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CNN Live Today

Checking Your 401(k); X Prize in the Skies

Aired October 04, 2004 - 10:30   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.


DARYN KAGAN, CNN ANCHOR: Well, big gains on Friday, but there's a lot of uncertainty in this market, and that may leave investors unsure about their 401(k)s. Our FN personal finance editor Gerri Willis has some perspective with today's top five tips.
Gerri, good morning.

GERRI WILLIS, CNN CORRESPONDENT: Hey, good morning, Daryn.

Tip No. 1 today, don't disengage. It's easy enough to think if you see the markets moving sideways, you get one of those quarterly statements on your 401(k) and it just looks abysmal to say, hey, I'm not going to contribute anymore but that would be a big mistake. Here's why, you'll miss out on the free money from your employer. What's more, people forget, you're putting that money into your 401(k) before taxes. So you get an extra benefit, an extra boost from the fact that Uncle Sam isn't taking his share. So, don't disengage.

KAGAN: So extreme makeovers are really cool on some of those television shows, but probably not a great idea for your 401(k)?

WILLIS: You bet. That's absolutely right, Daryn. Don't just go in wholesale and make changes to your 401(k), because you hate its performance. That would be a big mistake. Any decisions you make on the basis of emotion alone probably not too terrific.

KAGAN: What if you are looking to clean house a little bit and tidy things up, how do you pick real winners?

WILLIS: It does make sense, though, to really seriously evaluate what you've invested in here, and the best way to do that, look, don't pick up the latest list of top mutual funds. Those are the ones that are the most extremely volatile. They're at the top of that list for a reason. You want to pick the ones that do the best over the long term and make sure you're making apples to apples comparisons -- when you're looking at small-cap funds, compare them to other small-cap funds. Make sure that their performance is one of the best in the group. Going to morningstar.com, that can help you with some great suggestions.

KAGAN: And don't forget bonds can be your friend.

WILLIS: Bonds can be your friend. You know, people don't want to buy them right now because interest rates are probably headed higher. That's at least what the economists are saying right here. But you do want to have some bonds in your 401(k). We've got some names of ones right here. Fidelity Short-Term Bond Fund, Vanguard Short-Term Bond Index Fund, and Vanguard Short-Term Investment Grade. You want to stay short here on the yield curve right now, because rates could be headed higher.

KAGAN: And finally, what about a maturity fund? How can they fit in?

WILLIS: Well, you know, you want to make sure sometimes that if you don't have a lot of time to pay attention to your 401(k), that you can put it on automatic pilot and not worry about it. One way of doing that, target maturity funds. The investments in these change over time and with your age. And you don't have to do a thing. You don't have to worry about asset allocation at all. Make sure you check out the fees. The fees on some of these are high. So do your research. But take a look, it could be attractive -- Daryn.

KAGAN: All right, Gerri Willis, thank you so much for that.

WILLIS: Thank you.

KAGAN: We are going to see -- check in on California, private ambition. We might all reap the reward if you're interested in going into outerspace. Live pictures now of the privately built spaceship embarking on a historic journey to space. Will they make it? We'll check in with our Miles O'Brien, just ahead.

(COMMERCIAL BREAK)

KAGAN: Let's go ahead and check the stories happening now in the news. Iraq's health ministry says that at least 16 people are dead, and 85 wounded in a pair of car bombings today in central Baghdad. In a separate incident, a high-ranking Iraqi official was attacked and seriously wounded in eastern Baghdad. We have a live report from Iraq's capital coming up in the 11:00 hour.

There is a cauldron boiling beneath the surface of Washington's Mount St. Helens. A live picture from Washington State right now. In fact, many geologists had predicted an eruption this past weekend. Volcanic gases and low-level earthquakes are still being detected. But experts say an eruption is still likely, it is, though, difficult to predict a timetable.

We're keeping our eyes on the skies, a live picture from the Mojave Desert, or actually way above it. SpaceShipOne, a privately built spaceship, making its attempt for the edge of space for the second time in a week. If it succeeds, its crew will win $10 million. It's a contest designed to jumpstart private space flight.

Two Americans will share this year's Nobel Prize for medicine. The Nobel Committee announced that Richard Axel and Linda Buck received the award for research into the sense of smell. Academy members told the Associated Press the couple was honored for exploring one of humanity's most profound senses. The Peace Prize will be announced Thursday in Oslo, Norway.

Veteran actress Janet Leigh is being mourned today in Beverly Hills. Leigh died Sunday following a year-long battle with a blood disease. She may be best known for the shower scene, this scene right here, in the Alfred Hitchcock classic "Psycho." Janet Leigh was 77.

They're working on writing history over the skies of the Mojave Desert in Southern California this hour. SpaceShipOne is in the air, possibly en route to becoming the first privately developed manned rocket to reach space twice within two weeks. We're looking at live pictures from there. The accomplishment could be worth $10 million. Our space correspondent Miles O'Brien in the Mojave Desert to take a closer look, and, Miles, to describe it, $10 million doesn't even begin to cover the cost of making this dream come true.

MILES O'BRIEN, CNN ANCHOR: Well, I guess you could call it a loss leader, Daryn. And when you're Paul Allen, you don't really count such chump change as $10 million, or for that matter, the $25 million you invested in it. You're thinking about the big picture and the impact this has had. And look at the impact. We'll talk about the crowds and the interest in this in just a moment.

But first I'm joined by Dick Rutan, brother of Burt Rutan, the designer and builder of this craft, financed by Microsoft cofounder Paul Allen.

We've been now 49 minutes since White Knight carrying SpaceShipOne with pilot Brian Binnie aboard SpaceShipOne, Mike Melvill flying the carrier craft. Mike, of course, flew the first flight back on Wednesday in this attempt for the Ansari X Prize. Anyway, where are they announced to? What are they doing right now, Dick?

DICK RUTAN: Well, they're probably pretty close to about 44,000 to 45,000 feet. Now they're right at the top of their climb. So the climb rate is real slow and they're just creeping up to get every single foot of altitude they can.

O'BRIEN: All right, and as far as you've heard nothing unusual on the radio?

RUTAN: Nothing unusual. Everything is checking out just fine. In fact, it's been unusually quiet, which is really good news.

O'BRIEN: All right, when it's quiet, that's usually good news, Daryn.

I want to call your attention to this shot you're seeing here, upper right of your screen. You see clearly it says Dexter and Southfield Schools. Those are schools just outside of Boston, private schools. A couple of teachers there, along with some help from students, had developed this amazing tracking technology that you're seeing there right now. This is done with a couple of telescopes and some computers and some novel software. The team is located about 25 miles east of where I sit right now in the Mojave Desert, literally in the middle of nowhere, and they are able to -- there's Ron Dantowitz (ph). He is the leaders of the team. They're able with this technology and some fancy tripods that have the capability of swiveling around and following -- there you see it -- are able to track SpaceShipOne, White Knight and any other aircraft for that matter, as it flies through the sky. Now, you've got to remember, we're looking at something that the flight begins at about 50,000 feet, ultimately reaches 328,000 plus. So, it's a long way away. And you're going to see a little bit of shakiness in there. That's just inevitable when you have something that is so far telephoto as this.

In any case, it's wonderful technology that allows us to look in. Of course, you'll recall on Wednesday, gave us a great view of that incredible scene, 29 rolls as Mike Melvill reached space.

Now, as to the interest here -- 35 school buses, I'm told by Dick Rutan, pulled in here. Kids from all over this area are here. Literally thousands of people, many more people than we saw in June when SpaceShipOne on a test flight. There you see some of the shots down the flight line here at the Mojave -- and we can call it now a space port -- to see this piece of history, and see them, they hope, win that $10 million Ansari X Prize, having flown two trips to space inside of two weeks in a craft capable of carrying three people.

Now, there's only one person aboard. The rest is ballast equivalent to two individuals. Lots of trinkets and teddy bears and family photos from team members and the like to make it more meaningful for the team that's involved here. In any case, they hope by the end of the day -- actually very soon from now. We're now probably pretty close to when they're going to start the flight to space. But by the end of this flight, they hope to be $10 million richer.

And more to the point, going back to that crowd and the schoolkids and the people watching all around the world, really have sparked people's imagination in a way that space travel hasn't really perhaps since the early '60s when we first went to space and the space race began.

Dick Rutan, you were just at an air show this weekend. What are people asking you about this? What do you think -- why is there such interest in it?

RUTAN: Well, what the excitement about this is, is that all of a sudden regular people, not fancy astronauts, will be able to go into space now. And it's an entrepreneurial spirit. And the fact that we're going to build an organization where we can have -- you can go and buy a ticket and go into space and put the human being back into it.

O'BRIEN: So, Daryn Kagan, listening back in Atlanta, I assume you're anxious to get your pennies together and buy a ticket. Would you be interested in going for a ride in space? I'm curious.

KAGAN: Yeah. It just kind of depends on how many pennies that's actually going to be as we go forward.

O'BRIEN: Yeah, well, that's a good point. Now, Richard Branson -- of course, Virgin Airways -- made his announcement just a couple of weeks ago, saying that he would like to license this technology, build a craft that could carry up to seven people, and for as much as $200,000 take people to orbit -- not to orbit, but to space ever so briefly.

Now, that's a fair amount of money for bragging rights at a cocktail party, right? Wouldn't you say?

RUTAN: Well, that's pretty good.

O'BRIEN: Yeah.

RUTAN: OK, we're about five minutes out.

O'BRIEN: OK, we're five minutes away, Daryn. I'm curious: If money were no object, if you could write a check for $200,000, would you go, Daryn?

KAGAN: Yes. I think I would. I would do that. And I don't even have to ask you, Miles. You would write the check, even if you weren't good for it. You'd let it bounce. You'd go anyway.

O'BRIEN: Hopefully it wouldn't clear before I could get up there. Yes, but that would be something special.

But you know, the other thing to remember here is -- and we were reminded of that on Wednesday as we watched Mike Melvill encounter 29 rolls, fairly rapid roll rate, an unexpected roll rate on his way up -- but this is dangerous. And the key, as Burt Rutan has said time and again, is to make it about 100 times safer than space travel is now.

Well, that's a tall goal. I mean, I'm curious on your thoughts. What are you seeing there?

RUTAN: Well, what we're seeing right now is that we're up in the condensation, so we have a nice streamer coming out of the White Knight so everybody here will be able to see it.

O'BRIEN: All right. Well, let's be very clear on that. That's the contrail from the White Knight. That's not the rocket that is firing, Daryn.

What they're going to do is go through a series of checklists here over the next few minutes. And really for Brian Binnie, sitting in that SpaceShipOne, this is the -- a very slow period of time. There's not so much for him to do until that rocket is fired, correct?

RUTAN: I think probably the toughest part is that one-hour climb when you really don't have too much to do. You sit there and think about your thoughts about what's going to happen.

KAGAN: Hey, Miles?

RUTAN: Well, it's a lot better when you're actually doing something.

O'BRIEN: Yeah, Daryn?

KAGAN: I have a question here. So, they have to make it 328,000 feet, right, for this to count?

O'BRIEN: Right.

KAGAN: Who says? How do you know? They're up so high, how...

O'BRIEN: Who says?

KAGAN: Yeah.

O'BRIEN: It's not just taking their word for it.

KAGAN: Right, exactly.

O'BRIEN: What they have, there's a whole series -- there's an inertial altitude system, which is just a fancy altimeter on board the SpaceShipOne. But the real clincher is, you know, we're very close to Edwards Air Force Base, the hallowed ground for test pilots, and they have a very sophisticated radar system there. And they are painting -- as is the term in aviation -- painting SpaceShipOne as it goes up. And they'll be able to give it right down to the inch exactly how high SpaceShipOne went.

They made it by about 10,000 feet on Wednesday. What are you hearing right now, by the way?

RUTAN: OK, Mike Melvill just gave his condolences -- not condolences -- his best wishes. And he says, man, we're with you all the way, Brian. Go get them.

O'BRIEN: All right, yeah. All right. So, that means they're getting very close here. Any indication as to how long before they'll do separation? IS it just a matter of...

RUTAN: We're right there.

O'BRIEN: OK.

RUTAN: We're coming right up on the block right now.

KAGAN: How do they actually separate? Is a button pushed? A latch released? How does that work?

O'BRIEN: Yeah, it's a latch. It's a latch release, essentially, right?

RUTAN: It's a latch release. What happens is there's a consent light in each cockpit. And when they both consent to let it go and everybody's agreed -- so Mike has to consent to it, and they have a light, and then when everybody's agreeable, they pull the handle...

O'BRIEN: Pull the handle.

RUTAN: ... and manually release them and let him go.

O'BRIEN: And off they go. So, in other words, it's more than a radio communication. There's no misunderstandings. Unless you have that little light on in both places...

RUTAN: That's right. They have to ask him with a light, and he has to respond with a light.

O'BRIEN: Understand. And then, the trick here, Daryn, is it's really important that they separate quickly and that the rocket motor is fired relatively quickly, because you don't want to lose too much altitude. You want to be able to make this record in order to win that $10 million prize.

Now, part of the reason why we're doing this today, October 4th, is Burt Rutan wanted to preserve the option of a third flight if need be. There's time. He has until October 13th, by the rules of the contest, to fly two trips to space. He's got one under his belt, obviously.

And if this one doesn't make it, he has another rocket motor ready, and he will attempt a third try if for some reason they don't reach that altitude -- Daryn?

KAGAN: You were talking about the proximity to Edwards Air Force Base. Is that the reason they're doing this in the Mojave Desert?

RUTAN: One minute.

O'BRIEN: Yeah, well, of course, this is where Burt Rutan has set up his shop. And we are one minute away, I should tell you.

KAGAN: Right.

O'BRIEN: Oh, two minutes -- two minutes away.

RUTAN: Two minutes 30 seconds.

O'BRIEN: And this is just -- I mean, look at the weather out here. It's like this practically every day of the year. There's not -- it's not populated, so it's obviously a safe place with a lot of air space where you can do risky things in aviation.

And so, this is where Burt Rutan settled after he spent some time at Edwards Air Force Base working in design over there for one of the big contractors. He came over here, set up a little shop of his own to build small kit-built planes, and everything evolved to what you see today. And that has made Mojave really an unlikely place, if you think about it in many ways, a place you -- Daryn, I promise you, you wouldn't stop at the gas station if you were passing through here.

KAGAN: Well, no, that's not true. You do stop...

O'BRIEN: Have you stopped?

KAGAN: Oh, yeah, many times, driving up to mammoth to go skiing. So, you do stop in Mojave.

O'BRIEN: It is a stop. Although they just redid the road, and there's not as much traffic in town. And the Wendy's closed, so that's -- that's what happened.

KAGAN: I've been through Mojave many, many times.

You know, question as we get closer here to separation, you're talking about this being a contest. This is not a done deal that this project wins the $10 million. What about the other contender out there, the da Vinci Project?

O'BRIEN: Well, they've been having some problems, quite frankly. They -- we're one minute away.

KAGAN: OK.

O'BRIEN: One minute away. And I'll just tell you briefly what's going on is this is a project up in Canada. Brian Feeney is his name. And he's had some difficulties pulling it together.

The truth of the matter is Burt Rutan, because of his background and because of his fundings -- his background is what led Paul Allen to him -- is by far the best funded of these projects at $25 million.

What are you hearing?

RUTAN: Mission control says go. The White Knight says go, and Brian Binnie says we're go.

O'BRIEN: OK, so that's...

RUTAN: So, we're 30 seconds out.

O'BRIEN: We're 30 seconds away now. Let's watch and listen to this as we see, through the help of our tracking camera from the Dexter and Southfield schools -- and we apologize for that little shimmer there.

RUTAN: Twenty seconds.

O'BRIEN: Twenty seconds away from launch of SpaceShipOne...

KAGAN: What should we watch for, Miles? What should we watch for?

O'BRIEN: All right. You'll see SpaceShipOne drop down and...

RUTAN: Ten seconds.

O'BRIEN: ... almost immediately you're going to see a very bright flame coming out the business end of SpaceShipOne. Ten seconds away. Let's watch it as it goes down.

RUTAN: There's the release. Got a good, clean release.

KAGAN: All right.

RUTAN: ... fired. You got a good...

O'BRIEN: All right, that rocket, Daryn, is fueled by tire rubber and nitrous oxide. Brian Binnie.

RUTAN: Nice, stable burn.

KAGAN: How fast is it going?

RUTAN: It's looking good.

O'BRIEN: It's moving -- is it already supersonic, Dick? Very close to...

RUTAN: Going supersonic pretty quick here.

O'BRIEN: And ultimately will reach in excess of Mach 2, Mach 2.5 or so.

RUTAN: OK. He's going through supersonic right now. A little roll off.

O'BRIEN: Supersonic. That shake is in the tracking camera. So, don't get the sense that that craft is...

RUTAN: Looks like he's supersonic. He's in good shape.

O'BRIEN: All right. He's gone through supersonic now. And all that shaking you're seeing is just the -- an artifact of the tracking. It's a pretty stable flight, thus far -- 100,000 feet now.

KAGAN: So he has to go three times that, where he is now?

RUTAN: He's going up to 200,000 feet.

O'BRIEN: Yes, this rocket burn will last about 65, 70 seconds or so.

RUTAN: He's reporting a little bit of shaking.

O'BRIEN: He says it is a little bit shaky. He is reporting some...

RUTAN: The motor at this point starts running a little bit rough, starts chugging a little bit, but that's normal.

Three twenty eight, OK.

O'BRIEN: 328,000?

RUTAN: No they're not there yet, but they're predicting. He's got the energy to go. So he's predicted. So it's looking good.

O'BRIEN: And we welcome our viewers all around the world on CNN International as you're watching the flight of SpaceShipOne. Shut down the rocket now. The rest is a coast uphill to the 100-kilometer point, 328,000 feet, which is the threshold of space. Brian Binnie the pilot onboard right now indicates he has the energy to make it to that altitude. If they do that...

RUTAN: They're feathering right now.

O'BRIEN: OK.

RUTAN: He's got it into feather, and he's still going up.

O'BRIEN: Now the feather is a -- I'm with Dick Rutan, who is the brother of Burt Rutan, the designer and builder of this craft, and he is telling you that he's in feather, which means that's getting configured to come back in.

RUTAN: About 20,000 feet to go.

O'BRIEN: 20,000 feet to go, still climbing up.

RUTAN: Still coasting.

Feathering, looks like he's got it under real good control, too. The rates are down. Any second now, we'll have it.

O'BRIEN: He's still climbing, still climbing. We have not seen the rolls that we saw last Wednesday. There was a little bit of vibration that Brian Binnie reported, as he was kind of enter entering the trans-sonic zone, the speed of sound.

So it's in the feather mode, which is what allows it to drop ever so slowly like a shuttle shuttlecock, avoiding it burning up on re- entry. They put it in that position even as it goes up to prepare it for the trip back down.

RUTAN: They made it.

O'BRIEN: Apparently they just made it.

RUTAN: Well, mike gave him the congratulations. But I haven't heard exactly what the altitude is just yet.

O'BRIEN: This would be unofficial if we were to go with this of course and the reports of what they have onboard.

He's now taking pictures we're told on board SpaceShipOne. So obviously the -- he must feel as if he's accomplished his mission here and reached the altitude. Is he coming back down for sure?

RUTAN: He's almost there. We're just standing by for confirmation.

O'BRIEN: Brian Binnie, 20-year veteran of U.S. Navy test flying, and an employee of Scale Composites, Burt Rutan's company out here.

We're waiting for something unofficial to indicate whether he's won it or whether his team has won the $10 million Ansari X-Prize.

RUTAN: OK, he's just at apogee (ph) right now. He should be starting down. They reported it. He's just about five miles south of the bullseye where he's supposed to be. That's in really good shape.

O'BRIEN: OK, so five miles south meaning, maybe he was a little bit lower than he would have anticipated?

RUTAN: No, I mean south of his re-entry point.

O'BRIEN: But would he have been pointing straight up high or not?

RUTAN: Well, maybe the trajectory was off just a little bit. But basically, if he's within five miles of the re-entry tube, they're doing real good.

O'BRIEN: OK, and course this is all hand flown. This is no autopilot. This is a pilot who is following a little ball on a screen which gives him a presentation of the desired track to give him the altitude that he'd like.

KAGAN: Hey, Miles, so he (INAUDIBLE) up there to take some pictures?

O'BRIEN: Yes.

KAGAN: Any idea what those pictures -- what's the view? Of course he asked for a window seat, right?

O'BRIEN: Yes, he got the window seat, he did. Yes, in fact. And what you're seeing up there, first of all, it's the blackness of the sky is what they all talk about for one thing. You get the curvature of the Earth, and he is seeing a very healthy, good chunk of Southern California on this beautiful clear day. It's a spectacular view, I'm told, by Mike Melvill who was up there, just ogled at the sight.

RUTAN: We're starting to re-enter the atmosphere right now.

O'BRIEN: He's coming down now. I want to just show folks who might just be tuning in. We'll watch this carefully while he's coming down, Brian Binnie on his way back down to the high desert here. Let's look at that separation and the ignition of the rocket just a few moments ago. Did you see anything -- off it went. He lit it very quickly, which is an important thing. It's amazing how fast it gets out away from the White Knight carrier ship. Noticed a little bit of a roll.

RUTAN: A little bit of roll, but that's no problem at all.

O'BRIEN: He's kind of rocking the wings there. He said there was a little bit of vibration as he broke the...

RUTAN: The end of the rocket burn, it starts chugging a little bit. But he's in there probably about four or five g's right now.

O'BRIEN: All right, and screen right is live -- excuse me, screen left is live. Screen right is taped from just a few minutes ago as he went upward with that rocket motor burning. I didn't get the number of...

RUTAN: Right now the g forces are coming down to close to 1 g. So he already has the spacecraft to fly back into the re-entry box.

KAGAN: Miles, looking forward to people getting to take...

RUTAN: He's a little loosey-goosey right now. Now he's subsonic, and he's doing a lot of buffeting.

O'BRIEN: I'm sorry, go ahead, Daryn.

KAGAN: I'm just looking forward for people who are saying, a few years from now, I want to be able to take a personal, private spaceflight, how close will that be to what we're watching today? Is this what people will buy?

O'BRIEN: Well, you know, Richard Branson has purchased this particular technology. What it will be is just a larger version of what you're seeing here. So, yes, this will be -- this will be the flight, a smaller version as far as the size of the craft. But as far as speeds, altitudes, what kind of g forces, the amount of forces of gravity you'd feel coming down, all of it is going to be the same.

How is everything looking?

RUTAN: OK, it's coming down to feather. The feather looks like -- all he's got to do is lock and we're home free.

O'BRIEN: All right.

RUTAN: We get conformation of the feather lock.

O'BRIEN: And when you say the feather has to lock, you want to set this up so it drops sort of like a shuttlecock. Is it dropping right so far?

RUTAN: It comes into position, and it's a hook that grabs it.

O'BRIEN: I see.

RUTAN: And the hook has got to grab it.

Looks like he's in good shape.

O'BRIEN: All right, do we have any indication as to whether they passed 328,000 feet or 100 kilometers?

RUTAN: I haven't heard it.

O'BRIEN: OK, we don't know for sure yet. It's going to be one of those calls that we might have to wait until we get that radar telemetry back in. Nobody has said for certain here as to whether they made it.

The flight, according to Dick Rutan, sitting beside me here, seemed to go flawlessly, and he was very close to hitting his target. Only five miles off this little imaginary box in the sky, which would indicate that his trajectory was what they anticipated, which would mean that he probably was certainly close, if not had reached that barrier into space.

RUTAN: Yes, the predictor, the predictor that said that they're going to make a climb, but what it is exactly I don't know yet.

O'BRIEN: So, Daryn, now this would be the tricky part for people who are on their way down. If you buy a ticket you're going to feel, what, up to five times the force of gravity on the way down.

RUTAN: For 20 seconds. It's not too bad.

O'BRIEN: For 20 seconds, you've floated, you've been able to take your picture. You've released some M&Ms or whatever, floated around for a few seconds, and then, bam, five times your weight on the way down, so that's a fine...

RUTAN: Well, it builds up real smooth, though. It's kind of a gradual buildup and then it just kind of gradually bleeds off.

O'BRIEN: And is it coming back on you?

RUTAN: No, now it's straight down.

O'BRIEN: Straight down on you. So he's kind of...

RUTAN: It's not like jumping into a swimming pool or something. It's just a nice, soft feather bed.

O'BRIEN: So it would be a nice, smooth ride comparatively, Daryn.

RUTAN: And when it comes in, it comes in supersonic. And when it has the supersonic it's nice and smooth. And As soon as it goes subsonic, then it starts jumping all over the place and it gets a lot of bouncing.

O'BRIEN: All right, we're going to listen for that sonic boom as it comes in.

Daryn, go ahead.

KAGAN: I was saying, hopefully they have the airsick bags in the seat in front of you for the 5 G's.

O'BRIEN: That will standard equipment on this craft whenever it flies will be the sick sack for folks like Daryn, just in case.

KAGAN: How long is it going to take for him to get back down to Earth, Miles?

O'BRIEN: We've got probably -- he's at what altitude right now, Dick.

RUTAN: Well, it depends on how quick he wants to come home, 15 minutes maybe.

O'BRIEN: OK, we're talking roughly 15 minutes. He's going to fly around here.

We -- it's a very tricky thing to get the energy just right to land in just the right spot. He flies it manually, but he has a little computer to assist him in knowing where to point -- don't want to come up short, don't want to go long, because it is, after all, a glider. He has no jet engines or any sort of power. He's just coming in like a glider pilot would, and he has to manage his energy very well.

RUTAN: Well, He stays close to the airport. When you don't have an engine, you stay close to the airport.

KAGAN: Yes, good idea.

O'BRIEN: That's a good plan, keep the airport in sight when you don't have any...

RUTAN: You don't go out and do any sightseeing at all, no.

O'BRIEN: No, but having said that, as you say, he can kind of loiter, if he wants, a little bit, right?

RUTAN: Another thing, too, they have about three specific points that they get to. We call it high key, low key, base key. And then you can fine tune it, if you're a little off on one, you can cut the corner and make it up on the next checkpoint.

O'BRIEN: And key meaning putting a key through a keyhole.

RUTAN: No, it's kind of like a window you fly through.

O'BRIEN: I see.

And so he's got to try to manage all of that just right so he sets himself up for the nice, gradual approach. I don't want to belabor this one for Brian Binnie -- he's had a great flight so far -- but back in December, when he flew supersonic, he came in very steep, and as he landed, collapsed one of the landing gears. So it's not a simple thing to land.

RUTAN: I can imagine right now what's going through Brian Binnie's mind is he says, boy, I don't want that to happen to me again.

O'BRIEN: I can imagine that, yes.

RUTAN: But he's really focused on that right now.

KAGAN: And Miles, a little bit more, please, about this foundation, this X Prize Foundation. Is it Peter Diamandis who started it? What was his impetus for doing that, for putting this money...

O'BRIEN: Peter Diamandis is a guy from the age of nine who has dreamt of going to space. He determined somewhere along the way that he didn't think NASA was the way to do it. And he decided to commit his life to trying to build a business that didn't exist and that required some fanciful notions, quite frankly. And as part of this, came up with this notion of a $10 million prize for a civilian team to fly to space.

Well, it spurred a lot of teams. This one in particular has stood out because of its funding and because of the expertise of Burt Rutan. But there are 25 other teams out there, many of them just on a shoestring, and many of them not anywhere close to flying. Even the team you mentioned earlier, the da Vinci team, still has a ways to go.

Let's do a quick recap, Daryn, since a lot of folks might be turning in -- tuning in right here at the top of hour.

KAGAN: Good idea.

O'BRIEN: What you're watching live right now is the tail end of Brian Binnie's flight to space, SpaceShipOne on X Prize flight number two. And we don't have it for certain, but we have reason to believe that they did, in fact, cross the threshold into space.

We're going to have to check that. But if in fact that happened, this team, led by Burt Rutan, a company called Scale Composites, funded by Paul Allen, of Microsoft fame, this team will have won the $10 million X Prize, which went to the team or would go to the team that could fly to space twice in as many weeks in a craft designed to carry three.

There you see the takeoff, which occurred now an hour and 12 minutes ago or so. It took them about an hour to get to altitude, about 50,000 feet or so.

And then, once they got to that point, and all the systems checked out, they separated the two craft. And within just a couple of seconds, boom, that combination of nitrous oxide, laughing gas, and tire rubber, gave some -- no laughing matter thrust to Brian Binnie, sent him on his way, quickly supersonic, on a pretty much straight up ride beyond the atmosphere of Earth.

Whether he made that mythical barrier into space, 328,000 feet, remains to be seen. But as it stands right now, it looks like he had a pretty flawless flight compared to what we saw Wednesday, where we all held our breath as pilot Mike Melvill went through about 29 rolls on his way up, like an aerobatics performer at an air show.

What are you hearing right now? Dick Rutan with me right now, whose brother is Burt Rutan.

RUTAN: OK. The chase planes have just joined up with the spacecraft. They looked it over and they gave him a report that everything is in good shape.

O'BRIEN: OK. So these chase planes that are up there -- there are three of them in all, high, medium and low -- are out there not just to get pictures, they're there to make sure that everything checks out, the landing gear is down, all the control surfaces are just in place. And so far, everything has checked out perfectly. But we still don't know whether they made that barrier. What's your gut tell you?

RUTAN: I think they made it.

O'BRIEN: Yes.

RUTAN: I'm pretty confident they did.

O'BRIEN: OK. And you know that because they were just saying it looks like we're going to make that 328,000...

RUTAN: Yes. They had the predictor that they were going to make it if they shut down there. And then they ran a little bit longer to have a nice pad (ph) on it.

O'BRIEN: OK.

So there you have it, Daryn. They had a predictor, a computer predictor that said, if you shut the motor down now, you'll make 328,000 or 100 kilometers. But he let it run a little longer.

So there's reason to believe that they exceeded that. Of course we've got to wait for that radar data before the X Prize team here will pop any champagne corks. And, by the way, to that end -- oh, here we go. We are told, and I'm not sure where this is coming from...

UNIDENTIFIED MALE: X Prize.

RUTAN: X Prize. Hey, great.

O'BRIEN: OK, 368,000 feet. I just got handed the ever so low- tech response, 368,000 feet. That comes from the X Prize folks. And is that from radar information?

UNIDENTIFIED MALE: (UNINTELLIGIBLE) radar.

O'BRIEN: OK, that's the radar from Edwards.

RUTAN: They broke the X-15...

O'BRIEN: They just not only won $10 million, they broke the record set by the X-15, of 358,000 feet set in the early '60s.

RUTAN: That's right.

O'BRIEN: So this is a momentous occasion here.

RUTAN: Yes.

O'BRIEN: They have exceeded...

RUTAN: Yes, up in mission control right now. Paul Allen, Burt Rutan, they are probably grinning so hard.

O'BRIEN: I'd say a few high-fives are being had right now. We'll see that tape a little bit later.

Now, just so you know, they're not going to cut the check today. They're going to -- a little champagne will be expended, and some medallions will be given. But the big ceremony will occur in St. Louis, which is the home of the X Prize, inspired by the Spirit of St. Louis.

Charles Lindbergh flew to Paris for a prize for $25,000. That's what inspired Peter Diamandis to do this. And thus, St. Louis will be the place where the checks will be issued on November 6. So they've got to wait a little bit before they get the money.

RUTAN: Well, the X Prize is going to bleed it for everything they can.

O'BRIEN: I suppose so. Get a little more mileage out of it. As we see Brian Binnie coming down, I don't know, have you heard what altitude he is at right now, where he is exactly?

RUTAN: I think they're about 18,000 feet.

O'BRIEN: About 18,000 feet, as he circles around and around, corkscrew kind of pattern around the field here at Mojave's airport and Spaceport now, just making his way down ever so slowly.

RUTAN: Brian did report that the airplane is flying fine and he seems to be comfortable with it. So that's really good news.

O'BRIEN: And that gull-like craft behind it is the Beech Starship, another Rutan design, which is one of the chase planes giving him those indications that everything is good on the outside of his craft.

So they made it, Daryn. Of course there will be some more celebrations here later as the day goes on. Richard Branson is here, who is all about commercializing this moment and making this excitement into some kind of business. Kind of a risky business on the surface, but the idea to make it safe enough that people would buy a ticket and feel safe enough to take a wild ride like this.

KAGAN: Well, for centuries people have been fascinated with flight. And with the way to be able to get up there, whether it was just as an airplane or now up into space.

Miles, a question about the pilot here. He gets the honor today, but there were four ready to go, right? So he was lucky to get the call.

O'BRIEN: Yes, there are four pilots on the team. Actually, one of them, the head test pilot, Doug Shane, was not -- because he's kind of running the test program, he was not kind of in line for a flight.

So there were three of them, Mike Melvill, who flew the first three flights of SpaceShipOne -- or the first two, I should say -- the test flight in June and then the first X Prize flight in -- just on Wednesday. And then there was Pete Siebold, another pilot who had some health issues and thus disqualified himself for a little while from flying.

So it was really up to Mike Melvill or Brian Binnie flying today. And I'm told you're -- Mike Melvill is a great friend of yours -- that Mike really wanted Brian to have an opportunity to do this.

RUTAN: That's right. He volunteered. He says, fine. He said he's going to step aside with no problem and give everybody a chance to do that.

O'BRIEN: And knowing Mike Melvill as I do -- you know him better than I do -- that's the kind of person he is. He's not a guy who really seeks out necessarily the limelight. He likes to share.

RUTAN: Well, besides having the right stuff, Mike is a real standup guy.

O'BRIEN: Yes.

So Mike Melvill watched it from White Knight today instead of actually going on the ride. Brian Binnie gets his opportunity to become -- well, he's the second civilian astronaut.

We can say that with that radar data of 368,000 feet. A record for civilian spaceflight. A record for a rocket ship dropped from an aircraft as the X-15 was some 40 years ago.

By the way, today, Daryn, is a big day in the world of space. Forty-six years ago...

RUTAN: That's right.

O'BRIEN: Forty-six years ago or 47 years ago...

RUTAN: Was it Sputnik?

O'BRIEN: Sputnik flew. And that -- yes, Sputnik flew on this date in 1957, I think it was.

I'm going to get my dates wrong. But -- and somebody will check me on that. But the point is...

RUTAN: But it was October the 4th.

O'BRIEN: It was October 4th. And that changed the world, and perhaps this moment will change the world for the plain old civilians who want to take a ride as well.

RUTAN: OK. Now the low chase has picked him up now.

O'BRIEN: Go ahead, Daryn.

KAGAN: I was going to say, so as we look forward and, of course, I think with a lot of great interest, not just the science of this, but people at home who want to go, you said Richard Branson has purchased this technology. The idea is to make it a business, to at some point in the future offer these type of rides into space for those who are interested and can write the big, fat check. But how far away is that, Miles, realistically?

O'BRIEN: Well, you know, if you're willing to write a relatively big fat check -- no, a big fat check -- $200,000 is big. I'm just saying relatively because I know you can fly to the International Space Station if you want to go see the Russians for $20 million. That's the big check in this business.

$200,000 will get you a ticket on Virgin Galactic Spaceways or Airways, whatever it's called, by the year 2007. So he's talking about doing this in three years' time.

He wants to come out here in the desert and build a hotel for people to come and do their training here. Guys like Dick Rutan might help out in that. Who knows. Show them what the right stuff is all about.

And then off they go to space. And yes, that's not for everybody, but it's not $20 million either. So it's going in the right direction, if you're among those who are interested in this.

The point is, as time goes on, it's only going to get cheaper as this becomes more and more routine and more attempts are made, and more companies try it. This licensing deal that Burt Rutan and Paul Allen and Richard Branson signed is non-exclusive. So there are others out there who can buy the same technology and set up their own space liners.

KAGAN: Space liner. I like that term.

O'BRIEN: Yes.

KAGAN: Space liner.

O'BRIEN: Yes.

KAGAN: Why don't we explain the graphic that the viewers are seeing, the Dexter and Southfield schools. Who are those folks and why are we using their camera?

O'BRIEN: Yes. Yes, let's -- just like everything on this, Daryn, this is a grassroots operation in every respect.

Our tracking capability comes to us through the courtesy of -- and as we -- of course we're shifting to our own camera, lower chase camera. But that other camera, that Dexter and Southfield schools, gives us the ability to see the craft all the way up to 368,000 feet.

And it's done by a couple of teachers at this private school outside of Boston. And they developed the software, the tracking capability and the special tripods. And have offered this up to all of us to give us the ability to see this. And it's pretty amazing. I mean, you know, I'm sure the -- NASA's tracking cameras would be a little steadier and so forth, but I'm sure they would cost many orders of magnitude more money in order to do what they do.

So it kind of is in keeping with the philosophy of this, you know, high desert, small hangar effort here. Now, the flotilla or airtilla (ph), whatever you prefer, is overhead right now. Four planes, the Beech Starship, the AlphaJet, the Extra Aerobatic Plane (ph), and then SpaceShipOne, turning a right turn. He should be coming in...

RUTAN: It's the low-key thing. He's on the downwind, going to be turning base leg here in a second.

O'BRIEN: All right. So base leg is the one that is perpendicular, right-hand turn, perpendicular to the runway. And then he'll make another right turn, line up with the runway, and come on in for a landing.

He should be on the ground here in just a few moments. Brian Binnie, 51 years old, an employee of Scaled Composites, who has a business role as well as a test flying role, on his way down for -- I am sure he is aiming for the smoothest possible landing.

RUTAN: Geared to go.

O'BRIEN: With 20 years of Navy test pilot training behind him, has now become an astronaut, not with the help of the government. This time with the help of a small private entity out here to the tune of $25 million.

And there you see, as we try to lock up that shot, you see a fairly good close-up of SpaceShipOne, no more than 20 feet in length and about 2,000 pounds. And Daryn, we should point out it's capable of carrying three people. That's the contest rules.

Brian Binnie is there with a bunch of ballasts, which happens to be personal effects, trinkets, whatever, things that people on the team wanted to fly to say they had made it to space. Landing gear's down as he makes that final right turn to the final leg of his approach, lining up with the runway.

KAGAN: And what happened the last time he tried to land? Why is it so difficult?

O'BRIEN: He was a little too steep. And actually a lot too steep. And as a result, when he landed, that landing gear, one of the two angled ones, the main gear, gave way.

Now, he didn't have a scratch, but the ship was scratched a little bit. Let's listen as he comes down.

UNIDENTIFIED MALE: One and one foot. .

O'BRIEN: All right. He has dramatically improved his landing skills on SpaceShipOne.

Brian Binnie paints SpaceShipOne on to the runway here at Mojave Spaceport as the chase planes fly overhead. And Brian Binnie brings it in for a landing there. And very soon will be tugged over here, where they will receive plaques, a little bit of champagne and celebrate they've won a $10 million X Prize.

RUTAN: You bet. There's an insurance company right now that's got to pay off.

O'BRIEN: Yes. And I'm sure somewhere out there there's some insurance adjusters who are going, "Oh, jeez, this was a bad idea."

KAGAN: A lot of zeroes.

O'BRIEN: How did we let Peter Diamandis talk us into this one?

RUTAN: Well, they did an evaluation to see what the odds were. And they took up -- they took up the odds.

O'BRIEN: Yes. I'm not sure that's insurance or book-making. But nevertheless...

RUTAN: Well, I guess -- I guess they didn't know who Burt Rutan was.

O'BRIEN: Yes, precisely. Burt Rutan has a way of delivering on his promises, doesn't he?

RUTAN: Well, you know, my input to this whole thing is -- I said, "Burt, there's no way this will ever work," but it generally always does.

O'BRIEN: And that's what he's always said all along, going back to the Voyager days, when he said, "Let's fly around the world on one tank of gas." And you said, "Yeah, right."

RUTAN: Well, I thought he was crazy.

O'BRIEN: Yes.

KAGAN: Now, I remember from...

RUTAN: He talked about human-powered vehicles going into space.

O'BRIEN: Yes.

Go ahead, Daryn.

KAGAN: From the last one, the practice flight, at least, the -- they'll come around and get to pop out there, and there should be champagne uncorked and celebration.

O'BRIEN: Oh, yes. There's a little bit of a victory dance that is planned here, Daryn. And we will, of course, be following that very closely. It will take a few minutes for them to tug SpaceShipOne over here. Obviously it has no power of its own.

Does he even have brakes? It just lands and...

RUTAN: No, it has wheel brakes.

O'BRIEN: It has wheel brakes, but the nose wheel is just a piece of wood, right?

RUTAN: It's just a piece of walnut wood.

O'BRIEN: Yes.

RUTAN: And it grinds off a little bit. But they steer it with the brakes.

O'BRIEN: OK. They steer it with the brakes as it comes down. And it has obviously come to a stop right now.

And Brian Binnie is just waiting for a tug to pull him over to the area not far from where we sit here, where we'll see him being received by the X Prize, by family members, by members of the team, Paul Allen, Burt Rutan, and on and on.

What's going through their mind right now?

RUTAN: Well, they're probably looking for the champagne right now. There's going to be a lot of that.

O'BRIEN: Yes.

KAGAN: Well, if Dick can share with us -- Miles...

RUTAN: No, this is great. You know, there's a lot of pressure that's been taken off.

O'BRIEN: Yes.

RUTAN: People working really hard.

KAGAN: Yes, if Dick could share...

O'BRIEN: I'm sorry. Go ahead, Daryn.

KAGAN: I was just going to say, you know, Dick, part of this family, you've tried some kind of crazy things over the years and have accomplished quite a few things. Just what it feels like to him emotionally to have this day, this accomplishment -- yes.

O'BRIEN: Yes, give us your emotional feeling right now, just your sense (UNINTELLIGIBLE) a little victory lap for the AlphaJet.

Your sense of family pride here? I mean, you're brothers and you, you've had your ups and downs, as brothers always do. But this has got to be a moment of great pride.

RUTAN: No, this is really great. I'm really proud of my brother.

That guy has the courage. And when a lot of people said this could never be done, and he was crazy, even a of people on his own team at times said -- said, "Burt, are you really sure that we could actually do this?" And he hung in there, and here it is today. They did it.

O'BRIEN: I know you said before, though, your concern was that he was perhaps a little too confident, and that it would really -- a setback, a big setback would really deflate him.

RUTAN: Well, that would be terrible if they had a big setback. But, you know, this is -- this is not an easy thing to do. And there was some risk involved.

And right now, there's a huge -- a huge amount of relief. Because there was a lot of demons out there that could have grabbed that spaceship. And evidently -- actually, the demons, oh, they were out watching Mount St. Helens.

O'BRIEN: There you go. We sent the demons to St. Helens.

Let's look at the separation tape one more time for those who might be just tuning in. As you look at live pictures right there, the party that has met SpaceShipOne and will begin the process of tugging it back -- but let's look one more time at that separation, if we could.

One, one thousand, two, one thousand, three, one thousand, boom. Off it went. That's about as fast as you want to do it, right?

RUTAN: That's about as quick as you can do it.

O'BRIEN: Yes.

RUTAN: You get positive separation, turn the switch and hang on.

O'BRIEN: OK. So there he is. He's getting tossed kind of back in his seat there as he gets that kick.

Within just a few seconds he's going supersonic. As he was going -- and here's were going to see a fly-over right now of the chase planes as they come by in their victory roll.

But as they went up -- as he went up, he reported a lot of instability as he kind of just got into the supersonic realm, which I guess is...

RUTAN: Well, he did a little roll-off.

O'BRIEN: Yes.

RUTAN: And it looked like Brian handled it very well. But towards the end of the burn, when it's changing from liquid to gas, the engine starts chugging a little bit.

O'BRIEN: All right. So explain that, when you're going from liquid nitrous oxide to just gas.

RUTAN: It's just a gas.

O'BRIEN: And it kind of sputters. Is that essentially what happened?

RUTAN: And the thrust goes off quite a bit. But during that transition period, as it kind of sloshes around, a little liquid, gas, and it's chugging pretty hard, and it's a pretty rough ride at that time. But you're going straight up.

O'BRIEN: All right.

RUTAN: And when the predictor says you're going to make it...

O'BRIEN: You can almost see it right there, almost like it's sputtering.

RUTAN: Yes. You can see it chugging.

O'BRIEN: All right. Let's -- let's just put a button on this for folks.

We're not done covering this story, of course. We want to hear from everybody.

There's going to be a lot of talk about what's been accomplished here. But just to remind everybody what we've seen, you've seen a bit of space history, an important piece of space history. A new chapter, really, in the exploration of space.

RUTAN: Absolutely.

O'BRIEN: As they have -- this team here, SpaceShipOne, designed and built by Burt Rutan, funded by Paul Allen, a small team here in the middle of the Mojave Desert at a relatively small airport has captured the imagination of the world as they have successfully won the $10 million Ansari X Prize.

As you see the landing just a few moments ago, Brian Binnie, 51 years old, becoming the second civilian astronaut just a few moments ago above the high desert here of California, a place of great history, where in 1947 Chuck Yeager broke the speed of sound, when in the '60s X-15s flew into space themselves, where every major fighter and strike aircraft has been tested and rung out.

This is a historic place. This is hallowed ground for people involved in this. So it is fitting that on this day, October 4th, Sputnik day, that this team would win that $10 million Ansari X Prize.

RUTAN: And it all worked.

O'BRIEN: And it all worked. RUTAN: I mean, this is a lot of years, a lot of culmination of a lot of work and a lot of risk. But mainly a lot of courage.

O'BRIEN: Dick Rutan, well put. Thank you very much. We'll leave it at that.

RUTAN: Good. Thanks for having me.

O'BRIEN: Daryn.

KAGAN: Miles, our thanks to you and to Dick Rutan. We're coming back for the champagne. Don't think we're skipping that.

O'BRIEN: Oh, absolutely.

KAGAN: Absolutely.

O'BRIEN: And so are we. We're going to be here for the champagne, too.

KAGAN: You stay put. We'll check back with you for the celebration.

While we were spending a good chunk of our morning there watching one dream come true, there is other news in the world to tell you about, including a day of violence in Baghdad. Twin car bombings leaving death and destruction in their wake. We'll have the latest from Iraq coming up next.

And of course much more on the X Prize flight. Another shot at space and more on the big win coming up.

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(STOCK MARKET REPORT)

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KAGAN: To Iraq now. The Health Ministry reports at least 16 people dead and 85 wounded in a pair of car bombings today in central Baghdad. In a separate incident, a high-ranking Iraqi official was attacked and seriously wounded in eastern Baghdad.

More now from Brent Sadler, who's in Baghdad.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN CORRESPONDENT (voice-over): Two powerful car bomb attacks in central districts of Baghdad. The first targeting an army recruitment center, killing around 15 and wounding at least 75 others, according to Iraq's Health Ministry.

The explosion happened near a U.S. military checkpoint outside the heavily-fortified Green Zone, home to the U.S. and British embassies. A white sports utility vehicle burst into flames amid scenes of bloodshed and panic. The attack plan was similar to scores of other strikes on Iraq's security forces aimed at making Iraqis afraid of recruitment into the ranks of the police and army, as well as sapping morale among those already serving.

In a second blast, Iraqi reports say bombers targeted two armored vehicles of the type used by western security personnel and contractors in a busy commercial district. One killed and some 13 others wounded in that attack.

From the top of our hotel, we could see a large plume of black smoke, then a brief gun battle, shots echoing across the city as Iraqi police reportedly exchanged fire with expected insurgents.

(on camera): Even as U.S.-backed Iraqi forces claim success, overwhelmingly, rebels stronghold north of Baghdad, insurgents can still strike terror in the heart of the capital.

(voice-over): West of Baghdad, U.S. warplanes have again attacked suspected insurgent operations in Fallujah, destroying what the U.S. military claims are the movements of weapons, training and the planning of terror attacks, the kind of attacks that shook the capital on this day.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

KAGAN: We're going to go from Baghdad back to the Mojave Desert in California. More on the X Prize, the $10 million that appears to be in the bag for the team of SpaceShipOne.

We're back in a moment.

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Aired October 4, 2004 - 10:30   ET
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DARYN KAGAN, CNN ANCHOR: Well, big gains on Friday, but there's a lot of uncertainty in this market, and that may leave investors unsure about their 401(k)s. Our FN personal finance editor Gerri Willis has some perspective with today's top five tips.
Gerri, good morning.

GERRI WILLIS, CNN CORRESPONDENT: Hey, good morning, Daryn.

Tip No. 1 today, don't disengage. It's easy enough to think if you see the markets moving sideways, you get one of those quarterly statements on your 401(k) and it just looks abysmal to say, hey, I'm not going to contribute anymore but that would be a big mistake. Here's why, you'll miss out on the free money from your employer. What's more, people forget, you're putting that money into your 401(k) before taxes. So you get an extra benefit, an extra boost from the fact that Uncle Sam isn't taking his share. So, don't disengage.

KAGAN: So extreme makeovers are really cool on some of those television shows, but probably not a great idea for your 401(k)?

WILLIS: You bet. That's absolutely right, Daryn. Don't just go in wholesale and make changes to your 401(k), because you hate its performance. That would be a big mistake. Any decisions you make on the basis of emotion alone probably not too terrific.

KAGAN: What if you are looking to clean house a little bit and tidy things up, how do you pick real winners?

WILLIS: It does make sense, though, to really seriously evaluate what you've invested in here, and the best way to do that, look, don't pick up the latest list of top mutual funds. Those are the ones that are the most extremely volatile. They're at the top of that list for a reason. You want to pick the ones that do the best over the long term and make sure you're making apples to apples comparisons -- when you're looking at small-cap funds, compare them to other small-cap funds. Make sure that their performance is one of the best in the group. Going to morningstar.com, that can help you with some great suggestions.

KAGAN: And don't forget bonds can be your friend.

WILLIS: Bonds can be your friend. You know, people don't want to buy them right now because interest rates are probably headed higher. That's at least what the economists are saying right here. But you do want to have some bonds in your 401(k). We've got some names of ones right here. Fidelity Short-Term Bond Fund, Vanguard Short-Term Bond Index Fund, and Vanguard Short-Term Investment Grade. You want to stay short here on the yield curve right now, because rates could be headed higher.

KAGAN: And finally, what about a maturity fund? How can they fit in?

WILLIS: Well, you know, you want to make sure sometimes that if you don't have a lot of time to pay attention to your 401(k), that you can put it on automatic pilot and not worry about it. One way of doing that, target maturity funds. The investments in these change over time and with your age. And you don't have to do a thing. You don't have to worry about asset allocation at all. Make sure you check out the fees. The fees on some of these are high. So do your research. But take a look, it could be attractive -- Daryn.

KAGAN: All right, Gerri Willis, thank you so much for that.

WILLIS: Thank you.

KAGAN: We are going to see -- check in on California, private ambition. We might all reap the reward if you're interested in going into outerspace. Live pictures now of the privately built spaceship embarking on a historic journey to space. Will they make it? We'll check in with our Miles O'Brien, just ahead.

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KAGAN: Let's go ahead and check the stories happening now in the news. Iraq's health ministry says that at least 16 people are dead, and 85 wounded in a pair of car bombings today in central Baghdad. In a separate incident, a high-ranking Iraqi official was attacked and seriously wounded in eastern Baghdad. We have a live report from Iraq's capital coming up in the 11:00 hour.

There is a cauldron boiling beneath the surface of Washington's Mount St. Helens. A live picture from Washington State right now. In fact, many geologists had predicted an eruption this past weekend. Volcanic gases and low-level earthquakes are still being detected. But experts say an eruption is still likely, it is, though, difficult to predict a timetable.

We're keeping our eyes on the skies, a live picture from the Mojave Desert, or actually way above it. SpaceShipOne, a privately built spaceship, making its attempt for the edge of space for the second time in a week. If it succeeds, its crew will win $10 million. It's a contest designed to jumpstart private space flight.

Two Americans will share this year's Nobel Prize for medicine. The Nobel Committee announced that Richard Axel and Linda Buck received the award for research into the sense of smell. Academy members told the Associated Press the couple was honored for exploring one of humanity's most profound senses. The Peace Prize will be announced Thursday in Oslo, Norway.

Veteran actress Janet Leigh is being mourned today in Beverly Hills. Leigh died Sunday following a year-long battle with a blood disease. She may be best known for the shower scene, this scene right here, in the Alfred Hitchcock classic "Psycho." Janet Leigh was 77.

They're working on writing history over the skies of the Mojave Desert in Southern California this hour. SpaceShipOne is in the air, possibly en route to becoming the first privately developed manned rocket to reach space twice within two weeks. We're looking at live pictures from there. The accomplishment could be worth $10 million. Our space correspondent Miles O'Brien in the Mojave Desert to take a closer look, and, Miles, to describe it, $10 million doesn't even begin to cover the cost of making this dream come true.

MILES O'BRIEN, CNN ANCHOR: Well, I guess you could call it a loss leader, Daryn. And when you're Paul Allen, you don't really count such chump change as $10 million, or for that matter, the $25 million you invested in it. You're thinking about the big picture and the impact this has had. And look at the impact. We'll talk about the crowds and the interest in this in just a moment.

But first I'm joined by Dick Rutan, brother of Burt Rutan, the designer and builder of this craft, financed by Microsoft cofounder Paul Allen.

We've been now 49 minutes since White Knight carrying SpaceShipOne with pilot Brian Binnie aboard SpaceShipOne, Mike Melvill flying the carrier craft. Mike, of course, flew the first flight back on Wednesday in this attempt for the Ansari X Prize. Anyway, where are they announced to? What are they doing right now, Dick?

DICK RUTAN: Well, they're probably pretty close to about 44,000 to 45,000 feet. Now they're right at the top of their climb. So the climb rate is real slow and they're just creeping up to get every single foot of altitude they can.

O'BRIEN: All right, and as far as you've heard nothing unusual on the radio?

RUTAN: Nothing unusual. Everything is checking out just fine. In fact, it's been unusually quiet, which is really good news.

O'BRIEN: All right, when it's quiet, that's usually good news, Daryn.

I want to call your attention to this shot you're seeing here, upper right of your screen. You see clearly it says Dexter and Southfield Schools. Those are schools just outside of Boston, private schools. A couple of teachers there, along with some help from students, had developed this amazing tracking technology that you're seeing there right now. This is done with a couple of telescopes and some computers and some novel software. The team is located about 25 miles east of where I sit right now in the Mojave Desert, literally in the middle of nowhere, and they are able to -- there's Ron Dantowitz (ph). He is the leaders of the team. They're able with this technology and some fancy tripods that have the capability of swiveling around and following -- there you see it -- are able to track SpaceShipOne, White Knight and any other aircraft for that matter, as it flies through the sky. Now, you've got to remember, we're looking at something that the flight begins at about 50,000 feet, ultimately reaches 328,000 plus. So, it's a long way away. And you're going to see a little bit of shakiness in there. That's just inevitable when you have something that is so far telephoto as this.

In any case, it's wonderful technology that allows us to look in. Of course, you'll recall on Wednesday, gave us a great view of that incredible scene, 29 rolls as Mike Melvill reached space.

Now, as to the interest here -- 35 school buses, I'm told by Dick Rutan, pulled in here. Kids from all over this area are here. Literally thousands of people, many more people than we saw in June when SpaceShipOne on a test flight. There you see some of the shots down the flight line here at the Mojave -- and we can call it now a space port -- to see this piece of history, and see them, they hope, win that $10 million Ansari X Prize, having flown two trips to space inside of two weeks in a craft capable of carrying three people.

Now, there's only one person aboard. The rest is ballast equivalent to two individuals. Lots of trinkets and teddy bears and family photos from team members and the like to make it more meaningful for the team that's involved here. In any case, they hope by the end of the day -- actually very soon from now. We're now probably pretty close to when they're going to start the flight to space. But by the end of this flight, they hope to be $10 million richer.

And more to the point, going back to that crowd and the schoolkids and the people watching all around the world, really have sparked people's imagination in a way that space travel hasn't really perhaps since the early '60s when we first went to space and the space race began.

Dick Rutan, you were just at an air show this weekend. What are people asking you about this? What do you think -- why is there such interest in it?

RUTAN: Well, what the excitement about this is, is that all of a sudden regular people, not fancy astronauts, will be able to go into space now. And it's an entrepreneurial spirit. And the fact that we're going to build an organization where we can have -- you can go and buy a ticket and go into space and put the human being back into it.

O'BRIEN: So, Daryn Kagan, listening back in Atlanta, I assume you're anxious to get your pennies together and buy a ticket. Would you be interested in going for a ride in space? I'm curious.

KAGAN: Yeah. It just kind of depends on how many pennies that's actually going to be as we go forward.

O'BRIEN: Yeah, well, that's a good point. Now, Richard Branson -- of course, Virgin Airways -- made his announcement just a couple of weeks ago, saying that he would like to license this technology, build a craft that could carry up to seven people, and for as much as $200,000 take people to orbit -- not to orbit, but to space ever so briefly.

Now, that's a fair amount of money for bragging rights at a cocktail party, right? Wouldn't you say?

RUTAN: Well, that's pretty good.

O'BRIEN: Yeah.

RUTAN: OK, we're about five minutes out.

O'BRIEN: OK, we're five minutes away, Daryn. I'm curious: If money were no object, if you could write a check for $200,000, would you go, Daryn?

KAGAN: Yes. I think I would. I would do that. And I don't even have to ask you, Miles. You would write the check, even if you weren't good for it. You'd let it bounce. You'd go anyway.

O'BRIEN: Hopefully it wouldn't clear before I could get up there. Yes, but that would be something special.

But you know, the other thing to remember here is -- and we were reminded of that on Wednesday as we watched Mike Melvill encounter 29 rolls, fairly rapid roll rate, an unexpected roll rate on his way up -- but this is dangerous. And the key, as Burt Rutan has said time and again, is to make it about 100 times safer than space travel is now.

Well, that's a tall goal. I mean, I'm curious on your thoughts. What are you seeing there?

RUTAN: Well, what we're seeing right now is that we're up in the condensation, so we have a nice streamer coming out of the White Knight so everybody here will be able to see it.

O'BRIEN: All right. Well, let's be very clear on that. That's the contrail from the White Knight. That's not the rocket that is firing, Daryn.

What they're going to do is go through a series of checklists here over the next few minutes. And really for Brian Binnie, sitting in that SpaceShipOne, this is the -- a very slow period of time. There's not so much for him to do until that rocket is fired, correct?

RUTAN: I think probably the toughest part is that one-hour climb when you really don't have too much to do. You sit there and think about your thoughts about what's going to happen.

KAGAN: Hey, Miles?

RUTAN: Well, it's a lot better when you're actually doing something.

O'BRIEN: Yeah, Daryn?

KAGAN: I have a question here. So, they have to make it 328,000 feet, right, for this to count?

O'BRIEN: Right.

KAGAN: Who says? How do you know? They're up so high, how...

O'BRIEN: Who says?

KAGAN: Yeah.

O'BRIEN: It's not just taking their word for it.

KAGAN: Right, exactly.

O'BRIEN: What they have, there's a whole series -- there's an inertial altitude system, which is just a fancy altimeter on board the SpaceShipOne. But the real clincher is, you know, we're very close to Edwards Air Force Base, the hallowed ground for test pilots, and they have a very sophisticated radar system there. And they are painting -- as is the term in aviation -- painting SpaceShipOne as it goes up. And they'll be able to give it right down to the inch exactly how high SpaceShipOne went.

They made it by about 10,000 feet on Wednesday. What are you hearing right now, by the way?

RUTAN: OK, Mike Melvill just gave his condolences -- not condolences -- his best wishes. And he says, man, we're with you all the way, Brian. Go get them.

O'BRIEN: All right, yeah. All right. So, that means they're getting very close here. Any indication as to how long before they'll do separation? IS it just a matter of...

RUTAN: We're right there.

O'BRIEN: OK.

RUTAN: We're coming right up on the block right now.

KAGAN: How do they actually separate? Is a button pushed? A latch released? How does that work?

O'BRIEN: Yeah, it's a latch. It's a latch release, essentially, right?

RUTAN: It's a latch release. What happens is there's a consent light in each cockpit. And when they both consent to let it go and everybody's agreed -- so Mike has to consent to it, and they have a light, and then when everybody's agreeable, they pull the handle...

O'BRIEN: Pull the handle.

RUTAN: ... and manually release them and let him go.

O'BRIEN: And off they go. So, in other words, it's more than a radio communication. There's no misunderstandings. Unless you have that little light on in both places...

RUTAN: That's right. They have to ask him with a light, and he has to respond with a light.

O'BRIEN: Understand. And then, the trick here, Daryn, is it's really important that they separate quickly and that the rocket motor is fired relatively quickly, because you don't want to lose too much altitude. You want to be able to make this record in order to win that $10 million prize.

Now, part of the reason why we're doing this today, October 4th, is Burt Rutan wanted to preserve the option of a third flight if need be. There's time. He has until October 13th, by the rules of the contest, to fly two trips to space. He's got one under his belt, obviously.

And if this one doesn't make it, he has another rocket motor ready, and he will attempt a third try if for some reason they don't reach that altitude -- Daryn?

KAGAN: You were talking about the proximity to Edwards Air Force Base. Is that the reason they're doing this in the Mojave Desert?

RUTAN: One minute.

O'BRIEN: Yeah, well, of course, this is where Burt Rutan has set up his shop. And we are one minute away, I should tell you.

KAGAN: Right.

O'BRIEN: Oh, two minutes -- two minutes away.

RUTAN: Two minutes 30 seconds.

O'BRIEN: And this is just -- I mean, look at the weather out here. It's like this practically every day of the year. There's not -- it's not populated, so it's obviously a safe place with a lot of air space where you can do risky things in aviation.

And so, this is where Burt Rutan settled after he spent some time at Edwards Air Force Base working in design over there for one of the big contractors. He came over here, set up a little shop of his own to build small kit-built planes, and everything evolved to what you see today. And that has made Mojave really an unlikely place, if you think about it in many ways, a place you -- Daryn, I promise you, you wouldn't stop at the gas station if you were passing through here.

KAGAN: Well, no, that's not true. You do stop...

O'BRIEN: Have you stopped?

KAGAN: Oh, yeah, many times, driving up to mammoth to go skiing. So, you do stop in Mojave.

O'BRIEN: It is a stop. Although they just redid the road, and there's not as much traffic in town. And the Wendy's closed, so that's -- that's what happened.

KAGAN: I've been through Mojave many, many times.

You know, question as we get closer here to separation, you're talking about this being a contest. This is not a done deal that this project wins the $10 million. What about the other contender out there, the da Vinci Project?

O'BRIEN: Well, they've been having some problems, quite frankly. They -- we're one minute away.

KAGAN: OK.

O'BRIEN: One minute away. And I'll just tell you briefly what's going on is this is a project up in Canada. Brian Feeney is his name. And he's had some difficulties pulling it together.

The truth of the matter is Burt Rutan, because of his background and because of his fundings -- his background is what led Paul Allen to him -- is by far the best funded of these projects at $25 million.

What are you hearing?

RUTAN: Mission control says go. The White Knight says go, and Brian Binnie says we're go.

O'BRIEN: OK, so that's...

RUTAN: So, we're 30 seconds out.

O'BRIEN: We're 30 seconds away now. Let's watch and listen to this as we see, through the help of our tracking camera from the Dexter and Southfield schools -- and we apologize for that little shimmer there.

RUTAN: Twenty seconds.

O'BRIEN: Twenty seconds away from launch of SpaceShipOne...

KAGAN: What should we watch for, Miles? What should we watch for?

O'BRIEN: All right. You'll see SpaceShipOne drop down and...

RUTAN: Ten seconds.

O'BRIEN: ... almost immediately you're going to see a very bright flame coming out the business end of SpaceShipOne. Ten seconds away. Let's watch it as it goes down.

RUTAN: There's the release. Got a good, clean release.

KAGAN: All right.

RUTAN: ... fired. You got a good...

O'BRIEN: All right, that rocket, Daryn, is fueled by tire rubber and nitrous oxide. Brian Binnie.

RUTAN: Nice, stable burn.

KAGAN: How fast is it going?

RUTAN: It's looking good.

O'BRIEN: It's moving -- is it already supersonic, Dick? Very close to...

RUTAN: Going supersonic pretty quick here.

O'BRIEN: And ultimately will reach in excess of Mach 2, Mach 2.5 or so.

RUTAN: OK. He's going through supersonic right now. A little roll off.

O'BRIEN: Supersonic. That shake is in the tracking camera. So, don't get the sense that that craft is...

RUTAN: Looks like he's supersonic. He's in good shape.

O'BRIEN: All right. He's gone through supersonic now. And all that shaking you're seeing is just the -- an artifact of the tracking. It's a pretty stable flight, thus far -- 100,000 feet now.

KAGAN: So he has to go three times that, where he is now?

RUTAN: He's going up to 200,000 feet.

O'BRIEN: Yes, this rocket burn will last about 65, 70 seconds or so.

RUTAN: He's reporting a little bit of shaking.

O'BRIEN: He says it is a little bit shaky. He is reporting some...

RUTAN: The motor at this point starts running a little bit rough, starts chugging a little bit, but that's normal.

Three twenty eight, OK.

O'BRIEN: 328,000?

RUTAN: No they're not there yet, but they're predicting. He's got the energy to go. So he's predicted. So it's looking good.

O'BRIEN: And we welcome our viewers all around the world on CNN International as you're watching the flight of SpaceShipOne. Shut down the rocket now. The rest is a coast uphill to the 100-kilometer point, 328,000 feet, which is the threshold of space. Brian Binnie the pilot onboard right now indicates he has the energy to make it to that altitude. If they do that...

RUTAN: They're feathering right now.

O'BRIEN: OK.

RUTAN: He's got it into feather, and he's still going up.

O'BRIEN: Now the feather is a -- I'm with Dick Rutan, who is the brother of Burt Rutan, the designer and builder of this craft, and he is telling you that he's in feather, which means that's getting configured to come back in.

RUTAN: About 20,000 feet to go.

O'BRIEN: 20,000 feet to go, still climbing up.

RUTAN: Still coasting.

Feathering, looks like he's got it under real good control, too. The rates are down. Any second now, we'll have it.

O'BRIEN: He's still climbing, still climbing. We have not seen the rolls that we saw last Wednesday. There was a little bit of vibration that Brian Binnie reported, as he was kind of enter entering the trans-sonic zone, the speed of sound.

So it's in the feather mode, which is what allows it to drop ever so slowly like a shuttle shuttlecock, avoiding it burning up on re- entry. They put it in that position even as it goes up to prepare it for the trip back down.

RUTAN: They made it.

O'BRIEN: Apparently they just made it.

RUTAN: Well, mike gave him the congratulations. But I haven't heard exactly what the altitude is just yet.

O'BRIEN: This would be unofficial if we were to go with this of course and the reports of what they have onboard.

He's now taking pictures we're told on board SpaceShipOne. So obviously the -- he must feel as if he's accomplished his mission here and reached the altitude. Is he coming back down for sure?

RUTAN: He's almost there. We're just standing by for confirmation.

O'BRIEN: Brian Binnie, 20-year veteran of U.S. Navy test flying, and an employee of Scale Composites, Burt Rutan's company out here.

We're waiting for something unofficial to indicate whether he's won it or whether his team has won the $10 million Ansari X-Prize.

RUTAN: OK, he's just at apogee (ph) right now. He should be starting down. They reported it. He's just about five miles south of the bullseye where he's supposed to be. That's in really good shape.

O'BRIEN: OK, so five miles south meaning, maybe he was a little bit lower than he would have anticipated?

RUTAN: No, I mean south of his re-entry point.

O'BRIEN: But would he have been pointing straight up high or not?

RUTAN: Well, maybe the trajectory was off just a little bit. But basically, if he's within five miles of the re-entry tube, they're doing real good.

O'BRIEN: OK, and course this is all hand flown. This is no autopilot. This is a pilot who is following a little ball on a screen which gives him a presentation of the desired track to give him the altitude that he'd like.

KAGAN: Hey, Miles, so he (INAUDIBLE) up there to take some pictures?

O'BRIEN: Yes.

KAGAN: Any idea what those pictures -- what's the view? Of course he asked for a window seat, right?

O'BRIEN: Yes, he got the window seat, he did. Yes, in fact. And what you're seeing up there, first of all, it's the blackness of the sky is what they all talk about for one thing. You get the curvature of the Earth, and he is seeing a very healthy, good chunk of Southern California on this beautiful clear day. It's a spectacular view, I'm told, by Mike Melvill who was up there, just ogled at the sight.

RUTAN: We're starting to re-enter the atmosphere right now.

O'BRIEN: He's coming down now. I want to just show folks who might just be tuning in. We'll watch this carefully while he's coming down, Brian Binnie on his way back down to the high desert here. Let's look at that separation and the ignition of the rocket just a few moments ago. Did you see anything -- off it went. He lit it very quickly, which is an important thing. It's amazing how fast it gets out away from the White Knight carrier ship. Noticed a little bit of a roll.

RUTAN: A little bit of roll, but that's no problem at all.

O'BRIEN: He's kind of rocking the wings there. He said there was a little bit of vibration as he broke the...

RUTAN: The end of the rocket burn, it starts chugging a little bit. But he's in there probably about four or five g's right now.

O'BRIEN: All right, and screen right is live -- excuse me, screen left is live. Screen right is taped from just a few minutes ago as he went upward with that rocket motor burning. I didn't get the number of...

RUTAN: Right now the g forces are coming down to close to 1 g. So he already has the spacecraft to fly back into the re-entry box.

KAGAN: Miles, looking forward to people getting to take...

RUTAN: He's a little loosey-goosey right now. Now he's subsonic, and he's doing a lot of buffeting.

O'BRIEN: I'm sorry, go ahead, Daryn.

KAGAN: I'm just looking forward for people who are saying, a few years from now, I want to be able to take a personal, private spaceflight, how close will that be to what we're watching today? Is this what people will buy?

O'BRIEN: Well, you know, Richard Branson has purchased this particular technology. What it will be is just a larger version of what you're seeing here. So, yes, this will be -- this will be the flight, a smaller version as far as the size of the craft. But as far as speeds, altitudes, what kind of g forces, the amount of forces of gravity you'd feel coming down, all of it is going to be the same.

How is everything looking?

RUTAN: OK, it's coming down to feather. The feather looks like -- all he's got to do is lock and we're home free.

O'BRIEN: All right.

RUTAN: We get conformation of the feather lock.

O'BRIEN: And when you say the feather has to lock, you want to set this up so it drops sort of like a shuttlecock. Is it dropping right so far?

RUTAN: It comes into position, and it's a hook that grabs it.

O'BRIEN: I see.

RUTAN: And the hook has got to grab it.

Looks like he's in good shape.

O'BRIEN: All right, do we have any indication as to whether they passed 328,000 feet or 100 kilometers?

RUTAN: I haven't heard it.

O'BRIEN: OK, we don't know for sure yet. It's going to be one of those calls that we might have to wait until we get that radar telemetry back in. Nobody has said for certain here as to whether they made it.

The flight, according to Dick Rutan, sitting beside me here, seemed to go flawlessly, and he was very close to hitting his target. Only five miles off this little imaginary box in the sky, which would indicate that his trajectory was what they anticipated, which would mean that he probably was certainly close, if not had reached that barrier into space.

RUTAN: Yes, the predictor, the predictor that said that they're going to make a climb, but what it is exactly I don't know yet.

O'BRIEN: So, Daryn, now this would be the tricky part for people who are on their way down. If you buy a ticket you're going to feel, what, up to five times the force of gravity on the way down.

RUTAN: For 20 seconds. It's not too bad.

O'BRIEN: For 20 seconds, you've floated, you've been able to take your picture. You've released some M&Ms or whatever, floated around for a few seconds, and then, bam, five times your weight on the way down, so that's a fine...

RUTAN: Well, it builds up real smooth, though. It's kind of a gradual buildup and then it just kind of gradually bleeds off.

O'BRIEN: And is it coming back on you?

RUTAN: No, now it's straight down.

O'BRIEN: Straight down on you. So he's kind of...

RUTAN: It's not like jumping into a swimming pool or something. It's just a nice, soft feather bed.

O'BRIEN: So it would be a nice, smooth ride comparatively, Daryn.

RUTAN: And when it comes in, it comes in supersonic. And when it has the supersonic it's nice and smooth. And As soon as it goes subsonic, then it starts jumping all over the place and it gets a lot of bouncing.

O'BRIEN: All right, we're going to listen for that sonic boom as it comes in.

Daryn, go ahead.

KAGAN: I was saying, hopefully they have the airsick bags in the seat in front of you for the 5 G's.

O'BRIEN: That will standard equipment on this craft whenever it flies will be the sick sack for folks like Daryn, just in case.

KAGAN: How long is it going to take for him to get back down to Earth, Miles?

O'BRIEN: We've got probably -- he's at what altitude right now, Dick.

RUTAN: Well, it depends on how quick he wants to come home, 15 minutes maybe.

O'BRIEN: OK, we're talking roughly 15 minutes. He's going to fly around here.

We -- it's a very tricky thing to get the energy just right to land in just the right spot. He flies it manually, but he has a little computer to assist him in knowing where to point -- don't want to come up short, don't want to go long, because it is, after all, a glider. He has no jet engines or any sort of power. He's just coming in like a glider pilot would, and he has to manage his energy very well.

RUTAN: Well, He stays close to the airport. When you don't have an engine, you stay close to the airport.

KAGAN: Yes, good idea.

O'BRIEN: That's a good plan, keep the airport in sight when you don't have any...

RUTAN: You don't go out and do any sightseeing at all, no.

O'BRIEN: No, but having said that, as you say, he can kind of loiter, if he wants, a little bit, right?

RUTAN: Another thing, too, they have about three specific points that they get to. We call it high key, low key, base key. And then you can fine tune it, if you're a little off on one, you can cut the corner and make it up on the next checkpoint.

O'BRIEN: And key meaning putting a key through a keyhole.

RUTAN: No, it's kind of like a window you fly through.

O'BRIEN: I see.

And so he's got to try to manage all of that just right so he sets himself up for the nice, gradual approach. I don't want to belabor this one for Brian Binnie -- he's had a great flight so far -- but back in December, when he flew supersonic, he came in very steep, and as he landed, collapsed one of the landing gears. So it's not a simple thing to land.

RUTAN: I can imagine right now what's going through Brian Binnie's mind is he says, boy, I don't want that to happen to me again.

O'BRIEN: I can imagine that, yes.

RUTAN: But he's really focused on that right now.

KAGAN: And Miles, a little bit more, please, about this foundation, this X Prize Foundation. Is it Peter Diamandis who started it? What was his impetus for doing that, for putting this money...

O'BRIEN: Peter Diamandis is a guy from the age of nine who has dreamt of going to space. He determined somewhere along the way that he didn't think NASA was the way to do it. And he decided to commit his life to trying to build a business that didn't exist and that required some fanciful notions, quite frankly. And as part of this, came up with this notion of a $10 million prize for a civilian team to fly to space.

Well, it spurred a lot of teams. This one in particular has stood out because of its funding and because of the expertise of Burt Rutan. But there are 25 other teams out there, many of them just on a shoestring, and many of them not anywhere close to flying. Even the team you mentioned earlier, the da Vinci team, still has a ways to go.

Let's do a quick recap, Daryn, since a lot of folks might be turning in -- tuning in right here at the top of hour.

KAGAN: Good idea.

O'BRIEN: What you're watching live right now is the tail end of Brian Binnie's flight to space, SpaceShipOne on X Prize flight number two. And we don't have it for certain, but we have reason to believe that they did, in fact, cross the threshold into space.

We're going to have to check that. But if in fact that happened, this team, led by Burt Rutan, a company called Scale Composites, funded by Paul Allen, of Microsoft fame, this team will have won the $10 million X Prize, which went to the team or would go to the team that could fly to space twice in as many weeks in a craft designed to carry three.

There you see the takeoff, which occurred now an hour and 12 minutes ago or so. It took them about an hour to get to altitude, about 50,000 feet or so.

And then, once they got to that point, and all the systems checked out, they separated the two craft. And within just a couple of seconds, boom, that combination of nitrous oxide, laughing gas, and tire rubber, gave some -- no laughing matter thrust to Brian Binnie, sent him on his way, quickly supersonic, on a pretty much straight up ride beyond the atmosphere of Earth.

Whether he made that mythical barrier into space, 328,000 feet, remains to be seen. But as it stands right now, it looks like he had a pretty flawless flight compared to what we saw Wednesday, where we all held our breath as pilot Mike Melvill went through about 29 rolls on his way up, like an aerobatics performer at an air show.

What are you hearing right now? Dick Rutan with me right now, whose brother is Burt Rutan.

RUTAN: OK. The chase planes have just joined up with the spacecraft. They looked it over and they gave him a report that everything is in good shape.

O'BRIEN: OK. So these chase planes that are up there -- there are three of them in all, high, medium and low -- are out there not just to get pictures, they're there to make sure that everything checks out, the landing gear is down, all the control surfaces are just in place. And so far, everything has checked out perfectly. But we still don't know whether they made that barrier. What's your gut tell you?

RUTAN: I think they made it.

O'BRIEN: Yes.

RUTAN: I'm pretty confident they did.

O'BRIEN: OK. And you know that because they were just saying it looks like we're going to make that 328,000...

RUTAN: Yes. They had the predictor that they were going to make it if they shut down there. And then they ran a little bit longer to have a nice pad (ph) on it.

O'BRIEN: OK.

So there you have it, Daryn. They had a predictor, a computer predictor that said, if you shut the motor down now, you'll make 328,000 or 100 kilometers. But he let it run a little longer.

So there's reason to believe that they exceeded that. Of course we've got to wait for that radar data before the X Prize team here will pop any champagne corks. And, by the way, to that end -- oh, here we go. We are told, and I'm not sure where this is coming from...

UNIDENTIFIED MALE: X Prize.

RUTAN: X Prize. Hey, great.

O'BRIEN: OK, 368,000 feet. I just got handed the ever so low- tech response, 368,000 feet. That comes from the X Prize folks. And is that from radar information?

UNIDENTIFIED MALE: (UNINTELLIGIBLE) radar.

O'BRIEN: OK, that's the radar from Edwards.

RUTAN: They broke the X-15...

O'BRIEN: They just not only won $10 million, they broke the record set by the X-15, of 358,000 feet set in the early '60s.

RUTAN: That's right.

O'BRIEN: So this is a momentous occasion here.

RUTAN: Yes.

O'BRIEN: They have exceeded...

RUTAN: Yes, up in mission control right now. Paul Allen, Burt Rutan, they are probably grinning so hard.

O'BRIEN: I'd say a few high-fives are being had right now. We'll see that tape a little bit later.

Now, just so you know, they're not going to cut the check today. They're going to -- a little champagne will be expended, and some medallions will be given. But the big ceremony will occur in St. Louis, which is the home of the X Prize, inspired by the Spirit of St. Louis.

Charles Lindbergh flew to Paris for a prize for $25,000. That's what inspired Peter Diamandis to do this. And thus, St. Louis will be the place where the checks will be issued on November 6. So they've got to wait a little bit before they get the money.

RUTAN: Well, the X Prize is going to bleed it for everything they can.

O'BRIEN: I suppose so. Get a little more mileage out of it. As we see Brian Binnie coming down, I don't know, have you heard what altitude he is at right now, where he is exactly?

RUTAN: I think they're about 18,000 feet.

O'BRIEN: About 18,000 feet, as he circles around and around, corkscrew kind of pattern around the field here at Mojave's airport and Spaceport now, just making his way down ever so slowly.

RUTAN: Brian did report that the airplane is flying fine and he seems to be comfortable with it. So that's really good news.

O'BRIEN: And that gull-like craft behind it is the Beech Starship, another Rutan design, which is one of the chase planes giving him those indications that everything is good on the outside of his craft.

So they made it, Daryn. Of course there will be some more celebrations here later as the day goes on. Richard Branson is here, who is all about commercializing this moment and making this excitement into some kind of business. Kind of a risky business on the surface, but the idea to make it safe enough that people would buy a ticket and feel safe enough to take a wild ride like this.

KAGAN: Well, for centuries people have been fascinated with flight. And with the way to be able to get up there, whether it was just as an airplane or now up into space.

Miles, a question about the pilot here. He gets the honor today, but there were four ready to go, right? So he was lucky to get the call.

O'BRIEN: Yes, there are four pilots on the team. Actually, one of them, the head test pilot, Doug Shane, was not -- because he's kind of running the test program, he was not kind of in line for a flight.

So there were three of them, Mike Melvill, who flew the first three flights of SpaceShipOne -- or the first two, I should say -- the test flight in June and then the first X Prize flight in -- just on Wednesday. And then there was Pete Siebold, another pilot who had some health issues and thus disqualified himself for a little while from flying.

So it was really up to Mike Melvill or Brian Binnie flying today. And I'm told you're -- Mike Melvill is a great friend of yours -- that Mike really wanted Brian to have an opportunity to do this.

RUTAN: That's right. He volunteered. He says, fine. He said he's going to step aside with no problem and give everybody a chance to do that.

O'BRIEN: And knowing Mike Melvill as I do -- you know him better than I do -- that's the kind of person he is. He's not a guy who really seeks out necessarily the limelight. He likes to share.

RUTAN: Well, besides having the right stuff, Mike is a real standup guy.

O'BRIEN: Yes.

So Mike Melvill watched it from White Knight today instead of actually going on the ride. Brian Binnie gets his opportunity to become -- well, he's the second civilian astronaut.

We can say that with that radar data of 368,000 feet. A record for civilian spaceflight. A record for a rocket ship dropped from an aircraft as the X-15 was some 40 years ago.

By the way, today, Daryn, is a big day in the world of space. Forty-six years ago...

RUTAN: That's right.

O'BRIEN: Forty-six years ago or 47 years ago...

RUTAN: Was it Sputnik?

O'BRIEN: Sputnik flew. And that -- yes, Sputnik flew on this date in 1957, I think it was.

I'm going to get my dates wrong. But -- and somebody will check me on that. But the point is...

RUTAN: But it was October the 4th.

O'BRIEN: It was October 4th. And that changed the world, and perhaps this moment will change the world for the plain old civilians who want to take a ride as well.

RUTAN: OK. Now the low chase has picked him up now.

O'BRIEN: Go ahead, Daryn.

KAGAN: I was going to say, so as we look forward and, of course, I think with a lot of great interest, not just the science of this, but people at home who want to go, you said Richard Branson has purchased this technology. The idea is to make it a business, to at some point in the future offer these type of rides into space for those who are interested and can write the big, fat check. But how far away is that, Miles, realistically?

O'BRIEN: Well, you know, if you're willing to write a relatively big fat check -- no, a big fat check -- $200,000 is big. I'm just saying relatively because I know you can fly to the International Space Station if you want to go see the Russians for $20 million. That's the big check in this business.

$200,000 will get you a ticket on Virgin Galactic Spaceways or Airways, whatever it's called, by the year 2007. So he's talking about doing this in three years' time.

He wants to come out here in the desert and build a hotel for people to come and do their training here. Guys like Dick Rutan might help out in that. Who knows. Show them what the right stuff is all about.

And then off they go to space. And yes, that's not for everybody, but it's not $20 million either. So it's going in the right direction, if you're among those who are interested in this.

The point is, as time goes on, it's only going to get cheaper as this becomes more and more routine and more attempts are made, and more companies try it. This licensing deal that Burt Rutan and Paul Allen and Richard Branson signed is non-exclusive. So there are others out there who can buy the same technology and set up their own space liners.

KAGAN: Space liner. I like that term.

O'BRIEN: Yes.

KAGAN: Space liner.

O'BRIEN: Yes.

KAGAN: Why don't we explain the graphic that the viewers are seeing, the Dexter and Southfield schools. Who are those folks and why are we using their camera?

O'BRIEN: Yes. Yes, let's -- just like everything on this, Daryn, this is a grassroots operation in every respect.

Our tracking capability comes to us through the courtesy of -- and as we -- of course we're shifting to our own camera, lower chase camera. But that other camera, that Dexter and Southfield schools, gives us the ability to see the craft all the way up to 368,000 feet.

And it's done by a couple of teachers at this private school outside of Boston. And they developed the software, the tracking capability and the special tripods. And have offered this up to all of us to give us the ability to see this. And it's pretty amazing. I mean, you know, I'm sure the -- NASA's tracking cameras would be a little steadier and so forth, but I'm sure they would cost many orders of magnitude more money in order to do what they do.

So it kind of is in keeping with the philosophy of this, you know, high desert, small hangar effort here. Now, the flotilla or airtilla (ph), whatever you prefer, is overhead right now. Four planes, the Beech Starship, the AlphaJet, the Extra Aerobatic Plane (ph), and then SpaceShipOne, turning a right turn. He should be coming in...

RUTAN: It's the low-key thing. He's on the downwind, going to be turning base leg here in a second.

O'BRIEN: All right. So base leg is the one that is perpendicular, right-hand turn, perpendicular to the runway. And then he'll make another right turn, line up with the runway, and come on in for a landing.

He should be on the ground here in just a few moments. Brian Binnie, 51 years old, an employee of Scaled Composites, who has a business role as well as a test flying role, on his way down for -- I am sure he is aiming for the smoothest possible landing.

RUTAN: Geared to go.

O'BRIEN: With 20 years of Navy test pilot training behind him, has now become an astronaut, not with the help of the government. This time with the help of a small private entity out here to the tune of $25 million.

And there you see, as we try to lock up that shot, you see a fairly good close-up of SpaceShipOne, no more than 20 feet in length and about 2,000 pounds. And Daryn, we should point out it's capable of carrying three people. That's the contest rules.

Brian Binnie is there with a bunch of ballasts, which happens to be personal effects, trinkets, whatever, things that people on the team wanted to fly to say they had made it to space. Landing gear's down as he makes that final right turn to the final leg of his approach, lining up with the runway.

KAGAN: And what happened the last time he tried to land? Why is it so difficult?

O'BRIEN: He was a little too steep. And actually a lot too steep. And as a result, when he landed, that landing gear, one of the two angled ones, the main gear, gave way.

Now, he didn't have a scratch, but the ship was scratched a little bit. Let's listen as he comes down.

UNIDENTIFIED MALE: One and one foot. .

O'BRIEN: All right. He has dramatically improved his landing skills on SpaceShipOne.

Brian Binnie paints SpaceShipOne on to the runway here at Mojave Spaceport as the chase planes fly overhead. And Brian Binnie brings it in for a landing there. And very soon will be tugged over here, where they will receive plaques, a little bit of champagne and celebrate they've won a $10 million X Prize.

RUTAN: You bet. There's an insurance company right now that's got to pay off.

O'BRIEN: Yes. And I'm sure somewhere out there there's some insurance adjusters who are going, "Oh, jeez, this was a bad idea."

KAGAN: A lot of zeroes.

O'BRIEN: How did we let Peter Diamandis talk us into this one?

RUTAN: Well, they did an evaluation to see what the odds were. And they took up -- they took up the odds.

O'BRIEN: Yes. I'm not sure that's insurance or book-making. But nevertheless...

RUTAN: Well, I guess -- I guess they didn't know who Burt Rutan was.

O'BRIEN: Yes, precisely. Burt Rutan has a way of delivering on his promises, doesn't he?

RUTAN: Well, you know, my input to this whole thing is -- I said, "Burt, there's no way this will ever work," but it generally always does.

O'BRIEN: And that's what he's always said all along, going back to the Voyager days, when he said, "Let's fly around the world on one tank of gas." And you said, "Yeah, right."

RUTAN: Well, I thought he was crazy.

O'BRIEN: Yes.

KAGAN: Now, I remember from...

RUTAN: He talked about human-powered vehicles going into space.

O'BRIEN: Yes.

Go ahead, Daryn.

KAGAN: From the last one, the practice flight, at least, the -- they'll come around and get to pop out there, and there should be champagne uncorked and celebration.

O'BRIEN: Oh, yes. There's a little bit of a victory dance that is planned here, Daryn. And we will, of course, be following that very closely. It will take a few minutes for them to tug SpaceShipOne over here. Obviously it has no power of its own.

Does he even have brakes? It just lands and...

RUTAN: No, it has wheel brakes.

O'BRIEN: It has wheel brakes, but the nose wheel is just a piece of wood, right?

RUTAN: It's just a piece of walnut wood.

O'BRIEN: Yes.

RUTAN: And it grinds off a little bit. But they steer it with the brakes.

O'BRIEN: OK. They steer it with the brakes as it comes down. And it has obviously come to a stop right now.

And Brian Binnie is just waiting for a tug to pull him over to the area not far from where we sit here, where we'll see him being received by the X Prize, by family members, by members of the team, Paul Allen, Burt Rutan, and on and on.

What's going through their mind right now?

RUTAN: Well, they're probably looking for the champagne right now. There's going to be a lot of that.

O'BRIEN: Yes.

KAGAN: Well, if Dick can share with us -- Miles...

RUTAN: No, this is great. You know, there's a lot of pressure that's been taken off.

O'BRIEN: Yes.

RUTAN: People working really hard.

KAGAN: Yes, if Dick could share...

O'BRIEN: I'm sorry. Go ahead, Daryn.

KAGAN: I was just going to say, you know, Dick, part of this family, you've tried some kind of crazy things over the years and have accomplished quite a few things. Just what it feels like to him emotionally to have this day, this accomplishment -- yes.

O'BRIEN: Yes, give us your emotional feeling right now, just your sense (UNINTELLIGIBLE) a little victory lap for the AlphaJet.

Your sense of family pride here? I mean, you're brothers and you, you've had your ups and downs, as brothers always do. But this has got to be a moment of great pride.

RUTAN: No, this is really great. I'm really proud of my brother.

That guy has the courage. And when a lot of people said this could never be done, and he was crazy, even a of people on his own team at times said -- said, "Burt, are you really sure that we could actually do this?" And he hung in there, and here it is today. They did it.

O'BRIEN: I know you said before, though, your concern was that he was perhaps a little too confident, and that it would really -- a setback, a big setback would really deflate him.

RUTAN: Well, that would be terrible if they had a big setback. But, you know, this is -- this is not an easy thing to do. And there was some risk involved.

And right now, there's a huge -- a huge amount of relief. Because there was a lot of demons out there that could have grabbed that spaceship. And evidently -- actually, the demons, oh, they were out watching Mount St. Helens.

O'BRIEN: There you go. We sent the demons to St. Helens.

Let's look at the separation tape one more time for those who might be just tuning in. As you look at live pictures right there, the party that has met SpaceShipOne and will begin the process of tugging it back -- but let's look one more time at that separation, if we could.

One, one thousand, two, one thousand, three, one thousand, boom. Off it went. That's about as fast as you want to do it, right?

RUTAN: That's about as quick as you can do it.

O'BRIEN: Yes.

RUTAN: You get positive separation, turn the switch and hang on.

O'BRIEN: OK. So there he is. He's getting tossed kind of back in his seat there as he gets that kick.

Within just a few seconds he's going supersonic. As he was going -- and here's were going to see a fly-over right now of the chase planes as they come by in their victory roll.

But as they went up -- as he went up, he reported a lot of instability as he kind of just got into the supersonic realm, which I guess is...

RUTAN: Well, he did a little roll-off.

O'BRIEN: Yes.

RUTAN: And it looked like Brian handled it very well. But towards the end of the burn, when it's changing from liquid to gas, the engine starts chugging a little bit.

O'BRIEN: All right. So explain that, when you're going from liquid nitrous oxide to just gas.

RUTAN: It's just a gas.

O'BRIEN: And it kind of sputters. Is that essentially what happened?

RUTAN: And the thrust goes off quite a bit. But during that transition period, as it kind of sloshes around, a little liquid, gas, and it's chugging pretty hard, and it's a pretty rough ride at that time. But you're going straight up.

O'BRIEN: All right.

RUTAN: And when the predictor says you're going to make it...

O'BRIEN: You can almost see it right there, almost like it's sputtering.

RUTAN: Yes. You can see it chugging.

O'BRIEN: All right. Let's -- let's just put a button on this for folks.

We're not done covering this story, of course. We want to hear from everybody.

There's going to be a lot of talk about what's been accomplished here. But just to remind everybody what we've seen, you've seen a bit of space history, an important piece of space history. A new chapter, really, in the exploration of space.

RUTAN: Absolutely.

O'BRIEN: As they have -- this team here, SpaceShipOne, designed and built by Burt Rutan, funded by Paul Allen, a small team here in the middle of the Mojave Desert at a relatively small airport has captured the imagination of the world as they have successfully won the $10 million Ansari X Prize.

As you see the landing just a few moments ago, Brian Binnie, 51 years old, becoming the second civilian astronaut just a few moments ago above the high desert here of California, a place of great history, where in 1947 Chuck Yeager broke the speed of sound, when in the '60s X-15s flew into space themselves, where every major fighter and strike aircraft has been tested and rung out.

This is a historic place. This is hallowed ground for people involved in this. So it is fitting that on this day, October 4th, Sputnik day, that this team would win that $10 million Ansari X Prize.

RUTAN: And it all worked.

O'BRIEN: And it all worked. RUTAN: I mean, this is a lot of years, a lot of culmination of a lot of work and a lot of risk. But mainly a lot of courage.

O'BRIEN: Dick Rutan, well put. Thank you very much. We'll leave it at that.

RUTAN: Good. Thanks for having me.

O'BRIEN: Daryn.

KAGAN: Miles, our thanks to you and to Dick Rutan. We're coming back for the champagne. Don't think we're skipping that.

O'BRIEN: Oh, absolutely.

KAGAN: Absolutely.

O'BRIEN: And so are we. We're going to be here for the champagne, too.

KAGAN: You stay put. We'll check back with you for the celebration.

While we were spending a good chunk of our morning there watching one dream come true, there is other news in the world to tell you about, including a day of violence in Baghdad. Twin car bombings leaving death and destruction in their wake. We'll have the latest from Iraq coming up next.

And of course much more on the X Prize flight. Another shot at space and more on the big win coming up.

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KAGAN: To Iraq now. The Health Ministry reports at least 16 people dead and 85 wounded in a pair of car bombings today in central Baghdad. In a separate incident, a high-ranking Iraqi official was attacked and seriously wounded in eastern Baghdad.

More now from Brent Sadler, who's in Baghdad.

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BRENT SADLER, CNN CORRESPONDENT (voice-over): Two powerful car bomb attacks in central districts of Baghdad. The first targeting an army recruitment center, killing around 15 and wounding at least 75 others, according to Iraq's Health Ministry.

The explosion happened near a U.S. military checkpoint outside the heavily-fortified Green Zone, home to the U.S. and British embassies. A white sports utility vehicle burst into flames amid scenes of bloodshed and panic. The attack plan was similar to scores of other strikes on Iraq's security forces aimed at making Iraqis afraid of recruitment into the ranks of the police and army, as well as sapping morale among those already serving.

In a second blast, Iraqi reports say bombers targeted two armored vehicles of the type used by western security personnel and contractors in a busy commercial district. One killed and some 13 others wounded in that attack.

From the top of our hotel, we could see a large plume of black smoke, then a brief gun battle, shots echoing across the city as Iraqi police reportedly exchanged fire with expected insurgents.

(on camera): Even as U.S.-backed Iraqi forces claim success, overwhelmingly, rebels stronghold north of Baghdad, insurgents can still strike terror in the heart of the capital.

(voice-over): West of Baghdad, U.S. warplanes have again attacked suspected insurgent operations in Fallujah, destroying what the U.S. military claims are the movements of weapons, training and the planning of terror attacks, the kind of attacks that shook the capital on this day.

Brent Sadler, CNN, Baghdad.

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KAGAN: We're going to go from Baghdad back to the Mojave Desert in California. More on the X Prize, the $10 million that appears to be in the bag for the team of SpaceShipOne.

We're back in a moment.

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