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Another Awful Day in the Stock Market; Where Are Futures Heading; Europe, Asia Markets Suffer Big Losses; White House Won't Comment on Markets, Focusing on Jobs; GOP Criticizes Obama for Vacation While Markets Drop; Something Positive Must Turn Markets or Losses Continue; Opening Bell on Wall Street; Syrian Forces Fire on Protesters; Rick Perry Stumping in South Carolina; Georgetown-Chinese Team Brawl; Market Madness & You
Aired August 19, 2011 - 09:00 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, guys, thanks so much.
Well, the opening bell on Wall Street only half an hour away. And get ready to grit your teeth and count your loses. It looks like it's going to be another ugly day. As you know, yesterday, the Dow closed down more than 400 points. And adding to the gloom this hour, world markets taking a beating overnight. CNN correspondents covering all the angles for us that are impacting your cash, from New York to London to Hong Kong, Washington to Martha's Vineyard. We are breaking it all down for you.
All right, let's take a look at the big picture now.
Christine Romans is in New York.
Christine, you're actually calling it awful August.
(LAUGHTER)
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I know. It is awful August because you've got the Dow down 9.5 percent for the month, more than a thousand points the Dow has lost. And now yesterday's route really wiped out any kind of advance we had seen the last week.
It's an awful August because there's a lot has happened. We had the debt ceiling debacle. We had more economic news that's showing, Kyra, that the economy is not as robust as we'd like it to be. Even though you have job creation, it's not enough to really assuage the fears and nerves of people out there who do not feel like the unemployment situation is working well enough for them or their families. And all of this coming together as we have a big deadline coming up for the super community to figure out how to get our debts and deficits in order.
The rest of the world looking at us and worried about just how serious the U.S. is about political harmony to make sure there's real reform on our deficits. A lot of different fronts all moving at once. You add in Europe and the sense of confidence, this lack of confidence around the world, and that is what we are dealing with still this morning on a Friday morning -- Kyra?
PHILLIPS: All right, Christine.
We are all sitting back, wondering, OK, where the heck are futures headed?
Alison Kosik at the New York Stock Exchange.
Alison, what do you think?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: We are 30 minutes from the opening bell, Kyra, and it's looking just a little better. Dow futures are off their worst levels of the morning. But, oh, yes, we are still expecting another triple-digit drop on the Dow. All of the major averages right now down more than 1 percent. This is just more of the same, continuation of yesterday's sell-off. And it's the sell- off that we have seen circling the globe overnight, Asia, Europe, here. And then all the way around again, the bears made their trek. So it's all about all these fears continuing about slow growth in the economy, a possible recession. Yesterday, we heard Morgan Stanley come out and say the U.S. and Europe are close to a recession.
Today, more news. Deutsche Bank cut its growth outlook for China and JPMorgan cut its outlook for the U.S. And you have to remember, the U.S., European countries and China, these are some of the biggest -- these are the biggest economies in the world, so a slow down or a recession in any of these regions, we'd all feel it. We'd all feel it globally. This is why we are seeing this kind of sell-off.
You look for the year, stock-wise for the year for the Dow. Check out how the Dow has done so far this year. We're down 5 percent on the Dow. Analysts say they don't see any positive news coming in the near term. Without any good news coming, expect more of this selling. Expect more of this downward trend -- Kyra?
PHILLIPS: All right, we are all buckled in.
Alison, we will be talking a lot more in about 27 minutes.
As Alison mentioned, while you were sleeping, markets in Europe and Asia, you know, have pretty much wallowed in the red, suffering big losses.
Leone Lakhni is in London and she's been watching the numbers for us overseas -- Leone?
LEONE LAKHNI, CNN INTERNATIONAL CORRESPONDENT: Kyra, absolutely. The markets are taking a pounding once again and, as Alison mentioned, those global recession fears. And in addition to that, the entire debt crisis that is still is hanging over Europe like a cloud. It just won't go away. When you speak to fund managers and traders, the thing that comes up again and again and again is their concern about the lack of direction from policymakers, and that really is what is rattling their confidence.
And if we look at the markets at the moment here, you'll see red arrows across the board. FTSE down nearly 2 percent. CAC down around 2 percent. DAX upwards of 3 percent and Zurich down 2.5, 3 percent as well. And if you look at them, just to put it into perspective, the FTSE has lost nearly 13 percent this year. The other main indices have lost 20 percent, just to give you an example of how much investor confidence has been rattled this year. And if we are seeing what is happening in the Eurozone with the biggest economy stagnating at the moment, it really is difficult to see how they are going to emerge from this -- Kyra?
PHILLIPS: All right, Leone, we will be talking more.
Let's head to Asia now where the markets are closed but those losses pretty darn deep.
Kristie Lu Stout is in Hong Kong -- Kristie Lu?
KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT: Hey, there. There was a shock sell-off here in Asia. Let's start, first, in Japan where the Nikkei ended the day down some 2.5 percent with exporters bearing the brunt of those losses. Names like Nissan and Sony and Honda all deep into the red.
Here in Hong Kong, the Hang Seng ended the day down 3 percent. A little bit of a different story in Shanghai, the mainland. The Shanghai Composite there ending the day down but just 1 percent lower. The reason why is because the Shanghai Composite is more closely attuned to Chinese domestic economic concerns other than the global economic concerns.
That being said, we say big losses elsewhere in the region, including in Australia. But the worst performer by far was in South Korea, with the Seoul Kospi down 6.2 percent this day. So a lot of panic, a lot of fear out in there markets here in Asia this day.
Back to you.
PHILLIPS: All right, Kristie, thanks.
And President Obama may be vacationing on Martha's Vineyard but I bet you he isn't that relaxed as he awaits the opening bell this morning.
Dan Lothian is traveling with the president there in Massachusetts.
What a backdrop, Dan?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. Very nice backdrop here, but looking grim on the market as we saw yesterday.
One thing the White House has stayed away from is commenting on the daily gyrations of the stock market. In fact, Josh Ernest, the deputy White House spokesman, saying, during a gaggle with reporters yesterday, that he was not going to speculate on the movements of the market. What they will talk about, though, is the fact that the president is focused very heavily on fixing the economy, even while he is on vacation. In fact, one of his economic advisers will be coming to Martha's Vineyard next week. We are told he will provide the president with regular updates. In addition to that, the president will also be in touch with senior members of his economic team back in Washington.
And, of course, as we know, the president is working on that speech that he will be making and the new ideas, as the White House puts it, that he'll be rolling out, after Labor Day, after returning to Washington from Martha's Vineyard as to ways to create new jobs. So the president away from the White House but still very much on the job here.
PHILLIPS: OK. Dan, we will be paying close attention.
As expected, the GOP has already given the president plenty of flak for going on vacation while our portfolios are blowing up.
Deputy political director, Paul Steinhauser, has that side of the story -- Paul.
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, good morning, Kyra. Some of the Republican presidential candidates are criticizing the president for taking this vacation. No surprise, right? They are wanting to oust him from the White House, so you would expect that.
Sarah Palin, who is thinking of running, had some critical comments yesterday.
And take a listen to former Massachusetts governor, Mitt Romney. Here's what he said.
(BEGIN VIDEOTAPE)
MITT ROMNEY, (R), FORMER MASSACHUSETTS GOVERNOR & PRESIDENTIAL CANDIDATE: The president this week is in three states on a bus tour, campaigning. Then he is going to be going on a vacation to Martha's Vineyard for 10 days. A lot of Democrats at Martha's Vineyard. I don't know why. But --
(LAUGHTER)
I wish the president were in Washington calling back Congress and dealing with the challenges we have.
(END VIDEO CLIP)
STEINHAUSER: A lot of Democrats at Martha's Vineyard. He is referring, of course, to former President Clinton, who did vacations, did summers sometimes in Martha's Vineyard.
Remember, Mitt Romney is the former governor of Massachusetts. Martha's Vineyard is in Massachusetts. And guess what? He'll be there a week from now, Kyra, to raise campaign cash for his presidential bid.
One other thing. The Republican National Committee, they are having a little fun on this. They are asking or encouraging people to pick post cards, post cards from the president to take pot shots at the president. And they are also using this as a way to fundraise. So there is politics involved here most definitely, Kyra?
PHILLIPS: Hey, politics is what got us in this mess in the first place, Paul. Thanks.
CNN's Zain Verjee, live in London with reaction from around the world to the volatile markets here and overseas.
Zain, what are the headlines saying?
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Kyra, let's go straight to the "The Guardian" newspaper. Its headline says this: "Fear of risk taking is hindering recovery." Now it quotes a Bank of England official that says, "Psychological scarring caused by the last financial crisis and a growing reluctance to take risks in the markets is creating pessimism and threatens to delay a recovery."
Check out "The International Herald Tribune" with this headline: "Fears grow in Europe that banks need cash." It says, "The European banking system is showing signs of a cash crunch, analysts say, but a lack of clear data may be exaggerating the gravity of the problem, sowing mistrust among banks and making them reluctant to lend to each other as well as businesses and consumers."
Kyra, really, that underscores the point that there are concerns that what we are seeing is really a hangover of the problems of the banking sector back in 2008. And that that has now been transferred to the state sector and to governments holding big debt piles -- Kyra?
PHILLIPS: Zain, thanks so much.
We will take your questions about the market and your money on Twitter. I have a number of guests coming up in the next hour that want to answer your questions. So go ahead and tweet me at Kyra/CNN or at CNN/NEWSROOM." We have a number of gurus who will tackle all of your questions for you.
It's about 20 minutes until the opening bell.
Up next, Jeffrey McCracken breaks down what he thinks is going on with the markets and what it might mean to all of you.
And a Michigan driver pulls a Fred Flintstone while trying to stop his pickup truck. That story next as we go cross country.
(COMMERCIAL BREAK)
PHILLIPS: All right, checking stories across the country now.
Police in southern California say they have arrested 60 suspects with ties to Mexican drug gangs in an Iraqi social club. The raid netted guns, explosives, more than $500,000 in cash, pounds of meth and nearly two tons of marijuana.
Powerful storms and baseball-sized hail closed the airport in Omaha, Nebraska, last night. Take a look what it did to the cars in the parking lots. Steven planes were also damaged. The airport is open this morning.
In suburban Detroit, a driver with no working breaks tried to stop his pick-up truck with his fee. The Fred Flintstone-type move covered two and a half miles. Police say the driver hit four vehicles along the way until he finally came to a stop.
We are just a few minutes away from the opening bell, the last session of a pretty insane week for the markets. We dipped below 11,000 again yesterday and Dow futures not looking so great this morning.
Jeffrey McCracken is a senior business writer with "Bloomberg News" and "Business Week."
We've following what you and all your co-workers have been talking about, writing about. What are you looking to, Jeffrey, today?
JEFFREY MCCRACKEN, SENIOR BUSINESS WRITER, BLOOMBERG NEWS & BUSINESS WEEK: I think what you want to see -- it's obvious the market will open down this morning. So what you want to see is how far down does it go. Where does it stop the decline? Then you want to start to see what kind of catalysts are there going to be to change the conversation. What I mean by that is it's a fear-based, emotional market right now, so one bad data point, one negative report from an economist, which is what we had yesterday -- Morgan Stanley downgrading its outlook for the U.S. economy -- that begets a lot of fear. And then inevitably something comes along that changes the conversation and moves the market in a different direction.
The market was tumbling all day yesterday until the news came out, until actually we had "Bloomberg" reported that H.P. was looking to do a major acquisition and split itself up. And that seemed to halt the decline at least for a little while.
So I think what you want to see today is, is there going to be a data point, a comment from an analyst? Is there going to be some corporate news that will stop the fall? Because if you don't stop the fall, what happens is you finish on a down beat today with the U.S. stocks and then Sunday morning here in the United States or Sunday night here in the United States, the Asian markets open and they go down. You get this -- it's like Newton's Law of Physics.
(LAUGHTER)
It's objects in motion tend to go in motion. And, here, it's negative markets tend to stay negative until something positive turns them back the other way.
PHILLIPS: What is the catalyst for a bounce-back? We have had that several times in the last two weeks.
MCCRACKEN: My guess you'll see some economists and you're going to see some investors who come out the other side and say, listen, there is a lot of reason for apprehension, there's a lot of reason to be concerned, but this is not 2008. I think you'll start to hear from that from, whether it's corporate economists or some economists within the government here or in other governments. The fact is in 2008, the corporate balance sheets were nowhere near as fortified as they are right now. Corporate America alone is sitting on like $2 trillion, $2 trillion in cash --
PHILLIPS: So, and that's my question.
MCCRACKEN: -- to weather a recession.
PHILLIPS: And that's my question. Right. So, Jeffrey, why aren't they taking the risk? Why aren't they investing? I mean, even with the profits, they are still sitting back, you know, worried and not taking risks as well.
MCCRACKEN: Well, they are taking -- they are taking some risk. Let's go back to H.P. yesterday. H.P. said it's going to spend $10 billion to buy this company Autonomy out of the U.K., a software company.
And on Monday, Google made an enormous stop and bought Motorola.
So, you are seeing corporations doing some things.
What they're not doing in which they've done in the past upswings or turnarounds out of a recession, they've taken their cash and they've taken their money and they ramped up production, they've added plants, added stores, what have you. They're not doing that this time around. And that's why we're not seeing the job growth we've seen in previous comebacks out of a recession.
PHILLIPS: All right. Jeffrey McCracken, we'll be talking more throughout the next couple of hours, especially after 9:30 when we see that opening bell and see how the numbers go. Jeff, thanks.
And we are taking your market and many questions as well on Twitter. Just go to KyraCNN or CNNNewsroom and tell us what you want to know. Jeffrey McCracken, a number of or experts and analysts -- they'll be here in the next two hours to answer your questions.
Well, we're less than 15 minutes away now from the opening bell. And we are watching to see, of course, how Wall Street is going to close out this wild week. We'll try and see what our Money Team is expecting, coming up, right after the break.
(COMMERCIAL BREAK)
PHILLIPS: Minutes away from the opening bell. And if world markets are any indication, TGIF. With things so volatile, a lot of folks are pretty confused about what to do right now.
Finance expert Clyde Anderson joining me live from New York.
OK, Clyde, we talked, what, a week ago?
CLYDE ANDERSON, CNN CONTRIBUTOR: Yes.
PHILLIPS: Everything seems to be a blur of you saying multinationals, that's the way to go. Have you changed your tune since yesterday?
ANDERSON: I have not changed my tune. I mean, we definitely got to find something safe, but it was interesting. You know, the jobs report came out and I think that's really a big issue. And then the last segment, you talked about corporations having about $2 trillion that they are sitting on. But the keyword right there is that they are sitting on, and not investing.
Nobody has a plan right now. And so, they don't want to hire. They don't want to invest into production and other things, and that's hurting.
So, the reality is we don't have any jobs and people out here are really hurting.
PHILLIPS: And manufacturing, it doesn't help that manufacturing is down, right? That puts jobs there on the back.
ANDERSON: Exactly.
PHILLIPS: So, what needs to happen then to turn that around?
ANDERSON: I think that someone is looking for a plan. We need to have some sort of plan where these companies feel like they have someone behind them, that they're getting some sort of incentive, that they feel comfortable in reinvesting those dollars and definitely reinvesting in people right now -- I mean, because that's what we need to see. And see how that indicator right there hurt the market because, again, the numbers came out higher than expected.
And those are just the number of people that are on the books. You know, we are not talking about the people that are falling out of the system that just aren't receiving unemployment anymore. It's bad out there, especially when you're looking at Michigan or Detroit that has 31 percent unemployment.
PHILLIPS: Well, OK, two questions for you. What's your advice to somebody then right now who is looking for a job?
ANDERSON: Somebody right now that's looking for a job, I mean, the best advice is to create a job. You know, is to find something out there that you do well and to create it, and to find out how to tap into something else. I mean, because we see we can't put our faith right now in some of these corporations and so many people going to so little jobs. And so, we got to try to do something different.
I say don't stop the job hunt. You got to stand out and be different. But at the same time find, try to find another way or another stream of income that will bring in some money into the household.
PHILLIPS: You know, OK. So, how do you that? I can't tell you how many conversations I've been a part of where someone in the group sits back and says, boy, now is the time to invent something. Now is the time to start some type of business of something that involves something that people really want.
How do you even gauge that? How do you even begin that type of search?
ANDERSON: Well, and I think you have to figure out what do you do well, what are the things that you do well, or maybe, what have you been doing in your 9:00 to 5:00 job that can help someone else or benefit someone else.
When you're looking at corporations right now, you want to know what corporations are doing -- corporations are reinvesting themselves. We've seen a lot of corporations that are buying their own stock right now. And so, we need to start reinvesting in ourselves from that standpoint. What is it I do well and what is the thing people are buying right now?
Definitely in down markets or recession times, people still need services and that's why we go back to those multi-international corporations, I like 'em because I say invest in things that you buy, things that are staples, they've been around. You're going to need them. You know they are necessities.
So, what we need to figure out, how do we tap into that market?
PHILLIPS: All right. Clyde, I know you're going to stick around to take viewers questions on what the heck we do now. So, tweet us @KyraCNN.
Clyde is standing by the next couple of hours. Clyde, thanks so much.
ANDERSON: My pleasure.
PHILLIPS: And, once again, opening bell. Wall Street less than 10 minutes away. And it does look like we are facing another bruising day.
Christine Romans and Alison Kosik are watching the premarket numbers right now.
Alison, what do you think? What do we likely to see at the open?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You are likely to see a triple digit drop on the Dow. You know, this is following what happened in markets overnight in Asia. It's just more of the same. It's more worries about a possible recession coming around. And it's more of the fact that the economic reports that come out about the U.S. economy just aren't good.
And what Wall Street does is it looks to those economic reports for cues and it doesn't like what it's seeing -- Kyra.
PHILLIPS: All right. Christine, what are traders saying to you? I know you've been on the phone all morning.
CHRISTINE ROMANS, CNN SENIOR BUSINESS CORRESPONDENT: Yes.
PHILLIPS: With regard to what the market needs to hear in order for things to calm down.
ROMANS: There's just a confidence trap here and that's the real problem. You have stocks down because of concerns that the economy is slowing, that it's not doing as well as you would like. And when stocks fall, then people and companies and banks get nervous again and they, in turn, get more, you know, defensive and then that hurts the economy. So, it's a vicious cycle.
And what does it take to snap that? It takes someone for some reason having confidence to start spending money again and by someone, I mean, as you were talking about Clyde, companies reaching out and starting to spend that money by hiring people and by investing again and by expanding again.
No one really wants to do that quite yet because they are not sure what the economy is going to hold for them. They're expecting Asia to start slow. That has been a very big driver of things for global growth.
They're looking at worries in Europe, our biggest trading partner. And they're saying, OK, well, now, that could be another sore spot as those countries really tightening their belt and start spending less and deal with their own debt problems.
And what about the political situation in the United States? We are coming up on some deadlines for the U.S. to prove to the rest of the world and our investors, our lenders, that we've got our act together on debts and deficit. But so far, it's been political acrimony.
So, all of these things weighing together and that lack of confidence just continues.
PHILLIPS: Lack of confidence.
But, Alison, our corporate sector has remained strong. Christine just pointed out about corporate profits.
KOSIK: Yes. I mean -- corporate -- you know, these companies are flush with cash right now, but they're not investing, they're not hiring, because they don't know what's coming around the corner. They -- there's all of this uncertainty in the economy.
And you know what would calm them down? If they see something concrete come out of Washington. I mean, you look at even Standard & Poor's which downgraded the U.S. debt, Morgan Stanley coming out with this very dire sort of forecast, forecasting a possible recession for the U.S. and Europe getting close.
You know, it's -- it all sort of comes back to that big debt ceiling debate. You know, it may be over, but the reality is debt is still a major issue.
And policymakers are still deadlocked. You know, the fact of the matter is, there's just not enough income coming in to get a handle on the amount of the debt we have. And it's not just here in the United States. I mean, it's very much happening in Europe too. It's the reason why we see Wall Street react so violently because Europe is knee-deep in debt as well.
Just like in Europe, just like here. You know, everybody wants to hear policymakers take some big concrete steps to re-assure investors. And once that reassurance is put in place, you may see companies actually take a step and start hiring and start investing again -- Kyra.
PHILLIPS: Yes. And who knows when we are going to hear that, and from which policymakers. We are standing by for something that gives them all some sort of confidence.
All right. Ladies, four minutes and almost 10 seconds away from the opening bell. We'll talk to you in just a few minutes.
Also ahead, presidential candidate Rick Perry holding campaign event in South Carolina. We are following it. And if he makes news, we'll bring it to you.
(COMMERCIAL BREAK)
PHILLIPS: All right. It's time for the opening bell on Wall Street and we're going to break it down to see how it's all going to hopefully come through.
Christine Romans, part of our CNN Money Team. Also, Alison Kosik, she is watching the markets from New York Stock Exchange. And, yes, once again, we got our Richard Quest in London.
All right. Christine, let's start with you -- seconds away.
ROMANS: All right. Two words: risk off. That's what the people with money say in the markets about what's happening and that means anybody who is taking a risk they want to turn the risk off and do something safe.
That's why money is going into treasuries. That's why money is going into gold. You got records over and over again this morning in gold above $1,870 an ounce.
So, stocks, they think, are risky. And that's why you're seeing the market go down. If you're going to have some sort of even flirting with another recession, that's something that could hurt stocks and that's why you've got -- could hurt companies, quite frankly, and hurt the U.S. economy and that's why you got people selling stocks.
The irony here is that it's going to take something to break that risk off, that lack of confidence. We don't know quite -- what it is yet, to be honest with you. But futures have been popping around a little bit. So, we'll see if there's anybody deciding that they want to take a little risk and buy some stocks today.
PHILLIPS: We're going to see those numbers any minute now. The opening bell has -- you heard it right there. It has rung.
Alison Kosik, there we go. Negative territory already, of course.
KOSIK: And so -- exactly. So, the Dow slowly going down again.
You know, Christine had two words. I have one word of the day: volatility is king today again, especially since Wall Street doesn't really have much to trade on today, meaning we don't have many economic reports coming out. So, that means, you know, there is really no direction for the trade today. It's mostly going to be trading on what has already happened -- the worries about the recession, the already bleak economic reports that we have been getting.
Also , it's Friday. We are going into a weekend. And you usually see traders not willing to hold on to their stocks as they go into the weekend because you never know what's happening over the weekend.
Dow down right now, 96 points, not as bad as we thought with the initial opening bell. But still we are in the red -- Kyra.
PHILLIPS: Richard Quest, is this going to set the tone for the rest of the year?
RICHARD QUEST, HOST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": Oh, I think that is a huge leap to say that! I thought you were going to say is this setting the tone for the rest of the week!
(LAUGHTER)
PHILLIPS: OK, then that's good! Good. You're saying it's not going to look this bad and we are going to have a good year ender?
QUEST: No, I'm not. I think what you're looking for is you're looking for change. You're looking for decisions to be made and you're looking for an improving -- this is all about confidence.
These prices aren't falling because of any minor piece of economic news that comes out on a random Thursday at the end of a month. It's because there is a feeling because things are not good and, therefore, markets are falling.
Now, look. We have faced these problems before individually with countries of debts and deficits, but this is different. There is a much greater structural imbalance between countries that globalization means it's harder to sort out. And that's what you're seeing. To cause it, that's forcing into particular movements.
PHILLIPS: All right. Well, let's get the ladies to weigh in here. We heard where Richard stands. I heard you both laughing.
So, Christine, I'm trying to look for positive light at the end of the tunnel.
ROMANS: OK.
PHILLIPS: OK? Can we look to year's end and can we keep our fingers crossed? Because a lot of analysts are saying, hold on, just hold on. Give it to the end of the year, we could see an upside here.
ROMANS: I'll tell you what the consensus is from the traders and the strategists who I talk to. Their consensus is you got treacherous near term here, especially as you're watching politics in Washington. That's really honestly going to affect confidence on Wall Street. No question.
So, you could have more tough trading here in the very near term. But you also have talking about big companies that pay dividends. You got people talking about other places in the stock market you can get paid for holding stock, looking at beaten down companies, people trying to figure out where they can make some money in a year on out, or two years on out, if the worst case doesn't come through for the global economy.
So, there are people looking around in that way.
But you're also seeing all this money going into treasuries. Ironically, the thing we were all -- everyone is so worried about, that's the safe haven, treasuries. Treasury yields are so low.
Mortgage rates: 4.15 percent on a 30-year fixed rate loan. I can't believe those words came out of my mouth -- 4.15 percent on a fixed rate loan. A lot of people are scrambling to refinance, Kyra, and they're finding that when they are successful, they have more money hundred dollars or $100 more every month that is, you know, freed up by that.
And so, that's one area of excitement for people who aren't under water on their loan and who can get through on the phone to people who are doing their financings, but there are people who aren't really doing that now.
PHILLIPS: OK, good. There is a positive sign.
Alison, you know, I know you talked to traders as well. What's your take? What is the overall feeling if we were to look forward to what we could see at the end of the year?
KOSIK: Well, what you're seeing is an actual forward looking indicator. That's what the stock market really is. That's what Wall Street does.
And I'm much more -- not me, but the traders are much more pessimistic about going forward.
I mean, what you're seeing happen with stocks right now -- you know, they are moving lower because what you're seeing is worries about what's going to happen in the future. Does the slow economy mean the earnings that corporate America puts out are going to be worse?
So, what you see is kind of a re-pricing happening based on these calls that recession is around the corner. The economy is slowing even more, which could mean that companies could also be hurt in the end. And that's why you see the selling happening because of the worry about what will happen.
And until we se some positive data come out, because, once again, Wall Street takes its cues from the economic we get out on GDP, on manufacturing, on jobs, on housing -- until we see some sort of a good trend happen, I don't really think you're going to see any kind of upward trend happening in the markets any time soon.
Sorry, I don't have anything better to bring up.
PHILLIPS: Oh!
KOSIK: Hey, wait, I do have something positive. Oil prices -- yes, oil prices are down yet again, down to $81 a barrel. That could translate into lower gas prices. There you go.
PHILLIPS: There is a little light at the end of the tunnel. OK. We can drive more.
KOSIK: Right.
PHILLIPS: Richard, you know, Alison mentions the positive data, OK? But we are also waiting on policymakers. So much of this is because of a self-inflicted wound and everyone wants to hear from the politicians making decisions with regard to the debt. And, so far, we just -- we haven't heard anything of depth from the policymakers.
QUEST: Right. I think there are two distinct groups in this, that you have the United States which -- where you have the views of the Republicans and the Democrats and the Tea Party and the liberals. And they are very principle positions, whether you agree or disagree. But they are fighting to the core for something that they believe in extremely strongly. One side and the other believe that the other is completely and utterly barking mad and wrong!
In Europe, you have a lot more indecision. You have a lot more wishy-washiness, and inability and failure to seemingly get on top of it.
Now, you have the Bundesbank on one hand. You got the ECB. You got the French government. You got the German government. And you have systems of government that, frankly, can't cope.
What I think is most extraordinary about the last month is not that the markets have gone down or the markets gone up, that happens. But the swings, the volatility, that is so totally new -- these 300, 400-point days. And that is making everybody rethink their strategy and rethink the way they actually handle markets.
PHILLIPS: OK. Richard Quest, Alison Kosik and Christine Romans, we'll be talking a lot more over the next couple of hours. Thanks so much, guys.
And to all our viewers, we will keep a close eye on Wall Street throughout the morning and we will keep you posted on a regular basis.
Also, we are taking your market and money questions on Twitter @KyraCNN or @CNNNewsroom. Our team of experts and analysts will answer the best ones later in this newscast.
Now, despite international pressure to stop the violence, Syrian forces fire on protesters yet again. A live update right after the break.
(COMMERCIAL BREAK)
PHILLIPS: Checking top stories now:
Nearly three dozen people were killed in a bomb attack on a mosque in Pakistan. Police say a teen suicide bomber detonated during Friday prayers.
In Afghanistan, two suicide bombers attacked a British compound in Kabul killing eight people. The Taliban claimed responsibility.
And in the U.K., William and Kate wrap up three days of Royal visits by areas hit by heavy rioting earlier this month. Today, they visit a business in Birmingham.
Just a day after President Obama and other world leaders called on Syria's president to step down, Syrian troops continue their crackdown, firing on protesters today.
CNN's Arwa Damon is there in the region. She's following the developments from Beirut, Lebanon -- Arwa.
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Kyra, many people were saying that perhaps Friday would be a test. If, in fact, the government had been claiming that it had ended military and security operations, would it allow peaceful demonstrations to take place?
Well, we are being told from the local coordination committees and network of activists, is that at least 15 people have been killed when they say Syrian security forces fired at them in various parts of the country as they were trying to demonstrate following Friday prayers.
Now, the bulk of these casualties happened in a southern province of Daraa. And there, we are being told this area has been under effective military occupation since April. The main city, people can't go out and demonstrate there because of the heavy security presence, so what they have been doing has been demonstrating in various towns.
Those towns are coming under heavy attack. Activists are saying that it is because the Syrian security forces are trying to squash anyone who dares go out, anyone who dares speak against them. And now, they have decided to refocus on the province of Daraa -- Kyra.
PHILLIPS: So, here's my -- and I asked you this yesterday and I want to get your take today, as we have seen this -- the reaction toward the protesters, U.S. sanctions and the demands for al Assad to step down. It hasn't had any impact thus far. What do you think going forward?
DAMON: Well, Kyra, until other countries really jump on board, until this coalition is broadened, I don't think it is going to have any sort of an impact. The Russians have already come out and said that such should be given more time. They have effectively really served to boost the Syrian regime's cause and its moral to a certain degree because it now knows it continues to have a fairly solid ally in Russia. The Chinese, for example, as well, haven't spoken out against Syria. And Turkey, too, appears to be allowing -- appears to be willing to allow President Assad to have more time as well.
So, until you really get a strong international consensus, what the U.S. and Europe decides to do., that's not going to impact this government.
PHILLIPS: Arwa Damon, live from Beirut -- Arwa, thanks.
A massive dust cloud blankets the Phoenix area. We're going to show you the damage that it left behind, next.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Stop attacking middle class families, Rick Perry! Stop attacking --
(END VIDEO CLIP)
PHILLIPS: Well, that's a heckler you that hear targeting Rick Perry in New Hampshire. The presidential candidate is in South Carolina right now. We're going to check on the response, next.
(COMMERCIAL BREAK)
PHILLIPS: Checking stories cross country.
Now, another big dust storm hit the Phoenix area, shrouding visibility for drivers and temporarily shutting down the airport and knocking out power to thousands of people.
The fastfood chain Burger King has given their mascot the royal send-off. The new ad campaign to be announced today, means the end of the road for the 8-year-old character pitchman.
And in New York a fired lifeguard is suing the state over a swim wear policy. 61-year-old Roy Lester, who looks pretty darn good there says the requirement for guards to wear Speedos is really an attempt to get rid of older lifeguards. His lawsuit was tossed out twice before but an appeals court has decided to reinstate his claims.
Well, White House candidate Rick Perry is taking his campaign to the early primary state of South Carolina. And Perry just spoke at a hospital in the city of Florence.
Our deputy political director, Paul Steinhauser has been monitoring his remarks. Paul, what has he said?
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes Kyra good morning.
He was talking at hospital workers there, he was talking about health care. We've got some brand new material. Let's take a look at that, Perry there in South Carolina. It's a two day swing. Remember it was just last Saturday also in South Carolina that Rick Perry announced for president.
The Texas Governor is now back there. Of course, South Carolina is the first southern state to vote in the primaries. And yesterday, he was in New Hampshire for a second straight day and he got a little bit of a different reception. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Stop attacking middle class families, Rick Perry. Stop attacking middle class families.
(END VIDEO CLIP)
STEINHAUSER: Kyra, you can hear that heckling up there in Portsmouth, New Hampshire yesterday morning as he was making the rounds and doing a meet and greet. Those are Democratic protesters from the Alliance for Retired Americans. They were heckling Perry because of his stances on Social Security and Medicare.
Kyra, in the book he wrote last year Perry suggested that the creation of Social Security way back in the 1930s may have violated the Constitution. But you're not hearing him say that now; he's kind of tempering his stance on that since then.
We'll keep an eye on Rick Perry, Michele Bachmann and everybody else on the campaign trail and we'll report back to you -- Kyra.
PHILLIPS: It sounds good. Thanks Paul.
We'll have your next political update in just about an hour. And a reminder for all the latest political news you can always go to our Web site, CNNPolitics.com.
Well, a brawl breaks out at a goodwill game. I know. It doesn't make sense. We're going to actually show you the pictures when the Georgetown Hoyas and a Chinese basketball team duked it out.
(COMMERCIAL BREAK) PHILLIPS: Well, stories making news later today. Republican presidential candidate Michele Bachmann holds a town hall meeting at the Myrtle Beach or at Myrtle Beach, the convention center there and that will be noon Eastern.
And then, GOP presidential hopeful Rick Perry takes a tour of downtown Greenville, South Carolina; that's at 5:00 Eastern.
And Republican presidential candidate Ron Paul speaking to supporters in Orlando at 7:00 Eastern.
Well, we're following a lot of developments in the next hour of the CNN Newsroom. Let's check in first with Christine Romans live in New York -- Christine.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well Kyra, it's been an awful August, the Dow down 9.5 percent, more than 1,100 points lost just in the month of August. What will turn it around? What will bring confidence back and what does Friday of this week hold for your money? I'll have that at the top of the hour.
LOTHIAN: I'm Dan Lothian on Martha's Vineyard where President Obama is on a ten-day vacation but the White House says very much focused on fixing the economy and creating jobs. I'll have more on that at the top of the hour.
PHILLIPS: All right, thanks guys.
Also next hour, she just walked off a show. Then Christine O'Donnell accused our Piers Morgan of quote, "Borderline sexual harassment". Well, as you can imagine, Piers Morgan has plenty to say about that. He's going to join me live with his reaction.
(COMMERCIAL BREAK)
PHILLIPS: Well, it was supposed to be a goodwill game, but instead a few ball players brawled. CNN's Zain Verjee has more from London on the teams, the drama. What the heck was going on, Zain?
VERJEE: Oh, my gosh, Kyra. Just take a look at this video. Sports diplomacy officially has a black eye. It was supposed to be a goodwill game between the Georgetown Hoyas who had traveled to Beijing in China to play a local Chinese team which is actually an army team.
And look at what happened. Everybody went nuts. The score was 64-64, ten minutes to go, the players started whacking each other, punching each other, kicking each other. And even -- even the spectators got into it. They started hurling down plastic bottles and screaming. And -- and eventually they ended up just abandoning the match.
A lot of bad blood on both sides and what ended up happening, according to one U.S. source, is that both teams finally got together in the hotel room and they made peace. But we don't have any more details. But that's so embarrassing.
The U.S. Vice President Joe Biden was in China on an official visit at the time. But yes, that -- that was pretty bad.
PHILLIPS: And just taking a look at that video again. Ok, we've actually -- there we go, there is Joe Biden, being very diplomatic and shaking hands. And so is this normal operating procedure for the -- for the Chinese? I mean, we know our basketball players can be bad boys, right but what's the deal here?
VERJEE: Oh, my gosh, well yes, they do have a reputation like this. I think they were playing Brazil, both the -- the U.S. National team -- sorry -- the Chinese were playing Brazil, both their national teams, and it ended up in a massive scrap just like that. And eventually the Chinese team had to apologize to the Brazilians and say, oops we're really sorry.
And then online everyone is saying, well, yes our Chinese basketball team, they're not so hot on their skills but boy do they have hot tempers. So it's really embarrassing for the Chinese. Like I said, this is mostly an Army team. Many of them belong to the People's Liberation Army. And, you know, it ended up -- ending a goodwill game like this and it just looks really terrible on the Chinese.
But, boy, brawl video like that with the Vice President there.
(CROSSTALK)
PHILLIPS: A totally different level -- yes the vice -- do you wonder what the Vice President was whispering there to the side?
VERJEE: Yes.
PHILLIPS: Zain, thanks.
VERJEE: Let's go.
PHILLIPS: Yes, exactly. Time -- time to go.
VERJEE: Yes.
PHILLIPS: All right, see you in a bit.
All right, it's been nearly a half hour since the opening bell rang on Wall Street. Right now, what do we have? Dow industrial is down 70 points.
Well, a lot of traders are probably wishing that they were in a different line of work right now. Meantime, a lot of other folks would take any work that they could get. Finance expert Clyde Anderson back with us again.
Clyde, let's talk a little bit more about jobs. Since our -- our discussion about 15 minutes ago --
(CROSSTALK)
ANDERSON: Yes. PHILLIPS: I've been getting a number of tweets. And this one was particularly directed to you, what you were saying, hey, this is the time to create a job, be an entrepreneur.
ANDERSON: Right.
PHILLIPS: Take advantage of this. And -- and Pottery 47 writes, "Trying to start a children's business right now. Banks aren't lending, though. No -- no for-profit grants. How do you create a job without funding or money?"
ANDERSON: Well, now that's really interesting because what you have to do is think outside the box. I think desperate times call for desperate measures. And so we've got to be more creative with that. So if the bank is not giving you the money, who else down here is looking or could benefit from that venture taking off the ground?
We've going to kind of boot strap it. If you go back in time and you look at The Great Depression, people were able to create things out of nothing sometimes. And you have to see where you can start. What that level is. It may not be a big business with a big building, but you may be able to use resources that already available to you. We have to find out what those are and tap into it.
PHILLIPS: All right. "What are the markets doing across different industries? Does the volatility cross all industries?"
ANDERSON: And I think everyone is feeling the pinch right now. I mean we talked about it before. There are no jobs out here. And so people are feeling that pinch. Now, if you're in an industry like she is, and she's talking about child care, there are people that still are looking for work or have work and they do need child care. That's one of those necessities or one of those needs.
So, you've got to figure out how bootstrap that. And you've got to know that people are hurting but there are solutions. And if you can be part of the solution rather than being part of the problem, I think you have an upper hand.
PHILLIPS: You know, we've been trying to gauge each one of our guests about this with regard to a recession. Everybody has a different opinion. What's your take? Are we headed to a recession? Is there a -- has the risk risen?
ANDERSON: Did we get out of a recession?
PHILLIPS: No. Are we headed -- oh, you're saying we've already been there. Ok, we're already there.
ANDERSON: I mean, you know, if you look -- now, on paper, I guess, you know, that's what we're looking at. And we're trying to determine on paper if we're there. But I mean people have been hurting. I don't think people have stopped hurting. Unemployment has been high and so I think those are the things that we have to look at.
I mean the reality of what's happening on the ground. And people need solutions, they need answers and so they haven't seen their income increase. We're seeing companies cut back and we're seeing companies just really being tight with what they do have because they want to stay in business.
And so, I think if you look at it from the standpoint of the American people, a lot of them feel like we never left it or we never came out of it.
PHILLIPS: All right. Clyde Anderson, we'll be talking a lot more in the next 60 minutes.
Clyde, thanks so much.
ANDERSON: My pleasure.
