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Dow Tumbles in Early Trading; New Threat of Government Shutdown; Stock Sell-Off on Wall Street; Anti-Ahmadinejad Protests Expected; Ahmadinejad's Big Day; Freed Hikers: "We Are So Happy"; Governor Brokers Deal Ends Teachers Strike; Two NFL Players Linked to Pot Shipment; Survey: Colleges Want Rich Students; Kate Gets "Royal" Lessons; Jackson Doctor "Not A Monster"; Butler Shoots Down Death Threats; Brad Pitt Backlash?; Some Users Dislike New Facebook Changes; U.S.: New Terror Threat Growing; Dow Drops 300-Plus Points
Aired September 22, 2011 - 09:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: It's just about the top of the hour and this morning, we begin with politics and your pocketbook. Wall Street plunging more than 300 points since the opening bell. Dow Industrials down 372 points right now and Washington may be teetering on the brink of gridlock.
Kate Bolduan will tell us about the threat of a new government shutdown that's looming on the horizon. But first, let's start with Christine Romans of our CNNMoney team. Christine, well, why is the market tanking to this point right now?
ROMANS: Well, you know, you look around the world and I ask traders and they, why shouldn't it be? They can't find any reasons to be optimistic about the direction of growth in the U.S. and for the rest of the world.
One trader told me, Congress is dysfunctional, Greece is near default and China is slowing. What other reasons do you need? It's hard to find good things happening right now and the markets are responding appropriately.
Also got oil down sharply. Gold down sharply. It's as if investors are jumping out of all sorts of different products at the moment here just getting out of the way of the market. Dow down 369 points. We've seen a lot of volatility, of course, over the past few months.
It's not really that unusual to have a triple digit move, but this would be the third day in a row down for stocks. It also is really hinges on what the fed said yesterday. The Federal Reserve announced "Operation Twist," a new kind of short-term stimulus for the market.
But what investors and market participants are saying, these days, it's not about what the fed or the government can do to make things better, it's they have to do things so that it doesn't get worse. And that kind of just shows the kind of footing we're on overall.
The fed also yesterday, three keywords everyone's talking abou significant downside risks facing the U.S. economy. That's got people nervous. Banking stocks, most everything is down. Banking stocks, financial stocks really getting hit as are the big, heavy cyclical stocks, the companies that do better or worse depending on how the economy's doing in general. Kyra --
PHILLIPS: We'll keep following the numbers. Christine, thanks so much.
Let's go to Washington now and the threat of that new government shutdown we've talking about. It was a tense round of voting and lawmakers in the House rejected the spending bill. It's a move that surprised even the Republican leaders.
Kate Bolduan's been talking about that from the Hill this morning. Kate, the government due to run out of money at the end of the month so tell us about the inner workings here behind the scenes.
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Yes, House leaders are scrambling. They worked late into the evening after that surprising vote. They're working this morning to try to really figure out what's next and that is not clear.
The vote was 195-230. But here's the key number, 48 Republicans, 48 members of the majority of the House actually voted to reject this bill joining a majority of the Democrats in the House to reject this bill. This is a bill that's very much needed because it would -- the government continues to --
PHILLIPS: All right, we've lost our connection there with Kate Bolduan on the Hill. We will work to reconnect. Are we back? All right, Kate? I apologize. Go ahead.
BOLDUAN: Kyra, can you hear me?
PHILLIPS: Yes, we're OK. We're reconnected.
BOLDUAN: I apologize for that. Power failure. Someone didn't like what I was saying. Anyway, here we go again. So this is a bill. It's a short-term spending bill that also comes with additional funding for federal disaster aid.
The country's been dealing with flooding, tornados, wildfires, that everyone agree is needed, but here's the problem. House Republican leaders are dealing with two problems here. One on the Democrat side, Democrats are not happy with the amount of funding for FEMA. They say it's inadequate.
And they are also not happy that House Republican leaders are demanding that some of the money be off set, be paid for by cutting money for another program they call a job creator. That program helps to make more fuel efficient vehicles.
On the other side of the aisle, there's a big group of House conservative Republicans that are not happy with the overall number. They say it doesn't cut spending enough. So that's what House Republican leaders are dealing with. They're scrambling right now to figure this out.
I will tell you though they are trying to assure the public that they don't believe there will be a shutdown. Number two Republican in the House, Eric Cantor, he told Republicans, told reporters that last night and also said this. I'll read what he said.
He said, we're trying to affect change in a way that we spend taxpayer dollars. That's what this whole thing is about, he says. No one is denying anyone disaster aid if they need it and we're trying to be responsible and to do the right thing.
But as you said at the top, Kyra, here's the key that viewers need to know about. The government does run out of funding a week from this Saturday. The House and Senate are supposed to go on recess starting Friday, that would be tomorrow.
So they're scrambling now to try to figure out what to do. The House Republicans are already threatening that there may be a weekend session if they can't figure things out quickly. Kyra --
PHILLIPS: All right, Kate Bolduan, thanks. And we're continuing to watch those numbers plunge. Dow Industrials down 333 points right now.
Christine Romans, obviously, the fears have not gone away and then after we heard from the fed yesterday, it only renewed those fears and we're seeing the result right here in our wallets.
ROMANS: That's right. What we need to return is confidence and that's something that's in short supply. When you hear the fed say things like serious downside or significant downside risks remain.
When you look at Greece and how many fear it's very close to default and no matter what happens at this point, it will be painful for Europe. Europe is our biggest trading partner. Then you look at China and China's manufacturing has contracted I think now for three straight quarters in a row.
So it shows that the Chinese engine, which has been so important for global growth while the U.S. has been limping along, that slowing as well. So around the world, you look for bright spots and you see a lack of confidence.
We know that companies have $2 trillion in cash on the sidelines and we know that in a few weeks, we're going to start getting their quarterly report cards. And many economists and analysts are telling me they don't think that companies are going to be showing such great profit growth again.
That they rode the wave of the last year or so by cost cutting and by a little bit of improvement in the economy overall, but they can't ride it much more. So, you're not going to have that kind of -- for the markets. So, where does the confidence come from?
There's also a lack of confidence to sort of dove tail on what Kate was talking about, lack of confidence in Washington. A lack of confidence in the political process that I think has been, I would say highlighted since the downgrade from S&P, quite frankly.
And the whole brinksmanship over the debt ceiling and there's concern about the "Super Committee" deadline. Just a very profound lack of confidence and profound abundance of caution right now.
PHILLIPS: All right, you say we're looking for those bright spots. OK, what are the bright spots we need to see? I mean, where -- when can we expect a turn around? What needs to happen to see that turn around?
ROMANS: Well, you know, here's a good sort of bit of analysis from Ken Rogoff who literally the book on financial crisis. He said it's going to take a period of years, but it will happen. Make no mistake, he says. There will be a recovery. Maybe not right now and it feels like we're in a recession right now, but it will happen.
He says the next president will take credit for that probably wrongly because it's going to happen no matter what, but there will be a recovery. What's happening right now in our minds and in the investors' minds is we can't imagine that day because we still know too many people that don't have a job.
We don't feel secure in our own job. We're watching our retirement benefits sort of dwindle, (INAUDIBLE) a little bit every week and every quarter. You already have the S&P 500 down 7 percent for the year before this happened here today.
So you're negative on the year probably in the stocks and your portfolio. It's just kind of eating away at us, but it will eventually get better. Time heals all wounds in the economy and that's what we have to just be waiting for.
I don't know what's going to be that thing that triggers the confidence to return, but when it happens, I predict the little bell rings, you can see a lot of money moving off the sidelines. Companies starting to move again. It just hasn't happened yet.
PHILLIPS: All right, Christine Romans, we're still going to watch those numbers. We're going to check in with you every so often through the next 45 minutes. Christine, thanks so much. Once again, Dow Industrials in negative territory. We're expecting a pretty bad day. We'll continue to monitor it for you minute by minute.
Well, in New York, protests are expected today outside the United Nations building in Manhattan as Iranian President Mahmoud Ahminedjad is scheduled to speak before the general assembly around noon.
This is video from last year and the anti-Ahminedjad protest that took place there at the U.N. A group called "United Against Nuclear Iran: says it wants to make sure the Iranians never get a nuclear weapon. All eyes will be on the Iranian president as he makes his speech at the U.N. General Assembly about two hours from now.
The Palestinian push for statehood is going forward. Richard Roth covering the big stories out of the U.N. today. Richard, you remember when we spoke last year and what a controversy that created, wondering if it will any different this time around.
RICHARD ROTH, CNN SENIOR UNITED NATIONS CORRESPONDENT: Well, I've been here for several years of the president's remarks and I think some of the pizazz or luster or craziness has gone out a little bit. But certainly it's notable that we've had this revolution sweep through much of the Middle East world and protests did take place months ago in Iran.
But the turnover of regimes in other countries, Tunisia, Egypt, Libya, that has not happened in Iran. The president of Iran has often said there should be people's freedom should be defended, but not really through these mass protests.
The Iranian leader though has made many remarks that have caused diplomats to walk out of the general assembly. In an interview last night with Iranian television, he talked about the relationship between U.S. and Iran.
(BEGIN VIDEO CLIP)
MAHMOUD AHMADINEJAD, PRESIDENT OF IRAN (through translator): Iranians and Americans have no problem with each other and today, a large number of Iranians are living in America and there are Americans who have chosen to live in Iran. Both groups have no problem with each other. The problem of relations between the countries is because of American politicians and rulers who have unilaterally cut off relations with Iran.
(END VIDEO CLIP)
ROTH: The Iranian leader was timing his appearance here to hopefully in his view, get the release of those two U.S. hikers. Ahminedjad is not exactly as popular in other circles high up in Iran, so he's fighting battles on different fronts.
He's hoping to get an image boost here in the United States, but the release of two U.S. hikers is probably not going to do much considering the suspicions about Iran's nuclear program and his inflammatory remarks. Kyra --
PHILLIPS: OK, well, we will be waiting for the speech and we'll talk I'm sure before and right after.
For the first time in more than two years, a pair of American hikers, wake up to freedom. As you can see, Shane Bauer and Josh Fattal couldn't wait to get down those steps of their airplane last night and right into the arms of their loved ones.
Their arrival in the Middle Eastern county of Oman came just hours after being released from the Iranian prison. American Muslim and Christian leaders had spent nearly a week lobbying Iran's president for their release. Bauer and Fattal were arrested and convicted of spying after wondering across Iran's border.
Coming up, higher education for higher incomes. A new study suggests that American universities prefer students with money instead of those needing financial aid.
You need some money yourself? We're going to tell you about a church in New Jersey that's just giving it away.
(COMMERCIAL BREAK)
PHILLIPS: All year we've been introducing you to some pretty remarkable people. We call them "CNN Heroes." Every day people changing the world and today, CNN is announcing the top ten CNN heroes for 2011. Be sure to logon to cnnheroes.com and vote for the CNN hero who inspires you the most.
Let's check stories cross country. Late last night in Tacoma, Washington, striking teachers say they've agreed to a new labor deal. Thanks in part to the governor who helped broker it. Teachers will vote to ratify the agreement today and could be teaching by tomorrow.
A couple of Cincinnati football players being questioned about a package allegedly containing marijuana. It was mailed to their homes. Police allegedly found six more pounds of pot inside the homes of Jerome Simpson and Anthony Collins in Northern Kentucky. No arrests were made.
Pass the collection plate and grab some cash. A church in Morristown, New Jersey is holding a reverse offering this Sunday, giving away $30,000 to parishioners. The church's pastor says it's his way of giving back.
Money talks especially for perspective college students and a new survey suggests that admissions to American universities are easy for those who can afford to pay their tuition.
Christine Romans, you've had a busy day today. This is just yet another sign of the tough economy.
ROMANS: It is, well, you know what, Kyra? I sit here and tell you all the time about how a higher education is the buffer for you against unemployment rate. The unemployment for people with a bachelor's degree is like 4.6 percent. It's half the national average.
So you've got to go to college, right? Well, guess what? This new survey from inside higher education, they surveyed admissions officers, more than half of those admissions officers admitted that they're looking for students who can pay the full cost with no financial aid.
They don't want kids that have to worry about getting financial aid. More than half of them said that. Why? Because of the economy, they're getting pressure from administrators that they need to make sure they're going to get paid and money can trump smarts, grades, even your student record in some cases.
The 10 percent of cases, it's more important to have the cash on hand in the bank than it is to have the straight As. So there you go, that shows you that if you have money, you have a better chance of getting in, although there's another edge that admission officers are admitting.
That some students do have an edge that isn't financial, they're looking for minority students for athletes, for veterans, for children of alumni, for international students and Kyra, you'll really appreciate this one.
They're looking for men over women for balance. Even if they're grades and their academic record aren't as good because there are so many smart, overachieving middle class girls going to college whose parents can afford to pay.
PHILLIPS: I don't like they're picking less qualified men over women that are smart and way above the average mark. I mean, come on, it took us a while to break the glass ceiling. We don't want to go backwards.
ROMANS: I know, I guess that must be a sign of our success thought. That's how I'm going to take -- but look, not in all cases. Mostly, your record trumps everything else, but it shows you the financial straits the country is in.
A lot of kids are having to drop out because they can't afford the last year or there's such a scramble for financial aid. Schools are having to give so much financial aid for kids.
So this just shows that half, more than half the admission officers in this inside higher education survey admitted, yes, they're looking for kids who can pay in full.
PHILLIPS: There you go, Christine Romans. Meanwhile, Dow Industrials, still in negative territory, down 316 points. Right now, you're watching the numbers for us minute by minute. Thanks, Christine.
So how does a royal know how to act like a royal? In Kate Middleton's case, she's getting some crash courses in Royal 101. We've got the details.
Plus, death threats against Gerard Butler. The actor opens up in showbiz headlines.
(COMMERCIAL BREAK)
PHILLIPS: Kate Middleton has only been a royal for a few months, but it can be pretty tough work, so guess what? She's about to get some tutoring. Max Foster actually went to the class. He's going to tell us what the duchess is going to go through because that's why Max is so well behaved and such a classy man.
MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT: So polite. I wish I had gone to the classes. I haven't been allowed in. I'm told it just started. (Inaudible) calling it a program and the duchess will become a princess and she'll ultimately become the queen if everything goes as planned, so there are lots to learn.
So we understand that this program involves learning about the charitable causes and institutions related to national life and understanding them better. So as you understand that tutorials, one- on-ones with people.
Experts in the media, for example, government, the arts and also, Kyra, essentially getting to know the charities that she might want to get involved in because royals defined by their causes, really, their public works.
So she's going to be finding out about them and we'll expect an announcement about who she's supporting. Huge amount of interest at having Kate on board with charity. She brings so much media interest, of course, that's why we're talking about it now.
PHILLIPS: And Princess Diana, right, she came forward and talked about there was a lack in this type of training. She was so young and so inexperienced. What did she say and is that why we're seeing these sorts of royal lessons now?
FOSTER: Well, you wonder, don't you? She did famously complain to friends that she was thrown into being Princess of Wales overnight and she wasn't given any help. This is certainly different. We saw this during the wedding, actually.
Diana was told that she just had to have the wedding she was going to have. Kate Middleton, however, completely organized hers, so there does seem to be a shift in the way palaces treat their young royals now.
We'll wait to see what course does she choose, but looking at the royal wedding list, she asked for money to be given to charities. There are also charities that I think that she chose, bullying charity, for example. She was said to be bullied at school, so maybe that's a cause she'll follow.
She's very interested in army widows and military wives and how she can support them and also, arts and young people. How you can use arts to unlock the potential of young people. We saw that on her trip to L.A. recently. She's in training.
PHILLIPS: Kate said that she was bullied?
FOSTER: Yes, she we want to a school for a short period of time, a secondary school, and rumor has it that she was bullied there and moved quickly on to another school. She's given a lot of support to anti bullying charities in relation to children. She never denied it.
PHILLIPS: And look at her now. Max, thanks.
The doctor going on trial for Michael Jackson's death is getting support and sympathy from someone who's been there himself. "SHOWBIZ TONIGHT" host, A.J. Hammer has the details for us. A.J. --
A.J. HAMMER, HOST, "SHOWBIZ TONIGHT": Kyra, yes, as the Conrad Murray trial gets rolling in Los Angeles, it's really raising a lot of questions about the behavior of personal physicians when you have celebrities involved.
"SHOWBIZ TONIGHT'S" Kareen Wynter got an exclusive interview with the man who certainly understand the situation Murray is. Kareen sat down with Dr. Sandeep Kapoor, who was accused of illegally providing drugs to Anna Nicole Smith.
Kapoor's now expressing sympathy for Dr. Murray as he prepares to go on trial for involuntary manslaughter in the death of Michael Jackson. Dr. Kapoor was acquitted of the charges he faced, but here's what he had to say about Murray.
(BEGIN VIDEO CLIP)
DR. SANDEEP KAPOOR, FORMER DOCTOR FOR ANNA NICOLE SMITH: I don't think he's a monster. I mean, he's a physician. He's a cardiologist. He meant well. You know, he has a patient base that he's done a lot of great things for. I don't think he's a monster by any means.
(END VIDEO CLIP)
HAMMER: And, Kyra, Dr. Kapoor also says he doesn't doubt Murray had the best intentions, but did say it looked like Murray walked into a very bad situation and that's why he is where he is now.
PHILLIPS: Speaking of an interesting situation, possibly a bad situation, what's up with these death threats against Gerard Butler?
HAMMER: Well, he wants to clear the air on this because if you listen to Butler, the story doesn't really amount too much. He has a new film coming out. It's called "Machine Gun Preacher" and in this film he plays a "Hells Angels" member who converts to Christianity.
And he rescues orphans in the Sudan. If you think this all sounds unbelievable, it's actually based on a true story. So not surprisingly a movie about a Christian converting Muslim orphans is causing a bit of controversy.
And several outlets were actually reporting there were death threats made against Butler. He reportedly said he was increasing his security. Well, "SHOWBIZ TONIGHT" caught up with Butler at the premier of the film. He says the story is actually a whole lot of nothing. Listen to what he told us.
(BEGIN VIDEO CLIP)
GERARD BUTLER, ACTOR: No, that's not true. That's not true. I was talking about I'm a previous experience on 300, that happened a little bit. Then somebody suddenly, that's what happens when you do a thousand interviews.
(END VIDEO CLIP) HAMMER: So, Kyra, it's just a lot of confusion according to Gerard there.
PHILLIPS: OK, well, Brad Pitt, apparently some confusion here. He had made some comments about Jennifer Aniston, got a little heat from that. Now, possibly this could impact his new movie "Money Ball?"
HAMMER: Well, there had actually been speculation that all of these comments could possibly keep women away from the film. I'm actually not sure it's going to have a whole lot of impact here. Of course, we're talking about the recent interview Pitt gave where he said he was living a boring life before he started dating Angelina Jolie.
And his choice of words really made it sound like part of the reason was his marriage to Jennifer Aniston. Well, Pitt has since tried to clarify those remarks saying that he was talking about his own problems, he wasn't targeting Jen.
In fact, he told Matt Lauer on the "Today" show, he was trying to say something nice about Jolie and apparently he can't do that without it looking like he's looking like he's targeting Aniston. So I think the film is going to do great. Nonetheless, Kyra, it looks fantastic.
PHILLIPS: All right, I saw the trailer, too. I have the itch to see it as well. A.J., thanks.
Want anything breaking in the entertainment world? A.J.'s got it, every night. "Headline News" 11 p.m. on HLN.
Coming up next, Rick Santorum not happy with Google. Google his name and you'll see why.
(COMMERCIAL BREAK)
PHILLIPS: Checking top stories now:
The state of Georgia executed Troy Davis last night for the 1989 killing of a police officer. Execution witnesses say Davis told the officer's family he was not responsible for the killing.
Iranian President Mahmoud Ahmadinejad addresses the U.N. General Assembly about an hour and a half from now. His appearance comes one day after Iran released two American hikers.
And the Dow joining a huge global selloff. Futures down 312 points. Worries over the world economy and poor weekly jobs report prompted the slide we're seeing right now.
All right. "Political Buzz" -- your rapid fire look at the best political topics at the day, three questions, 30 seconds on the clock.
And playing today, Democratic National Committee member Robert Zimmerman, Comcast D.C. bureau chief Robert Traynham, and CNN contributor Will Cain.
First question, guys, Mitt Romney tells "USA Today" that he hopes Sarah Palin jumps into the race. Here's what he says, quote, "She would make the race that much more exciting, bring more people to watch the debates, and I hope she gets in."
All right. So, should he be a little careful what he wishes for? Will?
WILL CAIN, CNN CONTRIBUTOR: No, I'm just surprised he's being so transparent. I've said, should Sarah Palin get in, the biggest beneficiary, the biggest fist-bump out there would come from Mitt Romney.
Look, if Sarah Palin gets in, she splits up the Tea Party vote like four to five ways. Rick Perry, Michele Bachmann and then Sarah Palin, even Ron Paul, Herman Cain -- they also have claims to the Tea Party vote, leaving Mitt Romney with the rest. I think he should -- he would be very excited. He should just be a little careful about cheerleading it.
PHILLIPS: Robert Z?
ROBERT ZIMMERMAN, DEMOCRATIC NATIONAL COMMITTEE MEMBER: Will absolutely nailed it. For Romney to encourage Sarah Palin to the race is his political version of fantasy baseball because he needs Sarah Palin to divide the Tea Party vote and undercut Rick Perry, because in today's Republican Party, as long as Romney believes in the future of Social Security and believes in science and climate change, he's an outsider.
PHILLIPS: Robert T?
ROBERT TRAYNHAM, COMCAST D.C. BUREAU CHIEF: I agree 1,000 percent. Look, if Sarah Palin was going to get in to the race, it would be the gift that would keep on giving for Mitt Romney and the reason why is because of all the messages that we just heard a few moments ago.
But just as importantly, having Sarah Palin in the race makes Mitt Romney look like the grown-up in the room. It makes him look like the more reasonable, sensible candidate that go against Barack Obama in the general elections. So, you know, Mitt Romney is crazy like a fox if in fact Sarah Palin gets into the race. There's not question about it.
PHILLIPS: All right, guys. Worldwide protests over Troy Davis' execution last night. What do you think? Will the national debate over the death penalty become a campaign issue?
Robert Zimmerman?
ZIMMERMAN: Clearly, the issue of the death penalty should be addressed in the legislative process. There are so many states that have to rewrite their laws now because DNA overturns convictions. And in the case of Troy Davis, so many eyewitnesses recant their testimony. So change is the process.
Unfortunately though, there is not the political will by either party to address this issue and there's not sustained public demand that this be addressed legislatively.
PHILLIPS: Will?
CAIN: Sixty-four percent, Kyra, that's the number to know. 2010 Gallup poll, that's the percentage of Americans that support the death penalty. Only 29 percent oppose it.
So, while we can expect politicians to sometimes not take up popular issues, they will never take up unpopular issues. There is not political will, as Robert Zimmerman just said, and therefore, it won't be an issue in this campaign.
PHILLIPS: Robert Traynham?
TRAYNHAM: It's always an issue in the presidential debates. There's no question about it. Lawrence Brewer, does anyone remember who he is or was? He was the person that took James Byrd, Jr., wrapped him around a chain, put him on the back of a truck and drove for five miles and decapitated him. That happened 10 years ago in east Texas, and he was executed just last night.
So, you know, just very interest juxtaposition of someone that may have been innocent and someone that pleaded in the confession. So, you know, it's always a very, very subject. There's no question about it.
PHILLIPS: Your buzzer beater, 20 seconds each on this one, guys.
If you Google Rick Santorum's name, the first result you'll get is not his personal Web site, but a fake definition of Santorum. I guess we should say a sexual by-product that's a little too graphic for us to talk about on our show.
So, here's my question -- what's the worst thing that would come up with if we Googled your name, Robert Z?
ZIMMERMAN: Thanks for putting me first. About a few years ago, a rather prominent blogger kept referring to me in his blogs, this Botox Bob Zimmerman.
(LAUGHTER)
ZIMMERMAN: Now, let me be clear --
PHILLIPS: Is it true, Bob? Is it true?
ZIMMERMAN: By the way, I have nothing against it. In fact, Kyra, I'm saving up for it, but I haven't had any work done yet.
PHILLIPS: Will Cain, go ahead, fess up. What kind of plastic surgery have you had?
CAIN: None. My favorite topic, me. I like to do this a little more often we could, Kyra.
If you were to look me up, I would imagine you'd see some string of liberal bloggers who said who is this kid who doesn't have enough respect for Eliot Spitzer to put on a tie when he debates him on his ill-fated show. Or might see NewsBusters saying, who is this RINO in support of gay marriage? Either way, I've seen to be ticking both sides off.
PHILLIPS: Oh, boy. Robert Traynham, I'm scared to ask. Now, if we Googled your name --
TRAYNHAM: This overweight black kid who thinks he can dance on national television. When I Googled my name a couple of days ago, that's what came up. And so, you know, I can dance, maybe not like some people out there, but I can dance.
PHILLIPS: Cue the music.
CAIN: Let's see.
PHILLIPS: Believe me, he's moving it right now.
ZIMMERMAN: I'm writing him in for "Dancing with the Stars" for next season.
(LAUGHTER)
PHILLIPS: I love it. We got a dancer. We got a guy with Botox. And we got a guy that looks like he's 16. This is fantastic.
(LAUGHTER)
PHILLIPS: See you, guys.
CAIN: I put on my big boy tie.
PHILLIPS: There you go, playing with the grownups.
All right. Well, Facebook is holding its annual F8 Conference in San Francisco today, and apparently, we're going to hear about a lot of major changes. But if you've been on Facebook recently, you've probably already seen a bunch of changes.
Dan Simon is in San Francisco.
So, tell us what's so new, Dan.
DAN SIMON, CNN SILICON VALLEY CORRESPONDENT: Well, Kyra, Facebook has 750 million users and they managed to tick off a bunch with their new changes. They have fundamentally changed the interface when you logon at Facebook. First of all, the news feed, what they've done is taken the most important posts or the posts you think will be important and they put those on the news feed.
And then they've established this ticker on the right hand side of the screen. These are all the real-time status updates that all your friends are doing. Some people think these changes are confusing. They don't quite get it and they wished they could just go back to the old Facebook.
The company thinks that over time, you'll appreciate them and, you know, you'll get used to it. We'll just see what happens.
Mark Zuckerberg, here taking the stage in a couple of hours. This is the F8 Annual Conference that Facebook has for its developers. He'll talk about some of the changes and some of the new features that will be unveiled shortly -- Kyra.
PHILLIPS: All right. So, Mark Zuckerberg, you kind of have an idea of what he's going to say.
SIMON: We think that Facebook is going to really going to expand its music offerings, established what it's called Facebook Music where you'll be able to listen to music on Facebook and share some of your favorite songs and maybe even experience music with your friends in real-time. That could be a very innovative part of the site.
Also expected to make video offerings, you'll be able to share video easier and perhaps the long-awaited iPad app that I know many people would like to see. There hasn't been an iPad app for Facebook, at least an official one. Maybe they'll unveil it later today.
Again, Mark Zuckerberg taking the stage in a couple of hours, 1:00 Eastern Time. We'll be showing that live or at least sending it back to our folks in Atlanta, and we'll be updating our folks later in the day.
Back to you.
PHILLIPS: It sounds good, Dan. All right. And we'll take it. Thanks, Dan.
It's a terror group you may never have heard of, but it has been stepping up attacks on U.S. targets and troops in Afghanistan. Now, the U.S. is calling on an ally for help.
(COMMERCIAL BREAK)
PHILLIPS: Taking stories cross-country:
Someone is tagging Southwest Airlines planes and the company wants to know who's doing it. The vandalism began in February. Southwest won't detail exactly what the graffiti is. But CNN affiliate KNXV reports the markings appear to be Arabic words.
In New York City, the controversial Islamic center just a few blocks away from Ground Zero held its first visit last night. Park 51 gallery displaying a collection of photographs of immigrant children. The center's developer pointing out the exhibit's featured photographer is Jewish.
And from Newbury, Michigan, 99-year-old George Harris finally received his high school diploma. The World War II vet passed his GED years ago, but the state only got around to giving him the sheep skin. He says he hopes his story inspires younger people to stay in school.
Well, just minutes ago, the chairman of the Joints Chief of Staff accused Pakistan's intelligence service of helping a terrorist group and its mission to kill Americans. The group recently attacked the U.S. embassy in Afghanistan and our Barbara Starr takes a closer look.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): CNN has learned that the CIA and Pentagon agreed last year that the spy agency would step up armed drone attacks inside Pakistan against a terrorist network known as the Haqqanis, which is sending attackers and fighters across the border into Afghanistan to kill American troops and attack high profile targets like the U.S. embassy in Kabul.
It began after General David Petraeus, then commanding the war in Afghanistan, went to the CIA for help according to a senior U.S. official. U.S. troops cannot cross into Pakistan. CIA drones for now are the only way to get to Haqqani strong held.
The Obama administration has pushed Pakistan to go after the insurgents to no avail. Now, U.S. officials are showing little patience to wait any longer.
LEON PANETTA, DEFENSE SECRETARY: We cannot have the Haqqanis coming across the border, attacking our forces, attacking Afghanistanis and then disappearing back into a safe haven. That is not tolerable.
U.S. officials say elements of Pakistan's intelligence services are sheltering the Haqqanis, once again raising questions if Pakistani inaction is risking the lives of U.S. troops.
ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: I've been doing this working, supporting proxies for an extended period of time. It is a strategy in the country. And I think that strategic approach has to shift in the future.
STARR: This Pakistan border town of Miranshah is the center of concern. U.S. officials say Haqqani commanders are headquartered in a madrasah religious school here that cannot be attacked. A Pakistani intelligence unit is a short distance away and the Afghan border is in eyesight.
But the CIA drone strikes haven't stopped the Haqqanis. Now, the CIA director, Petraeus Wednesday told the Pakistani intelligence chief to crackdown. U.S. military options remain limited.
STEPHEN BIDDLE, COUNCIL ON FOREIGN RELIGIONS: Conceivably, you can imagine the United States launching ground raids by Special Forces or others against the havens. All of those things would require a substantial change in the nature of our relationship with Pakistan.
(END VIDEOTAPE)
STARR: Now, Pakistan officials are denying the relationship, their ties to the Haqqani Network. But as you said, Kyra, just a short time ago on Capitol Hill, Admiral Mullen said Pakistani intelligence and Haqqanis are tied together, and elements are behind these attacks against U.S. troops in Afghanistan -- Kyra.
PHILLIPS: Barbara Starr from the Pentagon -- Barbara, thanks.
Coming up, the feds call the online gambling site, Full Tilt, a Ponzi scheme. Hundreds of millions of dollars, gone. My next guest says it could have all been prevented.
(COMMERCIAL BREAK)
PHILLIPS: Millions of online poker players ripped off to the tune of 440 million bucks and the feds are blaming Full Tilt Poker and some of its celebrity players like Chris Ferguson for taking the profits. Prosecutors are calling it a Ponzi scheme.
Greg Raymer is a professional poker player. He's pretty stunned by the news.
Greg, why?
GREG RAYMER, 2004 WORLD SERIES OF POKER WINNER: Well, I mean, I know a lot of these guys personally. So, if these allegations are accurate and the player deposits added up to $390 million, but Full Tilt only had $60 million in cash, then that's a big mistake and a really bad action on their part. And since I know some of these guys personally, I'm just surprised that they could be guilty of such a thing.
So, I mean, I'm still waiting for the evidence and the proof that these facts as alleged are true, but I'm going to be surprised either way.
PHILLIPS: You say you know like Howard Lederer and Chris Ferguson. So, you're saying these guys are not shady.
RAYMER: Yes. And you know, I know Chris Ferguson probably best of all the high profile people that were involved in Full Tilt Poker, and I would just be shocked if he was doing something knowingly unethical because he is just always been one of the most straightforward, honest guys I've ever met in the poker world, in the legal world, in the scientific world.
PHILLIPS: So, Barry Boss, the attorney representing Full Tilt Poker, this is what he said. I want to get your reaction. He says that, "The fact that there may have been mistakes made by management does not mean that a Ponzi or that a business becomes a Ponzi scheme."
So do you believe it was innocent mistakes or did these guys know exactly they were -- what they were doing? I mean, this is -- this is a site that I believe grossed about a million bucks a day at some point, right?
RAYMER: That would certainly be the estimate that their gross revenues might have reached a million a day at some point in time. I just don't know the facts and I don't accept it as true just because it was alleged by the U.S. attorney.
(CROSSTALK)
PHILLIPS: You know the business. You've been right inside. You've been the poker champ. Have ever witnessed any shady activity that's being -- activity like what's being alleged here?
RAYMER: Nothing quite like this. I mean, we had a scandal a few years ago where one of the other sites, it turned out that a former owner had sold the company, kind of maintained the backdoor and was using the backdoor to see the whole cards and cheat players. So, this isn't the first time.
But the real issue is that all of this really highlights the need for tough U.S. regulation. Right now, we're outsourcing the regulation of online poker other countries, to other, you know, legalities. So, we've got, you know, Costa Rica and Gibraltar and so on that are regulating the online poker sites. You know, certainly, that's not the countries we would turn to, to outsource the FDA and decide which drugs are safe and effective and which suppliers are safe.
PHILLIPS: But if you regulate -- if you've got the government regulate the online gaming, I mean, doesn't that change the dynamics of the game? I mean, you know, critics have come forward saying, yes, they'll eventually shut it all down.
RAYMER: Well, that's the whole point. Right now, they have been trying to shut it down, but it's still going on and that leaves American consumers at risk because don't have anyone to turn to. If all these allegations are correct, if Full Tilt Poker was behaving inappropriately, what do we do about it? They're not in the U.S. We can't sue as consumers and get our money back.
So, that's why we want U.S. regulation. We want Congress to pass a bill to license and regulate online poker. And that's one of the things that a regulator ought to do is require the site to maintain cash reserves that are sufficient to reimburse the players.
The other big site that was taken down on black Friday we call it, April 15th, when the U.S. attorneys first filed this indictment, was Poker Stars. Their regulator, the Isle of Man, required them to keep that money in cash and all the American customers that were shut out of that site were returned their money.
PHILLIPS: Right, we'll see what happens here with Full Tilt.
RAYMER: So, that was a good regulator. We want the U.S. to be a good regulator like that as well.
PHILLIPS: We'll see how this plays out. Greg, thanks.
RAYMER: Thank you.
PHILLIPS: Alison Kosik going to check our money at the New York Stock Exchange, next.
(COMMERCIAL BREAK)
PHILLIPS: We're talking about this all morning. Stocks plunging after the U.S. Fed Reserve issued a weak assessment on our economy.
Alison Kosik is following all the action for us.
Dow Industrials down 337 points right now, Alison.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Oh, yes. And, you know, when the Fed talks, Kyra, people listen and it's clear now that the Fed is really getting more concerned about the economy. So, what's happened is the Fed had this policy meeting yesterday, issuing a statement as usual. And, you know what, most of the time, the statement that comes out, it's usually the same.
But this time, there was a real change in wording. I want to show you what it is. Take a look, we'll put it up on the screen. Yesterday's statement said, "There are significant downside risks to the economic outlook."
That certainly caught everybody by surprise, because when you look back at what they said in August, the committee now expects a somewhat slower pace of recovery over the coming quarters. You see that small change in language there, but that somewhat slower pace of recovery versus significant is what really spooked the markets yesterday because it doesn't sound big, but for the Fed, it is big. These are the nation's top economists and what they say is sometimes treated as gospel and that's also why we're seeing the selloff today -- Kyra.
PHILLIPS: Alison, thanks.
And coming up on the CNN NEWSROOM with Suzanne Malveaux, meet a remarkable woman who's working three jobs to support her kids right now. Hear why she considers herself lucky and the message she has for unemployed Americans.
(COMMERCIAL BREAK)
PHILLIPS: White House candidate Ron Paul making an appeal to fellow veterans in a new ad.
Our Mark Preston is here to tell us more about it -- Mark.
MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Hey, Kyra.
Yes, you know, there's been a lot of talk in this race for the Republican presidential nomination about the economy and about Social Security. We haven't really heard any direct appeals to veterans, but we're going to see that happen today. Ron Paul, the Texas congressman, is spending $1 million on a new 60-second TV ad where he makes this direct appeal.
In this ad, it shows a couple of veterans who talked about how Ron Paul went to bat for them. These are Vietnam veterans, and got them their medals years after their service in Vietnam. Ron Paul, of course, is a veteran himself of the Air Force.
So, Ron Paul, up with $1 million, pretty big ad buy. The ad will be running in four key states: South Carolina, New Hampshire, Iowa and Florida as well.
PHILLIPS: And I hear Mitt Romney --
PRESTON: You know, Kyra
PHILLIPS: Yes?
PRESTON: I'm sorry, what I was going to make the quick turn on Mitt Romney.
PHILLIPS: Yes, he's got a new endorsement.
PRESTON: A big endorsement and interesting endorsement. You know, we see these candidates rolling out these endorsements every day. But this one's interesting. It's Darrell Issa. He's a congressman from California.
And what makes this interesting is that he is the chairman of one of the committees on Capitol Hill that has oversight over the administration. And Darrell Issa, to say he's attack dog of the Obama administration would be very light. In fact, let's listen or look at a couple of things that he has done reports on the Obama administration: a report on the Obama green jobs program failures. Issa has also put another one out called Obama regulations putting family ranchers at risk.
So, big endorsement for Mitt Romney from an attack dog, a Republican attack dog, on Capitol Hill -- Kyra.
PHILLIPS: Mark, thanks.
That does it for us. We'll see you back here bright and early tomorrow morning.
Suzanne Malveaux takes it for the next two hours.
