearly is not a good day.
KOSIK: And the economic reports that we're getting about how this country is doing, let's say, in manufacturing -- we got that regional manufacturing report. It shows contraction.
What does Wall Street want to see at this point?
WEISBERG: Well, I think we all want to see the same thing. We need to see something change. And unfortunately, to a large degree, the stock market is now hostage and has been hostage to dysfunctional politicians both here in the U.S. and in Europe. But in particular, in the U.S., we have an administration that has been married to what clearly appeared -- not appeared to be -- flawed economic policies.
They refused to change. The unemployment rate, stubbornly high, and we had a jobless claims number which was worse than expected.
KOSIK: So we're going to need to see fiscal changes, you're saying, more than monetary changes?
WEISBERG: Well, yes. I mean, but yet the White House continues to stick to their flawed economic plan. So, until something changes, whether it's 2012, or whether it's before then, and we see some change in direction, either from the White House, from the Fed, from the Treasury, until something changes, I think we're going to be walking in the soft sand.
KOSIK: All right.
That was Teddy Weisberg. He's with Seaport Securities.
Fredricka, I will throw it back to you.
WHITFIELD: All right. Thanks so much, Alison.
Let's check in with Carter Evans. He's at the NASDAQ with more in the view from there -- Carter.
CARTER EVANS, CNN BUSINESS CORRESPONDENT: Well, I guess the silver lining, Fred, if there is one, is that we're off our lows for the day. But as Teddy said there, it's still bad when you see a 300, 400, 500-point drop.
Take a look. The Dow down 412 right now, off 3.6 percent. We were down 528 at our lowest point. The NASDAQ composite, down 4.3, right now, down 107 points.
Tech stocks really getting hammered today. And I'll tell you what -- overall, the front page on CNNMoney.com really says it all today, just "Walloped!" All stocks across the board getting nailed today. But there is not any fundamental change in a lot of these companies. Up above me, for example, Apple, down 3.3 percent today. No news coming from Apple saying that it lost three percent of its value.
This is fear driving the markets. And you can see it with the tech companies that are getting hammered broadly today on the NASDAQ. These are the 10 most active by volume here: Cisco, Microsoft, Intel, Oracle, Dell, all on this list.
Why? Because they need you to buy stuff. They need you to buy stuff, they need to have people having jobs so businesses can expand, so businesses can buy large servers.
It's the uncertainty in the market right now that is causing people to run from these types of companies. No fundamental changes whatsoever. But it is a big concern when the market is falling like it is, Fred, and that can cause a problem in and of itself if everybody tries to pull their money out.
WHITFIELD: All right. Carter Evans, thanks so much. Appreciate that.
Democratic Congresswoman Maxine Waters says President Obama isn't paying enough attention to jobless African-Americans. She told a Detroit audience the Congressional Black Caucus would call him on it if constituents give the go-ahead.
(BEGIN VIDEO CLIP)
REP. MAXINE WATERS (D), CALIFORNIA: We don't put pressure on the president because you all love the president. You love the president. Just a minute.
You are very proud to have a black man. When you tell us it's all right, and you unleash us, and you tell us you are ready for us to have this conversation, we're ready to have it.
(END VIDEO CLIP)
WHITFIELD: So that conversation Congresswoman Waters wants to have with the president might include these statistics. The jobless rate for African-American is almost 16 percent compared to the national average of 9.1 percent.
The Congressional Black Caucus is holding a job fair right here in Atlanta today. Congresswoman Waters is with us now. She's joining us live.
So you say people are hurting. Today's latest market numbers dropping don't help.
Are you telling the president that he is not doing enough, that it is up to him to fix this problem?
WATERS: First of all, we are here in Atlanta with this jobs fair that was initiated by the Congressional Black Caucus. We're in five cities, and we're seeing thousands of people come to these job fairs just looking for a chance, looking for an opportunity.
We decided to get out of Washington, D.C., and get away from the rhetoric. Yes, we're public policymakers, but it was time to hit the ground and come and let people know we feel their pain. We understand how devastating it is in our communities.
Not only are we losing jobs, and the unemployment rate is unconscionably high, but we have been faced with home foreclosures, we have lost most of the wealth in our families. And so all of us have a responsibility.
The president of the United States is, of course, the president. He is the leader of the nation. We support him.
We want to work with him. We want him to use that bully pulpit to get those banks in there -- we have profits that they're holding on to -- and lend that money in our communities to small businesses that create jobs. And those jobs will put money back into the economy, and that's how you revitalize the economy.
So, yes, we're working with him, but we are sounding the alarm. If you look at what is here today, with thousands of people lined up in the hot sun, we're putting a face on this misery, a face on this unemployment. The Congressional Black Caucus is determined to do everything that we can do not only as public policymakers, but also just as representatives who have been sent here by the people to represent them in every way we possibly can.
WHITFIELD: But your message yesterday went further, and you were talking specifically about the duty or the allegiance that perhaps this president, because he's a black president, should be paying to the black community, particularly because of this disproportionately high number of unemployed African-Americans.
Is that right?
WATERS: Well, no. What I have said is this -- we love the president, the people love the president. They are reticent to confront the president or do anything that would make it appear that they don't support him.
And so you have seen African-American be extremely patient as they have tried to find jobs and to deal with this misery. And so what I was saying to them is, we have got to put a face on it.
We have got to not only talk about what we're doing in the Congressional Black Caucus, but we have got to let the president know that we're behind him. Don't back up from the Tea Party. Stand up and fight them. Don't give in to them. Don't make deals with them because you are trying to get along.
We want the president to know that he's got a lot of people behind him. And we want him to be strong, we want him to fight, and they are saying, increasingly, yes, we're hurting, we're even getting angry. Let the president know that we want him to be tough.
WHITFIELD: OK. Well, you know, just a moment ago we spoke with a job seeker who is there at that job fair, Johanna Hill, and she said what frustrates her most is this --
(BEGIN VIDEO CLIP)
JOHANNA HILL, JOB SEEKER: This job thing has affected all of us, and it doesn't matter, white, black, Republican, Democrat, Tea Party. I mean, come on, guys. I mean, we're all adults here, and I don't understand all the bickering. If we can't sit at a table and make a decision -- I mean, there's a lot of things that can be done.
(END VIDEO CLIP)
WHITFIELD: And she elaborated further, talking about the kind of bickering that is taking place in Congress. So she is among those who are saying that there are a lot of people here who are standing in the way of some progress, and she points to government, congressional members as well.
WATERS: Well, first of all, let me say this, a lot of people are hurting, and we want everybody to be helped. It just so happens that the African-American community has the highest unemployment in the nation. It's the worst since the Great Depression, 16 percent, 35 to 40 percent in some communities where the unemployment has been bad for a long time.
So we are unique in terms of the pain that we are feeling in our community. And yes, we want the president to help everybody, just as he's helping the rural community.
When he rolled out in the past few days, he went to small towns and rural communities, and he went with a plan. And that plan was to invest money in those rural communities in order to develop jobs.
We like that. And we want the rural poor to be attended to. But we also want the urban poor to be attended to. That's all we're saying.
WHITFIELD: So when the president is to unveil more extensively his plan for the economy come mid-September, and apparently in that plan there may be some tax incentives to employers who would hire, how does the Congressional Black Congress, or how about you personally, Congresswoman, want to help the president craft a plan that would included everyone at the table?
WATERS: Well, we absolutely are going to have our input and to try and give the president some advice based on our experiences about what he can do for unemployment in this country. And again, as I told you, just as the president focuses on the rural unemployment, or any other kind of special efforts that are made, or whether it is with efforts such as dealing with the gay and lesbian community, efforts such as dealing with the Latino community, we want, in addition to the overall plan, to direct some effort toward the worst-off communities. If you have communities such as the black community, where you have 16 percent unemployment, translating into 35 percent and 40 percent, I think it is all right to ask that some special attention be given in addition to what you are doing in the rural communities and other places. So, yes, we support an infrastructure bank that will create jobs repairing the roads and the bridges and the water systems. We support stimulating the economy with another stimulus plan. We support using the bully pulpit to call the banks in and tell them we bailed them out and now they have to put money back out to small businesses so they can create jobs.
We're comprehensive in our approach. And we are speaking for all of the people that we represent, and we're bringing attention to the people who are hardest hit.
WHITFIELD: Congresswoman Maxine Waters, thanks so much for your time. Appreciate that from Atlanta, at a jobs fair there sponsored by the Congressional Black Caucus.
And we'll be right back. As we continue to watch the markets, the Dow still taking a pretty significant beating, down now 377 points. Our Money team continues to watch the numbers.
We'll be right back.
(COMMERCIAL BREAK)
WHITFIELD: All right. We continue to watch the markets. The Dow, taking quite the beating today, down 366 points there.
We have got our team coverage on this, with Ali Velshi joining us from New York, Richard Quest from London.
This is a global economy, it's not just the U.S. economy that's being impacted here.
Ali, let's begin with you.
First, what is at the root of this? Is it indeed fear?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, I'll tell you, first, a couple of things are happening. One is, these are weird days when I look at a Dow that's down 365 points, three percent, and say it's a lot better than it was two hours ago, when markets opened, two-and-a-half hours ago.
Here's the issue. It's the same stuff that's happening all around, but now we have reinforcement of it.
Morgan Stanley came out with a report that says earnings are going to be lower, growth is going to be lower. We've all suspected that, but we've always wanted somebody to do the math on it. And what you'll see -- Fred, you'll see -- probably for the next few days or the next few weeks, you will see other investment houses and economists coming out with these reports. Basically, they are saying what many of us have been suspecting, that there is a global growth slowdown. They've also said that there's an increasing chance of a recession.
They didn't say that it's their base case. They just think that the chances of a recession have increased, and a couple reasons for that.
One is, they don't think that the behavior, the policymaking behavior in the United States and Europe, has been correct. They also think that they'll probably need more intervention from the European Central Bank and from the Federal Reserve, even though Rick Perry made that a bad word earlier this week.
And finally, they did cite the debt drama in the United States as contributing to sort of global uncertainty about the future.
So, basically, it's a bunch of things that we already knew. Add to that a couple of economic reports this morning, the weekly jobless claims, and a report that inflation is high. We already know that -- or higher. You put it all into this mix and you have a market where people are saying, I don't want to be involved in stocks -- Fred.
WHITFIELD: Well, you know, Ali, we heard from a trader earlier who was being interviewed by Alison, and he talked about the stock market being held hostage to dysfunctional politicians, and that much of what is or isn't happening in Washington is making a significant impact on the markets, short term and long term.
VELSHI: Yes, and that's a valid point. I think Richard will speak to this.
The fact is, all of our -- many of our economic issues that we're debating here in the United States have -- we have all the data points, and we actually can solve them. But this intractable, you know, ideological debate on absolutely everything is starting to cripple markets.
You know, markets remember, Fred, the stock market is the value of the companies in that stock market, and it is based on how much those companies are going to earn. That doesn't change, it doesn't fluctuate wildly on a daily basis, but the sentiment about what's going to happen because we don't know what governments are going to do is definitely contributing to this a great deal.
Although I have to say, Richard -- I know he's standing there -- he's got a harsher take on this than I do.
WHITFIELD: All right.
Richard?
RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Well, look, the first thing to bear in mind, Morgan Stanley is not forecasting a global recession. So, as Ali rightly points out, there is growth. It's in the Asian markets, it's slowing down. But I think that the totality of what we are looking at now is far more serious, and the lack of policymakers' ability to deal with this on either side of the Atlantic, there is talk, talk, talk.
Now, why is this significant? Imagine you get up and you smell smoke in your house, and you can see smoke. But you're now having a debate with everybody in the house about how you are going to find the smoke. And if you do find the smoke, what you might do about it. And whether it's really smoke, but never mind, because the neighbor's house isn't smoking, but the --
(CROSSTALK)
VELSHI: Richard, and then you are having a fight about why the 3-year-old who lit the curtain on fire had matches in the first place. So everybody is doing everything but solving the problem to continue your analysis.
QUEST: Right. And that is exactly the situation. The markets are -- there is no reason why today, on a Thursday in August, they fell out of bed. And Europe did fall out of bed -- 5.5 percent off the DAX, five percent off the other major markets. The reason is people are unhappy.
WHITFIELD: Well, then, gentlemen, hearing this, it makes it seem like this is never ending. If we are saying that this is a consistent problem, no matter which side of the pond that you are on, where is the hope if there is so much mistrust, if there is so much "dysfunction," Richard? And fear?
QUEST: Well, it's not often I am at a loss for words.
WHITFIELD: Sorry. That's amazing.
QUEST: I mean, well, because, you used the word "hope." And frankly, I don't see a great deal in terms of the actions being taken.
WHITFIELD: Oh my goodness.
QUEST: Until now, we have been moving on fear. But the numbers that we are talking about today on jobless, on European growth, on German growth, on the inability to solve with the European sovereign debt crisis, these are facts.
And so I think, Ali, you might have a rare moment of agreement with me. And the facts are starting to drive the sentiment rather than fear.
VELSHI: That's true, but no amount of fact should be driving five percent swings in the market. I mean, yes, we had bad housing numbers here in the United States, we had not fantastic job numbers, but the jobless numbers were 400,000, as opposed to 399,000 last week. I mean, that shouldn't be causing a several percentage point swing.
So I think you are right about the underlying points, Richard, but the fear is exacerbating and exaggerating the reaction, which is why you're seeing these massive swings these days. QUEST: Well, I think that's because of a lot of high-frequency trading, and the computers are moving much faster.
But hang on a second, Ali. You're forgetting, perhaps, we have had numbers. The GDP in the U.S., GDP in Germany -- France is stagnant. Britain's unemployment rate has gone up quite sharply, the number of people claiming benefits. Those are the facts, and this is the straw on the camel.
WHITFIELD: All right. Well, thanks, I guess.
We're having no hope now because you have laid it all out for us.
Richard and Ali, thanks so much. Appreciate that.
VELSHI: I have hope that we will be talking to you later this afternoon.
WHITFIELD: Oh, well, we know that's going to happen. Yes, indeed.
All right. Thank you, gentlemen.
We're going to continue to watch the markets throughout the morning and the afternoon as the Dow continues to drop 366 points.
Much more after this.
(COMMERCIAL BREAK)
WHITFIELD: All right. Here is your chance to "Talk Back" on one of the big stories of the day. The question this morning: Are Rick Perry's treason accusations against the Fed out of line?
Carol Costello joins us now from New York with more on your comments.
CAROL COSTELLO, CNN CORRESPONDENT: It's an intriguing question, isn't it?
Are Rick Perry's treason accusations against the Fed out of line?
I know, this whole treason thing has been dragging on for days now, and it won't die because Perry's critics won't let it and neither will he. The tough-talking Texan ain't backing down. He said it would be treasonous for Fed Chairman Ben Bernanke to continue printing money to play politics. And yesterday he upped to ante.
(BEGIN VIDEO CLIP)
GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: They should open their books up. Until they do that, I think there will continue to be questions about their activity and what their true goal is for the United States.
(END VIDEO CLIP) COSTELLO: Critics are appalled. And that includes some Republicans. Tony Fratto, a former Bush White House spokesman, tweeted "Perry's remarks are inappropriate and un-presidential."
Although Perry has his supporters, too.
(BEGIN VIDEO CLIP)
TUCKER CARLSON, FOX NEWS ANALYST: The fundamental points he makes is totally true, actually. We are devaluing the currency. It's happening because of the Fed's policies, and it is benefiting, in a short-term way, I think, the White House.
(END VIDEO CLIP)
COSTELLO: Still, treason, as defined in Article III of the Constitution? If you don't have your pocket-size Constitution handy, this is what it says: "Levying war against them, or in adhering to their enemies, giving them aid and comfort," as in Benedict Arnold, who betrayed America during the Revolutionary War.
Fed Chair Ben Bernanke, the man running the Federal Reserve, which is basically the central bank for the country, is he conspiring against the United States?
So, the "Talk Back" question today: Are Rick Perry's treason accusations against the Fed out of line?
Facebook.com/CarolCNN. I'll read your comments later this hour.
WHITFIELD: All right, Carol. We look forward to that. Thanks so much.
And, of course, you know we continue to watch the markets, where the Dow has been taking a big beating today, down 383 points. So what do you do with your long-term investments? Valerie Morris will be along with some tips.
(COMMERCIAL BREAK)
WHITFIELD: All right. Let's jump into the race for the Republican presidential nomination for a minute.
Minnesota Congresswoman Michele Bachmann holding a rally in Columbia, South Carolina, right now. She's trying to build on her win in Iowa's presidential straw poll last weekend. Bachmann will find the campaign trail a little more crowded tomorrow, because that's when Texas Governor Rick Perry returns to South Carolina.
Meantime, Governor Perry says he wants to do for the country what he has done for Texas -- create jobs. Is that reality or just political rhetoric?
CNN's Ed Lavandera takes a closer look at Perry's record on jobs.
(BEGIN VIDEOTAPE) ED LAVANDERA, CNN NATIONAL CORRESPONDENT (voice-over): Rick Perry loves to talk about jobs.
GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: My actions as governor are helping create jobs in this country.
LAVANDERA: Really loves to talk about jobs.
PERRY: It is time to get America working again.
NARRATOR: -- is Rick Perry and the restoration of American jobs and the American dream begins now.
LAVANDERA: The campaign ads are clear, but does the hype would stand scrutiny? Since Perry became governor almost 11 years ago, the state has gained more than a million jobs, while the rest of the country has lost 1.5 million jobs.
Some call it the Texas miracle. Perry says tort reform and low taxes and more business friendly regulations make Texas a model state.
Critics like the progressive Center for Public Policy Priority say take a closer all right.
SCOTT MCCOWN, CENTER FOR PUBLIC POLICY PRIORITY: You wouldn't think your model state would be number one in low wages. You wouldn't think your model state would be number one in a lack of health insurance. You wouldn't think your model state would be smack dab in the middle in terms of your unemployment. That doesn't sound like the model.
UNIDENTIFIED MALE: We literally have people cramped in the rooms like this.
LAVANDERA: This is the newly opened corporate headquarters of a high tech company called Virtual Computing Environment.
TIM PAGE, VIRTUAL COMPUTING ENVIRONMENT: We looked at both coasts. So, San Francisco area, Bay Area, we look at Boston area, look at Chicago.
LAVANDERA: Vice president Tim Page says the company picked a Dallas suburb in large part because of a program created by Governor Perry.
The Texas enterprise fund offered VCE $2.5 million to hire almost 400 Texas workers at high wages.
(on camera): Did Texas come after you guys?
PAGE: They didn't approach us proactively. We found out when we were looking and we had come here. They embraced us efficiently and didn't let go until we made a decision.
LAVANDERA: In March, Governor Perry announced that a health care company called Golden Living would be moving its headquarters from Fort Smith, Arkansas, to this office building in the Dallas suburb of Plano. The governor said the move would create 100 new jobs in Texas.
But the reality is more of a mixed bag. Officials at Golden Living tell us that the company is actually relocating 50 of those employees here to Texas and they'll hire the other 50 here locally.
(voice-over): Critics say that kind of job creation is nothing more than job snatching.
MCCOWN: Job attraction and job creation are two different things. If all that you're doing is moving jobs from Utah to Texas, the nation is not any better off competitively.
LAVANDERA: Critics say Governor Perry is claiming credit for things out of his control. About a fourth of the jobs created in Texas under Perry are actually government jobs, mostly teachers hired to keep up with the state's population boom. And that the states also benefited from high energy prices fueling growth for oil and gas companies.
But Rick Perry is convinced voters will give him credit for making Texas a better place to do business.
(END VIDEOTAPE)
WHITFIELD: Ed Lavandera now joining us live from Dallas. And Ed, let's talk about how Governor Perry handled the state's $27 billion shortfall and what that could mean for the jobs picture in Texas.
LAVANDERA: You know, this is really going to be interesting. There are a lot of people in Texas who believe Perry went into the last legislative session, which ended earlier this summer fully intending on running for president. And there was a huge - almost a $25 billion short fall in Texas. The governor said we're not raising taxes; we're cutting spending. And obviously that comes with a great deal of cuts that were done across social services and education as well.
So, it will be interesting to se how the numbers and these unemployment figures play out in Texas in the coming months when these layoffs start to take place. The unemployment rate in Texas right now, 8.2 percent. A full point below the national average, but kind of in the middle of the pack nationwide. But it will be interesting to see how the unemployment figures move in the months ahead.
WHITFIELD: All right. Ed Lavandera, thank you so much from Dallas. Appreciate that.
And of course, the right hand lower section of your screen, you are looking at the numbers right there. The Dow down 380 points. We continue to watch. So, many of you are probably cringing, thinking about your 401(k)s, college savings, etc. Valarie Morris will be along to give us some advice on what to do with your money. Short- term and long-term. (COMMERCIAL BREAK)
WHITFIELD: We have been watching the Dow plunge today. And many are cringing. The Dow down over 400 points now. So, what kind of affect might that be having on your finances, and what should you do at this point?
Financial literacy specialist Valerie Coleman Morris joins us from Oakland, California. Good to see you! So, Valerie, what should people do when they see the market going up and down, especially down?
VALERIE MORRIS, FINANCIAL LITERACY SPECIALIST: I know. The first thing they need to do is just breathe. Get still and settled. And realize that what goes down goes up. I know it's really hard at a time like this, but I think what we want to do is talk to the people out there saying I know this will have a trickle effect on me, and how is it going to impact my wallet? I have kids to send to school; I'm doing all of this.
WHITFIELD: Right.
MORRIS: The most important thing people need to remember is that you make investments and you should look at it almost like it is a savings. You know, you have your retirement account for your future. How soon are you going to need that money? The market ups and downs, Washington's conversations or lack thereof, should not deter your own personal plans.
So, what I say to people is, remember why you invested and understand there can be a positive side to this. Can you believe that statement, Fredricka? A positive side.
WHITFIELD: Well, we want to think positive, but I think so many people are so nervous, because recently it seems like the Dow has taken such big plunges and so much money being is taken off 401(k), and long-term planning. So people kind of want to know, what should I do? Should I make any modifications as I think about that long term? People want to be hopeful, but they want to be proactive, too.
MORRIS: The problem - yes. But see, the problem is, that's a reaction. So, rather than being reactive, people need to be proactive. There is really little they can do right now. Don't try to call your broker; don't try to shift your money. Usually oves you make under pressure with your money are undoubtedly going to be poor moves. You cannot make one decision in your life without impacting others.
So, with your money you had plans, you had goals, you had ideas that were set specifically for that money/ So don't panic. Don't try and move your money around right now. Make sure that you use this as a buying opportunity, if in fact you have some money on the side, buy some companies that are good companies that are low value.
You know, the world's greatest investors -- take Warren Buffett, for example. I tell people this all the time. You steadily sell when a market is going up, and you steadily buy into a market that's going down. So, let's see this glass as half full rather than half empty.
And the biggest thing is, don't shoot yourself in the foot. Don't make any knee-jerk moves. Don't panic. It's your money, and you really need to take it personally.
WHITFIELD: All right, Valerie Coleman Morris. Thanks so much. Always good to see you.
MORRIS: Good to see you, too.
WHITFIELD: All right. A rare brain infection that you can actually get by swimming. What you need to know straight ahead.
(COMMERCIAL BREAK)
WHITFIELD: A mother in Virginia is grieving the loss of her nine-year-old boy to an extremely rare infection. A microscopic bug that enters the body through the nose and attacks the brain. This story from Angela Pillerano of CNN affilate WTFR.
(BEGIN VIDEOTAPE)
AMBER STRICKLAND, MOTHER: I felt like he made me a better person, you know. And I am sad that he is gone. I miss him more and more every day. I feel like I am losing it.
ANGELA PILLERANO, WTFR-TV CORRESPONDENT: Amber Strickland is talking about her nine-year-old son, Christian. It started out with a headache, and that was the beginning of the end. He died within four days.
DR. KERRY HOFF, STATE EPIDEMIOLOGIST: It's called nicoleria, and it's an amoebae.
PILLERANO: State epidemiologist Dr. Kerry Hoff said the boy died of a deadly infection from an amoebae, microscopic bugs found in fresh water which swim up the nose and enter the brain. Just a week before his death, Christian was spending time in a fishing camp where he was often in the water. A week later, he complained of a headache and the next morning, he became worse.
STRICKLAND: The next morning he doesn't want to get out of bed. He's falling asleep in an instant, and then looks at me like he doesn't know who I am or he's trying to figure out what words are coming out of my mouth. And then I got really scared and I called his pediatrician.
PILLERANO: Christian was immediately hospitalized and within three days was brain dead. Dr. Hoff says the deadly infection from an amoebae is rare. The last known case in Virginia was back in 1969. She says amoebas thrive in shallow, stagnant water when it gets warm.
Should people be concerned about this?
HOFF: Well, our goal is to make people aware that this amoebae exists, make people aware it's an exceptionally low risk. STRICKLAND: I wonder why when we have 3-D and 4-D TVs why children are dying from things like this. Just doesn't make any sense.
(END VIDEOTAPE)
WHITFIELD: And the CDC confirms three kids, including Christian Strickland, have died this summer after contracting an infection from waterborne amoebas.
So, senior medical correspondent Elizabeth Cohen is here to explain how alarmed should we be of this. We talk about it being rare, but when you hear about three this summer alone, that gets people nervous.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: We're talking 32 deaths in the past ten years. So, yes, it does happen, but it's not like, let's say, drownings at 36,000. OK? So, it's not as common as, let's say, a drowning.
But yes, what is scary about this is there is nothing you can do about it. So, you go into this water, you play in this water. Your kid comes out, you think they're fine. A week later they have a headache and maybe complaining of a little stiff neck. It could be a zillion things, including just virus, when in fact what's happened is this amoebae has got up their nose and has swum into their brain, and by the time you get them to medical care, there is really nothing you can do. So, that's the scary part.
The less scary part is that there's a particular kind of water that this exists in. It is very warm water. These deaths have been in places like Louisiana, Virginia, in Southern states. It's like 80 degrees or warmer. So, if this is something that freaks you out and you want to avoid it altogether, don't get into very warm water. A pool is fine.
FREDRICKA WHITFIELD, CNN ANCHOR: So, that's one measure of your prevention.
COHEN: Yes.
WHITFIELD: Stay away from the warm, stagnant water. Anything else you can do?
COHEN: Well, and I want to say that most people who get into warm, stagnant water are fine. This amoebae may go up their nose but it doesn't seem do anything to them. So, it's all about your tolerance for risk. If this freaks you out, you see the story, and you're like, "Oh, my God", -- there is the amoebae, by the way. Do not get into warm, untreated water. And we're talking above 80 degrees. So, we're talking pretty warm. You can also plug your nose if you are going to go under water. And also, if you stir up the sediment, that makes it more likely - you know, that gunk at your feet - that makes it more likely that that amoebae is going to get up there.
WHITFIELD: And it's strictly the nose canal, not the ear canal?
COHEN: It seems to be through the nose. Like, it goes through the nose and into the brain. And really, a week later they've got a headache and you're like, "Oh, so you've got a headache, kids get headaches".
WHITFIELD: Oh, my goodness.
COHEN: Yes, it's really - it is scary. It is scare.
WHITFIELD: Yes, it is.
COHEN: And so, definitely staying out of that warm water is a way to avoid it altogether.
WHITFIELD: All right, we will do that. Thanks so much, Elizabeth Cohen. Appreciate that.
And, of course, we also continue to watch the markets. You see the numbers there at the bottom of the screen. The DOW is taking a pretty significant hit. We will be right back with much more in the Newsroom.
(COMMERCIAL BREAK)
WHITFIELD: All right. The markets still taking a beating. The DOW down 414 points. Our Alison Kosik has a quick look at the markets from the New York Stock Exchange.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hi, Fredricka. We're still looking at a market shooting first and asking questions later. And we're seeing the market continue to fall. The DOW down 412 points. What sent the markets into a sell mode? Well, some comments in a note from Morgan Stanley. Morgan Stanley saying the U.S. and Europe are dangerously close to a recession. Also, Morgan Stanley dialing back its economic growth forecast for the U.S. and Europe.
Speaking of Europe, the selloff not just happening here. The European markets, Asian markets, have closed. If you take a look, European markets really were hit hard. The DAX, Paris' KAX (ph) down more than five percent. Asian markets also were hit hard.
You know, this obviously -- It's one more indication that we're inter-connected. You know the saying, Fredricka, when Europe gets a cold the U.S. starts sneezing. And a lot of the worries today are about Europe. Those European debt problems -- they are also on the minds of investors as well. Just as our own debt issues are, here. Fredricka?
WHITFIELD: So, Morgan Stanley saying anything more? Perhaps about the likelihood of a recession?
KOSIK: Well, here is what is interesting. The headline is a real scary one. When you see it saying the U.S. and Europe are dangerously close to a recession, but the reality is when you look further into the report, Morgan Stanley doesn't think it's going to happen. It just says we're really close.
In fact, it names three things working in our favor. For one, you know, you look at corporate America. We are doing pretty well there. We've got strong earnings and the companies are sitting on a lot of cash. You look at oil prices - oil prices are falling, quite a bit, today, actually, almost 5 percent lower. And what that does, it leaves more money in people's pockets. It means consumers have a little more disposable income to spend.
But what Morgan Stanley says is that the U.S. and European central banks -- they could also be there to support the economy as well. So, basically, Morgan Stanley coming out and giving these other reasons why it necessarily won't happen, but really driving this fear that we're seeing really grow in the market today. Fredricka?
WHITFIELD: All right. Alison Kosik, thank you so much.
All right. Time to head across country, now for stories our CNN affiliates are covering. First stop, New York, a sanitation truck driver lost control of this 16-ton salt spreader and smashed right through the wall of a garage, Wednesday, in Queens. Fire fighters quickly rescued the driver. The truck dangled over the edge for hours. The driver has been treated for head and back injuries.
And in Massachusetts, a 15-year-old boy reeled in the largest shark on record off the coast of Rock Port. He says he used cod as bait, and it took him half an hour to get that 12-foot long, 458-pound blue shark on the boat. Wow.
All right, in Missouri -- Joplin High School football players are getting ready for the season to start next Friday. It has been three months since the tornado killed 130 people and destroyed almost a third of the town, including the high school. Many of these players lost their homes in that tornado. The coach says football practice gives the players a sense of normalcy.
And Texas governor, Rick Perry accusing the Federal Reserve of treasonous acts. Manipulating money for political gain. As you can imagine, his comments have sparked a lot of controversy. And today's "Talk Back" question -- your responses are next.
All right now, some free money advice. Here's CNNMoney.com's Poppy Harlow.
(BEGIN VIDEOTAPE)
POPPY HARLOW, CNNMONEY.COM ANCHOR: Time now for the "Help Desk" where we get answers to your financial questions. Joining me this hour, Manisha Thakor our personal finance expert, and John Ulzheimer, the President of Consumer Education at Smartcredit.com.
Guys, thanks for coming in. Got some interesting viewer questions. The first for you, John, comes from Patricia in Phoenix, Arizona. Patricia asks, "I am a grad student with about $13,000 in credit card debt and I'm considering taking out a student loan to pay it down. Is that a good move?" JOHN ULZHEIMER, SMARTCREDIT.COM PRESIDENT OF CONSUMER EDUCATION: Oh, man. I would love to say that's a terrible move, but I'm not going to say that, because, believe it or not, there are hidden gems of gold within that question. You are converting revolving debt to installment debt, better for your credit score. You are converting not tax-deductible debt to tax-deductible debt, which is always better for you financially.
However, you are also converting dischargeable debt to non- dischargeable debt. You are essentially borrowing from Peter to pay Paul. You are still in the same amount of debt, except it's less expensive debt and more beneficial debt. So, if she is disciplined and she will attack the debt as aggressively as she should attack credit card debt, not a bad move.
HARLOW: And we're talking about 13 grand, not $300,000. Right, exactly.
Well, Manisha, your question comes from David in Chicago. David wrote, "My wife and I both have our 401(k)'s set up through the same company. Should we keep things simple and mimic each other's investments, or should we have a separate strategy for each?" What do you think? I mean, you'd think diversifying would be smart here.
MANISHA THAKOR, PERSONAL FINANCE AUTHOR: You know, it's interesting, Poppy. This question comes up a lot in financial planning. And one of the things I like to point out is that people forget that women and men have different life spans, and oftentimes an age difference. For instance, I am 41 and my husband is 59. If we were at the same place, we should not have portfolios that look the same, not, necessarily from a strategic standpoint in terms of value versus growth, but as an allocation standpoint.
So my advice, to keep it simple, is to be investing in target date retirement funds through their plans that are age appropriate, and that will adjust for any differences they have. And enable them, honestly, to have a chicken rotisserie-type set it and forget it approach that, hopefully, will also add to marital harmony.
HARLOW: Which a lot of people want. Marital harmony.
THAKOR: That is -
HARLOW: Very important. I know you've written a lot about that.
Thank you, guys. If you have a question you want answered by our experts, please send an email any time to us at CNN Help Desk at CNN.com.
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WHITFIELD: All right, you have been sounding of on our "Talk Back" question. Carol Costello joins us with your responses, Carol.
CAROL COSTELLO, CNN ANCHOR: And boy, have you been sounding off. The "Talk Back" question today, "Are Rick Perry's treason accusations against the Fed out of line?"
This from Colleen, "Good lord, yes, he's out of line. And you can be sure he doesn't believe this himself. He is playing off the irrational fears of the under-educated who think he knows everything because of who he is. Same old Bush politics all over again".
And this from G.I., "No, they are not. In fact, they seem to be quite accurate. This administration is printing and spending money that has no gold to back it up. In other words, the new moneys are useless paper".
This from Judy, "They are beyond out of line. It's curious Perry could say this and then expect Chairman Bernanke to set monetary policy and have the world have confidence in the U.S. Dollar. Come on, Perry, this isn't a John Wayne movie you're trying to get a part in.
And this from John, "Just another tactic to scare people into voting a certain way. Throw around strong words and get what you want. I hear too many words from both sides, not enough action". Keep the conversation going. Facebook.com/carolcnn. And, thanks, as always, for your comments.
WHITFIELD: All right. Per usual, folks not holding back at all. Nor are the comedians, Carol. The presidential contenders are giving late-night comics a lot to make fun of these days.
That includes Michele Bachmann's latest eyebrow raising promise. Maybe you heard this one, Carol?
COSTELLO: Two dollars a gallon?
(BEGIN VIDEO CLIP)
CONAN O'BRIEN, LATE NIGHT HOST: Michel le Bachmann said then when she is president gas prices will come down to less than $2 a gallon. Yeah. When asked how she will make that happen, Bachmann said she will hunt down the CEO of Exxon and stare at him.
(END VIDEO CLIP)
WHITFIELD: Carol, cold-blooded, that Conan.
COSTELLO: I know. And poor Michel le Bachmann will never get over that "Newsweek" cover. Although, she handled it very gracefully.
WHITFIELD: Yep. All right, thanks so much, Carol. I appreciate that.
Randi Kaye is up next with more of the NEWSROOM.
RANDI KAYE, CNN ANCHOR: Hi there, Fred. Thank you very much.
