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Cost of Gas Expected to Spike; Big Day for Jackson Trial

Aired March 09, 2005 - 14:30   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.


KATHLEEN HAYS, CNN CORRESPONDENT: What really caught people's attention this week is something we've been talking about on CNN for the last couple of days, and it's this forecast from the government itself. The Energy Information Administration forecasting that the price of gas is going to average about $2.15 a gallon by spring. Now, that's up from around $2 right now.
And some people will say, come on, adjust it for inflation. Then the peak was back in 1981, when the price of a gallon of gas, again, adjusted for inflation, over $3. However, we spoke to Phil Flynn, who is an oil trader, oil analyst at Alaron Trading out in Chicago, and Phil says the EIA estimates are always on the low side. He's adding on at least 15 cents. He thinks the price of a gallon of gas could get to $2.30 by this summer. And that's a lot closer to that $3 a gallon inflation adjusted peak from so many years ago.

And, of course, what's going on? You say, well, but don't we have lots of oil in the world? Isn't OPEC producing near capacity? Well, yes they are, but right now, of course, the East, the Northeast hit by a cold snap towards the end of the winter. It wasn't expected. The dollar is going lower. And that's forcing the speculators to dump their dollars and buy oil right now to make money. The speculators are playing a role in this run-up in crude oil prices we've been talking about as well.

Step back, though, and there is a big picture. It's not just the cold weather, it's not just speculators. Can you say 800-pound gorilla? China. China's demand is increasing by 200,000 barrels a day. That is not expected to go away anytime soon unless China were to fall, say, into a deep recession. People don't see that right now. India, a growing economy, also consuming more energy, also consuming more oil. All these things are coming together.

And finally OPEC, basically telling us in the last couple of weeks that they're fine with oil in this $40 to $50 a barrel range. We're over that now. But they don't want to boost output right now because they feel they have -- they're afraid that if there's any pullback in demand, they're going to be stuck with too much oil and see the price plummet. So they are not going to boost production. That's the latest from OPEC.

Phil Flynn said, in fact, that he thinks the new range for oil, he was thinking $50 to $55 a barrel. He thinks maybe it's $55 to $58 a barrel. So a lot of analysts are saying we could easily see $60 a barrel. So Kyra, the message is, the high gasoline prices volatile, but probably those low prices are a thing of the past. At least for a while. KYRA PHILLIPS, CNN CORRESPONDENT: Well, now, Kathleen, many people at home, regular viewers, might be sitting here thinking, OK, you mentioned China, India. You can talk about the strike in Venezuela. But what about Iraq?

HAYS: Iraq is certainly a factor and certainly Kyra, day to day, if a pipeline gets blown up in Iraq, if there's a strike in Nigeria, a very important oil producer, that will buffet the oil prices. But again, people say the big picture, the reason why people step back and say look at this year, look at the next five years, why the president's talking about finding a solution, why everybody is, because global demand is growing. Even when Iraq comes fully back online, global demand will still be growing and that's why they look for this long-term up trend in prices.

PHILLIPS: Kathleen Hays, thank you so much.

(STOCK MARKET REPORT)

PHILLIPS: We're going to take a quick break, we'll be right back.

MILES O'BRIEN, CNN ANCHOR: Welcome back to LIVE FROM. I'm Miles O'Brien in our Washington news room today.

PHILLIPS: And I'm Kyra Phillips in Atlanta. Here's what's happening now in the news.

Threat level, elevated. The U.S. consulate in the Saudi city of Jeddah is reinforcing its general warning to Americans living there and urging them to steer clear of a certain housing area. A December attack on the Jeddah consulate was claimed by al Qaeda.

The stories still don't match up. Italy's prime minister tells the Senate today that he feels confident that a joint investigation will determine who's accountable for the death of an Italian special agent in Iraq. The agent died while taking freed journalist Giuliana Sgrena to the Baghdad Airport. Sgrena tells one account of what happened. The U.S. military, who fired on their car, tells quite another.

President Bush going back to Ohio, trying to revive his clear skies energy plan after it stalled in the Senate. He's in Columbus promoting so-called clean-coal technology, alternates to conventional energy sources. Despite rising gas prices, the White House says the president has no intention of tapping into domestic petroleum reserves.

And look who's smoking again. They're trying to get a better look inside the crater of Mount St. Helens. Right now as we speak, after yesterday's seven-mile high belch of ash and steam, scientists say not to worry, but that mountain, as we all know, is full of surprises.

O'BRIEN: On the stand this week in the Michael Jackson trial, teenage brothers, one of whom says the pop star molested him, the other says he saw it happen.

Let's bring in former U.S. attorney Paul Butler, now a law professor at George Washington University. Paul, good to have you back with us.

PAUL BUTLER, LAW PROFESSOR: Nice to be here, Miles.

O'BRIEN: A lot of inconsistencies being brought up by Tom Mesereau, who is leading the defense there for Michael Jackson. It seems to me, there are probably a lot of people on the jury who are building a bit of a credibility gap in their minds over these accusations.

BUTLER: Well, the jurors realize that this just a fraction. It's the second week in what's going to be a five or six-month-long trial. But at the same time, this should be the government's show. It's the chance to put on its case without much interference from the defense, and it's not doing as well as you'd expect.

O'BRIEN: And some of these inconsistencies, when you look at them individually, they might seem sort of petty. For example, an adult magazine, which was published after the time when the accuser was at the Neverland Ranch, was brought in as evidence in testimony. But the point is that these magazines were there. But nevertheless, these little things and changes about access to wine cellars, all these little details, all of those things kind of add up, don't they?

BUTLER: Exactly. Again, none of them standing alone is all that significant. But what we have here is death by 1,000 cuts. It's very unusual to have an eyewitness to a sex crime. So, again, this should be the government's best effort. And yet this witness, the brother, is ending up damaging the government's case.

O'BRIEN: And after the brother testifies, we expect to hear from the accuser himself. Presumably, if you are Tom Sneddon and the prosecution team, you are doing some additional homework, schooling this particular witness, to make sure the same traps are not stepped on.

BUTLER: You're doing what you can. But again, a lot of his testimony has been preserved earlier. And if he, like his brother, is going to contradict himself or now say he doesn't remember things that he claimed to remember before, the prosecution's going to have the same issues with him that they had with the brother and sister.

O'BRIEN: So those depositions really do come back to haunt them?

BUTLER: Well, you know, they're one side or the other's best friend because they lock in testimony. And if someone contradicts themselves, the famous line from a lawyer is, well, are you lying then, or were you lying then or are you lying now? When are you telling the truth?

O'BRIEN: You know, it makes me wonder, if we're getting to the brother and accuser very shortly, perhaps as early as today, what lies ahead over the next five months? BUTLER: Well, again, the star witness will obviously be the accuser. So, that person will come in, and his credibility will be the most important. Again, jurors are forgiving. They understand that these are teenagers who have been through a traumatic experience, whatever happened. So, they're not going to be all that concerned about minor inconsistencies, but they'll look at the whole thing. You're absolutely right. We've got four or five months to go.

O'BRIEN: Wow! All right.

Former U.S. attorney, now law professor at George Washington University, Paul Butler. Thanks, as always. Appreciate your insights.

BUTLER: You bet.

O'BRIEN: Kyra.

PHILLIPS: Straight ahead, two more cases of identity theft to warn you about. In one of the cases, hundreds of driver's licenses were stolen right out of a DMV office. Details on both cases coming up.

Wondering what to get the couple who has everything as a wedding present? How about a commemorative stamp?

SIBILA VARGAS, CNN CORRESPONDENT: And I'm Sibila Vargas in Hollywood.

It's twins for Joan Lunden. Ed McMahon is on the mend. Ellen Degeneres feels better, and Elton John is in bed. I'll have the details when CNN's LIVE FROM continues.

(COMMERCIAL BREAK)

O'BRIEN: Here's what's happening across America this hour.

What can bad guys do with 1,700 fake driver's licenses? Authorities in Nevada are going over the possibilities. Somebody made off with the blank cards, a camera, and a laminating machine. No leads so far.

More crime, the discount shoe seller DSW cautioning customers to watch their credit accounts. Seems over the past three months credit card data was stolen from more than 100 DSW stores nationwide. The Secret Service is on the case.

And what grade would you give the country's infrastructure, if you were doing such a thing? The highways, public schools, airports, public parks and water systems? Well, the American Society of Civil Engineers does that, and it's not impressed. The grade, a D average, on 12 categories of infrastructure. Their report says American quality of life is eroding.

PHILLIPS: Well, illness is a sideline -- or sidelining rather -- a pop superstar, but a couple of other celebs are on the mend. And a lawmaker concerned about poker on television is putting her cards on the table. Let's go to Los Angeles and see what CNN entertainment correspondent Sibila Vargas has up her sleeve.

VARGAS: I'm not wearing any sleeves today, but I'm not going to give my hand (ph) either.

Listen up, all you popular TV poker shows. You're right, Kyra. A New Jersey lawmaker wants you to ante up. Assemblywoman Joan Voss (ph) is asking shows like Bravo's "Celebrity Poker Showdown" and ESPN's "The World Series of Poker" to put their money where their mouth is and start helping people with gambling problems. Voss thinks the easy access to coverage by younger viewers is dangerous. According to the assemblywoman, New Jersey casinos kick in about $600,000 annually towards programs that help gambling addicts. She feels networks should do the same.

Shifting gears, Elton John is having to cancel multiple tours because of doctor's orders.

(BEGIN VIDEO CLIP)

ELTON JOHN, MUSICIAN (singing): Blue jean baby...

(END VIDEO CLIP)

VARGAS: John postponed last night's show in Richmond, Virginia, tonight's performance in Winston-Salem, North Carolina, and he won't be taking the stage Saturday either. We called his publicist a short while ago who told us that the music man has got the flu. She expects Sir Elton to be back on the road on the 18th in Ft. Lauderdale.

And TV talk show maiden Ellen Degeneres is feeling a lot better after undergoing surgery. Degeneres had to get three polyps removed from her cervix. On her talk show, she urged women to get regular checkups and not be afraid of the procedure. Sound advice.

Ed McMahon is also on the mend after celebrating his 82nd birthday in the hospital. The entertainer was treated for a mild concussion and was given stitches for a gash on his forehead after falling from his home in Beverly Hills. McMahon says he plans to follow-up his birthday with a barbecue.

And celebrating of birth of new twins is Joan Lunden. This is the second set of twins for the TV personality. Look at the babies right there. Kimberly and Jack came by surrogate. It's the same woman who delivered the boy and a girl for Lunden and her husband nearly two years ago. Lunden jokes that she feels like she's living in Noah's Ark. She says babies are coming in two.

And Kyra, I don't know, she's got her hands full. I mean, she's got two babies. They're entering the terrible 2's and with these two newborns -- could you imagine?

PHILLIPS: No, it's the terrific 2's. You've got to just change the attitude, Sibila, that's all. VARGAS: Yes, OK, I like that. I'll take your advice.

PHILLIPS: All right, Sibila Vargas, thank you.

Well, it's all things royal coming up next. First posing for postage, something to remember the happy couple by, maybe? Then it's "Diana" -- the ballet. The story of the princess' life debuts just as the prince is about to remarry, a coincidence of timing?

(COMMERCIAL BREAK)

O'BRIEN: As Britain's Prince Charles prepares to wed Camilla Parker Bowles, his first marriage is getting brutal treatment in, of all places, on the ballet stage. Paula Hancocks reports on the last night's premiere of "Diana: The Princess."

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Well, the memory of Diana never ceased to haunt the royal family with the wedding of Charles and Camilla a month away and the postage stamps out to celebrate the occasion, and to "Diana: The Princess," the ballet. A tale of Diana's struggle with Prince Charles and the rest of the Windsor family, staged by the man who is artistic director of the English National Ballet when the princess was its patron.

PETER SCHAUFUSS, PRODUCER & CHOREOGRAPHER: She really loved the dance as an art form. It was really what she had loved and done since she was a young girl. So to celebrate her, I thought it was very appropriate to do it with a dance performance.

HANCOCKS: Schaufuss says Diana used to dance at his studios close to her royal residence whenever she could. His ballet casts Charles as cold and stupid and Diana, played by Schaufuss' wife, as vulnerable. We're not allowed to show the way Camilla is depicted, but the words "dominatrix" and "whip-cracking" could give you an idea.

The production has hardly received rave reviews, "camp classic," according to one critic, "twisted panto (ph)," says another, "naked opportunism," complains a third. But Schaufuss insists...

SCHAUFUSS: I'm not doing a documentary, although it's a serious piece that I'm doing. It also has to be entertainment when you go to a live performance in the theater.

HANCOCKS: As for the audience in Manchester, no doubts about whose side they were on, Camilla and the queen greeted with hisses.

(on camera): The production is here in Manchester for five days. And if all goes to plan, it could then end up in London's West End within about two months; around about the time that Charles and Camilla could come back from their honeymoon.

Paula Hancocks, CNN, Manchester, England.

(END VIDEOTAPE) (STOCK MARKET REPORT)

PHILLIPS: Well, there's much more LIVE FROM ahead from Atlanta and Washington today.

O'BRIEN: Two-city affair. Coming up, why is it so easy for someone on a terror watch list of terrorists to buy a gun? It's outrageous. We'll look at watch lists and how effective or ineffective they are.

(COMMERCIAL BREAK)

O'BRIEN: Checking stories "Now in the News." The future of Social Security, a Congressional committee jumped into the debate today. The head of the Government Accountability Office told lawmakers there is no immediate crisis, but he warned time is working against us. The House Ways and Means Committee is considering various proposals to overhaul the system.

Blowing off steam in Washington State. Mount St. Helens spewing ash nearly seven miles high yesterday. The biggest eruption since volcanic activity resumed in the fall, but not an indicator, say the scientists, that bigger steam bursts are to come.

In Michael Jackson's child molestation trial, the 14-year-old brother of Jackson's accuser facing another day of questioning by the defense. The teen has testified he twice saw Jackson molest his brother. Jackson's attorney is trying to point out inconsistencies between the boy's testimony and earlier accounts that he gave police.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired March 9, 2005 - 14:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATHLEEN HAYS, CNN CORRESPONDENT: What really caught people's attention this week is something we've been talking about on CNN for the last couple of days, and it's this forecast from the government itself. The Energy Information Administration forecasting that the price of gas is going to average about $2.15 a gallon by spring. Now, that's up from around $2 right now.
And some people will say, come on, adjust it for inflation. Then the peak was back in 1981, when the price of a gallon of gas, again, adjusted for inflation, over $3. However, we spoke to Phil Flynn, who is an oil trader, oil analyst at Alaron Trading out in Chicago, and Phil says the EIA estimates are always on the low side. He's adding on at least 15 cents. He thinks the price of a gallon of gas could get to $2.30 by this summer. And that's a lot closer to that $3 a gallon inflation adjusted peak from so many years ago.

And, of course, what's going on? You say, well, but don't we have lots of oil in the world? Isn't OPEC producing near capacity? Well, yes they are, but right now, of course, the East, the Northeast hit by a cold snap towards the end of the winter. It wasn't expected. The dollar is going lower. And that's forcing the speculators to dump their dollars and buy oil right now to make money. The speculators are playing a role in this run-up in crude oil prices we've been talking about as well.

Step back, though, and there is a big picture. It's not just the cold weather, it's not just speculators. Can you say 800-pound gorilla? China. China's demand is increasing by 200,000 barrels a day. That is not expected to go away anytime soon unless China were to fall, say, into a deep recession. People don't see that right now. India, a growing economy, also consuming more energy, also consuming more oil. All these things are coming together.

And finally OPEC, basically telling us in the last couple of weeks that they're fine with oil in this $40 to $50 a barrel range. We're over that now. But they don't want to boost output right now because they feel they have -- they're afraid that if there's any pullback in demand, they're going to be stuck with too much oil and see the price plummet. So they are not going to boost production. That's the latest from OPEC.

Phil Flynn said, in fact, that he thinks the new range for oil, he was thinking $50 to $55 a barrel. He thinks maybe it's $55 to $58 a barrel. So a lot of analysts are saying we could easily see $60 a barrel. So Kyra, the message is, the high gasoline prices volatile, but probably those low prices are a thing of the past. At least for a while. KYRA PHILLIPS, CNN CORRESPONDENT: Well, now, Kathleen, many people at home, regular viewers, might be sitting here thinking, OK, you mentioned China, India. You can talk about the strike in Venezuela. But what about Iraq?

HAYS: Iraq is certainly a factor and certainly Kyra, day to day, if a pipeline gets blown up in Iraq, if there's a strike in Nigeria, a very important oil producer, that will buffet the oil prices. But again, people say the big picture, the reason why people step back and say look at this year, look at the next five years, why the president's talking about finding a solution, why everybody is, because global demand is growing. Even when Iraq comes fully back online, global demand will still be growing and that's why they look for this long-term up trend in prices.

PHILLIPS: Kathleen Hays, thank you so much.

(STOCK MARKET REPORT)

PHILLIPS: We're going to take a quick break, we'll be right back.

MILES O'BRIEN, CNN ANCHOR: Welcome back to LIVE FROM. I'm Miles O'Brien in our Washington news room today.

PHILLIPS: And I'm Kyra Phillips in Atlanta. Here's what's happening now in the news.

Threat level, elevated. The U.S. consulate in the Saudi city of Jeddah is reinforcing its general warning to Americans living there and urging them to steer clear of a certain housing area. A December attack on the Jeddah consulate was claimed by al Qaeda.

The stories still don't match up. Italy's prime minister tells the Senate today that he feels confident that a joint investigation will determine who's accountable for the death of an Italian special agent in Iraq. The agent died while taking freed journalist Giuliana Sgrena to the Baghdad Airport. Sgrena tells one account of what happened. The U.S. military, who fired on their car, tells quite another.

President Bush going back to Ohio, trying to revive his clear skies energy plan after it stalled in the Senate. He's in Columbus promoting so-called clean-coal technology, alternates to conventional energy sources. Despite rising gas prices, the White House says the president has no intention of tapping into domestic petroleum reserves.

And look who's smoking again. They're trying to get a better look inside the crater of Mount St. Helens. Right now as we speak, after yesterday's seven-mile high belch of ash and steam, scientists say not to worry, but that mountain, as we all know, is full of surprises.

O'BRIEN: On the stand this week in the Michael Jackson trial, teenage brothers, one of whom says the pop star molested him, the other says he saw it happen.

Let's bring in former U.S. attorney Paul Butler, now a law professor at George Washington University. Paul, good to have you back with us.

PAUL BUTLER, LAW PROFESSOR: Nice to be here, Miles.

O'BRIEN: A lot of inconsistencies being brought up by Tom Mesereau, who is leading the defense there for Michael Jackson. It seems to me, there are probably a lot of people on the jury who are building a bit of a credibility gap in their minds over these accusations.

BUTLER: Well, the jurors realize that this just a fraction. It's the second week in what's going to be a five or six-month-long trial. But at the same time, this should be the government's show. It's the chance to put on its case without much interference from the defense, and it's not doing as well as you'd expect.

O'BRIEN: And some of these inconsistencies, when you look at them individually, they might seem sort of petty. For example, an adult magazine, which was published after the time when the accuser was at the Neverland Ranch, was brought in as evidence in testimony. But the point is that these magazines were there. But nevertheless, these little things and changes about access to wine cellars, all these little details, all of those things kind of add up, don't they?

BUTLER: Exactly. Again, none of them standing alone is all that significant. But what we have here is death by 1,000 cuts. It's very unusual to have an eyewitness to a sex crime. So, again, this should be the government's best effort. And yet this witness, the brother, is ending up damaging the government's case.

O'BRIEN: And after the brother testifies, we expect to hear from the accuser himself. Presumably, if you are Tom Sneddon and the prosecution team, you are doing some additional homework, schooling this particular witness, to make sure the same traps are not stepped on.

BUTLER: You're doing what you can. But again, a lot of his testimony has been preserved earlier. And if he, like his brother, is going to contradict himself or now say he doesn't remember things that he claimed to remember before, the prosecution's going to have the same issues with him that they had with the brother and sister.

O'BRIEN: So those depositions really do come back to haunt them?

BUTLER: Well, you know, they're one side or the other's best friend because they lock in testimony. And if someone contradicts themselves, the famous line from a lawyer is, well, are you lying then, or were you lying then or are you lying now? When are you telling the truth?

O'BRIEN: You know, it makes me wonder, if we're getting to the brother and accuser very shortly, perhaps as early as today, what lies ahead over the next five months? BUTLER: Well, again, the star witness will obviously be the accuser. So, that person will come in, and his credibility will be the most important. Again, jurors are forgiving. They understand that these are teenagers who have been through a traumatic experience, whatever happened. So, they're not going to be all that concerned about minor inconsistencies, but they'll look at the whole thing. You're absolutely right. We've got four or five months to go.

O'BRIEN: Wow! All right.

Former U.S. attorney, now law professor at George Washington University, Paul Butler. Thanks, as always. Appreciate your insights.

BUTLER: You bet.

O'BRIEN: Kyra.

PHILLIPS: Straight ahead, two more cases of identity theft to warn you about. In one of the cases, hundreds of driver's licenses were stolen right out of a DMV office. Details on both cases coming up.

Wondering what to get the couple who has everything as a wedding present? How about a commemorative stamp?

SIBILA VARGAS, CNN CORRESPONDENT: And I'm Sibila Vargas in Hollywood.

It's twins for Joan Lunden. Ed McMahon is on the mend. Ellen Degeneres feels better, and Elton John is in bed. I'll have the details when CNN's LIVE FROM continues.

(COMMERCIAL BREAK)

O'BRIEN: Here's what's happening across America this hour.

What can bad guys do with 1,700 fake driver's licenses? Authorities in Nevada are going over the possibilities. Somebody made off with the blank cards, a camera, and a laminating machine. No leads so far.

More crime, the discount shoe seller DSW cautioning customers to watch their credit accounts. Seems over the past three months credit card data was stolen from more than 100 DSW stores nationwide. The Secret Service is on the case.

And what grade would you give the country's infrastructure, if you were doing such a thing? The highways, public schools, airports, public parks and water systems? Well, the American Society of Civil Engineers does that, and it's not impressed. The grade, a D average, on 12 categories of infrastructure. Their report says American quality of life is eroding.

PHILLIPS: Well, illness is a sideline -- or sidelining rather -- a pop superstar, but a couple of other celebs are on the mend. And a lawmaker concerned about poker on television is putting her cards on the table. Let's go to Los Angeles and see what CNN entertainment correspondent Sibila Vargas has up her sleeve.

VARGAS: I'm not wearing any sleeves today, but I'm not going to give my hand (ph) either.

Listen up, all you popular TV poker shows. You're right, Kyra. A New Jersey lawmaker wants you to ante up. Assemblywoman Joan Voss (ph) is asking shows like Bravo's "Celebrity Poker Showdown" and ESPN's "The World Series of Poker" to put their money where their mouth is and start helping people with gambling problems. Voss thinks the easy access to coverage by younger viewers is dangerous. According to the assemblywoman, New Jersey casinos kick in about $600,000 annually towards programs that help gambling addicts. She feels networks should do the same.

Shifting gears, Elton John is having to cancel multiple tours because of doctor's orders.

(BEGIN VIDEO CLIP)

ELTON JOHN, MUSICIAN (singing): Blue jean baby...

(END VIDEO CLIP)

VARGAS: John postponed last night's show in Richmond, Virginia, tonight's performance in Winston-Salem, North Carolina, and he won't be taking the stage Saturday either. We called his publicist a short while ago who told us that the music man has got the flu. She expects Sir Elton to be back on the road on the 18th in Ft. Lauderdale.

And TV talk show maiden Ellen Degeneres is feeling a lot better after undergoing surgery. Degeneres had to get three polyps removed from her cervix. On her talk show, she urged women to get regular checkups and not be afraid of the procedure. Sound advice.

Ed McMahon is also on the mend after celebrating his 82nd birthday in the hospital. The entertainer was treated for a mild concussion and was given stitches for a gash on his forehead after falling from his home in Beverly Hills. McMahon says he plans to follow-up his birthday with a barbecue.

And celebrating of birth of new twins is Joan Lunden. This is the second set of twins for the TV personality. Look at the babies right there. Kimberly and Jack came by surrogate. It's the same woman who delivered the boy and a girl for Lunden and her husband nearly two years ago. Lunden jokes that she feels like she's living in Noah's Ark. She says babies are coming in two.

And Kyra, I don't know, she's got her hands full. I mean, she's got two babies. They're entering the terrible 2's and with these two newborns -- could you imagine?

PHILLIPS: No, it's the terrific 2's. You've got to just change the attitude, Sibila, that's all. VARGAS: Yes, OK, I like that. I'll take your advice.

PHILLIPS: All right, Sibila Vargas, thank you.

Well, it's all things royal coming up next. First posing for postage, something to remember the happy couple by, maybe? Then it's "Diana" -- the ballet. The story of the princess' life debuts just as the prince is about to remarry, a coincidence of timing?

(COMMERCIAL BREAK)

O'BRIEN: As Britain's Prince Charles prepares to wed Camilla Parker Bowles, his first marriage is getting brutal treatment in, of all places, on the ballet stage. Paula Hancocks reports on the last night's premiere of "Diana: The Princess."

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT (voice-over): Well, the memory of Diana never ceased to haunt the royal family with the wedding of Charles and Camilla a month away and the postage stamps out to celebrate the occasion, and to "Diana: The Princess," the ballet. A tale of Diana's struggle with Prince Charles and the rest of the Windsor family, staged by the man who is artistic director of the English National Ballet when the princess was its patron.

PETER SCHAUFUSS, PRODUCER & CHOREOGRAPHER: She really loved the dance as an art form. It was really what she had loved and done since she was a young girl. So to celebrate her, I thought it was very appropriate to do it with a dance performance.

HANCOCKS: Schaufuss says Diana used to dance at his studios close to her royal residence whenever she could. His ballet casts Charles as cold and stupid and Diana, played by Schaufuss' wife, as vulnerable. We're not allowed to show the way Camilla is depicted, but the words "dominatrix" and "whip-cracking" could give you an idea.

The production has hardly received rave reviews, "camp classic," according to one critic, "twisted panto (ph)," says another, "naked opportunism," complains a third. But Schaufuss insists...

SCHAUFUSS: I'm not doing a documentary, although it's a serious piece that I'm doing. It also has to be entertainment when you go to a live performance in the theater.

HANCOCKS: As for the audience in Manchester, no doubts about whose side they were on, Camilla and the queen greeted with hisses.

(on camera): The production is here in Manchester for five days. And if all goes to plan, it could then end up in London's West End within about two months; around about the time that Charles and Camilla could come back from their honeymoon.

Paula Hancocks, CNN, Manchester, England.

(END VIDEOTAPE) (STOCK MARKET REPORT)

PHILLIPS: Well, there's much more LIVE FROM ahead from Atlanta and Washington today.

O'BRIEN: Two-city affair. Coming up, why is it so easy for someone on a terror watch list of terrorists to buy a gun? It's outrageous. We'll look at watch lists and how effective or ineffective they are.

(COMMERCIAL BREAK)

O'BRIEN: Checking stories "Now in the News." The future of Social Security, a Congressional committee jumped into the debate today. The head of the Government Accountability Office told lawmakers there is no immediate crisis, but he warned time is working against us. The House Ways and Means Committee is considering various proposals to overhaul the system.

Blowing off steam in Washington State. Mount St. Helens spewing ash nearly seven miles high yesterday. The biggest eruption since volcanic activity resumed in the fall, but not an indicator, say the scientists, that bigger steam bursts are to come.

In Michael Jackson's child molestation trial, the 14-year-old brother of Jackson's accuser facing another day of questioning by the defense. The teen has testified he twice saw Jackson molest his brother. Jackson's attorney is trying to point out inconsistencies between the boy's testimony and earlier accounts that he gave police.

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