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American Morning

Dow Loses 362 Points; Writer Walkout?; Hurricane Noel; Politics Of The Day

Aired November 02, 2007 - 06:00   ET


THE SITUATION ROOM wJOHN ROBERTS, CNN ANCHOR: Rough ride. Oil soars. The Dow slides. Will Friday bring another free fall?
Ready to walk.


DAVE SCHIFF, TV WRITER, "KING OF THE HILL": Strike is the only option.


ROBERTS: Hollywood writers vote to put down their pencils. What it means for your favorite shows.

Plus, presidential one on one. Jimmy Carter on everything from his pet project, to global politics, and Iran, on this AMERICAN MORNING.

ROBERTS: And good morning. A lot going on today. It's Friday, the 2nd of November. Thanks for being with us. I'm John Roberts.


We start the hour with your money and some concerns this morning that the credit crisis may deepen after some bad news from banks yesterday. The world market also falling back today after the Dow suffered one of the biggest declines of the year yesterday, plummeting more than 360 points. So how will it affect your investments and what can we expect on Wall Street this morning? Our Ali Velshi has it covered for us. He's live at the New York Stock Exchange this morning.

Hey, Ali.

ALI VELSHI, CNN CORRESPONDENT: Hey, good morning, Kiran, if you can call it that.

What a day. It was the fourth worst day this year on the Dow. Take a look at the numbers on major exchanges in the United States. They all sort of accelerated at the end of the day. The Dow losing 263 points, about 2.6 percent. The Nasdaq down 2.25 percent, 64 points. And the S&P 500 down 2.75 to also 40 points lower.

Now why did this happen? It's because yesterday morning after a good day on Wednesday, when the Fed cut rates, a whole lot of things came together to worry investors again about where things are going with the U.S. economy. We've got these high oil prices. They pulled back last night but they're still well over $90 and most people believe going up.

Foreclosures, we talked about this yesterday, up 30 percent over the previous month and up 100 percent over the same time last year. That's got people worried. We saw that manufacturing growth was still weak in October and that was surprising because the U.S. dollar has been so weak, it should have created more demand for U.S.-made goods. We also saw that consumers didn't spend as much money after that last Fed rate cut that we expected and now we're in the holiday shopping season. So folks are worried that this rate cut won't result in consumers going out to the store.

And then the big news that really sunk the market yesterday, Citigroup got a downgrade from CIBC on worries that this crisis continues. That really sent the markets down. It didn't recover right off the top and that's what we've got. Headed into today, we've got Asian markets lower and European markets lower. I'll be here all morning to tell you what you can expect for the rest of today, Kiran.

CHETRY: How about Dow futures?

VELSHI: Dow futures are lower right now but we've got the employment report coming out at 8:30 a.m. Eastern. That will really change the scene depending on which way that goes.

CHETRY: All right. We'll check in with you throughout the morning. Ali, thanks.

VELSHI: Thank you.

ROBERTS: It's that time of year when your Tivo should be bursting with all kinds of good news (ph), but now the threat of a television writer's strike is more real than ever. This is what it looked like 20 years ago, the last time writers walked the picket line, long before reality TV was reality TV. Last night a negotiating team recommended that screen writers hit the picket lines. From prime time to late night, it could send your favorite scripted shows into reruns.


DAVE SCHIFF, TV WRITER, "KING OF THE HILL": It's not just for us who are currently working, but, you know, writers down the line, that we make sure that, you know, we get a piece of the pie.

DAVID LETTERMAN, "THE LATE SHOW WITH DAVID LETTERMAN": It could mean that all of your favorite television shows will go away. And they may not come back. And so what I'm trying to say is, this could be your last look at me and Paul.


ROBERTS: Lola Ogunnaike is live in the newsroom for us with more on this. Lola, when do you think this strike is going to happen, if it's going to happen?

LOLA OGUNNAIKE, CNN CORRESPONDENT: David Letterman jokes about this, but this strike is serious business. It could happen as early as this weekend. They're having a meeting this afternoon and they're going to decide whether or not this is something that will start, you know, on Sunday or early Monday. But it's pretty much a foregone conclusion that this will happen.


UNIDENTIFIED MALE: It really doesn't begin until the following morning.


OGUNNAIKE: On the one hand, it's new media that they're fighting about. In 1998, things like YouTube, iTunes, you know, Mobishows (ph), which are shows that downloaded to your cell phones did not exist. Writers want a cut of that. They also want to renegotiate the DVD revenue. Right now they get about four cents for every DVD. They want eight cents now. And those are the two major road blocks. The opposition is saying, we will not negotiate on that front. We don't know how big this pie is. We're still trying to monetize how big this world is. So we can't break you off a slice of this pie until we figure out how much this world is really worth right now.

ROBERTS: And what's the bottom line for viewers here?

OGUNNAIKE: Well, the bottom line is, you know, fans of Leno, Letterman, Colbert, Jon Stewart, they're going to be immediately affected. Those shows rely on 15 to 18 writers to create these shows. So without these writers, you won't have those shows. Soap operas will be the next affected. And then right after that it will be your prime time scripted comedies and dramas, like your "Desperate Housewives," your "Grey's Anatomy" and your "Ugly Betties." And then following that will be your movies. They won't be hit until some time next year because they've been stockpiling scripts.

ROBERTS: All right. Well, could change the landscape of television. Lola Ogunnaike for us this morning.

Lola, thanks. We'll check back in with you if there's any more news on that.

OGUNNAIKE: Thank you.


CHETRY: Also new this morning, the Senate passes a revised child health bill. The president says that he'll do with it like the first one, which is veto it. The revised measure would still cover an additional 4 million lower income children. Democrats say the new version addresses Republican complaints by tightening restrictions on illegal immigrants and also some adults receiving the benefits. It also caps the income levels of families that qualify for the program. But one GOP congressman compared the changes to "putting lipstick on a pig." The president says that the program is too expensive. He opposes the program to raise tobacco taxes to pay its $35 billion price tag. But negotiations on a compromise bill are still underway.

There's now a strong possibility that the nation could be without a top cop in a time of war. Growing opposition to the president's attorney general nominee, Michael Mukasey. The latest to enter the "no "column is Senator Ted Kennedy.


SEN. EDWARD KENNEDY, (D) MASSACHUSETTS: After six long years of reckless disregard for the rule of law by this administration, we cannot afford to take our chances on the judgment of someone who either does not know torture when he sees it or is willing to pretend so to suit the president.


CHETRY: Kennedy says Mukasey's unwillingness to say whether the interrogation method known as waterboarding is legal increases chances that it could be used against U.S. troops. President Bush then turned to the war on terror to say the Democrats are making a mistake.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This is no time for Congress to weaken the Department of Justice by denying it a strong and effective leader. It's no time for Congress to weaken our ability to gather vital intelligence from captured terrorists. It's no time for Congress to weaken our ability to intercept information from terrorists about potential attacks on the United States of America. And this is no time for Congress to hold back vital funding for our troops.


CHETRY: Well the swing vote could be New York Senator Chuck Schumer. The Democrat still hasn't said what he'll do when the committee votes next week.

Saudi Arabia saying that 9/11 could have been prevented if the United States had asked for its help. Saudi national security advisor, Prince Bandar Bin Sultan, made the claim in an Arabic TV documentary. He says Saudi intelligence was actively following most of the 9/11 plotters.


PRINCE BANDAR BIN SULTAN, SAUDI NATL. SECURITY ADVISER, (through translator): U.S. security authorities had engaged their Saudi counterparts in a serious and credible manner. In my opinion, we would have avoided what happened.

(END VIDEO CLIP) CHETRY: A U.S. official told CNN to take those comments with a "grain of salt." Fifteen of the 19 9/11 hijackers were Saudi. Saudi Arabia has been criticized for not doing enough to stop militants.

Well, Iran has apparently promised the Iraqi government that it would stop the flow of bomb-making materials and weapons across the border. Defense Secretary Robert Gates says he doesn't know whether to believe Iran and that he's going to "wait and see what happens." Iran is accused of providing insurgents with some of the deadliest weapons used in war. Weapons that can penetrate the most heavily armored military vehicles. Meanwhile, the number two U.S. commander in Iraq says that security has improved significantly and that the number of roadside bombs suspected of coming from Iran has fallen in the past few months.


ROBERTS: Major food recall to tell you about this morning. General Mills is recalling 5 million frozen pepperoni pizzas sold under the Totinos and Jenos labels. The company says the pepperoni could be contaminated with E. Coli bacteria. Health officials say 21 incidents of E. Coli related illnesses have been reported in 10 states since July. General Mills is telling consumers to throw the pizza out, send in the UPC bar code from the package for a replacement.

Right after signing a new labor agreement, Chrysler is cutting 12,000 more jobs. Some workers now feel betrayed by the move, which comes right on the heals of a new labor deal that only narrowly passed. Chrysler is also getting rid of four cars, the convert version of the PT Cruiser, as well as the Pacifica, the Crossfire and the Dodge Magnum. The cuts come on top of 13,000 Chrysler layoffs that were announced back in February.

It's official, Don Imus will be back on the air December the 3rd. Citadel Broadcasting hired the I-man (ph) for morning drive on flagship WABC in New York for a multimillion dollar annual salary. The shock jock will be syndicated across the country again, just seven months after he was fired by CBS and MSNBC for his racist and sexist comments about the Rutger's women's basketball team. Imus sued CBS and reportedly settled for as much as $20 million.

And Don Imus, just one of a number of celebrities caught making a racist comment. Comedian Jerry Seinfeld defended his former co-star, Michael Richards, last night on "Larry King Live." Seinfeld tried to explain what may have sparked Richards' racist rant last year while on stage at a comedy club.


JERRY SEINFELD, COMEDIAN/ACTOR: That was, I think, a thing that, where you have a flaw sometimes in your personality or in your kind of emotional base that sometimes it just cracks and something happens that you almost don't want to do. I think people know what it's like to lose their temper.

LARRY KING, CNN'S "LARRY KING LIVE": During all your years with him, was he ever racist?

SEINFELD: Oh, no, no, no.

KING: So you were shocked?

SEINFELD: Yes, completely.

KING: Did you talk to him?

SEINFELD: Yes. Sure. We talk all the time. I talked to him a couple days ago.

KING: How's he doing?

SEINFELD: He's doing good. He still, you know, he still feels bad.


ROBERTS: Seinfeld also said that his long-time friend is thinking about a return to show business.


CHETRY: Well, we're tracking extreme weather this morning. Hurricane Noel barreling into the Atlantic Ocean. Rob Marciano is tracking Noel at our weather update desk for us in Atlanta.

Hi, Rob.


Noel actually has strengthened over the last 24 hours. Hurricane status now and a pretty strong one at that and will be gaining strength potentially as we go on through the next 24 hours.

Take a look at the satellite picture. It looks a bit more impressive. And the good news is that it's gotten more impressive once it got away from the islands. Now into the open ocean here and heading rapidly off towards the north-northeast at about 18 miles an hour.

Still feeling the effects are folks who live along the Florida seaboard, the eastern part of it at least. Now winds have turned more northerly, but still a few showers getting in there and still kind of breezy. Some heavy surf advisories still posted for some areas. And this stretches all the way up the Georgia coastline, the South Carolina coastline, the North Carolina coastline as well. And with this system heading off to the north, high wind warnings have been posted for the Carolina coastline. Could see winds gust to 60 miles an hour in some spots.

These red l's you see here, this just means that it's going to go from being a hurricane to what we call an extra tropical storm. It starts to take in some cold air. But also notice that the winds don't decrease. If anything, they increase and this thing gets very close to Cape Cod, to Long Island and there are high wind watches up for tomorrow through tomorrow evening for the Cape, for Long Island. We could see winds gust there to hurricane strength and then making landfall across Nova Scotia early Monday morning.

So Noel not dead yet, that's for sure. It is a hurricane. And once it exits, Kiran, it will kind of open the door for some wintry- type of air across the western Great Lakes. We'll talk more about that in about a next an half hour.

CHETRY: All right. Sounds good. Rob, thanks so much.


ROBERTS: Coming up to 12 minutes after the hour. Southern hospitality topping your "Quick Hits" now. President Bush travels to South Carolina today. He's going to speak at a basic combat training graduation ceremony at Ft. Jackson. The White House says the president will offer a detailed update on the Iraq strategy and then attend a fund-raiser for Republican Senator Lindsay Graham.

And protesting constitutional changes in Venezuela that would allow President Hugo Chavez to run for re-election repeatedly. Basically make him president for life. Thousands of students staged a rally outside of the electoral agency's office chanted "freedom, freedom!" Police used tear gas and water cannons to break up the crowds after some students threw rocks and bottles. No reports, though, of any arrests or serious injuries.

She has been the front-runner in the all boys club, but is Hillary Clinton showing some signs of vulnerability? Why her latest comments have her fellow candidates calling her a flip-flopper. That's ahead on AMERICAN MORNING.

And a racist tirade caught on tape. Duane "Dog" Chapman is heard ranting against his son's African-American girl friend. Wait until you hear who sold TV's bounty hunter out to a tabloid. That's ahead on AMERICAN MORNING.


ROBERTS: Exactly 15 minutes after the hour now and some of the shots you've got to see in your "Quick Hits."

It's being called the biggest drug bust ever. Twenty-three tons of cocaine seized by Mexican authorities. They say that they found two separate stashes, at least 11 tons apiece, on a ship coming in from Colombia.

Firefighters say it was full of children when it went up in flames. An absolute inferno at the United Methodist Children's Home just outside of Atlanta. Everyone, thankfully, was able to get out. No one was injured. The place was founded as an orphanage when Atlanta was being rebuilt after the Civil War. And check this out. Fireball after fireball shooting from a propane pipeline in Mississippi. The explosion killed at least two people, destroyed four homes and burned 150 acres. Everyone living within a mile radius was evacuated. The National Transportation Safety Board is on the scene this morning to try to figure out what happened.


CHETRY: Well, the nomination of Michael Mukasey as attorney general, once considered a slam dunk, now appears very much in doubt after he refused to comment on the legality of waterboarding. Hillary Clinton also calling out the presidential boy's club after what may have been the worst week for her campaign so for. For more on both of these stories, we turn to "Time" magazine's Mark Halperin. He's the author of "Undecided Voter's Guide to the Next President." Mark's in D.C. this morning.

Good to see you, Mark.


CHETRY: So now more and more senators are saying they're going to oppose Michael Mukasey's nomination. It looks like Democratic Senator Chuck Schumer will be the likely swing vote on this one. So bottom line here, will Mukasey be the next attorney general?

HALPERIN: Well, Chuck Schumer and a couple other senators, Senator Leahy of Vermont, Senator Feinstein of California, are going to decide whether they let this go to the full Senate, get it out of the Judiciary Committee. It could go either way and it shows the Democrats are not afraid to take this president on, on issues related to national security and civil liberties. That's a big change from, of course, immediately after 9/11 when the Democrats, I think, were a little bit cautious in trying to pick fights like this.

CHETRY: Would it be better because it appears, or at least the president seemed to intimated, that he would not put up another nominee for the rest of his term. Would that be a better political position for the Democrats?

HALPERIN: Well, everybody agrees on the substance, that there should be a new attorney general. Mukasey was pretty well received before this controversy arose. I'm not sure how this one's going to end. If you like Washington cliffhangers, this is going to be one. It's going to be up to those few Democratic senators to decide. And like I said, they're not afraid of having this confrontation with the president. It could go either way.

CHETRY: All right. Well, let's talk about the interesting thing about the fight. Democrats have been taking a stand on national security, as you said, where they have traditionally come off, at least perception-wise, as a little bit weak. So is this a sign that they're stronger or that the president is more of a lame duck? HALPERIN: I think a little bit of both. And, of course, they relate to each other. As President Bush's term comes to an end, as Democrats feel that they can stand up and say, look, torture is bad. They say waterboarding is torture. Mukasey is being vague. He doesn't want to commit. Democrats are saying, without a commitment, they're not going to support him.

CHETRY: All right, let's move on to Hillary Clinton. She's been the target of both Republicans and her fellow Democratic contenders for the nomination. This week, though, we had former House Speaker Newt Gingrich yesterday, in fact, who's always said that he's pretty confident she'll going to get the nomination, saying that he believes that's dropped from about 80 percent to 50 percent because of her being a little bit fuzzy on whether or not she supports driver's licenses for illegal immigrants. It's the plan by New York Governor Eliot Spitzer. Are we making too much of this because she's really run almost a picture-perfect campaign so far or is she in trouble?

HALPERIN: Well, I think this week could be a very bad week for her. If we look back, if she doesn't win the Democratic nomination, I think this will be the week where her decline started. On the other hand, she's still a very strong front-runner. This is a bad week for her. It shows that she's venerable. It's emboldened her opponents.

She's gone with this defense of saying, well, I'm going to rally women behind me because the men are ganging up on me. That, a lot of people say, is not fitting of someone who wants to be commander in chief.

Finally, there are real issues here. Where does she stand on this drivers license issue? She hasn't been clear. This issue of the sealed records at the Clinton archives from her days of first lady. There are still some dark days ahead for her and how she handles it will be really key. She hasn't handled things very well this week, starting with that debate.

CHETRY: All right. Mark Halperin, senior political analyst with "Time" magazine.

Thanks for being with us.


ROBERTS: This morning it appears that the audio recording of TV bounty hunter Duane "Dog" Chapman going on a racist rant was a setup. According to Chapman's attorney, the phone conversation in which Chapman is heard railing against his son, Tucker's, black girlfriend was taped by his son and sold to "The National Enquirer" for "a lot of money." The tape is full of the "n" word and other offensive language. We first played it for you yesterday. Take another listen.


DUANE "DOG" CHAPMAN: It's not because she's black. It's because we use the word (EXPLETIVE DELETED) seems here. I'm not going to take a chance ever in life of losing everything I've worked for, for 30 years because some (EXPLETIVE DELETED) heard us say (EXPLETIVE DELETED) and turned us in to the "Enquirer" magazine. Our career is over. I'm not taking that chance at all.


ROBERTS: It seems he took the chance and actually did it. Chapman later apologized to his son and the woman before learning how the tape got into the "Enquirer's" hands. No word yet on how he feels about it now. The A&E network has suspended production of his TV series, "Dog, The Bounty Hunter."


CHETRY: Pilots asleep in the cockpit. Is that scary enough for you. Well, there are some details of a report that NASA did not want to you hear, including a case of pilots fall asleep and then being awoken to frantic calls from air traffic control in the nick of time.

Also, some more personal airline horror stories. It's all ahead on AMERICAN MORNING.


CHETRY: Well, we've been talking about airline horror stories all week. This one should probably scare a lot of folks out there. Pilots asleep behind the wheel of a plane. That's one of the things that NASA didn't want you to know about before you booked your next flight. It's in the agency's once secret aviation safety reporting. It recounts the story of two commercial pilots who supposedly fell asleep on a red eye flight between Baltimore and Denver. Their rest was interrupted by frantic calls from air traffic controllers warning that they were approaching the airport at twice the speed allowed. NASA had once refused to release the report over fears that it could hurt airline profits.

ROBERTS: Oh, my God, pilots flying drunk, pilots falling asleep while drunk. Where's it going to end?

We've been taking a look at the frustrations that all of us face as flyers and the list is as long as the line at LaGuardia. No sleeping pilots yet have been reported, but some of the stories are almost as bad. Our Chris Lawrence has been looking through the e- mails that you sent to us and he got specific answers to some of your nightmare problems. He's going to join us in our next hour.

Keep those stories coming, by the way. E-mail us. The address is

CHETRY: All right. Well, that brings us to our Quick Vote today. We want you to rate your last airline trip. Maybe yours wasn't as bad as some of the horror stories we've been getting. Was it smooth as silk, a little bumpy or the absolute worst? Cast your vote, We're going to have the first results for you coming up a little later in the hour.

ROBERTS: And here's a look at a story coming up in our next half hour that you just can't miss. We call him mighty mouse. Scientists astounded by the creation of a genetically modified super mouse with extraordinary physical abilities to run what amounts to mouse marathons on treadmills, eat without gaining weight, live longer, stay sexual potent into old age.

CHETRY: How about that. They're even calling this mouse, the Lance Armstrong of mice, just because of its shear physical abilities. But the question is, could this one day -- because all they did was modify a gene, could it translate into super humans? We're going to take a look at that story coming up. Also the headlines when AMERICAN MORNING comes right back. The other mouse gave up. Look, he's sitting on the edge.


KIRAN CHETRY, CNN ANCHOR: Welcome back. It is 6:30 here on the East Coast and its Friday, November 2nd. I'm Kiran Chetry.

JOHN ROBERTS, CNN ANCHOR: Good morning to you. I'm John Roberts. New this morning, worldwide worries about money after the DOW took a 360-point nose dive. There is fear that a credit crisis, and surging oil price will drag down the entire U.S. economy. The reason you're not spending. The holidays are coming up and the Fed may not be there next time to bail us out. If fact, they've said they're pretty much done with interest rate cuts for the time being. Our Ali Velshi is live at the New York Stock exchange to decode all of this for us. What does it look like it's heading today? That's the big question, Ali.

ALI VELSHI, CNN CORRESPONDENT: Well, for now it looks like it's heading a little bit lower. But John, you made a very good point. The Fed is basically said we're done rescuing people. Now, you're going to have to deal with your own situation. What I would advice people to do is take a look at your own portfolio. Because John, despite these gyrations in the market, in fact, if you look at where these markets have been from January to now, take a look at it. The DOW is up. It's up about 8 percent. The NASDAQ has done particularly well. It's up about 15 percent, and the S&P 500 is up as well, about 6 percent. Your portfolio, if it's diversified, should sort of reflect that.

But keep in mind; look at the NASDAQ, up way more than the other two. So, investors should do about three things. One is don't trade on this kind of momentum, up or down. When you sell, when the market is down, you lock in your losses. If your investment plan is proper, it should be okay. Number two, stay diversified. These markets have been going up in different sectors in different ways. So, you want to have a piece of all of that action, including some very conservative investments like gold for instance, and number three, every three months, John, rebalance your portfolio. If you're heavy in technology, that's gone up a lot. Take some money out of that and put it into something that hasn't done well. John, we've spent an hour discussing this.

Now, I want to tell our viewers if they can get access to that on a CNN radio special that we've done. Greg hunter, our consumer reporter and I, both spent some time talking about what is going on in this market. You can access this on or on a CNN radio affiliate or iTunes. It's worth listening to for a whole hour. This is the question on people's minds. What do I do to protect myself? And the answer is, you can actually do things, John.

ROBERTS: So, does this look like it is going to be repeated again today, where the DOW future, S&P futures is they pointed?

VELSHI: They're both pointed a little lower right now. Asian markets were up quite a bit. European markets are up a little less. But at 8:30 a.m. today Eastern, John, we have the employment report for the month of October. That will decide how the market is going for the day. I'll be back here to tell you what happens at that point and how markets are likely to trade.

ROBERTS: We will keep checking back in with you this morning. Ali, thanks very much.


CHETRY: Well, new this morning. There are new details in the mysterious disappearance of a woman in the Chicago area and also new questions for her police officer husband. The family of 23-year-old Stacey Peterson reported her missing on Sunday. Her aunt says that Stacey had told her that her husband, Drew, she wanted a divorce just two days before she disappeared. He also says Stacy told her she was afraid of her husband and he tracked her every move with GPS in her cell phone. Police searched the Peterson's home, as well as their two cars on Thursday. Drew Peterson is a 29-year veteran of the Bowling Brook Illinois Police Department. He says that Stacy is fine and she left him for another man.

Her family says she would never leave her 2 and 4-year-old children behind and not call them. They're fearing the worst. Prosecutors are now looking at the death of Drew Peterson's former wife. She was found dead in a bathtub three years ago. Back then, the police said it was accidental.

Well, they voted to strike and now we're waiting to hear when and see soon and just how soon you'll be able to see the fallout on your TV. TV and movie writers last walked the picket line two decades ago. But last night, a negotiating team recommended that screenwriters do it again after they're contract expired. It's all for revenues for new medias. Things like DVDs, as well as downloads.

ROBERTS: Bombshell accusations this morning for the head of the Consumer Products Safety Commission. Records reportedly show that she was traveling on the toy industry's dime as parents were buying millions of potentially lead-tainted toys. Records obtained by the "Washington Post" show that the agency's acting Chairman Nancy Nord, who was on AMERICAN MORNING yesterday and the previous chairman took nearly 30 trips since 2002. Destinations included China and Hilton Head, South Carolina. All paid for by the toy appliance and children's furniture industries, along with other manufacturers that they regulate. House Speaker Nancy Pelosi called for Nord's resignation before this even came out but the Commission Spokesman had no comment about the new information.

New comments this morning though from Ryan Crocker, the U.S. ambassador to Iraq, about the decision to send diplomats to Baghdad and that they could be fired if they refuse the assignment. Crocker says diplomats who put their safety before the country are in quote "The wrong line of business."

Progress in Iraq reported the number two U.S. Commander in Iraq says that signs of normalcy are returning to the Iraqi people. According to Lieutenant General Ray Odierno, the troop surge has insurgents on the run and Iraqi forces are improving and increasingly taking the lead from U.S. troops in Iraq's security.

CHETRY: In the meantime, Secretary of State Condoleezza Rice landed in Turkey just a couple of hours ago. She is promising solidarity between the U.S. And Turkey, when it comes to the Kurdish rebels on the other side of Turkey's border with Iraq. Kurdish officials, though, say they want more than just promises. Our Zain Verjee is live now from Istanbul with more.

ZAIN VERJEE, CNN CORRESPONDENT: Kiran, Turkish officials are saying what they want to see from Secretary Rice and from the United States is concrete action. Turkey basically wants to destroy Kurdish rebels that are based in Northern Iraq, called the PKK, that have been killing Turkish soldiers. The PKK, think of them kind of like Turkey's al Qaeda, and that's what they're dealing with.

They see it as their terrorist threat and they've really been complaining over the past few months that the United States is not helping them enough to fight their problem. On the plane over here, Secretary Rice said to reporters that the U.S. is going to work with Turkey and with Iraq to deal with the PKK problem. Now, she wasn't really specific about exactly what the United States intends to do. The big fear the U.S. has here, Kiran, is that Turkey will go into Northern Iraq and destabilize a pretty stable situation there, and open up a new front in the Iraq war. The United States, too, is in a pretty tricky situation here.

They're kind of caught between two allies, on the one hand, you have turkey, that's really been helping out the United States, sending supplies to support U.S. troops in Iraq, and then on the other hand, the Iraqi Kurds, where the U.S. have a close partnership with in the stable northern region in Iraq. One analyst, Kiran, put it this way. It's kind of like the U.S. has two girl friends, Turkey and Iraq, and Turkey is pushing them to choose.

CHETRY: What about the Turkish people, what are they thinking in this situation?

VERJEE: Well, they're outraged. We talked to a bunch of Turkish people here at a marketplace and they said that they feel let down by the U.S. They say that the U.S. has a double standard here. On the one hand, they're fighting terrorism and on the other hand they're telling Turkey when it's dealing with its own terrorist threat, to hang on a minute, just be restrained, let's see what we can do with the situation. There is a huge amount of pressure by the Turkish public on the government here to say, you know what? Forget it. We're just going to go off on these guys ourselves.


CHETRY: Difficult situation for sure. Zain Verjee reporting for us from Istanbul this morning, thank you.

ROBERTS: Firefighters in Southern California are training with the marines today. It's part of a new agreement in hopes of getting more military helicopters in the air faster. The next time wildfires try to take over. Crews from the California Department of Forestry and fire protection will head to Miramar in San Diego. There were reports that communication issues kept some marine choppers grounded as flames burned more than 500,000 acres last month. The California Department of Fire already has an agreement with the navy to help fight. Now, they're trying to expand that to the marines.

This morning, for the first time, we're hearing the frantic 911 calls from people in the San Diego area, some of them inside homes that were already on fire.


DISPATCHER: 911 Fire and Medical. This is Leanne.

CALLER: I'm engulfed in flames and my property is on fire, and I'm in my house and I can't get out.

DISPATCHER: You're inside the house and it's on fire?

CALLER: The fire is all around me on the property. My whole property is in flames. I am engulfed in flames

DISPATCHER: I want you to get in the lower part of your house. Get down on the lowest part. Get down on the floor, OK? Stay with me, OK? Stay on the phone with me.

CALLER: Oh, I will very definitely. You are the first voice I've heard. You can not imagine what this is like.

DISPATCHER: No, I can't. I really can't.


ROBERTS: Obviously the dispatcher trying to talk her out of the house. There are thousands of people came home days later to find out that their homes were entirely burned to the ground.

CHETRY: 39 minutes past the hour. We've been tracking extreme weather this morning. Hurricane Noel now barreling into the Atlantic Ocean with hurricane strength. Rob Marciano tracking Noel at the weather update desk. And will people living on the eastern seaboard feel the effects even though if there's no direct hit?


CHETRY: Orem, Tennessee, by the way, and Rob's been talking about this a lot, over the past several months, the severe drought. Orem, Tennessee is now out of water. The waterfall that usually provides water to the town's 145 residents is now just a trickle. So, the volunteer fire keeps headed into Alabama three times bringing back 20,000 gallons of water to Orem. At 6:00 every night, the mayor turns on the water. Everyone in the town showers and does laundry at that time, because at 9:00 the water gets shut off again. A very difficult season for those living in the southeast and the drought could be a much bigger problem for Atlanta and its 5 million residents as well.

Mayor Shirley Franklin speaking today about ways that resident can conserve water. Franklin has previously urged residents to save water by not watering the lawns. They say they need to save the water for drinking and also for fighting fires.

A nightmare commutes for a 5-year-old boy. Why a school bus driver booted him at the wrong stop, leaving him stranded six miles from home.

Coming up, Former President Jimmy Carter talks with us about his work for Habitat for Humanity, as well as his views on President Bush, Iran and the race for the White House. And it seems, Dennis Kucinich may not be the only candidate in history who's seen a UFO.


JIMMY CARTER, FORMER PRESIDENT: I and about 25 others saw something in the air that changed colors, that was round and came and left.


ROBERTS: Was it a bird, was it a plane? Or is it Carter tells us what he saw ahead on AMERICAN MORNING.


CHETRY: Welcome back to AMERICAN MORNING. Your top stories on your "Political Ticker". Senator Barack Obama says he personally talked with Iran, if elected. He tells the "New York Times" that he'd offer economic and security incentives if Iran promises to stop meddling in Iraq and to cooperate on terrorism as well as nuclear weapons. Senator Hillary Clinton called this approach naive back in July but then later said her administration would also negotiate with Iran with no strings attached.

The nomination fight over Attorney General heating up now as Senate Judiciary Chairman Patrick Leahy is expected to announce today whether or not he'll support Michael Mukasey's nomination. Senator Ted Kennedy is the latest Democrat to say he's against the nomination. He says Mukasey's unwillingness to say whether the interrogation method known as waterboarding is legal increases the chance that it will be used against U.S. troops. President Bush has said it's unfair to question Mukasey about the legality of interrogation techniques on which he has not been briefed.

A Katherine Harris campaign contributor will pay a whopping $1 million fine. Defense Contractor Mitchell Wade admits reimbursing his employees for contributing to her senate campaign. There is no evidence that Harris knew about those illegal contribution. She's remembered for being in the middle of 2000 Bush/Gore election standoff in Florida.

A short campaign. Presidential campaign of Stephen Colbert is over. At least in South Carolina. The comedian tried to sign up for the Democratic primary but party leaders voted 13-3 to keep him off the ballot. You can find all the day's political news around the clock at

ROBERTS: Habitat for Humanity, Jimmy Carter's work project brings thousands of volunteers together to build affordable homes for those in need. The 24th Annual Work Project kicked off in Los Angeles on Sunday. Joining us to talk more about that project and other things, Former President Jimmy Carter. President Carter, good to see you. Why Los Angeles as a location for this project? It may not be the place that people immediately think of where there is a need for affordable homes.

JIMMY CARTER, FORMER PRESIDENT: Well, it's extraordinary. I don't think there's any place in America that needs housing more than Los Angeles. First of all, there are more poverty families in Los Angeles than any other city in America. Secondly, more homeless people here, over 82,000 in any other place in America and third thing is a lot of difference between what people earn and what housing costs here.

ROBERTS: Let me just move on to a couple of other topics if I could, President Carter and this deals with housing. The Subprime Mortgage Crisis that has seen so many foreclosures in the last couple of months. Do you believe this White House is doing enough to help people out or caught up in that crisis?

CARTER: Well, I think that White House and the congress have to work together. I don't think it's fair to blame just the White House for the lack of support, but because new legislation, I understand, it will have to be passed and I'm sure any reasonable legislation that's passed by the congress, that the president would sign it.

ROBERTS: You probably heard the President in recent days say that if Iran acquires the knowledge, just the knowledge to produce a nuclear weapon that could mean World War III. What do you think of that statement?

CARTER: I think it's a foolish statement for anybody to make. You know, every year at the Carter Center, we bring in about 35 nations from around the world, all of whom know how to make atomic weapons. They have the technical capability.

ROBERTS: If Iran were to develop a nuclear weapon, how serious a development, how serious a threat to global stability would that be?

CARTER: Well, obviously, I hope that everything can be done to prevent that from happening. ROBERTS: I know, President Carter, that you've been awfully busy with your housing project there but I'm sure you've been keeping an eye on the presidential race. Hillary Clinton, the other night at this debate, her Democratic opponents pounced all over her. Do you think she's vulnerable now?

CARTER: Well, she's way ahead but I think, this time, in advance of the Democratic primaries, nobody would have dreamed that Michael Dukakis would have been the nominee, or John Kerry would have been a nominee or I would have been a nominee or Bill Clinton would have been the nominee. So, you can't tell this far ahead of time.

ROBERTS: You know, also, at this debate earlier this week, there was a bit of a humorous moment when Congressman Dennis Kucinich said that he'd seen a UFO. But that something that you're intimately familiar with yourself.

CARTER: When I was back at a peanut farmer and ahead of a lunch club in a Southwest Georgia, I and about 25 others saw something in the air that changed colors and was round and came and left. We couldn't figure out what it was. It was unidentified as far as we were concerned but I think it's impossible in my opinion. Some people disagree, to have space people from other planets or other stars to come to us, I don't think that's possible.

ROBERTS: Well, it's certainly proof, though, Mr. President that you can see a UFO and go on to become president of the United States. Maybe, it's not over for Congressman Kucinich yet.

CARTER: Well, I wish him well.

ROBERTS: Jimmy Carter, thanks very much for joining us today. It's good to see you. Good luck with your project there.

CARTER: Thank you, John. We're making good progress.

CHETRY: Well, the school bus doors open. One 5-year-old boy never steps out. Why the bus driver dropped him off miles away from home, and how it all turned out. That's ahead on AMERICAN MORNING.


ROBERTS: If you're just joining us, here's a look at what's making headlines this morning. Asian markets taking it on the chin this morning, after the DOW's huge drop. Credit fears are being blamed for the drop which came one day after a rally caused by a cut in interest rates.

The negotiating team for Hollywood writers recommended that they go on strike. They last walked the line 20 years ago before anyone had heard of iTunes and downloads. Writers are now looking for a bigger chunk of those revenues. We'll find out what impact the writer's strike could have on your favorite television shows coming up at the top of the hour.

Don Imus is coming back, the disgrace radio host. Will have a new nationally syndicated show through the ABC radio network. It begins next month, December 3rd. Imus is inspired by CBS in April for racial insults against Rutgers Women's basketball team.

It's now hurricane Noel, getting bigger and stronger but moving away from the Bahamas and out into the Atlantic. Maximum sustained winds now topping 80 miles an hour. High winds and rain expected for North Carolina all the way up to New England.

All the recent toy recalls are putting attention on lead poisoning. Now a government panel is saying that children with blood lead levels lower than the U.S. standard may still suffer low IQs or other problems. Doctors are being urged to be more alert to the signs of lead poisoning.


CHETRY: Well, it was a frightening trip home for school for a 5- year-old boy. A school bus driver in Flagstaff, Arizona, told kindergartner Tyler Figueroa to get off the bus at the wrong stop. He was too shy to speak up so he got out and started walking home. He didn't know, though, that home was six miles away. His mom was terrified when the doors open and he didn't come out. She later found him in tears. The school says the driver was a sub who was not familiar with the bus route.


DAWN TRUBAKOFF, TYLER'S PRINCIPAL: I said what are you doing? Why did you get off the bus, hysterically crying and he just mentioned that the bus driver told him this was his bus stop.

UNIDENTIFIED FEMALE: When there is a substitute bus driver, it is their responsibility to come into us as principals and let us know they are a substitute bus driver so then we can make them aware of children in special circumstances.


CHETRY: Well, the parents are still furious. From now on, they say, they're going to be picking up Tyler from school.

ROBERTS: 55 minutes after the hour. All right, all you wannabe athletes and weekend warriors listen up because this is a story you're going to want to hear about. It's ripped out of the comic books, call it mighty mouse or super mouse. Check out the video here. Mighty mouse is on his way. Two mice on the treadmill there. The one on the left that stays up the front has had its genes tweaked.

Scientists from Case Western Reserve University genetically modified this mouse. The rodent keeps pace on the treadmill for more than a half an hour here. You can see that the other mouse who was on the treadmill finally gave up after a mere 20 minutes. Look at that, an hour into it and this mouse keeps going. They called it the Lance Armstrong of mice. Just the ability to go and go own and go and go. The super mouse, get this, also lived longer, ate much more, but had 90 percent less body fat, also was sexually active later on in life. You were saying Kiran, it's almost sounds like buddy love in "The Nutty Professor."

CHETRY: The alter ego. But the other interesting thing and that they say, well, obviously we're not going to start messing around with the human, you know, genes like they did with this mouse.

ROBERTS: Well, not yet.

CHETRY: Well, they said it could lead to studies about how to get muscles to recover faster. They were also saying that he doesn't appear to suffer from muscle fatigue which plagues so many athletes.

ROBERTS: You know, apparently, humans have the same type of gene that they manipulated in this mouse. So, it may be possible somewhere down the road to create super humans, super athletes. It opens up a whole new can of worms in terms of enhancing athletic performance and how do you test for that?

CHETRY: That's right. We thought just terrorist are the problem now. Just wait until we get this. Well, some 5 million frozen pizzas being recalled for possible E. coli contamination. Medical correspondent Elizabeth Cohen is going to be along to tell us what you need to know coming up.


ROBERTS: Stocks slide. World markets sink overnight. Can the DOW recover today?

Tough talk.


GEORGE W. BUSH, U.S. PRESIDENT: America would have not attorney general during this time of war.