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American Morning
Fed Cuts Interest Rate by Half Percentage Point; British Government to Rescue Largest Banks; Dissecting the Debate
Aired October 08, 2008 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Well, we are just almost at the top of the hour now and we're following breaking news this morning. The Federal Reserve cutting a key interest rate by a half percentage point. It's part of a joint effort with central banks in Europe and Asia to lower interest rates around the world. That news is sending Dow futures up. Right now 79 points. Comes after a 508-point drop that triggered panic selling in Asia overnight.
In Japan, the Nikkei losing more than 9 percent. Tokyo's biggest one-day drop in 21 years. In Hong Kong, the Hang Seng Index closing down more than 8 percent. Trading was suspended in Indonesia after the Jakarta market fell 10 percent. European markets, though, are reacting positively as well to that news. We have London's FTSE average up about 15 right now as well.
And Christine Romans is here "Minding Your Business" to put more of this into perspective. You perhaps hit it the best in the break. You said, I have 10 years of news in just this morning alone.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: That's right. In one hour, ten years of news. Well, let's reset the stage then. We had a big stock market selloff in the United States yesterday. That came on the heels of big selloffs overseas. And then overnight you had the British authorities saying that they were going to orchestrate a bailout of British banks and there were concerns across the globe about the health of the banking sector and global recession fears sending Asian stock markets down sharply, sending the European stock markets down sharply, and then exactly an hour ago we got news from the fed that in an unprecedented effort, they were cutting interest rates by half a percentage point to 1.5 percent in a coordinated global rate cut.
That is the important part of this. Coordinated global rate cut. It's something that the market has been hoping for over the past few days as a sign of -- of confidence restoring into the marketplace, showing that the fed and global central bankers are doing everything that they possibly can to try to fix this credit crisis and this crisis of confidence, really, that is spreading across the globe.
Now, confidence is the key here. Central bankers trying to restore confidence in the international system. And that is something that has been in very, very short supply of late. Yesterday, we heard the fed that it is going to bailout business loans essentially.
We know there is that $700 billion bailout package that Congress passed. We know that the fed and the Treasury, Kiran and John, have done just about everything that they can in their power to try to restore some sense of normalcy to the international system. And we also know that Dow Jones Industrial Average over the past five days is down almost 13 percent. And that is a point loss. That has never happened before.
CHETRY: It really is staggering when you especially look at your 401(k). But again, we see futures, S&P, Nasdaq and Dow Jones up right now. We'll see what the day holds.
ROMANS: We will see (INAUDIBLE) very sharply for some time.
JOHN ROBERTS, CNN ANCHOR: Christine, thanks.
The news, the rate cut comes just hours after the British government announced a sweeping plan to bail out its banks. More than $87 billion of taxpayers' money will be used to purchase shares in eight major banks.
CNN's Becky Anderson watching the developments in London right now.
Becky, what's it looking like over there, and particularly, in light of this coordinated bank rate cut between the U.S. Federal Reserve, Central Bank there in Europe and as well other banks including the Bank of England?
BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT: John, interesting reaction. Really interesting reaction. A 6 percent drop before that action. And those markets went straight up. They're now just trading slightly lower, but these European markets have liked that coordinated action. And at least we're trading at or around a level point this Wednesday.
And the really interesting point was it was that pushed these markets higher. Not this $90 billion bank bailout that the chancellor here, the finance minister here announced this morning before the markets opened. And don't forget that is only 10 percent of what the British government is making available to the financial system.
There is another, some $900 billion that they're making available across the money markets in order to inspire some confidence. This is what I've heard, though, from traders today. It's an interesting point. What I think they feel is this. That ultimately these markets have gone higher off the back of that rate cut because they think that's it. Pretty much they think that the government has said we've got nothing else to give you, guys. You sort it out.
And at this point most of what they've got is priced into the market and we may -- we may just see the beginnings of a little bit of confidence. Not the green shoes of recovery necessary, but the -- a little bit of confidence coming back into the markets.
Let me show you how the newspapers sold this story though this morning. This of course is before the rate cut. "Day of Reckoning" says "The Daily Telegraph." And I've got to say I think that's absolutely spot on this morning. "Day of Reckoning" for the financial markets. "The Independent" newspaper here in the U.K., "50 Billion Pounds Bailout to Save Britain's Bank, But Will It Be Enough to Save Us?" Good question.
We're looking at banking stocks up significantly this morning on the back of this bailout and on the back of the rate cut by 50 basis point or half of one percentage points if you don't watch the markets. And "Le Figaro," the French newspaper this morning. "Europe is Engaged in Trying to Work out What You Do to Avoid What is Ultimately a Complete Banking Failure." Those are the headlines. Better day as we move through the session on the back of that rate cut.
Gordon Brown, though, let me just leave you with this. What the prime minister said today as they announced this big bailout for the banks of the U.K. He said this, "The global financial system is trekking towards collapse" -- John.
ROBERTS: We could certainly use a little bit of good news. Becky Anderson for us this morning.
Becky, thanks so much.
How will the big interest rate can affect Wall Street? As we wait for that, we're taking a look at what Barack Obama and John McCain said that they would do to shore up your money. The best political team on television breaks down the candidate's plans.
And while you're sleep, the British government announced the plan to rescue its largest banks with almost $90 billion. How their plan differs from our own bailout bill. And will it restore investor confidence?
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most Politics in the Morning" now.
There's a new poll this morning saying that Barack Obama won last night's debate against John McCain. 54 percent of viewers gave him the win and it's issue number one, the global financial selloff was the top issue on the docket. Poll says that more viewers think that Obama is better suited to handle the financial crisis. Both he and John McCain offered their fixes.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Part of the problem I think for a lot of people who are listening here tonight is they don't feel as if they are sharing the burden with other folks. I mean, you know, it's tough to ask a teacher, who's making $30,000 or $35,000 a year to tighten her belt when people who are making much more than her are living pretty high on the hog.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Senator Obama's secret that you don't know is that his tax increases will increase taxes on 50 percent of small business revenue. Small businesses across America will -- will have to cut jobs and will have their taxes increased and won't be able to hire because of Senator Obama's tax policies.
You know, he said some time ago, he said he would forego his tax increases if the economy was bad. I got some news, Senator Obama, the news is bad.
(END VIDEO CLIP)
CHETRY: Well, both candidates head back on the trail today. Barack Obama is going to be in Indiana, and John McCain teams up with Sarah Palin for rallies in Pennsylvania and Ohio.
ROBERTS: So, as we consider all of this this morning, let's get a little more analysis and perspective on what happened in last night's debate and how it changes the game going forward.
Our White House correspondent Ed Henry is covering the McCain campaign. He's at the debate site in Nashville this morning. Suzanne Malveaux following the Obama side of things and she's in New York this morning.
You talk with the advisers from the Obama campaign last night, what sort of footing do they feel that they are on after last night's debate?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: They're excited about it. They're confident. They're not yet cocky. They say there's still a lot of work to be done. There's 27 days and really 27 days is a long time in a campaign, a lifetime, really. But what they're going to do is focus on essentially making the case that John McCain is bad for the economy. That he is out of touch. That Barack Obama has a better plan. That they feel that he's the stronger candidate in that sense. They're going to stay away from the kind of character and judgment issues. And he's just going to be himself. He's going to try to reach out not only to the Democratic stronghold, but obviously the independent voters.
ROBERTS: He's going to Indiana today. Our latest CNN "TIME" Opinion Research Corporation Poll shows that John McCain still is leading in Indiana, but he's trying to keep it in play.
MALVEAUX: And it's interesting because this is a Republican stronghold as you know. McCain is still ahead. They are trying to chip away at his lead. One of the things that they're doing going to Indianapolis today. This is his 46th visit but he really is trying to increase the percentage of African-Americans who are registering to vote. That is critical.
He's also going to go on to Ohio. At Ohio, he's going to be in Cincinnati. And that really is the belly of the beast here because that is one of the places where Republicans are really holding on to John McCain. A very strong support for him there.
He feels like there's some way that he could chip away at that and it's also Ohio a place where in the Democratic primary we saw that race -- 20 percent of those polled said that race was an important factor. So, we'll see how that whole race thing plays out as well. ROBERTS: Yes, as we talked with Mayor Willie Brown. He thinks that it's definitely going to be factor on November the 4th. Suzanne Malveaux this morning. Thanks.
Let's check in with Ed Henry again. He's in Nashville at the site of last night's debate.
Ed, the McCain campaign, they've got to be looking at those numbers from the year 2000 as Ed Rollins reminded us this morning when Al Gore was 11 points ahead going into the final debate in some polls, and thinking that maybe, just maybe, they can turn it around still.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: They do. Obviously, they always have hope, but I can tell you after the spin room closed here on campus, I ran into a couple of McCain advisers off-campus. And they were kind of resigned to the fact, frankly, that the numbers are not looking good and the fact that the way they put it is basically because of this financial crisis.
When you look at any poll, CNN or any other news organization, it's showing that sort of right track/wrong track, that the vast, vast majority of the American people believe the country's on the wrong track right now.
These McCain advisers were basically saying the fact that McCain is even this close at this point is remarkable and they still have hope, but they realize it's really going to take a lot to overcome any deficit against Obama right now. Just because the financial crisis has just sort of deepened the malaise for the Republican Party and they know that, John.
ROBERTS: You know, I got to point out, too, Ed, that the weather the you're experiencing there is exactly the same as it was Election night in 2000, when John King, I and others stood in the rain all night waiting for the election to end and it never did.
HENRY: I don't know if it's a metaphor.
ROBERTS: Ed Henry, thanks very much. 12 minutes after the hour now.
Dissecting the debate.
(BEGIN VIDEO CLIP)
MCCAIN: I've got some news, Senator Obama. The news is bad.
(END VIDEO CLIP)
ROBERTS: The candidates took plenty of shots. But were there any knockouts? Our panel breaks down the crucial night.
(BEGIN VIDEO CLIP)
OBAMA: The straight-talk express lost a wheel on that one.
(END VIDEO CLIP)
ROBERTS: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back. We're following breaking news. A coordinated global rate cut by the world's leading central banks. Right now, Dow futures are up 150 points on the news. That follows a massive selloff in overseas markets early this morning. CNN's Richard Quest is live in London.
You know, they're making an effort, Richard, to do all they can to try to turn things around. A rough, rough day on the markets.
RICHARD QUEST, CNN CORRESPONDENT: Absolutely. But what the difference a half a percentage point makes. The Fed led the way, knocking half a percentage point off its interest rates. European central banks followed suit, along with the Bank of England, right the way around the world, all the way to China. They were cutting interest rates and indeed it's done the deed.
Currently, markets in Europe, the London market up just a tad, the Frankfurt market and the Paris market down just a bit. But that doesn't really matter because we started the day in torrid territory, to use a cliche if you'll forgive me, when they all fell very sharply overnight. You've been reporting all morning Japan down nearly 10 percent. Suddenly, the sun is not exactly shining, it's not pouring with rain either.
CHETRY: That's true, Richard. We're going to see how long it lasts. Dow futures also up 199 points right now. Thanks.
Checking the facts.
(BEGIN VIDEO CLIP)
MCCAIN: Senator Obama was the second highest recipient of Fannie Mae and Freddie Mac money in history.
(END VIDEO CLIP)
CHETRY: McCain attacks Obama for ties to the financial industry. But is he right? The "Truth Squad" checks the record and separates fact from fiction. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
MCCAIN: Until we stabilize home values in America, we're never going to start turning around and creating jobs and fixing our economy. And we've got to give some trust and confidence back to America.
(END VIDEO CLIP) ROBERTS: Back now to this morning's breaking news, the Fed joining world banks in cutting interest rates to ease fears of a global recession. Down half a percentage point.
Senators Barack Obama and John McCain had some ideas of their own at last night's debate and joining me here in New York to talk more about this, Republican strategist and CNN contributor Ed Rollins and Democratic strategist Lisa Caputo.
Welcome to both of you. It's good to see you.
LISA CAPUTO, DEMOCRATIC STRATEGIST: (INAUDIBLE).
ED ROLLINS, REPUBLICAN STRATEGIST: Good morning.
ROBERTS: First of all, let's talk about the performance in last night's debate. Of course, John McCain has been challenging Barack Obama to a series of 10 town hall meetings. Obama never took the bait on that. Ed, how do you think Senator McCain did? This is supposed to be his familial territory.
ROLLINS: Thank goodness, Barack didn't take the challenge. We all would have been bored to death. I think your London commentator just summed it up -- the sun is not out but we're not drowning in rain yet. I don't think the senator was able -- Senator McCain was able to do what he needed to do last night, which was either instill the confidence that he had a road to economic survival here. He had to score a big night and I think it was probably a draw.
ROBERTS: But he did have at least a new idea which was for the federal government, the Treasury Department, to buy up some of these toxic mortgages and help keep people in their homes. It's like the homeowners' loan program from the 1930s that actually Hillary Clinton suggested a little while ago. Remember, John McCain last night channeling Hillary Clinton.
CAPUTO: He had a new idea but no one knew about it because it was buried and he also didn't say how he was going to pay for it. And so, I couldn't agree more with my friend Ed Rollins. John McCain needed a game-changer. He didn't get it. And, you know, to think that the town hall format was his format, I think is a far cry. I mean, I didn't see that as his format at all.
And I thought it was interesting at the end of the debate, John, that Barack Obama stayed around in the hall for a good long time. He did Bill Clinton, as we like to say, and worked the room. McCain exited out of the hall.
ROBERTS: Obama has been throttling McCain on the economy. But he did get in one, what appeared to be a fairly good line last night. Let's listen to how he responded.
(BEGIN VIDEO CLIP)
MCCAIN: You know, he said some time ago, he said, he would forego his tax increases if the economy was bad. I got some news, Senator Obama. The news is bad.
(END VIDEO CLIP)
ROBERTS: Ed, at that point, I could imagine Barack Obama standing up and saying, well, didn't two weeks ago you come out at the beginning of this economic crisis and say the fundamentals of the economy was sound. The format didn't allow him to do it. So, was that a clear zinger for McCain?
ROLLINS: It was a good zinger. I mean, there weren't many zingers in either one of these debates. And I think to a certain extent as I said halfway through, I was hoping it was a tag match and Sarah Palin could come in and finish the job off. It didn't happen. You know, we still got a ways to go. And I'm not in any way, shape, or form conceding it. It's still, it's still -- the sale is not made. And I don't think Barack quite finishing him off either, which is his job.
ROBERTS: Well, the flip side of the coin perhaps Obama did do himself some good when John McCain was talking about Pakistan and going in there and telegraphing your intentions. Here's how Barack Obama came back from that zinger.
(BEGIN VIDEO CLIP)
OBAMA: Senator McCain, this is the guy who sang, bomb, bomb, bomb Iran. Who called for the annihilation of North Korea. That I don't think is an example of speaking softly. This is the person who, after we had -- we hadn't even finished Afghanistan where he said, next up, Baghdad.
(END VIDEO CLIP)
ROBERTS: Did he effectively counter the notion that he is dangerously naive when it comes to foreign policy?
CAPUTO: He absolutely did. What he did there that was so effective I thought was he proved that he could go toe to toe with John McCain on foreign policy issues and he prove he could actually outdebate John McCain on foreign policy issues. And I really credit both Senator Obama's grasp of the issues and the extraordinary work done by his staff led by Greg Craig, his foreign policy adviser. I think you saw a different Barack Obama last night on foreign policy issues, certainly than you did in the primary debates.
ROBERTS: You know, McCain was forced on defense there, Ed, to say, well, it was a private joke.
CAPUTO: Yes.
ROBERTS: You just have to be in a very public meeting in front of television cameras.
CAPUTO: Yes.
ROLLINS: He was forced to respond. I think the sad part is that neither man was inspirational last night. I think the country definitely is looking for someone -- please, please, someone step up and be a leader. And I think a lot of Senate debate talk.
ROBERTS: Yes, I mean, I would have liked to have seen it. The part that I was jazzed about was when Brokaw allowed them to have a follow-up. They liked to see more of that.
CAPUTO: Yes. It would have been nicer to see some more personal moments between them and the audience.
ROBERTS: Lisa Caputo, Ed Rollins, as always, thanks so much.
(CROSSTALK)
CAPUTO: It's good to see you.
ROLLINS: Take care.
ROBERTS: 22-and-a-half minutes after the hour now.
Race and politics.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: He flat out said to me, I can't vote for that black boy.
(END VIDEO CLIP)
ROBERTS: Union workers launched a small town offensive inside the fight to convince crucial voters to look beyond the color of the candidate's skin.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Look, you know, we got to get past that. Carol Costello with "The Voice of the People."
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
JAMES CARVILLE, DEMOCRATIC STRATEGIST: I think he's going to win. I think absent -- absent some unforeseen circumstances, you can call the dogs in, wet the fire, and leave the house. The hunt is over.
(END VIDEO CLIP)
CHETRY: Welcome back to the "Most News in the Morning." That's some confidence from Democratic strategist James Carville that Barack Obama will be our next president. The polls seem to corroborate that at this moment in time, but did John McCain manage to change any minds last night with his answers on the economy and foreign policy? Well, joining me now is Republican strategist and former counselor to President George W. Bush, Karen Hughes.
Thanks for being with us this morning, Karen.
KAREN HUGHES, REPUBLICAN STRATEGIST: Good morning. You have to give James Carville The Colorful Quote of the Night Award, I guess, after that -- his statement.
CHETRY: Exactly. But is there any truth to what he said? Is there a feeling that perhaps this is slipping out of John McCain's grasp?
HUGHES: Well, I think right now the polls are showing that Senator Obama does appear to be a little bit ahead. But the 27 days as we learned during our campaign is a lifetime in presidential politics and a lot can still happen. I actually thought both men did well in the debate last night.
Barack Obama is actually better in these debates than he was in the debates against Hillary Clinton. But I think what I said that Senator McCain had to do going into the debate was connect with the American people. And I think from his first answer where he identified with Americans and said they're angry and they're upset and they're fearful, I thought he came across as very genuine and was able to establish that connection.
Barack Obama I would say was very smooth. He's a trained lawyer. He's very good at making arguments. But I woke up this morning and I thought, what did he really say? You know, he said a lot of things that were nice to hear. He would consider this or we'll have to deal with that. But there wasn't a whole lot of there there to the substance of his comments. I didn't think.
CHETRY: You know -- and when we take a look at our polling, 54 percent of the people who watched that debate felt that Barack Obama did do a better job. We also have Barack Obama leading in the national polls that we were looking at, especially in these battleground states. In some red states, in fact.
Now, I know back in 2000 Gore was leading George W. Bush up until that last debate and you counseled him on that. What would you be saying to John McCain today? What are some of the lessons from how you were able to turn that around in 2000?
HUGHES: Well, I think he has to continue to make his points. Obviously the economy has become the issue of this campaign. John McCain last night unveiled a new proposal to try to help more Americans stay in their homes. That's something Barack Obama had previously said he wanted to do. Well, John McCain last night outlined a plan to actually get that done and acknowledged very frankly and honestly that it would be expensive.
CHETRY: Barack Obama's campaign today, by the way, is saying that this is something he mentioned two weeks ago as well. They're trying to say that it's not a new idea. But let's listen to what John McCain said about the mortgage situation, and I want to get your take on that.
(BEGIN VIDEO CLIP)
MCCAIN: I would order the secretary of the Treasury to immediately buy up the bad home loan mortgages in America and renegotiate at the new value of those homes, at the diminished value of those homes and let people be able to make those payments and stay in their homes. Is it expensive? Yes.
(END VIDEO CLIP)
HUGHES: You know, that's straight talk. It's not very often that you hear a presidential campaign -- candidate say, this is going to cost a lot of money, but he obviously feels it's something that's important to be done. We've had a big package that's gone out to try to help both Wall Street and Main Street to prevent further financial turmoil that's really freezing up the ability for, you know, businesses to meet their payroll and for people to get loans to buy cars and send their kids to college.
(CROSSTALK)
CHETRY: Right. But Karen, you said here are the collective groans I'm sure from the fiscal conservative wing of the Republican Party. Is that what they want to hear that we're going to be reworking individual homeowners' loans, you know, and putting it on the government tab?
HUGHES: Well, I think there are a lot of people very worried. And this is a tough time for fiscal conservatives, because, you're right, no one likes to have to spend big amounts of government money. On the other hand, we are in a very severe financial crisis. And what John McCain said last night is government at some times government exists to intervene to help protect people, and this is one of those times he judged. So, I think he did a good job in the debate last night.
And I -- again, I did think, by the way, that Barack Obama, Senator Obama, had one moment that I found to be quite churlish and that's when he said that President Bush after September 11th asked Americans to go shopping. Well, what President Bush actually did was launch a huge volunteer effort and call in Americans to engage in public service, and I was part of that. He created a very small part, but he created the USA Freedom Corps which has really spurred volunteerism in communities across America, and Senator Obama said he wanted to increase the Peace Corps. Well, under President Bush the Peace Corps is now at its highest level ever since President Kennedy first created it.
And so, I thought that was a little bit of a gratuitous shot. And it's kind of unfair of Senator Obama.
CHETRY: Well, it's great to have you with us this morning. Karen Hughes, thanks for being with us.
HUGHES: Thank you so much. ROBERTS: 30 minutes after the hour. Back to our breaking news right now. Just a short time ago Central banks around the world announced an unprecedented coordinated move to cut interest rates altogether. Here at home, the Fed cut its rate by half a percentage point to 1.5 percent that sent the Dow futures soaring out of negative territory.
The U.K.'s rate cut erased nearly all of this morning's losses on the London FTSE index. Right now, it's trading up nearly 40 points. Half an hour before the market opened, the British government announced it would partly nationalize the country's eight largest bank by spending nearly $90 billion of taxpayer money by buying shares in those banks. That did not affect the market much but the rate cut did.
The economic uncertainty dominated the presidential debate last night between Senators Barack Obama and John McCain. Both men offered their plans to fix the economy.
Well, we have heard from the candidates. We have heard from the voters and we've heard from the pundits. What about the party loyalists who watched the debate? What do they think the candidates' best moments were? CNN's Jason Carroll joins me now with more on that.
Good morning, Jason.
JASON CARROLL, CNN CORRESPONDENT: And there were a few good moments. Obviously the economy was the number one issue that dominated the debate. Both Republican and Democratic debate watchers say their candidate did well on the subject. But they also say their candidate's best moment came when they addressed other topics.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): The analysts may not agree.
DAVID GERGEN, CNN POLITICAL ANALYST: It seems to me there wasn't much electricity tonight.
UNIDENTIFIED FEMALE: I disagree with that.
UNIDENTIFIED MALE: I disagree with that one.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It was clearly early on that McCain was more comfortable with this format.
CARROLL: But at a Republican debate party in Ohio and at a Democratic one in Miami, each side agreed their candidate won.
BROOKE FERGUSON, OBAMA SUPPORTER: I thought Senator Obama did an amazing job. I thought his ability to steer very clearly through the issues was right on point.
CHRISTINE MACNAMARA, MCCAIN SUPPORTER: On economics he stands strong. On -- on foreign policy, he stands strong. President Obama would be a disaster.
CARROLL: Some GOP debate watchers say Senator John McCain was at his best toward the end of the debate. He talked about his service to country.
MCCAIN: It's been my great honor to serve for many, many years. And I'm asking the American people to give me another opportunity.
KEITH FABER, MCCAIN SUPPORTER: The points were -- McCain was making a direct plea to the people I thought were impressive.
MATT HUFFMAN, MCCAIN SUPPORTER: It was McCainesque. I thought he did a nice job. Very strong.
CARROLL: As for Senator Obama, Democrat debate watchers say one of his best moments dealt with foreign policy. And his response to McCain's charge he should walk softly and carry a big stick in dealing with Pakistan.
OBAMA: Senator McCain, this is a guy who sang "bomb, bomb, bomb Iran," who called for the annihilation of North Korea. That I don't think is an example of speaking softly.
KEISHA WITHERSPOON, OBAMA SUPPORTER: It was a very hilarious moment.
UNIDENTIFIED FEMALE: To me it was very telling of the contradictions on the part of the McCain campaign.
CARROLL: Several national poll show McCain trailing Obama, but a substantial chunk of voters are still undecided and analysts say despite what debate watchers say, neither candidate did much to change the campaign scores.
AMANDA CARPENTER, TOWNHALL.COM: John McCain certainly had a higher mountain to climb going into this debate and coming out of it. I don't think he had the game-changer moment he needed.
HILARY ROSEN, EDITOR AT LARGE, HUFFINGTONPOST.COM: The zingers on both sides mostly fell flat. I didn't think the audience particularly registered well when either one of these candidates attacked the other.
(END VIDEOTAPE)
CARROLL: And, again, what was interesting was the Democratic debate watchers seemed to like it when Obama got a little feisty when defending himself. The GOP debate watchers thought one of McCain's best moments wasn't when he was feisty so much but when he was showing his patriotism and talking about serving the country. But, again, at the end of the day there didn't seem to be a game-changer here.
ROBERTS: All right. Jason Carroll for us this morning with that. Fascinating to watch.
CHETRY: Well, the youth vote will be vital in this election, so which issues do young voters really care about the most and how many of them will actually show up on election day? We're going to talk to them coming up.
Also Senator John McCain could be the oldest president ever. What kind of shape is he in? We're "Paging Dr. Gupta," who got a rare three-hour look at McCain's medical files.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the most news in the morning. We're covering breaking news today. The Federal Reserve cuts its key interest rate half a point. Six other major banks from around the world also cut interest rates as well. This after world markets plummeted overnight. Dow futures now soaring on the news. Turning around sharply. Yesterday a 508-point drop and today we have the Dow futures looking up. Right now 67 points.
Well, meantime, the economy dominated last night's debate as well. And we're talking about young voters, though. They're going to be the ones that will inherit this deficit and mess. So, how did they feel about the candidates' answers on fixing the economy?
ROBERTS: A good chance that they'll be paying for the debt for generations to come. Joining us now from Dallas is Alexandra Acker, she's the executive director of Young Democrats for America and from Washington, D.C., Jason Mattera is a conservative youth outreach organizer and a special correspondent to hotair.com. Welcome to both of you.
Let's throw it out there. Did either one of the candidates address issues of importance to the youth of America last night?
Alexandra, why don't you start us off?
ALEXANDRA ACKER, NATIONAL YOUTH OUTREACH DIRECTOR: Absolutely. You know, Barack Obama obviously focused on the economic crisis that's been gripping our country and it's been gripping young people as well. The economy is overwhelmingly the number one issue for young people. But what you heard last night was Senator Obama talking about the specific concerns of young people. The rising cost of health care, college affordability, ending the war in Iraq so we can be investing back here at home and providing real solutions to the problems that are facing America, not to mention the fact that he made a really strong case for his tax cut for 95 percent of all Americans.
ROBERTS: Jason, you want to respond?
JASON MATTERA, CONSERVATIVE YOUTH OUTREACH ORGANIZER: Absolutely. I thought John McCain did a fine job articulating how a President Obama would raise taxes on productive small businesses, which is -- which is going to pinch young people. I mean, we need small businesses to have as much capital and liquidity because young people are getting hired for these entry-level positions. You tax the small businesses and we don't get the entry-level positions --
CHETRY: Jason I want to ask you about -- MATTERA: So people like me, so young people, I thought should be resoundingly in favor of McCain, not only in favor of lowering taxes but keeping them where they are, the same burden.
CHETRY: I want to ask you about what John McCain said, one of the proposals last night was to buy the mortgages to get the Treasury to buy the mortgages of homeowners in financial trouble, replace them with more affordable loans just to be on top of, you know, the billions that are better being spent on the Wall Street bailout. How do you square that as a young conservative with some of your fiscal ideals?
MATTERA: Well, overall this financial crisis is troubling. Because we want less government, not more. I think -- I believe, as I heard John McCain, and he was articulating his plan more so, is the $700 billion, that was passed. He's going to use part of that $300 billion, in this new plan to buy up mortgages. It is going to affect young people for generations to come. We are already straddled with debt.
And it's interesting when you look at the two candidates, Barack Obama his solution to every problem is more government. Whether it's education, whether it's health care, whether it's climate change, everything is increasing the size, scope, and power of the federal government, which means more tax dollars.
I thought what Senator McCain did was fundamentally say, listen, I want to give you the choice in health care. I want to give you the choice in lowering taxes and have you decide your economic future, not Uncle Sam.
ACKER: OK. Jason, Americans want solutions to problems. Young people are afraid of the future. They don't know what they are going to do as well as their parents did.
MATTERA: They should be with President Obama.
ACKER: And Barack Obama's offering real solutions that young people -- for problems young people care about, you know, talking about green jobs. Talking about getting the economy together by making investments.
ROBERTS: Alexandra.
ACKER: By making investments -- Jason, let me finish. By making investments in our infrastructure.
MATTERA: That was John.
ACKER: It's not increasing the size of the federal government it's providing solutions to the problems that Americans care about.
ROBERTS: Jason and Alexandra, let's stop for a second. Sorry, Alexandra, that was me, not Jason breaking in there. I want to ask you about this issue of health care because young people, students, about to get out of college, they're looking for a job. They will no longer be covered by their parents' health plans once they are finished being students, they may not get into the job market right away. John McCain is offering a $5,000 tax credit should they get an entry level job perhaps in a company that doesn't offer benefits, is that not a good way of addressing the health care crisis in America?
ACKER: Well, then he's saying he wants to tax that health benefit, increasing Americans' taxes on something that's crucial that Barack Obama pointed out was a right, not a responsibility.
MATTERA: Oh come on. Alexandra.
ACKER: Health care for all Americans. Barack Obama's plan would cover nearly every American. Making health care more affordable, taking special interests --
CHETRY: All right. Last one --
MATTERA: You're socializing.
CHETRY: Last word, quickly. We got to leave it there.
ACKER: Taking health care out of the hands of --
MATTERA: You're socializing the health care industry. The government has already screwed up social security. The government has already screwed up -- health care.
ACKER: Screwed up social security. Tell that to the senior citizens, Jason.
MATTERA: The war in Iraq, why in the world -- would you want to socialize the entire health care industry then?
ACKER: You and I both you know that's not what they're proposing.
MATTERA: This isn't empowering young people.
CHETRY: Well, we are going to have to leave it there this morning. I got to tell you. We're not lacking passion among the youth vote. I tell you that. We love having you guys on. You have a lot of great points of view.
ACKER: Thanks so much.
CHETRY: Alexandra Acker and Jason Mattera, thanks.
ROBERTS: They're a fireballs.
CHETRY: They sure are.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Door to door. Could the presidential race come down to race?
UNIDENTIFIED MALE: She said her father couldn't see himself voting for a black man.
CHETRY: Inside a small-town effort to convince voters that color shouldn't matter.
UNIDENTIFIED MALE: Look, we got to get past that. Carol Costello with "Voice of the People." You're watching the most news in the morning.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHETRY: Welcome back to the most politics in the morning. Today we're bringing you part two of our "Voice of the People" series and we're examining race and the election. Our Carol Costello has a special report for us. She joins us live from Washington this morning.
A lot of people are saying is this the unspoken factor that could make the difference in this election?
CAROL COSTELLO, CNN CORRESPONDENT: You're right, Kiran.
Race does matter in states like Pennsylvania and Ohio. Union leaders who back Obama know it, and they are worried. So, they're using a strategy meant to appeal to a middle of America that admires telling it like it is. They just hope it works.
(BEGIN VIDEOTAPE)
COSTELLO: It remains an ugly truth, race still matters. The question is, how much. Barack Obama leads in the latest national polls yet his foot soldiers on the ground still worry.
UNIDENTIFIED MALE: When he finally got to where she lowered her voice it's because he's black.
COSTELLO: In a small town in Pennsylvania, Jim English with the United Steelworkers Union is sending out teams of union workers like Andy, Laura and Doug to knock on doors. Their job is to make sure their fellow steelworkers vote Obama.
UNIDENTIFIED MALE: I'm just worried about foreign policy with Obama.
COSTELLO: That's an argument they feel they can win. But sometime it's more complicated.
DOUGLAS WARD, UNION MEMBER: One lady I went to told me, the reason why she had the issue was because how she was raised. She said her father is still alive and is 85 and he couldn't see herself voting for a black man.
COSTELLO: So they had to convince some of their union brethren, the race isn't about race.
ANDY ZANAGLIO, UNION MEMBER: And she flat out said to me I can't vote for that black boy.
WARD: They talked about him being a Muslim. He said countless time that he's a Christian.
COSTELLO: Obama is and always has been a Christian. The union feels the Muslim tag is really code for he's black.
JIM ENGLISH, SECRETARY TREASURER, UNION STEELWORKERS UNION: What they are saying really is probably a cover for being uncomfortable with him because of his race.
COSTELLO: In other words, he says sadly in some circles it's socially acceptable to call Obama Muslim rather than something else. And it's not just here in Pennsylvania. Subtle references on the campaign trail to Obama's middle name just reinforced those Muslim belief.
UNIDENTIFIED MALE: On November 4th let's leave Barack Hussein Obama wondering what happened.
COSTELLO: And just last week in Ohio.
UNIDENTIFIED MALE: He was the Muslim but he won't say it.
COSTELLO: Andy, Doug and Laura are used to that by now. Andy says about a quarter of the people he talks to raise the race issue. But he has a ready response.
ZANAGLIO: What I do when they bring that up I just say look you know we got to get pass that. We live in America, we're the best nation on earth. We got to get to the real issues of what's going on in this campaign.
(END VIDEOTAPE)
COSTELLO: And Barack Obama points to the polls as proof the race question maybe be over stated. He is ahead in the polls nationally. Obama says that tells me that the American people are good, that they're judging me on my ideas and my vision and my values and not my skin color -- Kiran.
CHETRY: All right, well, we'll certainly have to wait and see. Carol Costello, thanks.
And as the economic crisis expands, so does the gap between the, "haves and have-nots." We're taking a closer look on that. Carol's special report "Main Street versus Wall Street" it's tomorrow on AMERICAN MORNING.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): McCain's medical records.
MCCAIN: People will judge -- will judge by the vigor and the enthusiasm associated with our campaign.
ROBERTS: Dr. Sanjay Gupta check up on the man who could be the oldest president ever.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: I have my notes sort of prepared the things I'm looking for and we're going to see what we find.
ROBERTS: And the one big reason some say there's nothing to worry about.
UNIDENTIFIED FEMALE: Longevity runs very strongly in the family.
You are watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: We're following breaking news this morning. The Federal Reserve cut its key interest by a half a percentage point in the last two hours. Six other major banks from around the world also cut interest rates as well after world markets plunged overnight. Right now, we're taking a look at the Dow futures. They are down after being up for the past hour or so. Just 41 points. We'll see what happens after the Dow dropped 508 points yesterday -- John.
ROBERTS: They're down now?
CHETRY: Down 41 from the last time I refreshed the screen, yes.
ROBERTS: Well so much for the positive news this morning. Age and health are an issue in this presidential campaign and that's a worry for the McCain camp. A new CNN poll finds nearly half, 47 percent of Americans are concerned that John McCain might not make it through a first term in good health. Just 19 percent are concerned about Senator Obama's health. Now are these valid concerns? Our Dr. Sanjay Gupta has been checking in to all of this. He actually had a chance to review in great detail Senator McCain's records. What have you found out?
GUPTA: Well, first of all, John, health is always a concern in every presidential election, no question about that. But maybe no more so than in this one when it comes to physical health, cognitive health, mental health, there's a lot of fiction out there. There's some reality as well. We've been digging into this for several months. Take a look.
(BEGIN VIDEOTAPE)
GUPTA (voice-over): When questions come up about his age, 72- year-old John McCain likes to point to his mother Roberta.
MCCAIN: People will judge - will judge by the vigor and the enthusiasm associated with our campaign.
GUPTA: According to actuarial tables, a 72-year-old man can expect to live another 12 years and McCain has some advantages, like good health care and good genes. Dr. Thomas Perl's is an expert on aging. DR. THOMAS PERL, BOSTON UNIVERSITY: we found that longevity runs very strongly in families. So, having a 96-year-old mom who is in pretty good shape definitely bodes well for him.
GUPTA: The biggest issue for McCain is cancer, specifically melanoma. This spring I had a rare and somewhat unusual look at Senator McCain's medical records.
GUPTA (on-camera): we're going to be in his room for a period of time. No electronic devices are allowed in. I have my notes, sort of prepared for things that I'm looking for and we're going to see what we find. They gave us three hours to pore through more than 1,100 pages. They only covered the last three years and there's no way to determine what might be missing. The same day in a conference call with reporters, McCain's lead Dr. John Eckstein gave the candidate an unequivocal thumbs-up.
VOICE OF DR. JOHN ECKSTEIN, INTERNAL MEDICINE MAYO CLINIC: I and my colleagues can find no medical reason or problems that would preclude Senator McCain from fulfilling all of the duties and obligations of the president of the United States.
GUPTA: But that didn't silence the critics. Just this month, a liberal activist group, Brave New Films, ran a full page ad in "The New York Times." This petition, signed by more than 2,700 doctors. It calls on McCain to release his medical records to the public. Everyone, not just a few reporters.
This is a skin cancer that can kill people and that's what we need to find out. We need to know, did this melanoma spread or didn't it? And that can only be answered by an independent group dermatologic pathologists look at the slides.
GUPTA: McCain's doctors say it didn't spread and the pathology report I saw supports that. The campaign said it's unacceptable for doctors who haven't examined McCain to second-guess his own physicians.
(END VIDEOTAPE)
GUPTA: Now, the campaign went on to say, look, there's a double standard here. People calling on McCain to release more medical records when Senator Obama only released one page of medical record. So, the debate continues, John.
ROBERTS: What about that controversy? What do we know about Senator Obama's health? I mean, for one thing he's been a smoker for a long time, right?
GUPTA: That's right. And this is just one page that said he was in good health. It actually said he was in excellent health. Talked about the smoking, talked about the balanced diet. Gave some cholesterol numbers. But we are going to go into more detail, John, tomorrow, about what we found about Senator Obama, his family history and some of his other pertinent medical history.
ROBERTS: Looking forward to it. Dr. Sanjay Gupta this morning from Atlanta. Sanjay, thanks so much.
GUPTA: Thank you.
CHETRY: Well "Fortune" magazine has named its top 50 most powerful women in business and here's a TV executive who is no stranger to the list. Before we tell you who she is, here's your chance to guess.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: When I was younger, I thought about being a teacher, because my parents are educators.
CHETRY (voice-over): But instead, she went from the classroom to the board room to run a media empire. Who is the woman keeping people tuned in? Find out after the break.
(COMMERCIAL BREAK)
(BEGIN VIDEOTAPE)
CHETRY: Taking the number 12 spot on "Fortune" magazine's most powerful women list is Ann Sweeney of Disney ABC television group. A key player in getting Disney, ABC an extreme makeover, Sweeney believes taking risks can put you at the top. And equipping your team with the latest gadgets keeps you there.
ANNE SWEENEY, DISNEY-ABC TELEVISION GROUP: Don't just talk about technology. Don't just talk about the future. Experience it. I know my team. And when I put something new into their hands, I can count on them coming back with big ideas.
(END VIDEOTAPE)
CHETRY: Well, before we leave you today, Jeanne Moos is picking the winners in last night's presidential debate in some of the most unusual categories.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Before starting the debate moderator got rid of his gum. Leaving us to chew over the debate. One Internet wagged described as being like watching small claims court. The award for the most annoying repetition goes to an overfriendly John McCain.
MCCAIN: My friends, my friends, my friends, my friends, my friends. At the end of the day, my friend.
MOOS: The award for best smile --
MCCAIN: Remarkable.
MOOS: While being attacked.
OBAMA: What Senator McCain doesn't mention is that he's been there 26 of them.
MOOS: Goes to Barack Obama.
MCCAIN: He will still not admit that he was wrong about the strategy of the surge in Iraq.
MOOS: Best conjuring up of a mental image goes to Senator McCain.
MCCAIN: Nailing down Senator Obama's various tax proposals is like nailing Jell-O to the wall.
MOOS: Nailing the pronunciation of Pakistan earned Senator Obama the award for sounding either most worldly or most elite.
OBAMA: Nobody called for the invasion of Pakistan. If Pakistan is unable or unwilling --
MOOS: Since Senator Obama didn't really attempt any jokes, Senator McCain, by default, wins the lamest joke award for this remark. Discussing what health insurance might or might not cover.
MCCAIN: You know, like hair transplants. I might need one of those myself, but the point is --
MOOS: The award for most casual debate-watching attire goes to Governor Sarah Palin. She showed up in jeans at a restaurant in North Carolina. She sipped on a soft drink. Watched her Blackberry and joshed around. During the debate, she took notes and laughed heartily, and our next winner, moderator Tom Brokaw takes the award for pushing around two would-be presidents.
TOM BROKAW, MODERATOR: And you're in the way of my script there if you will move.
MOOS: The award for the weirdest way not to call your opponent by name goes to Senator McCain.
MCCAIN: You know who voted for it. You might never know. That one.
MOOS: Though that one didn't seem to mind. The two candidates will have to share the award for most macho campaign promise.
OBAMA: We will kill bin Laden. We will crush al Qaeda.
MCCAIN: I'll get Osama bin Laden, my friends.
MOOS: My friends doesn't seem to include his opponent.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
ROBERTS: And a reminder this morning, don't miss CNN's Special Investigations Unit's presentation "FIT TO LEAD," the challenges of the president as a patient, hosted by -- hosted by our Dr. Sanjay Gupta, Saturday and Sunday, 8:00 and 11:00 p.m. Eastern.
That's it for us. Thanks for joining us on AMERICAN MORNING. We'll see you back here again tomorrow.
CHETRY: And right now "CNN NEWSROOM" with Heidi Collins.
