Return to Transcripts main page

CNN Newsroom

Wall Street Races for More Losses; Dozens of Fires Burn in Texas; Romney Releases Jobs Plan Today; Libyan Convoy Passes through Niger; Bachmann Ready to Ax Education Dept.; DNA Critical in American's Trial; Palin Teasing Potential Run; Don't Count on an Inheritance; U.S. Open Oddities; Dow Drops 250+ at Open

Aired September 06, 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: Good morning, you guys. Thanks so much.

Well, the long holiday weekend is over and as many Americans may dread going back to work, there are a lot of other people that just wish they had a job. And on that happy note Wall Street is bracing for what could be another ugly day, right, Christine Romans?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's absolutely right.

We've got futures down, Kyra, some 200 points right now, 30 minutes to go until the Opening Bell actually rings. But a couple of things here. It's a hangover really from Friday. Three-day weekend. People are still trying to assess just how dangerous the job situation is in this country and whether there are really plans on both sides of the aisle to fix it.

You've also got European markets that had a tough night overnight. They rebound a little bit, now they're lower again. But the concern there continues to be the European debt crisis, Kyra.

Without any new reason to be confident in world markets or in the U.S., jobs and the debt crisis, no new catalyst to inspire any confidence or buying. The path of least resistance after a long weekend is quite frankly lower.

Bank stocks lower. In premarket trading, Bank of America shares down about 4 percent. Your 401(k) probably has this in it. Citigroup. Your 401(k) probably has this one in there, too. That one is down about 3 percent.

You might have missed it, but on Friday, the federal government suing 17 banks and financial institutions trying to recoup taxpayer losses tied to that mortgage debacle of the past couple of years.

So right now stocks are lower in premarket trading. They're down for the year, as you can see. The Dow, Nasdaq and S&P are all down for the year, bracing for more losses this morning -- Kyra.

PHILLIPS: All right. Christine, we'll see you back here at the Opening Bell in about 28 minutes or so. ROMANS: Yes.

PHILLIPS: Thank you so much.

All right. Well, the other story that we're talking a lot about this morning, the worst fire season in Texas state history. It's growing even more ominous. Dozens of wildfires are burning now in at least 17 counties. The largest place is near Austin and has destroyed close to 500 homes.

Five thousand residents have fled their homes now. Some only steps ahead of the fast moving flames. And since the fire season began, flames have devoured 3.5 million acres. That's an area roughly the size of Connecticut.

Jim Spellman is in Bastrop, Texas. That's about 30 miles southeast of Boston.

So how intense is it right now, Jim?

JIM SPELLMAN, CNN CORRESPONDENT: Tell you what, the sun has come up about an hour ago and you can still see this low-lying smoke here all across the horizon. This just goes on and on and on.

You know they have a lot of challenges to fight this fire. The first thing is just the intensity of it. In less than two days, as you mentioned, almost 500 homes destroyed, 25,000 acres. It's all part of these intense drought conditions all over. Ninety percent of the state of Texas, this huge state, under these drought conditions.

Just down the road a few miles, a fire popped up yesterday, 25 homes destroyed. Near Houston, another fire, 20 homes destroyed. And we're likely to see that going on and on. And one of the big challenges they're facing, because of so many different fires spread around the state, is firefighter fatigue. Two hundred and 90 consecutive days they've been fighting fires here.

In Texas, many of these crews, darting all around the state, putting out fires as they can, huge amount of challenges. On the good side the weather is a little better today. It's much cooler. Winds are calm. They're going to take as much advantage of that on the ground to create fire lines between the fire and homes that have yet to be damaged and in the air with helicopters and planes dropping water and retardant to try to get a handle on this before it gets worse and before it spreads to other areas -- Kyra.

PHILLIPS: All right. Jim Spellman, we'll be talking more throughout the morning.

Jim, thanks.

And you know the remnants of Tropical Storm Lee are moving toward the northeast now and leaving a trail of damage across much of the south. Several tornadoes ripped through our area, the Atlanta suburbs, yesterday. Injuries were minor but the real danger is the massive rainfall. At least three deaths are reported in Mississippi, Alabama, and Georgia, and now the rainmaker carries the same flooding threat to the mid-Atlantic, right, Rob?

ROB MARCIANO, AMS METEOROLOGIST: And the northeast. The folks who were -- dealt with Irene just a week ago are to be dealing with this rainfall.

(WEATHER REPORT)

PHILLIPS: OK. Thanks, Rob.

MARCIANO: You bet.

PHILLIPS: All right. Let's talk politics now. Mitt Romney, making a pitch to unemployed Americans today.

Our deputy political director Paul Steinhauser to talk about what's in the plan -- Paul.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Hey, good morning, Kyra.

You know with unemployment still over 9 percent jobs by far the top economic issue on the minds of American. And yes, Mitt Romney today goes to a trucking company north Las Vegas, Nevada, where he will introduce his jobs plan and of course it comes just two days before the president in primetime goes before Congress to address them on his plan.

This morning, in the "USA Today" in an op-ed, Romney, the former Massachusetts governor who's making his second bid for the White House, he gave a little bit of a preview and here are some of the things he listed what he says will create jobs.

First of all, he's going to push for lower corporate and individual tax rates. He says he wants to pare back government regulations. He wants to increase create a free trade zone with other countries. He wants to increase domestic energy production. He wants to push for right-to-work legislation.

And he wants to cut the federal budget and he wants to cap spending. He says these ideas will increase job creation.

We'll hear a lot more from Romney this afternoon when he lays out the plan but as you can imagine, some of his rivals are already criticizing. Jon Huntsman, another -- former Utah governor who's also running for the nomination, criticizing Romney on a Web video.

And as you can imagine, Kyra, the Democrats are as well. Here's a statement this morning from the Democratic National Committee communications director Brad Woodhouse. He says, "Mitt Romney has promised an economic a plan that is bold and sweeping. But if the past months have shown anything, what Americans really are likely to get is more of the same tired rhetoric and worn-out ideas which have failed America in the past. And if the best Mitt Romney can offer is Tea Party warmed-over ideas of the past how does that distinguish him with anyone else running for the nomination?"

Kyra, we're going to hear a lot more about jobs from Romney, from the president, from the other Republicans. It is the top issue.

PHILLIPS: Well, another top subject that we're talking about this morning. The shake-up in Michele Bachmann's campaign.

STEINHAUSER: Yes, this came down last night after she appeared in that forum in South Carolina. And Ed Rollins, somebody we're all very familiar with right here at CNN, the longtime Republican strategist, he was running the campaign. He was the campaign manager. He is out now.

Listen to what he said last night on "ANDERSON COOPER 360."

(BEGIN VIDEO CLIP)

ED ROLLINS, REPUBLICAN ADVISOR: I'm 64 years -- 68 years old. You know I had a stroke a year and a half ago. So you know it's just -- work 12, 14 hour days, it's wearing.

(END OF VIDEO CLIP)

STEINHAUSER: Mr. Rollins will still have a senior advisory role and they thank him for all his work. His number two is also out as well. So is this a total reorganization? The campaign says no, that this was kind of planned, but maybe it seems that way.

Listen. When Rollins jumped in, Bachmann kind of went up and up and up. She won that straw poll in Iowa last month. That was a huge, huge victory and some of that credit goes to Rollins, of course, but since then she's been overshadowed by Rick Perry and is dropping in the polls. Guess what it was time for a change -- Kyra.

PHILLIPS: All right. Paul, thanks.

And Teamsters' president Jimmy Hoffa with a quote that everyone is talking about this morning. His target? Tea partiers.

(BEGIN VIDEO CLIP)

JAMES HOFFA, INTERNATIONAL BROTHERHOOD OF TEAMSTERS: Everybody here has got to vote. If we go back and we keep the eye in the prize, let's take this son of a bitch out and give America back to America where we belong.

(END OF VIDEO CLIP)

PHILLIPS: We will get reaction from Tea Party Express leader Amy Kramer in the next hour of CNN NEWSROOM.

So did Moammar Gadhafi get away? Officials in the African nation of Niger tell CNN the two Libyan convoys are passing through their country. One has already reached the capital in the south of the country, the other on the way. And there's no immediate word on who exactly is in those convoys. Our Zain Verjee out of London saying she is hearing something else -- Zain.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: We're hoping to try and nail it down to see whether Moammar Gadhafi or members of his family are in those convoy but it's really difficult, Kyra.

Only one report from the Reuters news agency suggested that he was not in that convoy, that according to an official in Niger.

Moammar Gadhafi, Kyra, has had a good relationship with so many African leaders. Why? Well, because he's bankrolled a lot of them. A lot of the Libyan oil money, he's been very generous with and he'd given it -- given it to so many African leaders.

The other thing, too, is Moammar Gadhafi also tried to push for a United States of Africa, you know, a government, a single currency, everybody has the same passport, and guess who would be the leader of that United States of Africa?

He wanted all that African traditional leaders once set a meeting to call him king of the kings so that he would be the one running the show.

Let's just take a look again at the map and just focus on one or two countries, Kyra. Because I just want to try and explain some of the dynamics that are going on here.

In Niger itself, there's a tribe called a Tuarag tribe and they're pretty close to Moammar Gadhafi's own tribe. They have very close links. And he in the past has financed the Tuarag rebellion in Niger. He's also been using these same tribesmen, the Tuarag fighters, in the recent uprising and calling them in to try and defend him against the rebels.

There are also reports that those same Tuarag rebels are part of that convoy or are protecting that convoy.

Now Burkina Faso has said that they would accept Moammar Gadhafi if he wanted asylum, he could have it. Now Burkina Faso is a very poor country and Moammar Gadhafi again has been very generous with them giving them a lot of money. They are party to -- signatory to the International Criminal Court. So if Gadhafi was to show up there, Burkina Faso, would be obliged to hand them over but it's unclear, making an offer if they would do that.

And finally, Chad, you can see there on the right of the map to Niger, Gadhafi has used a lot of mercenaries and he's called them in as we've seen evidence to fight and defend him, too. So there are very strong links in that region and that map that you're looking at with Gadhafi.

PHILLIPS: We'll keep our eye on the story. Zain Verjee out of London, Zain, thanks.

And back in court today and fighting for her future, attorneys for American Amanda Knox are appealing her Italian murder conviction.

And Michele Bachmann says she is ready to ax the Department of Education. Could that ever really happen? We'll talk to a former secretary of education.

(COMMERCIAL BREAK)

PHILLIPS: Stories "Cross Country" now.

A violent Labor Day weekend in New York City. At least 48 people were shot, 33 on Sunday alone. The latest incident last night in Brooklyn. Three people were killed, two police officers were injured and a gunfight in the Crowned Height neighborhood.

A special session of the New Mexico legislature convenes today. Among the issues deciding whether to roll back a law that allows undocumented immigrants to get driver's licenses.

And Darius Rucker along with very special guest singer as you can see at the MDA telethon that posted its best show since 2008 even without longtime host Jerry Lewis. The 46th annual telethon took in nearly $61.5 million.

Eighty-five-year-old Lewis retired this year. He was remembered, though, with two-minute montage at the end of the show.

And Michele Bachmann says she is ready to eliminate the Department of Education. Here's how she put it at yesterday's Republicans forum.

(BEGIN VIDEO CLIP)

REP. MICHELE BACHMANN (R-MN), PRESIDENTIAL CANDIDATE: Areas of government would include, for instance, I believe, the Department of Education, because the Constitution does not specifically enumerate nor does it give to the federal government the role and duty to superintend over education, that historically has been held by the parents and by local communities and by state government.

(END VIDEO CLIP)

PHILLIPS: The Department of Education has been a target for the Republican governments since established in 1979. Its budget has grown to $68.6 billion with 4,200 employees.

CNN political contributor Bill Bennett is a former secretary of education in the Reagan administration. Reagan also tried to ax the Education Department.

So, Bill, if it were to be abolished, who would take on responsibilities like overseeing the research of our schools, enforcing laws that prohibit discrimination and also the monitoring of all the funding?

BILL BENNETT, CNN POLITICAL CONTRIBUTOR: I don't think it's going to happen, Kyra. Philosophically and historically, Michele Bachmann is right and one might point out our scores were better as a country before there was a Department of Education. But you would still see some federal oversight. There obviously is still federal law and civil rights law and so on. But some of these things could be done in other places and departments.

I was there in '84, '85 when Ronald Reagan tried to abolish this, was after a Reagan landslide. And it couldn't get done then and I doubt if it could get done this time even with Republican majorities and a Republican president, partly because I think there are other fish to fry. There are bigger priorities.

PHILLIPS: And that leaves me to my next question. You know, if Reagan couldn't get it done, you know, is this conversation just a waste of time?

BENNETT: Well, I don't think it's a waste of time in this sense, because what we are having is a national debate about the role of the federal government and how much responsibility the federal government has. The Department of Education is illustrative here, but it's not central. I don't think it's as important to the debate as things like Obamacare, entitlements, federal spending and so on. But it's illustrative.

It could go, if people decided that, you know, really had you to make these very dramatic and draconian cuts and you had to choose between welfare and the Department of Education, that the Department of Education could go. Most of these functions could be done by the states. And in fact, when I did a survey when I was secretary, we asked the recipients of our funds, most of whom were favor in a department, what was the single best program we had, they said it was the block grant and that's where we took the money from them and sent it right back to them.

So, most of this could be done at the state and local level.

PHILLIPS: Well, obviously, a lot of reform happens at that level as well, Bill. You know, while I have you among the GOP candidates --

BENNETT: Sure, sure.

PHILLIPS: Who are you supporting right now?

BENNETT: I'm not supporting anyone. I've traveled with Rick Perry and found him to be a very, very good candidate, very compelling. I thought Romney had a fabulous day yesterday. It looks like a two-man race right now, but we shall see.

I think Bachmann is not finished but Perry has really changed the chemistry for her. We shall see when these two get tomorrow night.

It's a busy week. You know, it's after Labor Day. We've got the Republican debate. We've got the president's speech. We've got Romney releasing his jobs plans today.

We are in the thick of it and we've got 14 more months of it.

PHILLIPS: Maybe at the end of the week, we should talk again and recap the week. Bill, thanks.

BENNETT: Absolutely. Thank you, Kyra. Bye.

PHILLIPS: All right.

Italian prosecutors will try again today to keep American Amanda Knox in prison for a long time. A jury convicted her of murder but her attorneys say the DNA evidence is flawed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In parting, we wish you -- we wish you love, peace, and soul!

(END VIDEO CLIP)

PHILLIPS: Can you believe it's been 40 years since we first heard those words? And in Chicago, thousands of fans got to celebrate the anniversary of "Soul Train"!

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Black, cowboy hat!

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: All right. Let's hit the showbiz headlines.

Oh, who could forget "Soul Train"? Monday's 40th anniversary was celebrated in Chicago. Fifteen thousand people cheered as Don Cornelius actually got an honorary street sign that's going to go by the old studio where he launched the show in '71. And even at 74 years old, the "Soul Train," well, he showed the crowd he's still got the moves.

Madonna will have a new album for 2012, her first since 2008. And she tells Swedish TV that she expects a single in February or March.

And after leaving CBS for ABC last June, tonight, Katie Couric makes her network debut on "Nightline." She talks to actress Sarah Jessica Parker about movies, kids and what Parker calls the, quote, "snarky media." Couric is also developing a daytime talk show also for ABC.

An American student on trial for murder in Italy is pinning her future now on DNA evidence -- evidence that Amanda Knox's attorney calls flawed. The prosecutors are fighting back.

Zain Verjee is following the story out of London for us.

Zain, what do you know?

VERJEE: Hi there, Kyra.

The prosecutors are fighting back. They called on the stand the police forensic expert that did the initial DNA analysis and they are coming out punching saying that they did everything that they should have done. The methods were accurate and they explained the kind of equipment that they used and said that they did everything the way that they should have and it was conclusive and that the first result of the initial trial was right on and that Amanda Knox was guilty and should be convicted.

What essentially they are focusing on here, Kyra, is two pieces of critical evidence. Genetic material of Amanda Knox that is alleged to be on handle of the knife itself which the prosecution says was the murder weapon of Meredith Kercher who at that time was the roommate, the flat mate of Amanda Knox, and also on the metal of the bra clasp that they are saying that they actually handled that properly with equipment that was -- that would not have contaminated the evidence.

Now, Amanda Knox's attorneys are saying that's absolutely not true. Those two critical pieces of evidence were contaminated. They were not handled properly. So, it's a bit of a back and forth. But these are final arguments, really critical, pivotal. There will be rebuttals, and, at the end of the month, probably a verdict.

PHILLIPS: All right. Zain Verjee out of London -- Zain, thanks.

Raw nerves and shrinking (INAUDIBLE). We're going to take you live to the opening bell on Wall Street and what could be another pretty ugly day of losses.

And Sarah Palin supporters are giving her advice about the White House.

(BEGIN VIDEO CLIP)

SARAH PALIN (R), FORMER ALASKA GOVERNOR: I appreciate your encouragement.

(END VIDEO CLIP)

PHILLIPS: But is Palin already too far behind in the polls? We'll look at that in 20 minutes.

(COMMERCIAL BREAK)

PHILLIPS: All right. Checking top stories now.

Did Moammar Gadhafi escape Libya? No one really knows, but the government in neighboring Niger says that two convoys from Libya are passing through the country right now. We are on the story.

And General David Petraeus takes over the CIA today, ending a 37-year military career. Petraeus serves as the top U.S. commander in both the Iraq and Afghanistan war. He calls his new job an exciting new journey. Petraeus replaces Leon Panetta who is now secretary of defense.

(MUSIC)

PHILLIPS: All right. It's almost half past the hour and time for the opening bell on Wall Street.

And by all early signs -- well, it could be a pretty ugly day. Christine Romans is at the New York Stock Exchange.

Christine, markets definitely took a beating on Friday and stocks already in the red.

ROMANS: Yes. And there was a three-day weekend. So, yesterday, Europe was open. It had big losses yesterday, although it stabilized overnight. Europe did and some of the other overseas markets.

But, basically, the front page of "The Wall Street Journal" today says Europe signals global gloom, and that is the story here. The U.S. is in malaise. Jobs market problem here and no real catalyst seeing that turn around in the near term. So, that's a problem.

You look at the E.U., there's a debt crisis there. It's a huge economic powerhouse, the European Union, and so, that's a slow down.

So, basically, you got slow in growth and developed world and then you've got real problems in the engine of the world. Slow growth for some places like China and the emerging markets as well.

(BELL RINGING)

ROMANS: So, here we go, you know? There is no real reason to think that stocks should go higher in an environment where no one knows what it's going to be to turn everything around. You have oil prices lower, gold prices higher. Some of the patterns we have seen on fears of a global slowdown, just global malaise. That's what we got.

Futures were down more than 200 points for the Dow. When you look at the board here, one after another the stocks start to open up. So, these numbers are not reflecting to you all of the stocks open in the Dow 30, although you had in premarket trading Bank of America, Citi, a lot of financial stocks were down as well, Kyra. So --

PHILLIPS: Let's hope we get out of that negative territory. We'll watch it throughout the day.

ROMANS: I know. And remember, if you look at your 401(k), just to let you know even before lots here today, the Dow is down about three percent for the year so far. NASDAQ down 6.5 percent. The S&P 500 down more than six percent for the year so far. So, now you're -- it's been tough for stock market investors and that means for the rest of us who have our money in a portfolio, in a 401(k), in a retirement plan as well.

So, let's just hope that the worse is behind us, but down 181 right now and we will watch and see which components are the worst hit. My suspicion is that you've got financials getting hit pretty hard here this morning.

PHILLIPS: Well, also too, we have been talking about the jobs report, jobs report. You know? Lack of jobs. Is it going to get any better? A lot of people focusing on Obama's speech coming up on Thursday. And, you know, we are going to see how the markets react to that as well.

ROMANS: You know, and the other thing is what President Obama can say but it's also what Congress can do. And there is this feeling -- there's a widely retweeted headline this morning from Reuters about how Congress is hurting the economy. And that's one of the things that people keep talking about. Until you get a different story, story line out of Washington, you're going to have uncertainty for companies and for individuals.

And here is what I'm talking about the story line. Kyra, some people are saying that the president must do something to create jobs. And then you got the other side of the fence saying the president must undo everything he has done. There's so much space between those two positions, it makes people wonder where there is room for compromise to actually get the economy on a solid footing. And so that's why people are saying the political environment is actually a real negative right now for a recovery in the economy and the jobs market.

PHILLIPS: All right. Christine, we will keep watching those numbers. Still in negative territory now. Dow Jones Industrials down 272 points. Christine, thanks.

One of the big challenges to the economy is the miserable jobs market as we just mentioned. Well paying jobs have disappeared. Lower paying jobs have replaced them. And for a lot of people, the odds of recovery are shaped by the factors beyond all of our control.

CNN's Tom Foreman shows us who exactly is being hit the hardest.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Kyra, depending on where you live and who you are, this recession may have hit you much harder than it might somebody else.

Look at the country first of all, and where people are most unemployed. Down here in the Southeast, this dark blue area, a lot of unemployment there. And also out here in the West. If we try to find who is being hit the hardest, we are going to wind up in California in El Central, California they have almost 31 percent unemployment rate right now.

Who is being hit the hardest there? Males or females? I don't think there's any surprise there. The males are pushing 10 percent unemployment across the country right now. Females about 8.5 percent. So, we're looking at a male living in El Central, California.

What about the question of race? We have all heard this over and over again. When you look at the numbers here, no question. African- Americans are being hit much harder than anybody else. These are the highest numbers we have seen in many, many years.

So now we are talking about an African-American, young man living in California. I said a young man. Let's talk about how young he is. What about the age here? Who is hit the hardest? Sixteen to 24. Look at how much joblessness in that group compared to everybody else. Almost 18 percent of the unemployed people in this country are in that age group.

And most of all what about education? Always a real factor here. If you look at the education of our target person here, less than a high school diploma. They are being hit the hardest. 14.3 percent.

So, if you try to say who is most likely being hit the hardest in this country by the economic downturn, it's an African-American male living in El Centro, California. He's 16 to 24 years old and has less than a high school diploma.

But that's just a symbol of what's happening. The simple truth is, all of these are indicators of who is the most vulnerable and who has been pounded the most by this economic downturn. If you live anywhere in the country and you qualify by some of this, this may mean you're more vulnerable.

Tomorrow, we will look at how the jobs have been lost, in many cases, were much better than the jobs that have been regained. Kyra?

(END VIDEOTAPE)

PHILLIPS: All right, our Tom Foreman. Tom, thanks.

With the anniversary of 9/11 just days away, my next guest says while it's a reminder of what we have lost, it should also be an affirmation of what we have. What he means, coming up.

(COMMERCIAL BREAK)

PHILLIPS: We have been talking about having some pretty ugly numbers today. You can see we are still in negative territory. Dow Industrials down 284 points. We are keeping an eye on the markets for you.

Over the next few days, it's going to be pretty hard to get away from images of 9/11. You'll hear experts talking about the urgent lessons from that day.

But LZ Granderson says don't forget 9/11's other lessons. LZ, in your CNN.com editorial, you talk about a number of families you met who have to face life every day after losing a member of their family to 9/11. What did you learn from these families?

LZ GRANDERSON, CNN.COM CONTRIBUTOR: I learned a lot. I learned to appreciate the things that I have. I learned to appreciate the people who are in my life. I learned to appreciate the life that I have, you know, separate from anything that I may want in terms of consumption.

And so, you know, as we get bombarded, if you will, with a lot of media reminiscing and coverage of September 11, it's I think important not to get so caught up in the deaths and in the things that we have lost as a nation, but to look around our communities and really appreciate what we have.

PHILLIPS: You even say in your piece that you warn against, quote, "Obsessing over 9/11 before and after." Why?

GRANDERSON: Well, because I think it's really easy for us in this 24-hours new cycle that we live in to become fixated on one story. The story of 9/11 is a very tragic one and can cause us to have a blackened heart and have a darkened view of our world, of our culture and what is happening in the future of our kids.

And getting so trapped up in that story line, you forget some of the other things that were important. That is the heroes, the people who did make it home, the people who weren't in the buildings for whatever reasons and just having another day and another chance for life. I think that too should be a part of the story line. Hopefully, when people read my piece thee feel the inspiration that yes, times are tough right now. But happiness is wanting what you have, but not always getting what you want.

PHILLIPS: LZ Granderson, always great to get you to weigh in. Bottom line, you're saying I love you more, and that is not a bad thing.

GRANDERSON: Absolutely.

PHILLIPS: Thanks, LZ.

You can read his entire piece on CNN.com/opinion if you'd like. Join the conversation. Leave a comment for LZ.

Well, the remnants of Lee dumped record rainfall on eastern Tennessee. We are going to tell you about the flooding in Chattanooga and a lot of other damage done by the massive storm as we go "Cross Country" right after the break.

And Sarah Palin is attacking the president and taking apparent swipes at GOP frontrunners. So, does that mean she is ready for a White House run or just teasing her fans?

(COMMERCIAL BREAK)

PHILLIPS: All right, check the Big Board once again. Friday, not looking so good. We sort of expected this today. How ugly will it get? Still not sure yet but we are watching those numbers closely. Still in negative territory, Dow Industrials down 269 points.

Other stories "Cross Country" that we are watching.

Texas is burning. Several large wildfires are burning across the state right now. One near Austin has already destroyed close to 500 homes; 3.5 million acres have already burned. That's an area roughly the size of Connecticut.

And those tornado warnings sounded again and again in suburban Atlanta. The last remnants of Lee causing tornadoes to touch down in several metro counties yesterday. High winds and knocked down trees and power lines throughout the area. In just a five-mile stretch, more than one hundred homes damaged or destroyed.

And in Chattanooga to the north, the problem was flooding. More than eight inches of rain fell in a 24-hour period, breaking an all- time record. Several creeks flooded and are not expected to crest until later today.

Well, Sarah Palin continues to keep people guessing about possible presidential plans, but while we wait for her final announcement, Palin is not sitting on the sidelines. Here is CNN's Brian Todd.

(BEGIN VIDEOTAPE)

SARAH PALIN, FORMER GOVERNOR OF ALASKA: They can't stop us!

BRIAN TODD, CNN CORRESPONDENT (voice-over): She is hitting those crucial early decision stops in Iowa and New Hampshire, sounding out themes popular with the Tea Party.

PALIN: We believe that the government that governs least governs best.

TODD: Sarah Palin hasn't said if she will jump into the presidential race, but some in this crowd tried to push her along.

CROWD: Run, Sarah, run.

PALIN: I appreciate your encouragement.

TODD: In New Hampshire and Iowa in recent days, Palin has pounded on the ideas of reducing the role of government and cutting taxes, but she hasn't given specifics on what she would do to meet those goals.

We called and e-mailed Palin's representative to get specifics to find out if she's jumping into the GOP race or not. We didn't hear back. How long can Palin keep her supporters wondering?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: She's been showing a lot of ankle, but you can only do that so long. People eventually sense they are being teased and they will fade back from that.

TODD: Palin is specific when she blames President Obama for more spending, more regulation, but was the president her only target when she repeatedly said this in Iowa and New Hampshire?

PALIN: Let's invite candidates who will refudiate the crony capitalism and the corporate welfare and the waste and the corrupt politics and the government bailouts for their buddies.

TODD: Some analysts believe the phrase crony capitalism is also a swipe from Palin at Texas Governor Rick Perry, who recently jumped into the race and straight into the lead among GOP candidates.

Political opponents have long accused Perry of rewarding his allies and campaign donors with government posts and contracts. Contacted by CNN, a spokesman for Perry said he and Palin are friends, that she once campaigned for him and that she must have been talking about Washington politicians, not about Perry's record of job creation and fiscal conservatism.

Palin has also taken subtle jabs at Mitt Romney recently, leading to speculation on whether she senses that she is losing some ground to the three candidates firmly in the GOP race who are topping the polls.

(on camera): Is she eclipsed already by Perry, Bachmann and Romney?

SUSAN PAGE, WASHINGTON BUREAU CHIEF, "USA TODAY": I think it's dangerous to assume that because she's the original Tea Party candidate. She's got clout that she could exercise even with these other candidates in the race.

TODD (voice-over): Page and other analysts point out if and when Palin jumps in she may get the same kind of instant boost in the polls that Perry got and that she would likely command more media attention than any candidate. Palin has previously indicated she plans to make a decision about the presidential race by the end of this month.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: Generation "Y" better work hard because they may not be able to count on an inheritance. Details of a new survey next.

(COMMERCIAL BREAK)

PHILLIPS: Well, many kids can kiss their inheritance good-bye. Karina Huber at the New York Stock Exchange has the details of a new survey. What's the deal, Karina?

KARINA HUBER, CNN CORRESPONDENT: Well, the deal is that many of these parents are going to spend their money instead of leaving it to their kids. We've got a new survey from the U.S. Trust that found that 51 percent of rich baby boomers say it's not important to leave their kids an inheritance.

Now, the survey measured boomers with more than $3 million. Most of them say they are self-made. They earned their money the hard way from hard work and sacrifice and now they want to spend it as they choose which is mainly to travel.

Now some have also said they've already given their kids an inheritance of sorts by paying for their college, the down payments for the home et cetera; and others are worried about running out of money, thanks to high medical costs.

And still some are not truthful about how much they're actually worth. They haven't told their children that much. So kids who are planning to bank on their parents, it's a bit of disappointing news, and I kind of hope my parents aren't watching us right now -- Kyra.

PHILLIPS: Hey look, I -- I always knew beginning from that paper route, I had to work hard if I wanted to make it, darn it.

All right, what about the market?

HUBER: That's why you've gotten to where you are.

PHILLIPS: There you go exactly. That's what we're talking right here on CNN.

HUBER: Exactly.

PHILLIPS: What are -- are we expecting a bit of a sell-off today?

HUBER: Yes, it's a bit of a -- it's a bad day today. We've got the major indices down by more than two percent right now. The Dow is down by 264 points. S&P 500 and Nasdaq also down by more than two percent.

Now the drop started here on Thursday. And then on Friday we had that weak jobs report, which sent the Dow down by more than 200 points. Then, yesterday the European stocks were really hammered, and there's new worries about the European economy and debt; of course, that caused the sell-off in Europe. Now the sell-off has circled back here today.

We're expecting a weak reading on the services sector in just a few minutes, so it's not looking like a nice day on Wall Street -- Kyra.

PHILLIPS: All right, Karina, we'll keep checking in. I appreciate it.

And checking stories making news later today. At 1:00 Eastern, the California Supreme Court will hear arguments on Proposition 8, the ballot measure banning same-sex marriage.

And the U.S. Senate is back in session today after a summer recess; that's at 2:00 Eastern.

And Republican presidential hopeful Mitt Romney revealing his plan for creating jobs. That's going to happen 3:30 Eastern Time.

All right, we're following lots of developments in the next hour of CNN NEWSROOM. Let's check in first with Jim Spellman in Texas -- Jim.

JIM SPELLMAN, CNN CORRESPONDENT: Hi, Kyra, we're in Bastrop, Texas where the wild fires have destroyed over 500 homes. We'll have a live report at the top of the hour.

ROB MARCIANO, AMS METEOROLOGIST: I'm Rob Marciano on the CNN Severe Weather Center. Remnants of Lee causing havoc as far as flooding and severe weather across the south. That's moving off towards the north and east. And Katia now a major Category 3 hurricane. Details in the next hour.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: I'm Dan Lothian at the White House, where President Obama is putting the finishing touches on his jobs plan that he'll unveil on Thursday, even as critics are asking for real ideas, not another speech. I'll have details at the top of the hour.

PHILLIPS: All right, guys, thanks a lot.

And spying on friends, the U.S. bugging the Israeli embassy? An FBI translator released the transcripts to a blogger. We're going to talk to the New York Times reporter who broke the story.

(COMMERCIAL BREAK)

PHILLIPS: All right. We're keeping our eye on the markets for you; Dow industrials unfortunately still in negative territory, down 251 points. We'll keep watching it for you.

All right, let's talk sports. How about college football? There were probably more tweets about what Maryland was wearing than how they were actually playing. The Terrapins showed up in new uniforms and helmets for their opening game against Miami last night. The design, well, the color is based on the state flag.

NBA superstar, Lebron James, though is not a fan. He actually tweeted, "Maryland uniforms?" Maybe they were good luck, though. Maryland beat Miami 32-24.

To the links now, the final round of the TPC Boston Webb Simpson sinking a 15 foot birdie putt on the first playoff hole. Oh yes Simpson's wife cheers him on, son James not so thrilled. Probably the jiggling up and down threw him off.

And then it was on to the second playoff hole, Dad nails another birdie to win, Webb Simpson in his second tour victory in three weeks.

More fans support, this time Roger Federer's dad in the red cap there watching him at the U.S. Open. Federer served four aces in a row in his match against Juan Monaco. Federer won easily to advance to the quarterfinals.

So who hasn't had an agonizing leg cramp, but at the U.S. Open, one of the world's top tennis players had what you could call the mother of Charley Horses and it was caught on camera. That was just one of the oddities at the Open.

CNN's Jeanne Moos takes it from there.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDNET: When Rafael Nadal sank lower and lower in the middle of a press conference, it was unlike anything we had seen before, unlike the time Marie Osmond just fainted on "Dancing with the Stars". People are always fainting in the public from a Spelling Bee finalist to a guest on Glenn Beck's old show, to audience members lulled into unconsciousness by politicians.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: That everybody agrees there.

MOOS: But Nadal didn't pass out. He cramped up grimacing, covering the face with his arm, and repeatedly sighing.

UNIDENTIFIED FEMALE: Can I do anything.

RAFAEL NADAL, TENNIS PLAYER: No.

MOOS: He did ask someone to call the trainers.

Forget tennis elbow. Nadal has set a new standard of pain for the leg cramp. You know, the thing that most of us have at night in bed?

UNIDENTIFIED FEMALE: A knot and the twist and you get up, thinking, oh, my God, ok, let me walk this off. Let me walk this off, and you're like --

MOOS: Except Nadal couldn't even walk, slid to the floor with his right hamstring and thigh cramping.

UNIDENTIFIED FEMALE: Ok. I think we'll put -- draw an end to the press conference. If you would all mind leaving.

MOOS: After almost ten minutes of massage, ice packs and Gatorade, Nadal was fine. He told CBS Sports that the humidity during the match he just won was probably to blame, and he said he gets cramps often.

NADAL: Yes, lots of times, yes. Nothing new, but not during a press conference.

MOOS: There was more spastic muscle cramping at the U.S. Open. Oh, wait, that's dancing. A spectator in the stands was imitated on the court by Novak Djokovic. The two later danced together.

Of course. Rafael Nadal's tennis cramp could have happened at an even worse time. What if his leg stiffened during one of his Armani underwear ad shoots?

Tennis fans posted remedies. "Yellow mustard helps, one spoonful every night has stopped cramps for me." The people's pharmacy noted that some people keep mustard packets at their bedside -- to eat, not rub.

NADAL: Is it cramped up?

MOOS: Maybe Rafael Nadal could improve his serve by serving mustard.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)