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Lou Dobbs Tonight
White House Strikes Back; Claudette Heads For Texas Coastline
Aired July 14, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, July 14. Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, CNN ANCHOR: Good evening, everyone.
"Darn good intelligence," that's what President Bush says he gets from his sources, despite the faulty information he used in his State of the Union address. Earlier, the White House tried to put an end to the controversy, saying it is -- quote -- "time to move on." But the uproar will not go away.
Chris Burns is at the White House and Jonathan Karl is on Capitol Hill, where Democrats are maintaining their attack.
We go to Chris Burns first -- Chris.
CHRIS BURNS, CNN CORRESPONDENT: Well, Jan, the White House today waged what amounted to a counterattack. Ari Fleischer, on his swan song day as press spokesman here, really laid into the critics of President Bush, critics who say that President Bush's State of the Union speech back on January 28, in -- which accused Saddam Hussein of trying to buy uranium -- that's yellow cake-style uranium -- from somewhere in Africa was not substantiated.
Well, the Bush administration has said it was a mistake because the evidence did not rise to the level of a State of the Union message, but Ari Fleischer saying it is still true that Saddam Hussein was trying to build a nuclear weapons program, reconstitute a nuclear weapons program, and those critics are engaging in a revisionist notion. It's a bunch of bull, in his words. It is a media frenzy. And whether or not that item in the State of the Union speech was true, President Bush did act on the correct intelligence.
President Bush was asked about that as he met with U.N. Secretary-General Kofi Annan on a number of issues, President Bush saying he made the right decision based on the right intelligence.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the intelligence I get is darn good intelligence. And the speeches I have given were backed by good intelligence. And I am absolutely convinced today, like I was convinced when I gave the speeches, that Saddam Hussein developed a program of weapons of mass destruction and that our country made the right decision.
(END VIDEO CLIP) BURNS: Then why, critics say, did the president not include that item in a Cincinnati speech back last fall? He included it in his State of the Union message. But Secretary of State Colin Powell did not include it as part of the evidence that he presented to the United Nations.
Well, President Bush trying to smooth over what the Democrats are seizing on as a credibility gap -- that gap could stand to widen, unless weapons of mass destruction or their programs are actually found in Iraq -- Jan.
HOPKINS: Chris, still support from the administration for George Tenet, the head of the CIA?
BURNS: Yes. Absolutely, rock solid up to this point, no indication that President Bush intends to let Mr. Tenet go. However, of course, the White House has been qualifying the information that they included in the State of the Union message as being one that was signed off on and approved by the CIA and by Mr. Tenet himself, so perhaps a little bit of room, an elbow room perhaps, to eventually let Tenet go.
But, at this point, there is no direct indication, President Bush saying he has full confidence in Mr. Tenet -- Jan.
HOPKINS: Chris Burns at the White House, thanks.
BURNS: Thank you.
HOPKINS: The Democrats continue to call for an investigation into the intelligence controversy today. Many Democrats accuse the president of misleading the American people in his State of the Union speech.
Jonathan Karl joins me now live from Capitol Hill -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: And, Jan, it's not just Democrats. A little while ago, a senior Republican on the Senate Intelligence Committee told CNN that responsibility for this controversy goes beyond simply the Central Intelligence Agency.
(BEGIN VIDEO CLIP)
SEN. CHUCK HAGEL (R), NEBRASKA: It wasn't just the CIA involved here. We had the vice president and his office involved, Secretary Rumsfeld, Condi Rice, Secretary Powell's people. This wasn't just a one-man show. And this is too serious here for this country to not know what happened. And America will want to know what happened, as the world will.
Now, as far as going to war with Saddam, I think most people are glad Saddam is gone. But there's a fundamental point here. Did in fact we base our reasons for going to war on something that was faulty intelligence or abused intelligence?
(END VIDEO CLIP) KARL: And, Jan, I'm joined now by the senior Democrat on the Intelligence Committee, Jay Rockefeller of West Virginia.
So, how about Senator Hagel's point? Did we go to war with Iraq under false pretenses?
SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: I don't know if you could say that.
But, to me, the bottom line on all of this, Jonathan, is the fact that, if you point your finger, if the White House points its finger towards the CIA and said it was their fault they didn't vet the speech properly and we acted, we thought, properly, what you're really saying to the intelligence community, on a broad scale nationally, is that: You be very careful about what you do in your analysis, because it may be that the people higher up who have controls over your lives may want you to say something different. And that's a chilling message.
KARL: What about Condoleezza Rice in all of this? You have suggested that she certainly knew that that information was false.
ROCKEFELLER: Well, I think she did.
And my question is, how could she not have? I mean, the National Security Council has its own -- she has her own director of intelligence and her own Africa specialist, her own Iraq specialist. Wilson had been over there. She's in touch with George Tenet all the time. They had been very skeptical over the Niger situation all along. So I'm not accusing her of anything. I just think it's a little disingenuous not to take accountability.
I mean, I was a governor for eight years. When something went wrong, I took accountability for it.
KARL: Now, John McCain has suggested that whoever was responsible for this should be fired, should lose their jobs. Do you think that's going to come to that?
ROCKEFELLER: That's an easy thing to say, and I think it sometimes can be a damaging thing to do.
KARL: So what happens now with your investigation?
ROCKEFELLER: We've got four investigations going, all on Niger, the CIA, the FBI, the State Department, and our own. And I think we're going to speed up our own and we're going to cause the other three to get speeded up, too.
KARL: And this has been going on behind closed doors. When does this get out, the public get to hear what's going on?
ROCKEFELLER: I think by fall. But it needs to be done. It's a large issue. It's not just a little trivia, factual disagreement.
KARL: OK. And I don't imagine you think it's time to move on, like the White House suggests. ROCKEFELLER: Yes, it's time to move on, but we also have to do this right.
KARL: OK, Senator Rockefeller of West Virginia, thank you very much.
Jan Hopkins, this goes on. This investigation goes on. George Tenet is expected before the Intelligence Committee in a closed session on Wednesday.
HOPKINS: Jonathan Karl on Capitol Hill, thanks very much.
The United Nations nuclear watchdog today questioned the authenticity of the British intelligence on Saddam Hussein's attempt to buy nuclear materials.
The International Atomic Energy Agency said the evidence provided by Britain may be based on forged documents. But Britain says the evidence was not based on forged documents; it came from another country.
As the intelligence controversy continues, U.S. troops in Iraq faced more deadly attacks today. One soldier was killed, another six wounded, when a convoy was attacked in Baghdad. The Pentagon today extended the 3rd Infantry Division's tour of duty in Iraq.
Senior Pentagon correspondent Jamie McIntyre has more -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Jan, the 3rd Infantry Division was the first U.S. Army troops into Baghdad. They've borne the brunt of the fighting during the war and the brunt of the initial guerrilla-style attacks.
They had thought they were going to be going home in the next two months. The 3rd Brigade of the 3rd Infantry Division is on its way home. But today, we learned that the 1st and 2nd brigades have now been told that their stay has been extended indefinitely, while the Pentagon tries to work out a rotation plan, this despite the fact that Defense Secretary Donald Rumsfeld announced that the battle-weary division would be home by September during congressional testimony earlier this week.
That leaves some 9,000 soldiers in Baghdad wondering again when they'll come home. And the soldiers tell us and have been telling us that the uncertainty is the hardest part of that mission, not knowing when they'll be coming home.
So what happened? Well, some Army official suggest, simply, that the security situation isn't good enough for them to come home. Pentagon officials stress that the secretary is working very hard on a rotation plan and they hope to be able to announce a timetable for the return of those first-in troops some time soon -- Jan.
HOPKINS: Jamie McIntyre at the Pentagon, thanks.
Despite the latest violence in Iraq, the new governing council continued its work today. The council voted to send a delegation to the U.N. Security Council and formed three committees to organize business. But it did not name a leader today, as was originally planned. A spokesperson said that decision could be made later.
The controversy over the use of faulty intelligence in the State of the Union speech could eventually have an impact on the president's popularity ratings.
For more on this, let's bring in our senior political analyst, Bill Schneider.
So, Bill, what kind of political fallout do we have from the discussion about faulty intelligence?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Jan, I'd say, so far, limited political damage. And here's why.
The "Newsweek" poll just released asked people, do you think the president purposely misled the public about evidence that Iraq had banned weapons? And 38 percent of Americans said, yes, they thought he deliberately misled the public; 53 percent said no. That 38 percent figure is interesting, because that's almost exactly the same percentage who say they would vote for Howard Dean against George Bush next year or Joe Lieberman or Dick Gephardt. In other words, it looks like that 38 percent is suspiciously similar to the number of Democratic voters out there.
It suggests that the damage is, so far at least, limited to Democrats.
HOPKINS: And it's not accelerating, even though the news is accelerating. The damage is not accelerating.
SCHNEIDER: Well, the damage -- complaints about Iraq have been accelerating.
Now, here's some evidence from the ABC News/"Washington Post" poll. A mounting number of Americans are saying that the number of U.S. casualties in Iraq is unacceptable. The figure was just 28 percent in early April, 44 percent in late June. And now it's up to 52 percent. The majority of Americans, the majority, say unacceptable number of casualties. Now, that is really driving down the president's ratings. That's hurting him. That is where the damage is coming from.
The issue to most Americans isn't, was there flawed intelligence? It's, why are so many Americans getting killed?
HOPKINS: So how do you think this is going to play out?
SCHNEIDER: Well, I think, in the long run, it could be a problem for the president. And the long run means next year, when he runs for reelection.
I don't think the flawed intelligence debate is going to turn Americans against the war. There's a good reason for that. Over two- thirds of Americans are convinced that Saddam Hussein had the weapons of mass destruction all along. The evidence for that? Well, he refused to cooperate, or he was reluctant to cooperate with U.N. inspectors. And that's prima facie evidence that he had something to hide, to most Americans.
But if the casualties continue to mount -- and they've been about one a day since the war ended -- and if the situation on the ground in Iraq continues to be out of control or chaotic, then a lot of Americans are going to say, what are we still doing there? And they're becoming already more and more critical. Once the public turns against the war, then the question is going to be raised, hey, how did we get into this mess in the first place? And that's when the issue of flawed intelligence will begin to matter.
HOPKINS: But that means that this has to kind of stay in the news for a year. Is that likely?
SCHNEIDER: Much depends on American presence over there. The secretary of defense said we could be there for a year. We could be there for more than a year.
HOPKINS: No, but I'm talking about the flawed intelligence issue, that it kind of remains there in the foreground or the background.
SCHNEIDER: The flawed intelligence issue, unless this story goes somewhere, is likely to fade out of the news. But the continuing U.S. presence in Iraq will stay in the news. And, at some point, when people begin to get angry about that, if more -- tragically, if more Americans suffer, if there are more casualties, then they're going to say, hey, wait a minute, how did we get into this? And then the flawed intelligence issue will come rushing back into the news.
HOPKINS: Thanks, Bill Schneider.
SCHNEIDER: Sure.
HOPKINS: The other big international issue facing President Bush tonight is Liberia. Today, the United States said it has deployed four aircraft and 100 troops to Senegal and Sierra Leone in West Africa. The force will support a team of U.S. military experts already in Liberia. Those experts are assessing security needs to help the president determine whether or not to deploy hundreds of U.S. peacekeeping troops.
Still to come tonight: Tropical Storm Claudette gaining strength and setting her sights on the Lone Star State. Max Mayfield of the National Hurricane Center will be our guest.
And later: "Food Fight," our series of special reports on genetically engineered food, what we know and what we don't about the food we eat.
(COMMERCIAL BREAK)
HOPKINS: Gas prices continued to climb this summer. The average price of a gallon of gas is up more than 11 cents, compared to a year ago. In just the last three week, the average price of a gallon is up a penny to $1.52. That's according to the latest Lundberg survey. If you're looking forget a better deal, Charleston, South Carolina boasts the most affordable gas in the country at $1.36, while Honolulu, Hawaii, is the most expensive at just under $2 a gallon.
Stock prices also continued their rise this summer. Today, the Dow rose 57 points. The Nasdaq gained 20. The S&P added 5. While the gains were solid, Wall Street did close well below its high for the day.
Christine Romans is here with the market -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, Jan, there were some upgrades of some Dow stocks, among them Merck, Johnson & Johnson, Intel. The financial earnings looked decent for the day. And there were two notable deals today.
We'll start with the earnings. Credit cards and mortgages helped profit at Citigroup and Bank of America. And Citigroup raised its dividend 75 percent to 35 cents and said it favors shifting compensation to restricted stocks from options. Now the deals: OfficeMax shares rallied 19 percent on news Boise Cascade will buy that company for just over $1 billion dollars. And Yahoo! will pay $1.6 billion in cash and stock for Overture Systems.
Now, volume today was average, 1.4 billion shares trading at the Big Board, two-thirds of that volume at higher prices. And 295 stocks hit 52-week highs, among them, American Express, Citigroup, J.P. Morgan, Hewlett-Packard, Compaq, Caterpillar, and Merrill.
Now, Jan, the Dow had been up 159 points at its best today. That was a one-month high. There was some selling in a thin futures pit. That spooked the rest of the market in the last hour. Traders said the market was spooked because it's a very busy week ahead, investors pretty quick to lock in their recent profits. Alan Greenspan testifies tomorrow and Wednesday on Capitol Hill on the economy. And dozens more companies will report their quarterly earnings. There's also a retail sales report and CPI this week, so a lot ahead of us. It's just Monday.
HOPKINS: Thanks, Christine Romans.
And still ahead, there's a storm front coming and Texas is getting ready. We'll have a live report on Tropical Storm Claudette as she gains intensity and aims for land.
And then Kobe Bryant in his own defense -- the basketball player speaks out.
Many of you wrote in about the president's State of the Union address, Iraq, and matters of intelligence. We'll share your e-mails.
(COMMERCIAL BREAK)
HOPKINS: This just in: At least four people have been killed, eight others injured, in a San Francisco traffic accident. The accident occurred when a tow truck crashed off an elevated stretch of freeway in San Francisco. The truck fell onto traffic below. One car was crushed. At least two other cars were damaged.
In other news tonight, basketball star Kobe Bryant is playing defense. Bryant says that he did not sexually assault a 19-year-old woman. Meanwhile, Colorado prosecutors are still trying to decide whether to charge him.
Brian Cabell is in Vail, Colorado, with the latest -- Brian.
BRIAN CABELL, CNN CORRESPONDENT: Jan, it was just two weeks ago today that Kobe Bryant came to Colorado for knee surgery. And it was two weeks ago tonight that the alleged incident took place, but still no decision on whether to file charges.
We talked to the district attorney just about 90 minutes ago. He said he doesn't have a decision yet. He doesn't have an announcement yet. He's hoping to have it in the next couple of days, he says. In the meantime, Bryant, his mug shot was released over the weekend for the first time, after about a one-week delay. And he is speaking up for himself. He spoke to "The Los Angeles Times" by phone over the weekend.
And he said -- quote -- "When everything comes clean, it will be fine. You'll see. But you guys know me. I shouldn't have to say anything. You know I would never do anything like that. Man, there's a lot of crazy stories out there."
Friends of the alleged victim are speaking up for her. One of them appeared on ABC this morning and said, yes, the girl had had emotional problems in the past.
(BEGIN VIDEO CLIP, "GOOD MORNING AMERICA")
STARLENE BRAY, FRIEND OF ALLEGED KOBE BRYANT VICTIM: Yes, it's true. She did seek some medical help. She knew that she needed it, so she went and got it. I don't think it has anything to do with what happened that night. I think that was solely just something that came about, has nothing to do with her psychological abilities.
(END VIDEO CLIP)
CABELL: Another friend went on NBC this morning and said she had talked to the alleged victim in the last few days and said the alleged victim had said -- quote -- "He went the whole way," referring to a sexual encounter, the alleged sexual encounter, with Kobe Bryant.
CBI, the Colorado Bureau of Investigation, is now analyzing all the evidence that's been submitted to them, physical evidence, DNA evidence. Some of those tests have been completed, sent back to the sheriff's office here. Some have not. But we've been told by an official there that they hope to have all of those tests completed by this week. And, again, the latest from the prosecutor's office here, the DA's office, they are hoping to have a decision and an announcement on whether to file charges some time this week, perhaps in the next two days -- Jan.
HOPKINS: Brian Cabell in Vail, Colorado.
Tonight, a manhunt is under way in West Virginia. Police are searching for this man caught on store video cameras. They say that he stalked and molested an 11-year-old girl this weekend after telling her he was a security guard.
A violent confrontation between Rhode Island State troopers and members of the Narragansett Indian tribe. Police raided a shop selling tax-free cigarettes. People were thrown to the ground by police. The tribe wants those arrested to be returned to the reservation.
Take a look at these waves rolling in, in Galveston, Texas. Tropical Storm Claudette -- we'll see it in a minute -- is closing in on the Texas coast. It is expected to gain hurricane strength by tomorrow afternoon. People in Texas are preparing for the storm's arrival. And we will have a live report on Tropical Storm Claudette from the coast coming right up.
Firefighters are battling a raging wildfire in Arizona tonight. The 1,500-acre blaze was sparked by lightning yesterday. It is very close to the scene of last year's wildfire, which destroyed nearly a half-million acres, close to 500 buildings and homes.
Now for a look at some of your thoughts. Many of you wrote about President Bush's disputed claim that Iraq sought African uranium.
Kitty from Tennessee wrote: "I don't think it was such a big deal. We all know that Saddam is dangerous. And people who have defected to the United States have said that Saddam was working on all kinds of dangerous weapons."
William Hamilton of Holiday, Florida, said: "All of those Democrats and the news media are beating a dead horse over the 16 words. I feel that justice was done. End of story."
Joseph Florio disagreed: "It seems to me that the statement in the president's State of the Union speech that Africa was involved in making WMDs was made by our president, not by George Tenet. Even if he was to blame for the error, it was our president who told us that lie."
Bruce Cooke from West Yellowstone, Montana, asks: "Let me get this straight. It's not the president's fault because his staff gave him the wrong information?"
And, finally, Daniel McRae from Burbank, California, asks: "Is Mr. Bush trying to convince us that he's just a speech reader and doesn't really know if what he's saying is the truth? Mr. Bush should stop trying to evade responsibility for inaccuracies in his speech and remember the sign on Harry Truman's desk in the Oval Office: The Buck stops here."
We love hearing from you. You can send us your thoughts at LouDobbs@CNN.com.
When we return: Tropical Storm Claudette is picking up steam and strength as she heads for land. Max Mayfield of the National Hurricane Center will join us.
And then, how much do we really know about the foods we eat? A special report on genetically engineered foods.
And health advocates are raging about vending machines. But plans to fight obesity could hurt the schools, as well as help the children. Kitty Pilgrim will have that report.
(COMMERCIAL BREAK)
HOPKINS: Two-hundred miles of the Texas coast are under a hurricane warning tonight. Tropical Storm Claudette is expected to reach hurricane strength tomorrow. Forecasters still aren't sure where Claudette will come ashore.
John Zarrella is in Corpus Christi, Texas, with the latest.
John, what are the conditions right now?
JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Well, Jan, it's a beautiful early evening here in Corpus Christi. And that's one of the tough things that hurricane forecasters have always to deal with, is the beautiful days leading up to hurricanes, getting people convinced that there's really trouble lurking out there.
But, in fact, here in Corpus Christi, the people have been taking it extremely seriously. We're at the marina. And all day long, folks have been, to use that cliche, battening down the hatches, tying up their coasts, securing them, just in case Claudette should come this way. There is a sailboat behind me here named the Hazy Moon. And it may well be that way tomorrow night. But, tonight, it will probably be a beautiful, clear full moon here again in Corpus Christi.
And, as I said, people are taking it very seriously. Early today, the Home Depot here in Corpus Christi was already packed with people who were buying plywood, loading up their cars, getting ready, and preparing to go home and start boarding up. The catch phrases here are, better to be safe than to be sorry. People are taking no chances. Others began boarding up very early, all up and down the Texas coastline, people saying they just want to be ready. They've been through a lot of hurricanes and near misses. And they're just not going to take any chances this time around, even though Claudette is still just a tropical storm.
And up the coast in Galveston, a little heads-up, an early warning that Claudette is coming. A couple of water spouts were spotted off the Galveston coastline there, and again, just a little warning that Claudette is lurking out there, and, as you said, not quite sure exactly where the storm will make landfall, but it is clearly heading towards the Texas coastline.
Here, again, in the area of Corpus Christi, emergency managers and a lot of folks worried, particularly about the threat from inland flooding. This might not be a real wind maker of a storm, but it may well dump a lot of rain. And they have had a lot of rain here in the past six months or so. So it could very well be a serious problem if Claudette moves slowly. This is John Zarrella, reporting live from Corpus Christi, Texas -- Jan.
HOPKINS: Thanks, John.
Later in the program, we will have more on Tropical Storm Claudette from Max Mayfield, director of the National Hurricane Center in Miami.
From a tropical storm to a storm of controversy over food. Tonight, we begin a series of special reports on genetically modified foods. We begin with a look at how much bioengineered food we're eating and how it's made its way to our stomachs in our series "Food Fight."
(BEGIN VIDEOTAPE)
HOPKINS (voice-over): Noisy protests in Europe over genetically modified food. For the last five years, Europeans have banned what some call Frankenfood.
Yet farmers in this country have quietly embraced the new technology. According to the USDA, 80 percent of soybeans grown in the United States are now genetically modified; 34 percent of the corn grown here is bioengineered.
John Reifsteck of Illinois saves money because science is able to breed soybeans that require less weed killer. Without bioengineered crops, his fields would be different.
JOHN REIFSTECK, CORN AND SOYBEAN FARMER: We find more pesticides being used. You'd find more soil erosion. And who would benefit from that? Certainly not the consumer and certainly not the environment.
Reifsteck and farmers around the country have been planting genetically modified crops since the mid '90s. According to the Grocery Manufacturers of America, as much as 3/4 of all processed foods on store shelves now contain some genetically modified element, either directly or through products such as animal feed.
JOSEPH ECKER, SALK INSTITUTE: Genetically modified food is a term that's used for the alteration of genes to create new varieties of plants. Some examples are alterations of the cold tolerance of a plant or the pest resistance of a plant.
HOPKINS: There are groups in the United States that raise questions about the safety of food that's genetically engineered. They worry about what might happen down the road.
RICHARD CAPLAN, USPIRQ: Because many of these crops contain genes that encode for resistance to antibiotics, that there may be a problem with exacerbating the problem of antibiotic resistance. HOPKINS: The U.S. Agriculture Department approves all genetically modified crops. The Food and Drug Administration is responsible for our food. The FDA asks companies to submit information about new food products, but this is voluntary, not required by law.
JIM MARYANSKI, FOOD AND DRUG ADMIN.: Our responsibility for new products is to ensure that they are safe and comply with all the requirements of the law.
HOPKINS: In Europe, trade talks now center around whether bioengineered food should be labeled.
So despite the widespread acceptance of bioengineered crops in this country, farmers still worry whether they'll be able to sell what they grow at home and abroad.
(END VIDEOTAPE)
HOPKINS: Tomorrow we continue our series of special reports on genetically modified foods. Casey Wian looks at whether bioengineered food is safe to eat and what risks it may contain.
That brings us to tonight's poll: "Would you knowingly eat genetically modified food? Yes or no?" Cast your vote at cnn.com/lou. And we'll bring you the preliminary results later in the show.
Now the final results of Friday's poll question. We asked: "Which story held your interest the most last week?" Sixty-two percent of you said questions about WMD; 5 percent said President Bush in Africa; 23 percent said U.S. troops under fire in Iraq and 10 percent said the sausage knockdown.
Coming up, from turning over a new leaf at "The New York Times" to turning profits on Wall Street. The editors of the nation's business magazines join us for our weekly "Editors' Circle." That's next.
And then, the cost of fighting fat in schools. Why health advocates are targeting vending machines. Kitty Pilgrim will have that report.
And a controversial new movie stirring up trouble before it even hits the big screen. We'll tell you why coming up.
(COMMERCIAL BREAK)
HOPKINS: Joining us now is Max Mayfield. He is the director of the National Hurricane Center in Miami.
Max, what can you tell us about tropical storm now Claudette?
MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: Well, it's a strong tropical storm. The maximum sustained winds are about 65 miles per hour. We think that we will see some additional strengthening and it could very well become a category 1 hurricane by the time it gets to the coast tomorrow.
HOPKINS: Any idea where it might hit?
MAYFIELD: Well, our forecast has it moving west northwestward. And the hurricane warning goes up from Baffin Bay, Texas, up to High Island, Texas. So people really within that hurricane warning area need to treat this with a great deal of respect and prepare for a category 1 hurricane.
If the track goes a little bit to the north, it will be in the -- closer to the Galveston area. If it goes a bit to the left of our track, it will be closer to Corpus.
HOPKINS: And what kind of damage could be expected? John Zarrella was talking about a lot of inland flooding. But I would assume there would be other things as well.
MAYFIELD: Well, we really don't want to overdo this. I mean, this is certainly not a major hurricane. In fact, it's not even a major -- not even a hurricane yet. It's a strong tropical storm.
But at the same time, we really don't want to minimize this,, because even in strong storms or weak hurricanes we often do have loss of life. Our main concern right now is with the marine community, the small boats on the coast, the swimmers and the surfers. And then as it moves on inland, we would expect three to five feet of storm surge, five to eight inches of rainfall. There will be some tornadoes, in all likelihood as the system moves inland in the next 24 hours or so.
HOPKINS: And your best guess again for when it might hit?
MAYFIELD: Well, the center should be approaching the coast tomorrow afternoon. If it goes a little bit to the right of our track, it will be early afternoon just because the orientation of the Texas coastline. If it's a little bit to the left of our track, it will be later tomorrow afternoon. But people need to understand that there is a developing tropical storm out there that is headed toward that hurricane warning area and listen very carefully to their local officials.
HOPKINS: Thanks very much. Max Mayfield of the National Hurricane Center. I'm sure we'll be talking to you again.
MAYFIELD: OK. Thank you.
HOPKINS: The argument over fraud on Wall Street broke wide open today, and the issue had almost nothing to do with Wall Street. It's a power struggle between state attorneys general, led by Eliot Spitzer of New York and Congress. Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): After all he did to crack down on wall street shenanigans, it's no wonder Eliot Spitzer has a few enemies these days. The surprise is that Spitzer says his enemies are in Congress and they're trying to take away his power to police Wall Street.
At issue: this amendment written by Congressman Richard Baker of Louisiana. It prohibits states from enacting rules, settlements, or agreements that would force Wall Street to change its behavior, leaving all rulemaking and dealmaking to William Donaldson and the Securities and Exchange Commission. Spitzer and his peers are outraged.
WILLIAM GALVIN, SECY., COMMONWEALTH OF MASS.: There is an effort now under way in Washington, led by the securities industry, to eliminate the role of state regulators. As absurd as it sounds, at a time when the state securities regulators have consistently demonstrated their ability to root out corruption in the industry.
VILES: Baker's staff insists that's not the case. Quote: "He in no way wants to limit states from pursuing wrongdoing. But at whatever point that they decide they're going to become rulemakers for national marketplaces, they need to consult with the feds."
Spitzer, never one to shy from a fight, called on Donaldson to join him in fighting the amendment.
ELIOT SPITZER, N.Y. ATTORNEY GENERAL: Mr. Donaldson, today I'm calling on you to stand up loudly and clearly, reject this amendment. Say it is not good for the public. Say it is not good for investors. Say it is not good for the integrity of the marketplace. If you do not do that, then I will have to draw the conclusion that you have not learned the lesson of the last five years.
VILES (on camera): Strong words as usual from Eliot Spitzer. And what did the SEC have to say in response? Well, this amendment has been circulating now for six days. But the SEC had no immediate comment on Eliot Spitzer's challenge.
Peter Viles, CNN, New York.
(END VIDEOTAPE)
HOPKINS: "The New York Times" has named a new executive editor to replace Howell Raines. Bill Keller, who lost out to Raines for the top spot two years ago, will take over later this month. Keller is a Pulitzer Prize-winning reporter who currently writes for the "Times" editorial page and Sunday magazine. Raines resigned last month in the wake of the Jayson Blair scandal.
The top editors of the leading business magazines are here for our weekly "Editors' Circle." Jim Ellis is the chief of correspondents at "BusinessWeek," and Rik Kirkland is the managing editor of "Fortune." Welcome to both of you. First of all, this fight between the state attorneys general and the SEC, is there anything to it?
JIM ELLIS, "BUSINESSWEEK": Well, I think it looks like sort of a classic power play between the feds and the state AGs. I think in this case, though, the state AGs definitely have a higher ground, which is that if the SEC had been as vigilant as a lot of people seem to think that they ought to have been, then we wouldn't have had a lot of these scandals out there. And it really did take the push of the state AGs, particularly Eliot Spitzer, to get this thing done.
And therefore, I think it's sort of silly to say that they shouldn't be able to actually make rules.
RIK KIRKLAND, "FORTUNE" MAGAZINE: In theory you can make a case that you need centralized rulemaking, but I agree with Jim. The reality of the last year -- Harvey Pitt was making the same argument last summer. Remember him?
HOPKINS: He's not there anymore.
KIRKLAND: And he's not there anymore. So I think Spitzer's got the high ground here.
HOPKINS: Let's talk about the market, because we've really had quite a rally, really since the end of March. And now we're starting to get some evidence that investors have been waiting for, and that's earnings.
ELLIS: I mean, we've really had a good rally, but it has been a rally that people have basically just sort of bet that they were going to have something to back it up. I mean, the tech stocks are up about 30 percent for the year. The S&P is up about 20. And now we've got to have some earnings to back it up. And I think that the market was extremely enthusiastic earlier today when the financial companies came out with good earnings, B of A and Citigroup.
And I think that the problem we saw earlier in the day was a lot of people got ahead of themselves. The market was up over 100 points, and everybody was saying this is it, this is it. But over the next two weeks we have a lot of very large companies coming out that aren't in the financial sector and don't have a lot of the good sort of fundamentals that the financial sector has going for it.
So that will really tell the tale, and I think investors sort of picked that up later in the day, as well as something in the futures markets that pulled the market back. But I think it's still too early to say that the market's taken off.
KIRKLAND: Yes, I would say -- I don't think this is a bubble as some have characterized it, but it does feel a little bubblecious (ph), if I can use that term. Part of the problem is that the shorts are all on the run. There is still a fair number of people out there who think this market's gotten ahead of itself, but it's very hard to bet against it right now. Part of this is you've got M&A fever picking up again now. I mean, today you had Boise Cascade paying cash for OfficeMax...
(CROSSTALK)
HOPKINS: Which makes a lot of sense. You have a paper company buying the distributor.
KIRKLAND: You (UNINTELLIGIBLE) you push the paper. I mean, probably like all mergers it will end in tears and the acquirer will lose value for its shareholders. But the point is, CEOs are buying up undervalued properties or value plays like OfficeMax for cash, and then you've got Yahoo! using its high-flying Internet multiple to buy this Overture Services, because they're afraid of the challenge of Google. So if you're out there thinking these companies are overpriced and yet somebody's going in and making a deal, you get killed. So I think the shorts are sort of on the run right now. This thing could go up a little more, but I'm not sure the fundamentals are there yet.
HOPKINS: Are you surprised at how fast investors have come back? I mean, we've talked about how unforgiving investors are going to be for a very long time.
ELLIS: I have to admit I am surprised. I sort of think that investors have extremely short memories. And a lot of people just don't like to be left behind. A lot of people, you know, it's the old thing, don't fight the tape. I mean, they want to run behind stocks. And it's very difficult now to not try to make up some of the losses that you had earlier in the year.
KIRKLAND: I would also, though -- I mean, they come back, but you remember, they've been down -- we've been down for over two years here, so you know, if you believe -- I'm not sure if this is a bear market rally, but I think, you know, it's typical after the market goes down 60, 70 percent, to run back up for a while, and then we'll see if we can hold on to it.
So I think individuals are still -- I mean, there are signs, they're coming back into mutual funds and so on. But a lot of people are still wary. So we'll see.
ELLIS: The place I wouldn't want to be right now is in the bond market.
(CROSSTALK)
ELLIS: It's very difficult to figure out exactly where you should be, but I think that for most people, particularly for small investors, it's a place to avoid right now. And unfortunately, I think the danger that we have from what's happening in the bond market now is that a lot of people who are dependent on refinancings to pump new money back into their own personal balance sheets, and that's helped keep the economy going, that's going to sort of stall out now. I think that unfortunately, refinancings are sort of like -- we've definitely hit the high on those.
HOPKINS: Well, and also the bond market went so high on price and low on yield that now you're having the reverse.
ELLIS: Yes, I think...
KIRKLAND: That's part of why the stock market is up, because people think, well, I can't live with these low returns, I've got to go make some bets. But as we've learned over the last few years, you can also just lose money. So sometimes lower returns are better than losing money.
HOPKINS: What's your sense of what's going on in the economy? Is it bad or getting better or worse or what?
KIRKLAND: It's this mixed picture. I think that it's -- you know, we've had three years of waiting for the second half to save us. And I think this second half looks better than the other ones. But the big question is business spending, and everybody I talk to, the CEOs are still not making big bets. And until they do, it's a chicken and egg thing. The economy can't really come back.
ELLIS: There's just no reason for people to really get off the dime and start doing heavy business spending just now. I mean, the market's positive. I mean, that's a good thing. And Alan Greenspan is extremely accommodative. The problem is that why should you, if you've really gotten productivity gains out of your employees, why should you go ahead and make new investments? You don't have to add staff, you don't have to add new plant and equipment, and you can still make money.
That's the real danger. And that has to change, or else the economy never will get very far, especially if consumers aren't going to be able to monetize the amounts of money in their homes.
HOPKINS: What about what's going on politically and in Iraq? Is this going to have an effect on the economy, on consumer confidence? What do you think?
KIRKLAND: It doesn't help. We've learned in the past week and a half or so that we're spending twice what we thought we were on the occupation over there. And remember, I think people forget this, that's not even in the budget. This $400 billion deficit doesn't count the $60 billion or so we're going to be spending between Iraq and Afghanistan. So I think it doesn't help consumer confidence, but you know, the immediate economic impact is not that heavy.
ELLIS: I actually think that what's going on with Iraq right now is actually very dangerous for the economy, simply because it's going to put a lot more attention on the economy at the election time. I think that what happened was that a lot of people thought, OK, we're beyond that, and instead we're not beyond, and every time we see -- it makes security not look like it's such a set issue as it was before. You know, maybe we didn't win the war...
KIRKLAND: It's not a winning issue.
ELLIS: Yes, maybe we didn't win the war, so therefore I've got to talk about the economy, and the economy's the one thing the administration doesn't want to talk about right now.
HOPKINS: We have to end it there. Jim Ellis and Rik Kirkland.
And when we come back, rage against the machine. Are vending machines to blame for adolescent obesity? Kitty Pilgrim will report.
And you could call him a shell of a man. One man who has saved more than 1,200 turtles from uncertain future.
(COMMERCIAL BREAK)
HOPKINS: An upcoming movie from Miramax and Disney is causing controversy even before it hits theaters. "Buffalo Soldiers" is a fictional account of U.S. Army clerks who take up drug running and other criminal activity while stationed in late Cold War Germany. The film's portrayal of U.S. troops and the timing of its release are being criticized. Miramax first bought that film the day before September 11 and has shelved it ever since.
Disney took in a pirate's booty at the box office this weekend. "Pirates of the Caribbean," the movie based on the Disney theme park ride, earned $46.5 million at the box office. "The League of Extraordinary Gentlemen," starring Sean Connery, was second on the list, earning $23 million. And last weekend's No. 1 movie, "Terminator 3," came in third with $19 million. "Legally Blonde 2" and "Finding Nemo" rounded out the top five.
Too much time spent watching movies and television may be one factor in the rise in childhood obesity in this country. Another target of blame: soft drinks and the vending machines that make them so easily accessible in many schools. Now some educators are making an effort to make some changes. Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): A recent survey of New York kids from kindergarten to fifth grade shows 43 percent of them are officially fat and nearly a quarter of them obese.
Nationally, children are getting fatter, especially over the last 10 years. Some public schools in cities across the country are increasing pressure to limit vending machines on school grounds.
A recent health survey by Cornell University found excessive consumption of soft drinks could end up replacing milk consumption and increasing the number of calories in the diet. Over time, that leads to weight gain.
Some obesity specialists say a little soda is OK, but argue for vending machines with nutritional choices.
DR. RONALD KLEINMAN, CHIEF PEDIATRIC GASTROENTEORLOGY MASSACHUSETTS GENERAL HOSPITAL: Like all foods that potentially can contribute to obesity, those foods ought to be taken in moderation, particularly those foods that are rich in calories and pretty low in all the other nutrients, like a can of soda.
PILGRIM: Many schools are reluctant to give up vending machines because they generate significant revenues for schools, money often used for extracurricular activities. Senator Patrick Leahy has a problem with that and has co-sponsored legislation to restrict the sale of soft drinks in schools.
SEN. PATRICK LEAHY (D), VERMONT: Some schools are terribly addicted to it. They use the money for their sports program, even for some of the scholastic programs. At some point parents have got to wake up, that we, all of us in the community, and we shouldn't be saying that the only way we're going to fund it is to make sure we do something that's going to hurt our kids' health.
PILGRIM: Beverage companies are increasingly working with schools to stock vending machines with bottled water and juice. Yet another solution, tried in California and other places, is to put soda machines on a timer, turning them off during lunch hour.
(END VIDEOTAPE)
PILGRIM: The solutions are not easy, and for that reason there's no real national approach to how to handle it. It's a fight that's being fought in individual districts around the country -- Jan.
HOPKINS: Thanks, Kitty.
When we come back, the results of tonight's poll.
Plus, a man who was a friend of more than 1,000 turtles.
And it was sweet revenge for three mascots after last week's attack on a fellow mascot.
(COMMERCIAL BREAK)
HOPKINS: Call it mascot revenge or the attack of the killer dills. These minor league pickles were out to settle a score this weekend in Kentucky. Last week, one of their fellow mascots, an Italian sausage, was whacked with a bat in Milwaukee.
Finally tonight, he calls it turtle love. One man who has made a home for over 1,000 turtles. Jeanne Moos has that story.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Ever yearn for a turtle when you were a kid? How about 1,200 turtles? An entire Manhattan loft crammed with tanks full of them.
Richard Ogust calls himself a turtle conservationist.
RICHARD OGUST, TURTLE CONSERVATIONIST: But I'm also pretty nuts about turtles.
MOOS: He's nuts about the one that looks like an albino anteater. He's nuts about the snake neck.
OGUST: These guys are almost extinct.
MOOS: And he's really nuts about his favorite, Oscar, as in Oscar Mayer wieners.
OGUST: She was brought to us as a blind turtle that someone had raised on frankfurters. MOOS: Malnutrition by hot dog left Oscar blind, though her vision is improving with proper diet. The turtles here do seem to eat well, from fish ...
UNIDENTIFIED FEMALE: Oh, here he goes. There we go.
MOOS: ...to cantaloupe worth fighting over, to lots and lots of lettuce.
(on camera): Did you hear what the one turtle said to the other turtle?
OGUST: I did.
MOOS: I'll have a BLT but hold the B and the T.
(voice-over): Their names are unpronounceable.
OGUST: He's a uwanawai (ph). This is called a quoromaquondi (ph). She's qund (ph), and she's un (ph).
MOOS: Richard bought some of the turtles. Some he rescued. Some are endangered species confiscated by authorities.
He still has his very first turtle. She was about to become part of the seafood buffet at this Chinatown restaurant. Richard spotted her in the tank and was fixated.
OGUST: I got her for 20 bucks. They started to take her back to the kitchen to chop her up and put her in a bag for me. I said, no, no, no, no!
MOOS: He took her home and a friend named her Empress. That was nine years ago, 1,200 turtles ago. And the turtles Richard collects keep reproducing.
UNIDENTIFIED FEMALE: We have turtle love happening here.
MOOS: The male bites the female's neck to keep her in position.
Speaking of lovers, turtle lovers help fund this operation. There are plans to move it to a 50-acre site in New Jersey.
The highlight of our tour was hand-feeding figs to Burmese turtles.
(on camera): Is there a technique so I can keep my fingers?
OGUST: That's the technique.
MOOS (voice-over): Now if only he'd practiced it.
OGUST: Ow. That hurt.
MOOS (on camera): I mean, does it cut?
OGUST: I was really lucky.
MOOS (voice-over): Richard would never dream of eating turtle soup. But turtles apparently can't resist finger food.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
HOPKINS: That's our show tonight. Thanks for joining us. For all of us here, good night from New York.
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Aired July 14, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, July 14. Sitting in for Lou Dobbs, Jan Hopkins.
JAN HOPKINS, CNN ANCHOR: Good evening, everyone.
"Darn good intelligence," that's what President Bush says he gets from his sources, despite the faulty information he used in his State of the Union address. Earlier, the White House tried to put an end to the controversy, saying it is -- quote -- "time to move on." But the uproar will not go away.
Chris Burns is at the White House and Jonathan Karl is on Capitol Hill, where Democrats are maintaining their attack.
We go to Chris Burns first -- Chris.
CHRIS BURNS, CNN CORRESPONDENT: Well, Jan, the White House today waged what amounted to a counterattack. Ari Fleischer, on his swan song day as press spokesman here, really laid into the critics of President Bush, critics who say that President Bush's State of the Union speech back on January 28, in -- which accused Saddam Hussein of trying to buy uranium -- that's yellow cake-style uranium -- from somewhere in Africa was not substantiated.
Well, the Bush administration has said it was a mistake because the evidence did not rise to the level of a State of the Union message, but Ari Fleischer saying it is still true that Saddam Hussein was trying to build a nuclear weapons program, reconstitute a nuclear weapons program, and those critics are engaging in a revisionist notion. It's a bunch of bull, in his words. It is a media frenzy. And whether or not that item in the State of the Union speech was true, President Bush did act on the correct intelligence.
President Bush was asked about that as he met with U.N. Secretary-General Kofi Annan on a number of issues, President Bush saying he made the right decision based on the right intelligence.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the intelligence I get is darn good intelligence. And the speeches I have given were backed by good intelligence. And I am absolutely convinced today, like I was convinced when I gave the speeches, that Saddam Hussein developed a program of weapons of mass destruction and that our country made the right decision.
(END VIDEO CLIP) BURNS: Then why, critics say, did the president not include that item in a Cincinnati speech back last fall? He included it in his State of the Union message. But Secretary of State Colin Powell did not include it as part of the evidence that he presented to the United Nations.
Well, President Bush trying to smooth over what the Democrats are seizing on as a credibility gap -- that gap could stand to widen, unless weapons of mass destruction or their programs are actually found in Iraq -- Jan.
HOPKINS: Chris, still support from the administration for George Tenet, the head of the CIA?
BURNS: Yes. Absolutely, rock solid up to this point, no indication that President Bush intends to let Mr. Tenet go. However, of course, the White House has been qualifying the information that they included in the State of the Union message as being one that was signed off on and approved by the CIA and by Mr. Tenet himself, so perhaps a little bit of room, an elbow room perhaps, to eventually let Tenet go.
But, at this point, there is no direct indication, President Bush saying he has full confidence in Mr. Tenet -- Jan.
HOPKINS: Chris Burns at the White House, thanks.
BURNS: Thank you.
HOPKINS: The Democrats continue to call for an investigation into the intelligence controversy today. Many Democrats accuse the president of misleading the American people in his State of the Union speech.
Jonathan Karl joins me now live from Capitol Hill -- Jonathan.
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: And, Jan, it's not just Democrats. A little while ago, a senior Republican on the Senate Intelligence Committee told CNN that responsibility for this controversy goes beyond simply the Central Intelligence Agency.
(BEGIN VIDEO CLIP)
SEN. CHUCK HAGEL (R), NEBRASKA: It wasn't just the CIA involved here. We had the vice president and his office involved, Secretary Rumsfeld, Condi Rice, Secretary Powell's people. This wasn't just a one-man show. And this is too serious here for this country to not know what happened. And America will want to know what happened, as the world will.
Now, as far as going to war with Saddam, I think most people are glad Saddam is gone. But there's a fundamental point here. Did in fact we base our reasons for going to war on something that was faulty intelligence or abused intelligence?
(END VIDEO CLIP) KARL: And, Jan, I'm joined now by the senior Democrat on the Intelligence Committee, Jay Rockefeller of West Virginia.
So, how about Senator Hagel's point? Did we go to war with Iraq under false pretenses?
SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: I don't know if you could say that.
But, to me, the bottom line on all of this, Jonathan, is the fact that, if you point your finger, if the White House points its finger towards the CIA and said it was their fault they didn't vet the speech properly and we acted, we thought, properly, what you're really saying to the intelligence community, on a broad scale nationally, is that: You be very careful about what you do in your analysis, because it may be that the people higher up who have controls over your lives may want you to say something different. And that's a chilling message.
KARL: What about Condoleezza Rice in all of this? You have suggested that she certainly knew that that information was false.
ROCKEFELLER: Well, I think she did.
And my question is, how could she not have? I mean, the National Security Council has its own -- she has her own director of intelligence and her own Africa specialist, her own Iraq specialist. Wilson had been over there. She's in touch with George Tenet all the time. They had been very skeptical over the Niger situation all along. So I'm not accusing her of anything. I just think it's a little disingenuous not to take accountability.
I mean, I was a governor for eight years. When something went wrong, I took accountability for it.
KARL: Now, John McCain has suggested that whoever was responsible for this should be fired, should lose their jobs. Do you think that's going to come to that?
ROCKEFELLER: That's an easy thing to say, and I think it sometimes can be a damaging thing to do.
KARL: So what happens now with your investigation?
ROCKEFELLER: We've got four investigations going, all on Niger, the CIA, the FBI, the State Department, and our own. And I think we're going to speed up our own and we're going to cause the other three to get speeded up, too.
KARL: And this has been going on behind closed doors. When does this get out, the public get to hear what's going on?
ROCKEFELLER: I think by fall. But it needs to be done. It's a large issue. It's not just a little trivia, factual disagreement.
KARL: OK. And I don't imagine you think it's time to move on, like the White House suggests. ROCKEFELLER: Yes, it's time to move on, but we also have to do this right.
KARL: OK, Senator Rockefeller of West Virginia, thank you very much.
Jan Hopkins, this goes on. This investigation goes on. George Tenet is expected before the Intelligence Committee in a closed session on Wednesday.
HOPKINS: Jonathan Karl on Capitol Hill, thanks very much.
The United Nations nuclear watchdog today questioned the authenticity of the British intelligence on Saddam Hussein's attempt to buy nuclear materials.
The International Atomic Energy Agency said the evidence provided by Britain may be based on forged documents. But Britain says the evidence was not based on forged documents; it came from another country.
As the intelligence controversy continues, U.S. troops in Iraq faced more deadly attacks today. One soldier was killed, another six wounded, when a convoy was attacked in Baghdad. The Pentagon today extended the 3rd Infantry Division's tour of duty in Iraq.
Senior Pentagon correspondent Jamie McIntyre has more -- Jamie.
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Jan, the 3rd Infantry Division was the first U.S. Army troops into Baghdad. They've borne the brunt of the fighting during the war and the brunt of the initial guerrilla-style attacks.
They had thought they were going to be going home in the next two months. The 3rd Brigade of the 3rd Infantry Division is on its way home. But today, we learned that the 1st and 2nd brigades have now been told that their stay has been extended indefinitely, while the Pentagon tries to work out a rotation plan, this despite the fact that Defense Secretary Donald Rumsfeld announced that the battle-weary division would be home by September during congressional testimony earlier this week.
That leaves some 9,000 soldiers in Baghdad wondering again when they'll come home. And the soldiers tell us and have been telling us that the uncertainty is the hardest part of that mission, not knowing when they'll be coming home.
So what happened? Well, some Army official suggest, simply, that the security situation isn't good enough for them to come home. Pentagon officials stress that the secretary is working very hard on a rotation plan and they hope to be able to announce a timetable for the return of those first-in troops some time soon -- Jan.
HOPKINS: Jamie McIntyre at the Pentagon, thanks.
Despite the latest violence in Iraq, the new governing council continued its work today. The council voted to send a delegation to the U.N. Security Council and formed three committees to organize business. But it did not name a leader today, as was originally planned. A spokesperson said that decision could be made later.
The controversy over the use of faulty intelligence in the State of the Union speech could eventually have an impact on the president's popularity ratings.
For more on this, let's bring in our senior political analyst, Bill Schneider.
So, Bill, what kind of political fallout do we have from the discussion about faulty intelligence?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Jan, I'd say, so far, limited political damage. And here's why.
The "Newsweek" poll just released asked people, do you think the president purposely misled the public about evidence that Iraq had banned weapons? And 38 percent of Americans said, yes, they thought he deliberately misled the public; 53 percent said no. That 38 percent figure is interesting, because that's almost exactly the same percentage who say they would vote for Howard Dean against George Bush next year or Joe Lieberman or Dick Gephardt. In other words, it looks like that 38 percent is suspiciously similar to the number of Democratic voters out there.
It suggests that the damage is, so far at least, limited to Democrats.
HOPKINS: And it's not accelerating, even though the news is accelerating. The damage is not accelerating.
SCHNEIDER: Well, the damage -- complaints about Iraq have been accelerating.
Now, here's some evidence from the ABC News/"Washington Post" poll. A mounting number of Americans are saying that the number of U.S. casualties in Iraq is unacceptable. The figure was just 28 percent in early April, 44 percent in late June. And now it's up to 52 percent. The majority of Americans, the majority, say unacceptable number of casualties. Now, that is really driving down the president's ratings. That's hurting him. That is where the damage is coming from.
The issue to most Americans isn't, was there flawed intelligence? It's, why are so many Americans getting killed?
HOPKINS: So how do you think this is going to play out?
SCHNEIDER: Well, I think, in the long run, it could be a problem for the president. And the long run means next year, when he runs for reelection.
I don't think the flawed intelligence debate is going to turn Americans against the war. There's a good reason for that. Over two- thirds of Americans are convinced that Saddam Hussein had the weapons of mass destruction all along. The evidence for that? Well, he refused to cooperate, or he was reluctant to cooperate with U.N. inspectors. And that's prima facie evidence that he had something to hide, to most Americans.
But if the casualties continue to mount -- and they've been about one a day since the war ended -- and if the situation on the ground in Iraq continues to be out of control or chaotic, then a lot of Americans are going to say, what are we still doing there? And they're becoming already more and more critical. Once the public turns against the war, then the question is going to be raised, hey, how did we get into this mess in the first place? And that's when the issue of flawed intelligence will begin to matter.
HOPKINS: But that means that this has to kind of stay in the news for a year. Is that likely?
SCHNEIDER: Much depends on American presence over there. The secretary of defense said we could be there for a year. We could be there for more than a year.
HOPKINS: No, but I'm talking about the flawed intelligence issue, that it kind of remains there in the foreground or the background.
SCHNEIDER: The flawed intelligence issue, unless this story goes somewhere, is likely to fade out of the news. But the continuing U.S. presence in Iraq will stay in the news. And, at some point, when people begin to get angry about that, if more -- tragically, if more Americans suffer, if there are more casualties, then they're going to say, hey, wait a minute, how did we get into this? And then the flawed intelligence issue will come rushing back into the news.
HOPKINS: Thanks, Bill Schneider.
SCHNEIDER: Sure.
HOPKINS: The other big international issue facing President Bush tonight is Liberia. Today, the United States said it has deployed four aircraft and 100 troops to Senegal and Sierra Leone in West Africa. The force will support a team of U.S. military experts already in Liberia. Those experts are assessing security needs to help the president determine whether or not to deploy hundreds of U.S. peacekeeping troops.
Still to come tonight: Tropical Storm Claudette gaining strength and setting her sights on the Lone Star State. Max Mayfield of the National Hurricane Center will be our guest.
And later: "Food Fight," our series of special reports on genetically engineered food, what we know and what we don't about the food we eat.
(COMMERCIAL BREAK)
HOPKINS: Gas prices continued to climb this summer. The average price of a gallon of gas is up more than 11 cents, compared to a year ago. In just the last three week, the average price of a gallon is up a penny to $1.52. That's according to the latest Lundberg survey. If you're looking forget a better deal, Charleston, South Carolina boasts the most affordable gas in the country at $1.36, while Honolulu, Hawaii, is the most expensive at just under $2 a gallon.
Stock prices also continued their rise this summer. Today, the Dow rose 57 points. The Nasdaq gained 20. The S&P added 5. While the gains were solid, Wall Street did close well below its high for the day.
Christine Romans is here with the market -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, Jan, there were some upgrades of some Dow stocks, among them Merck, Johnson & Johnson, Intel. The financial earnings looked decent for the day. And there were two notable deals today.
We'll start with the earnings. Credit cards and mortgages helped profit at Citigroup and Bank of America. And Citigroup raised its dividend 75 percent to 35 cents and said it favors shifting compensation to restricted stocks from options. Now the deals: OfficeMax shares rallied 19 percent on news Boise Cascade will buy that company for just over $1 billion dollars. And Yahoo! will pay $1.6 billion in cash and stock for Overture Systems.
Now, volume today was average, 1.4 billion shares trading at the Big Board, two-thirds of that volume at higher prices. And 295 stocks hit 52-week highs, among them, American Express, Citigroup, J.P. Morgan, Hewlett-Packard, Compaq, Caterpillar, and Merrill.
Now, Jan, the Dow had been up 159 points at its best today. That was a one-month high. There was some selling in a thin futures pit. That spooked the rest of the market in the last hour. Traders said the market was spooked because it's a very busy week ahead, investors pretty quick to lock in their recent profits. Alan Greenspan testifies tomorrow and Wednesday on Capitol Hill on the economy. And dozens more companies will report their quarterly earnings. There's also a retail sales report and CPI this week, so a lot ahead of us. It's just Monday.
HOPKINS: Thanks, Christine Romans.
And still ahead, there's a storm front coming and Texas is getting ready. We'll have a live report on Tropical Storm Claudette as she gains intensity and aims for land.
And then Kobe Bryant in his own defense -- the basketball player speaks out.
Many of you wrote in about the president's State of the Union address, Iraq, and matters of intelligence. We'll share your e-mails.
(COMMERCIAL BREAK)
HOPKINS: This just in: At least four people have been killed, eight others injured, in a San Francisco traffic accident. The accident occurred when a tow truck crashed off an elevated stretch of freeway in San Francisco. The truck fell onto traffic below. One car was crushed. At least two other cars were damaged.
In other news tonight, basketball star Kobe Bryant is playing defense. Bryant says that he did not sexually assault a 19-year-old woman. Meanwhile, Colorado prosecutors are still trying to decide whether to charge him.
Brian Cabell is in Vail, Colorado, with the latest -- Brian.
BRIAN CABELL, CNN CORRESPONDENT: Jan, it was just two weeks ago today that Kobe Bryant came to Colorado for knee surgery. And it was two weeks ago tonight that the alleged incident took place, but still no decision on whether to file charges.
We talked to the district attorney just about 90 minutes ago. He said he doesn't have a decision yet. He doesn't have an announcement yet. He's hoping to have it in the next couple of days, he says. In the meantime, Bryant, his mug shot was released over the weekend for the first time, after about a one-week delay. And he is speaking up for himself. He spoke to "The Los Angeles Times" by phone over the weekend.
And he said -- quote -- "When everything comes clean, it will be fine. You'll see. But you guys know me. I shouldn't have to say anything. You know I would never do anything like that. Man, there's a lot of crazy stories out there."
Friends of the alleged victim are speaking up for her. One of them appeared on ABC this morning and said, yes, the girl had had emotional problems in the past.
(BEGIN VIDEO CLIP, "GOOD MORNING AMERICA")
STARLENE BRAY, FRIEND OF ALLEGED KOBE BRYANT VICTIM: Yes, it's true. She did seek some medical help. She knew that she needed it, so she went and got it. I don't think it has anything to do with what happened that night. I think that was solely just something that came about, has nothing to do with her psychological abilities.
(END VIDEO CLIP)
CABELL: Another friend went on NBC this morning and said she had talked to the alleged victim in the last few days and said the alleged victim had said -- quote -- "He went the whole way," referring to a sexual encounter, the alleged sexual encounter, with Kobe Bryant.
CBI, the Colorado Bureau of Investigation, is now analyzing all the evidence that's been submitted to them, physical evidence, DNA evidence. Some of those tests have been completed, sent back to the sheriff's office here. Some have not. But we've been told by an official there that they hope to have all of those tests completed by this week. And, again, the latest from the prosecutor's office here, the DA's office, they are hoping to have a decision and an announcement on whether to file charges some time this week, perhaps in the next two days -- Jan.
HOPKINS: Brian Cabell in Vail, Colorado.
Tonight, a manhunt is under way in West Virginia. Police are searching for this man caught on store video cameras. They say that he stalked and molested an 11-year-old girl this weekend after telling her he was a security guard.
A violent confrontation between Rhode Island State troopers and members of the Narragansett Indian tribe. Police raided a shop selling tax-free cigarettes. People were thrown to the ground by police. The tribe wants those arrested to be returned to the reservation.
Take a look at these waves rolling in, in Galveston, Texas. Tropical Storm Claudette -- we'll see it in a minute -- is closing in on the Texas coast. It is expected to gain hurricane strength by tomorrow afternoon. People in Texas are preparing for the storm's arrival. And we will have a live report on Tropical Storm Claudette from the coast coming right up.
Firefighters are battling a raging wildfire in Arizona tonight. The 1,500-acre blaze was sparked by lightning yesterday. It is very close to the scene of last year's wildfire, which destroyed nearly a half-million acres, close to 500 buildings and homes.
Now for a look at some of your thoughts. Many of you wrote about President Bush's disputed claim that Iraq sought African uranium.
Kitty from Tennessee wrote: "I don't think it was such a big deal. We all know that Saddam is dangerous. And people who have defected to the United States have said that Saddam was working on all kinds of dangerous weapons."
William Hamilton of Holiday, Florida, said: "All of those Democrats and the news media are beating a dead horse over the 16 words. I feel that justice was done. End of story."
Joseph Florio disagreed: "It seems to me that the statement in the president's State of the Union speech that Africa was involved in making WMDs was made by our president, not by George Tenet. Even if he was to blame for the error, it was our president who told us that lie."
Bruce Cooke from West Yellowstone, Montana, asks: "Let me get this straight. It's not the president's fault because his staff gave him the wrong information?"
And, finally, Daniel McRae from Burbank, California, asks: "Is Mr. Bush trying to convince us that he's just a speech reader and doesn't really know if what he's saying is the truth? Mr. Bush should stop trying to evade responsibility for inaccuracies in his speech and remember the sign on Harry Truman's desk in the Oval Office: The Buck stops here."
We love hearing from you. You can send us your thoughts at LouDobbs@CNN.com.
When we return: Tropical Storm Claudette is picking up steam and strength as she heads for land. Max Mayfield of the National Hurricane Center will join us.
And then, how much do we really know about the foods we eat? A special report on genetically engineered foods.
And health advocates are raging about vending machines. But plans to fight obesity could hurt the schools, as well as help the children. Kitty Pilgrim will have that report.
(COMMERCIAL BREAK)
HOPKINS: Two-hundred miles of the Texas coast are under a hurricane warning tonight. Tropical Storm Claudette is expected to reach hurricane strength tomorrow. Forecasters still aren't sure where Claudette will come ashore.
John Zarrella is in Corpus Christi, Texas, with the latest.
John, what are the conditions right now?
JOHN ZARRELLA, CNN MIAMI BUREAU CHIEF: Well, Jan, it's a beautiful early evening here in Corpus Christi. And that's one of the tough things that hurricane forecasters have always to deal with, is the beautiful days leading up to hurricanes, getting people convinced that there's really trouble lurking out there.
But, in fact, here in Corpus Christi, the people have been taking it extremely seriously. We're at the marina. And all day long, folks have been, to use that cliche, battening down the hatches, tying up their coasts, securing them, just in case Claudette should come this way. There is a sailboat behind me here named the Hazy Moon. And it may well be that way tomorrow night. But, tonight, it will probably be a beautiful, clear full moon here again in Corpus Christi.
And, as I said, people are taking it very seriously. Early today, the Home Depot here in Corpus Christi was already packed with people who were buying plywood, loading up their cars, getting ready, and preparing to go home and start boarding up. The catch phrases here are, better to be safe than to be sorry. People are taking no chances. Others began boarding up very early, all up and down the Texas coastline, people saying they just want to be ready. They've been through a lot of hurricanes and near misses. And they're just not going to take any chances this time around, even though Claudette is still just a tropical storm.
And up the coast in Galveston, a little heads-up, an early warning that Claudette is coming. A couple of water spouts were spotted off the Galveston coastline there, and again, just a little warning that Claudette is lurking out there, and, as you said, not quite sure exactly where the storm will make landfall, but it is clearly heading towards the Texas coastline.
Here, again, in the area of Corpus Christi, emergency managers and a lot of folks worried, particularly about the threat from inland flooding. This might not be a real wind maker of a storm, but it may well dump a lot of rain. And they have had a lot of rain here in the past six months or so. So it could very well be a serious problem if Claudette moves slowly. This is John Zarrella, reporting live from Corpus Christi, Texas -- Jan.
HOPKINS: Thanks, John.
Later in the program, we will have more on Tropical Storm Claudette from Max Mayfield, director of the National Hurricane Center in Miami.
From a tropical storm to a storm of controversy over food. Tonight, we begin a series of special reports on genetically modified foods. We begin with a look at how much bioengineered food we're eating and how it's made its way to our stomachs in our series "Food Fight."
(BEGIN VIDEOTAPE)
HOPKINS (voice-over): Noisy protests in Europe over genetically modified food. For the last five years, Europeans have banned what some call Frankenfood.
Yet farmers in this country have quietly embraced the new technology. According to the USDA, 80 percent of soybeans grown in the United States are now genetically modified; 34 percent of the corn grown here is bioengineered.
John Reifsteck of Illinois saves money because science is able to breed soybeans that require less weed killer. Without bioengineered crops, his fields would be different.
JOHN REIFSTECK, CORN AND SOYBEAN FARMER: We find more pesticides being used. You'd find more soil erosion. And who would benefit from that? Certainly not the consumer and certainly not the environment.
Reifsteck and farmers around the country have been planting genetically modified crops since the mid '90s. According to the Grocery Manufacturers of America, as much as 3/4 of all processed foods on store shelves now contain some genetically modified element, either directly or through products such as animal feed.
JOSEPH ECKER, SALK INSTITUTE: Genetically modified food is a term that's used for the alteration of genes to create new varieties of plants. Some examples are alterations of the cold tolerance of a plant or the pest resistance of a plant.
HOPKINS: There are groups in the United States that raise questions about the safety of food that's genetically engineered. They worry about what might happen down the road.
RICHARD CAPLAN, USPIRQ: Because many of these crops contain genes that encode for resistance to antibiotics, that there may be a problem with exacerbating the problem of antibiotic resistance. HOPKINS: The U.S. Agriculture Department approves all genetically modified crops. The Food and Drug Administration is responsible for our food. The FDA asks companies to submit information about new food products, but this is voluntary, not required by law.
JIM MARYANSKI, FOOD AND DRUG ADMIN.: Our responsibility for new products is to ensure that they are safe and comply with all the requirements of the law.
HOPKINS: In Europe, trade talks now center around whether bioengineered food should be labeled.
So despite the widespread acceptance of bioengineered crops in this country, farmers still worry whether they'll be able to sell what they grow at home and abroad.
(END VIDEOTAPE)
HOPKINS: Tomorrow we continue our series of special reports on genetically modified foods. Casey Wian looks at whether bioengineered food is safe to eat and what risks it may contain.
That brings us to tonight's poll: "Would you knowingly eat genetically modified food? Yes or no?" Cast your vote at cnn.com/lou. And we'll bring you the preliminary results later in the show.
Now the final results of Friday's poll question. We asked: "Which story held your interest the most last week?" Sixty-two percent of you said questions about WMD; 5 percent said President Bush in Africa; 23 percent said U.S. troops under fire in Iraq and 10 percent said the sausage knockdown.
Coming up, from turning over a new leaf at "The New York Times" to turning profits on Wall Street. The editors of the nation's business magazines join us for our weekly "Editors' Circle." That's next.
And then, the cost of fighting fat in schools. Why health advocates are targeting vending machines. Kitty Pilgrim will have that report.
And a controversial new movie stirring up trouble before it even hits the big screen. We'll tell you why coming up.
(COMMERCIAL BREAK)
HOPKINS: Joining us now is Max Mayfield. He is the director of the National Hurricane Center in Miami.
Max, what can you tell us about tropical storm now Claudette?
MAX MAYFIELD, DIRECTOR, NATIONAL HURRICANE CENTER: Well, it's a strong tropical storm. The maximum sustained winds are about 65 miles per hour. We think that we will see some additional strengthening and it could very well become a category 1 hurricane by the time it gets to the coast tomorrow.
HOPKINS: Any idea where it might hit?
MAYFIELD: Well, our forecast has it moving west northwestward. And the hurricane warning goes up from Baffin Bay, Texas, up to High Island, Texas. So people really within that hurricane warning area need to treat this with a great deal of respect and prepare for a category 1 hurricane.
If the track goes a little bit to the north, it will be in the -- closer to the Galveston area. If it goes a bit to the left of our track, it will be closer to Corpus.
HOPKINS: And what kind of damage could be expected? John Zarrella was talking about a lot of inland flooding. But I would assume there would be other things as well.
MAYFIELD: Well, we really don't want to overdo this. I mean, this is certainly not a major hurricane. In fact, it's not even a major -- not even a hurricane yet. It's a strong tropical storm.
But at the same time, we really don't want to minimize this,, because even in strong storms or weak hurricanes we often do have loss of life. Our main concern right now is with the marine community, the small boats on the coast, the swimmers and the surfers. And then as it moves on inland, we would expect three to five feet of storm surge, five to eight inches of rainfall. There will be some tornadoes, in all likelihood as the system moves inland in the next 24 hours or so.
HOPKINS: And your best guess again for when it might hit?
MAYFIELD: Well, the center should be approaching the coast tomorrow afternoon. If it goes a little bit to the right of our track, it will be early afternoon just because the orientation of the Texas coastline. If it's a little bit to the left of our track, it will be later tomorrow afternoon. But people need to understand that there is a developing tropical storm out there that is headed toward that hurricane warning area and listen very carefully to their local officials.
HOPKINS: Thanks very much. Max Mayfield of the National Hurricane Center. I'm sure we'll be talking to you again.
MAYFIELD: OK. Thank you.
HOPKINS: The argument over fraud on Wall Street broke wide open today, and the issue had almost nothing to do with Wall Street. It's a power struggle between state attorneys general, led by Eliot Spitzer of New York and Congress. Peter Viles has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNNfn CORRESPONDENT (voice-over): After all he did to crack down on wall street shenanigans, it's no wonder Eliot Spitzer has a few enemies these days. The surprise is that Spitzer says his enemies are in Congress and they're trying to take away his power to police Wall Street.
At issue: this amendment written by Congressman Richard Baker of Louisiana. It prohibits states from enacting rules, settlements, or agreements that would force Wall Street to change its behavior, leaving all rulemaking and dealmaking to William Donaldson and the Securities and Exchange Commission. Spitzer and his peers are outraged.
WILLIAM GALVIN, SECY., COMMONWEALTH OF MASS.: There is an effort now under way in Washington, led by the securities industry, to eliminate the role of state regulators. As absurd as it sounds, at a time when the state securities regulators have consistently demonstrated their ability to root out corruption in the industry.
VILES: Baker's staff insists that's not the case. Quote: "He in no way wants to limit states from pursuing wrongdoing. But at whatever point that they decide they're going to become rulemakers for national marketplaces, they need to consult with the feds."
Spitzer, never one to shy from a fight, called on Donaldson to join him in fighting the amendment.
ELIOT SPITZER, N.Y. ATTORNEY GENERAL: Mr. Donaldson, today I'm calling on you to stand up loudly and clearly, reject this amendment. Say it is not good for the public. Say it is not good for investors. Say it is not good for the integrity of the marketplace. If you do not do that, then I will have to draw the conclusion that you have not learned the lesson of the last five years.
VILES (on camera): Strong words as usual from Eliot Spitzer. And what did the SEC have to say in response? Well, this amendment has been circulating now for six days. But the SEC had no immediate comment on Eliot Spitzer's challenge.
Peter Viles, CNN, New York.
(END VIDEOTAPE)
HOPKINS: "The New York Times" has named a new executive editor to replace Howell Raines. Bill Keller, who lost out to Raines for the top spot two years ago, will take over later this month. Keller is a Pulitzer Prize-winning reporter who currently writes for the "Times" editorial page and Sunday magazine. Raines resigned last month in the wake of the Jayson Blair scandal.
The top editors of the leading business magazines are here for our weekly "Editors' Circle." Jim Ellis is the chief of correspondents at "BusinessWeek," and Rik Kirkland is the managing editor of "Fortune." Welcome to both of you. First of all, this fight between the state attorneys general and the SEC, is there anything to it?
JIM ELLIS, "BUSINESSWEEK": Well, I think it looks like sort of a classic power play between the feds and the state AGs. I think in this case, though, the state AGs definitely have a higher ground, which is that if the SEC had been as vigilant as a lot of people seem to think that they ought to have been, then we wouldn't have had a lot of these scandals out there. And it really did take the push of the state AGs, particularly Eliot Spitzer, to get this thing done.
And therefore, I think it's sort of silly to say that they shouldn't be able to actually make rules.
RIK KIRKLAND, "FORTUNE" MAGAZINE: In theory you can make a case that you need centralized rulemaking, but I agree with Jim. The reality of the last year -- Harvey Pitt was making the same argument last summer. Remember him?
HOPKINS: He's not there anymore.
KIRKLAND: And he's not there anymore. So I think Spitzer's got the high ground here.
HOPKINS: Let's talk about the market, because we've really had quite a rally, really since the end of March. And now we're starting to get some evidence that investors have been waiting for, and that's earnings.
ELLIS: I mean, we've really had a good rally, but it has been a rally that people have basically just sort of bet that they were going to have something to back it up. I mean, the tech stocks are up about 30 percent for the year. The S&P is up about 20. And now we've got to have some earnings to back it up. And I think that the market was extremely enthusiastic earlier today when the financial companies came out with good earnings, B of A and Citigroup.
And I think that the problem we saw earlier in the day was a lot of people got ahead of themselves. The market was up over 100 points, and everybody was saying this is it, this is it. But over the next two weeks we have a lot of very large companies coming out that aren't in the financial sector and don't have a lot of the good sort of fundamentals that the financial sector has going for it.
So that will really tell the tale, and I think investors sort of picked that up later in the day, as well as something in the futures markets that pulled the market back. But I think it's still too early to say that the market's taken off.
KIRKLAND: Yes, I would say -- I don't think this is a bubble as some have characterized it, but it does feel a little bubblecious (ph), if I can use that term. Part of the problem is that the shorts are all on the run. There is still a fair number of people out there who think this market's gotten ahead of itself, but it's very hard to bet against it right now. Part of this is you've got M&A fever picking up again now. I mean, today you had Boise Cascade paying cash for OfficeMax...
(CROSSTALK)
HOPKINS: Which makes a lot of sense. You have a paper company buying the distributor.
KIRKLAND: You (UNINTELLIGIBLE) you push the paper. I mean, probably like all mergers it will end in tears and the acquirer will lose value for its shareholders. But the point is, CEOs are buying up undervalued properties or value plays like OfficeMax for cash, and then you've got Yahoo! using its high-flying Internet multiple to buy this Overture Services, because they're afraid of the challenge of Google. So if you're out there thinking these companies are overpriced and yet somebody's going in and making a deal, you get killed. So I think the shorts are sort of on the run right now. This thing could go up a little more, but I'm not sure the fundamentals are there yet.
HOPKINS: Are you surprised at how fast investors have come back? I mean, we've talked about how unforgiving investors are going to be for a very long time.
ELLIS: I have to admit I am surprised. I sort of think that investors have extremely short memories. And a lot of people just don't like to be left behind. A lot of people, you know, it's the old thing, don't fight the tape. I mean, they want to run behind stocks. And it's very difficult now to not try to make up some of the losses that you had earlier in the year.
KIRKLAND: I would also, though -- I mean, they come back, but you remember, they've been down -- we've been down for over two years here, so you know, if you believe -- I'm not sure if this is a bear market rally, but I think, you know, it's typical after the market goes down 60, 70 percent, to run back up for a while, and then we'll see if we can hold on to it.
So I think individuals are still -- I mean, there are signs, they're coming back into mutual funds and so on. But a lot of people are still wary. So we'll see.
ELLIS: The place I wouldn't want to be right now is in the bond market.
(CROSSTALK)
ELLIS: It's very difficult to figure out exactly where you should be, but I think that for most people, particularly for small investors, it's a place to avoid right now. And unfortunately, I think the danger that we have from what's happening in the bond market now is that a lot of people who are dependent on refinancings to pump new money back into their own personal balance sheets, and that's helped keep the economy going, that's going to sort of stall out now. I think that unfortunately, refinancings are sort of like -- we've definitely hit the high on those.
HOPKINS: Well, and also the bond market went so high on price and low on yield that now you're having the reverse.
ELLIS: Yes, I think...
KIRKLAND: That's part of why the stock market is up, because people think, well, I can't live with these low returns, I've got to go make some bets. But as we've learned over the last few years, you can also just lose money. So sometimes lower returns are better than losing money.
HOPKINS: What's your sense of what's going on in the economy? Is it bad or getting better or worse or what?
KIRKLAND: It's this mixed picture. I think that it's -- you know, we've had three years of waiting for the second half to save us. And I think this second half looks better than the other ones. But the big question is business spending, and everybody I talk to, the CEOs are still not making big bets. And until they do, it's a chicken and egg thing. The economy can't really come back.
ELLIS: There's just no reason for people to really get off the dime and start doing heavy business spending just now. I mean, the market's positive. I mean, that's a good thing. And Alan Greenspan is extremely accommodative. The problem is that why should you, if you've really gotten productivity gains out of your employees, why should you go ahead and make new investments? You don't have to add staff, you don't have to add new plant and equipment, and you can still make money.
That's the real danger. And that has to change, or else the economy never will get very far, especially if consumers aren't going to be able to monetize the amounts of money in their homes.
HOPKINS: What about what's going on politically and in Iraq? Is this going to have an effect on the economy, on consumer confidence? What do you think?
KIRKLAND: It doesn't help. We've learned in the past week and a half or so that we're spending twice what we thought we were on the occupation over there. And remember, I think people forget this, that's not even in the budget. This $400 billion deficit doesn't count the $60 billion or so we're going to be spending between Iraq and Afghanistan. So I think it doesn't help consumer confidence, but you know, the immediate economic impact is not that heavy.
ELLIS: I actually think that what's going on with Iraq right now is actually very dangerous for the economy, simply because it's going to put a lot more attention on the economy at the election time. I think that what happened was that a lot of people thought, OK, we're beyond that, and instead we're not beyond, and every time we see -- it makes security not look like it's such a set issue as it was before. You know, maybe we didn't win the war...
KIRKLAND: It's not a winning issue.
ELLIS: Yes, maybe we didn't win the war, so therefore I've got to talk about the economy, and the economy's the one thing the administration doesn't want to talk about right now.
HOPKINS: We have to end it there. Jim Ellis and Rik Kirkland.
And when we come back, rage against the machine. Are vending machines to blame for adolescent obesity? Kitty Pilgrim will report.
And you could call him a shell of a man. One man who has saved more than 1,200 turtles from uncertain future.
(COMMERCIAL BREAK)
HOPKINS: An upcoming movie from Miramax and Disney is causing controversy even before it hits theaters. "Buffalo Soldiers" is a fictional account of U.S. Army clerks who take up drug running and other criminal activity while stationed in late Cold War Germany. The film's portrayal of U.S. troops and the timing of its release are being criticized. Miramax first bought that film the day before September 11 and has shelved it ever since.
Disney took in a pirate's booty at the box office this weekend. "Pirates of the Caribbean," the movie based on the Disney theme park ride, earned $46.5 million at the box office. "The League of Extraordinary Gentlemen," starring Sean Connery, was second on the list, earning $23 million. And last weekend's No. 1 movie, "Terminator 3," came in third with $19 million. "Legally Blonde 2" and "Finding Nemo" rounded out the top five.
Too much time spent watching movies and television may be one factor in the rise in childhood obesity in this country. Another target of blame: soft drinks and the vending machines that make them so easily accessible in many schools. Now some educators are making an effort to make some changes. Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): A recent survey of New York kids from kindergarten to fifth grade shows 43 percent of them are officially fat and nearly a quarter of them obese.
Nationally, children are getting fatter, especially over the last 10 years. Some public schools in cities across the country are increasing pressure to limit vending machines on school grounds.
A recent health survey by Cornell University found excessive consumption of soft drinks could end up replacing milk consumption and increasing the number of calories in the diet. Over time, that leads to weight gain.
Some obesity specialists say a little soda is OK, but argue for vending machines with nutritional choices.
DR. RONALD KLEINMAN, CHIEF PEDIATRIC GASTROENTEORLOGY MASSACHUSETTS GENERAL HOSPITAL: Like all foods that potentially can contribute to obesity, those foods ought to be taken in moderation, particularly those foods that are rich in calories and pretty low in all the other nutrients, like a can of soda.
PILGRIM: Many schools are reluctant to give up vending machines because they generate significant revenues for schools, money often used for extracurricular activities. Senator Patrick Leahy has a problem with that and has co-sponsored legislation to restrict the sale of soft drinks in schools.
SEN. PATRICK LEAHY (D), VERMONT: Some schools are terribly addicted to it. They use the money for their sports program, even for some of the scholastic programs. At some point parents have got to wake up, that we, all of us in the community, and we shouldn't be saying that the only way we're going to fund it is to make sure we do something that's going to hurt our kids' health.
PILGRIM: Beverage companies are increasingly working with schools to stock vending machines with bottled water and juice. Yet another solution, tried in California and other places, is to put soda machines on a timer, turning them off during lunch hour.
(END VIDEOTAPE)
PILGRIM: The solutions are not easy, and for that reason there's no real national approach to how to handle it. It's a fight that's being fought in individual districts around the country -- Jan.
HOPKINS: Thanks, Kitty.
When we come back, the results of tonight's poll.
Plus, a man who was a friend of more than 1,000 turtles.
And it was sweet revenge for three mascots after last week's attack on a fellow mascot.
(COMMERCIAL BREAK)
HOPKINS: Call it mascot revenge or the attack of the killer dills. These minor league pickles were out to settle a score this weekend in Kentucky. Last week, one of their fellow mascots, an Italian sausage, was whacked with a bat in Milwaukee.
Finally tonight, he calls it turtle love. One man who has made a home for over 1,000 turtles. Jeanne Moos has that story.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Ever yearn for a turtle when you were a kid? How about 1,200 turtles? An entire Manhattan loft crammed with tanks full of them.
Richard Ogust calls himself a turtle conservationist.
RICHARD OGUST, TURTLE CONSERVATIONIST: But I'm also pretty nuts about turtles.
MOOS: He's nuts about the one that looks like an albino anteater. He's nuts about the snake neck.
OGUST: These guys are almost extinct.
MOOS: And he's really nuts about his favorite, Oscar, as in Oscar Mayer wieners.
OGUST: She was brought to us as a blind turtle that someone had raised on frankfurters. MOOS: Malnutrition by hot dog left Oscar blind, though her vision is improving with proper diet. The turtles here do seem to eat well, from fish ...
UNIDENTIFIED FEMALE: Oh, here he goes. There we go.
MOOS: ...to cantaloupe worth fighting over, to lots and lots of lettuce.
(on camera): Did you hear what the one turtle said to the other turtle?
OGUST: I did.
MOOS: I'll have a BLT but hold the B and the T.
(voice-over): Their names are unpronounceable.
OGUST: He's a uwanawai (ph). This is called a quoromaquondi (ph). She's qund (ph), and she's un (ph).
MOOS: Richard bought some of the turtles. Some he rescued. Some are endangered species confiscated by authorities.
He still has his very first turtle. She was about to become part of the seafood buffet at this Chinatown restaurant. Richard spotted her in the tank and was fixated.
OGUST: I got her for 20 bucks. They started to take her back to the kitchen to chop her up and put her in a bag for me. I said, no, no, no, no!
MOOS: He took her home and a friend named her Empress. That was nine years ago, 1,200 turtles ago. And the turtles Richard collects keep reproducing.
UNIDENTIFIED FEMALE: We have turtle love happening here.
MOOS: The male bites the female's neck to keep her in position.
Speaking of lovers, turtle lovers help fund this operation. There are plans to move it to a 50-acre site in New Jersey.
The highlight of our tour was hand-feeding figs to Burmese turtles.
(on camera): Is there a technique so I can keep my fingers?
OGUST: That's the technique.
MOOS (voice-over): Now if only he'd practiced it.
OGUST: Ow. That hurt.
MOOS (on camera): I mean, does it cut?
OGUST: I was really lucky.
MOOS (voice-over): Richard would never dream of eating turtle soup. But turtles apparently can't resist finger food.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
HOPKINS: That's our show tonight. Thanks for joining us. For all of us here, good night from New York.
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