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Reports: Explosions Near Gadhafi Compound; Gadhafi's Son Emerges; Saif Gadhafi: Father Safe in Tripoli; Hurricane Irene Heads Toward U.S.; Case Against Dominique Strauss-Kahn to be Dropped; Stock Futures up; Banks Continue Mass Layoffs; Philly Extends Teen Curfew.
Aired August 23, 2011 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: Get ready to get out. I'm Ali Velshi. The southeast United States now on alert as Hurricane Irene grows into a Category 2 storm. It causes some serious damage in the Caribbean.
CHRISTINE ROMANS, CNN ANCHOR: Breaking news this morning out of Libya, I'm Christine Romans. What could be Gadhafi's last stand? Reports of explosions near a compound where he may be hiding.
CAROL COSTELLO, CNN ANCHOR: And I'm Carol Costello. A new poll predicting a tight race in 2012 whether it's Obama versus Romney, Bachmann, Perry or Paul on this AMERICAN MORNING.
VELSHI: Good morning to you. It is Tuesday, August the 23rd. This is AMERICAN MORNING. We have a lot going on today here, this weather in the United States.
ROMANS: That's right.
VELSHI: Politics and, of course the developments in Libya.
ROMANS: That's right. So let's start with breaking news in the battle for Libya this morning. The Arabic news network Al Arabiya reporting explosions near the compound where Moammar Gadhafi is believed to be hiding.
This coming as the regime is teetering on the brink of collapse. No one has seen Gadhafi since the opposition rolled into Tripoli over the weekend.
COSTELLO: His son, Christine, Saif Al Islam, made a surprise appearance just hours after the Libyan opposition claimed they captured him. He showed up at a hotel filled with western journalists.
He actually spoke to our Matthew Chance and said his father is alive and well and in Tripoli. The International Criminal Court was apparently already negotiating his transfer to The Hague when that happened.
VELSHI: Now in this really strange encounter, Saif even invited CNN out on the town, which is currently under siege. Listen to this.
(BEGIN VIDEO CLIP) SAIF AL-ISLAM GADHAFI, MOAMMAR GADHAFI SON: And we broke the backbone of the rebels. And so we gave them hard time. And so we are - we are winning. And now let's go. Let's go together to the hottest places in Tripoli, OK. It's very hot. You want to go? OK, go. Take the car let's go.
UNIDENTIFIED MALE: Wait, I have to --
SAIF GADHAFI: No. We have to -- I have to move right away.
UNIDENTIFIED MALE: May I get a picture, sir?
SAIF GADHAFI: Victory.
(END VIDEO CLIP)
VELSHI: That is remarkable. It's unclear what he meant when he said I'll take you to the hottest places in Tripoli. We don't know what that means --
COSTELLO: Night clubs.
VELSHI: Hottest battle places or night clubs. Another one of his siblings, Mohammed Gadhafi, whose capture was recorded live on Al Jazeera on the phone, escaped yesterday according to the Libyan ambassador to the United States. He escaped what seemed to be a house arrest of some sort.
COSTELLO: Although some people said he was hijacked. But actually the rebel group said he was hijacked. So it's unclear what is going on.
VELSHI: It is very unclear what is going on?
COSTELLO: In the meantime the fierce battle rages on for control of parts of Tripoli. This is a YouTube video posted yesterday taken from inside a family's home, black smoke rising all around them. The sounds of machine gunfire and a rocket-propelled grenade launch. You can hear one woman calling for help from God.
ROMANS: All right. Reports now in Libya of explosions near a compound where Gadhafi may be hiding. Arwa Damon live for us from Tripoli's airport. She's been waiting to see if it's safe enough to go on the streets this morning.
Good morning, Arwa. What's the latest on these reported explosions at the Gadhafi compound? What do we know now about that?
ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, Christine, the Gadhafi compound has really been the focus of some of the most intense fighting, ever since rebel fighters began their initial push into Tripoli.
What we are now hearing is there are ongoing sounds of explosions. There are smoke rising above that part of the capital. We're around 15 miles to the south at the Tripoli international airport that rebel fighters captured yesterday.
They said that fighting has been quite intense. What they have managed to do is clear the area to the west of the airport and now they're running probing missions to the east and up north because there is a straight shot from here all the way to the compound.
But they fully anticipate there is going to be a fairly intense battle because on that road there are many significant military positions, Gadhafi military positions. There is, for example, a refueling station.
There is also an oil storage facility plus to the east there are also two main military compounds. So they're telling us that right now they're trying to push forward very slowly, trying to see what kind of resistance they encounter before they begin to pull back. They most certainly expect a very fierce battle ahead.
ROMANS: Arwa, the Al Jazeera is reporting that rebel fighters are closing in within 500 meters of that compound. Meantime, the opposition now saying that sleeper cells have secretly armed residents helped them take Tripoli. What can you tell us about that?
DAMON: That's right. We heard that from the fighters we are with us. Well, effectively it seems as if the rebels established these sleeper cells early on in this uprising in various neighborhoods and these sleeper cells, based on what we're being told have a fairly complex chain of command.
And the minute they received the word go, that the operation to try to attack Tripoli was going to be taking place, they all rose up as well and joined in the effort. However, although we are hearing from opposition fighters that they do control or they say that they control most of the capital.
And they say that they especially control the areas to the west, at the very same time they are saying that they have been forced back from certain positions as Gadhafi forces appear to have regrouped and launched various counter attacks, Christine.
ROMANS: All right. Arwa Damon at the airport there in Tripoli. Thank you so much, Arwa.
COSTELLO: Let's get back to Gadhafi's sons, shall we? Our Matthew Chance, as you saw a moment ago, spoke with Saif Gadhafi. His appearance coming after reports of his capture.
It may prove that the opposition is as good at spinning as the guy they're trying to topple. Matthew with more on his strange encounter with Saif Gadhafi.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT (via telephone): All this hassle in the lobby of the hotel. I was woken up around my room, ran downstairs and everyone pointing at this white armored Land Cruiser saying Saif is the in there. I walked up to the Land Cruiser and knocked on the door, he was about to drive off. It opened up, I said Saif, I need to see you with my own eyes. I leaned in. I turned on the light on the ceiling of the -- in the back seat of this Land Cruiser. There he was.
So I took a photograph of him and I asked him about where his father was. He said all of his family are in Tripoli. He went on to say that, you know, it was all a trick, the rebels coming in to Tripoli, that we've now broken their backbone.
And we've given them a hard time. He then invited me to get into the car and to drive around Tripoli so he could prove how, you know, how much it was under the government's control. But before I had to chance to do that, the door closed and he drove off.
But it was quite incredible because, I mean, as we've been discussing, we all thought the rebels had reported, the ICC, International Criminal Courts in The Hague, had confirmed, we believed, he was in the custody of the rebels.
He's not. He's free and he's driving around Tripoli. One correspondent that's been here much longer than me said that, you know, the thing is about Libya, the trouble is with reporting it, is that kind of lying is the national sport.
Obviously, it was a little tongue in cheek. But, you know, the fact is both sides in this conflict have been, you know, spinning us a line. Both sides have been exaggerating. Both sides have been telling us untruths, and it's been very difficult, all along, for the whole -- for the past six months.
It's been very difficult picking through that and trying to get to the truth or as close to it as we can. This was another, you know, really vivid example of that.
(END VIDEOTAPE)
COSTELLO: Of course, the most disturbing part of this, Saif Gadhafi, was supposedly running the country in the place of his father. He was his closest political adviser and there were reports that the International Criminal Court in The Hague, it was preparing to try this guy.
VELSHI: Yes.
COSTELLO: Matthew Chance, by the way, we're trying to get him on the phone. But we believe the power might be out in the hotel because he's still trapped in that hotel in Tripoli.
VELSHI: That's been happening in the last couple of days. Power has been out. So certainly there are developments in Libya and we're following them closely.
COSTELLO: Absolutely, we could learn more about these reported strikes during a NATO briefing that is scheduled for 8:00 a.m. Eastern. People will update us on the Libya mission and we'll carry that live.
VELSHI: We've got continuing breaking news here in the United States. The first Atlantic hurricane of the season is now a Category 2 storm headed toward the southeast United States.
President Obama has declared an emergency for Puerto Rico, the storm causing floods, landslides and power outages there. Earlier this morning, the storm kicked up dangerous surf along the northern coast of the Dominican Republic.
Irene is also flooding streets and knocking down trees. The track of the storm is -- which is predicted, by the way, to be a Category 4 by later this week, a very serious storm, could be anywhere from Florida to Virginia, some tracks have it just off of land, some have it on land.
The folks in the Carolinas are preparing now for possible evacuations. Also along the coast officials are warning residents and vacationers to start reviewing their emergency plans. Emergency officials are also checking truck, forklifts, generators and computers to make sure everything is working.
Jacqui Jeras joins us live now in the CNN Hurricane Headquarters. Unusual this storm could take a track that makes it substantially more powerful after crossing over land and wide swath of United States in that cone of uncertainty, Jacqui.
JACQUI JERAS, AMS METEOROLOGIST: Yes. All signs really point towards huge intensification here, Ali. The main reason why this is a stronger storm than what we thought over the weekend, is because the position that it's in right now.
The center of the storm is just north of the Dominican Republic and the computer models initially brought it over the land. Had this moved over the island, those mountains would have ripped this thing apart and a weaker storm. But in the meantime it stays over the warm water, which is going to allow it to get stronger and really make Irene a formidable storm, unfortunately, category 2 now, 100-mile-per- hour winds.
It will be slow to intensify today because even though it's over water it still is interacting with Hispaniola. It's going to move through the Turks and Caicos then through the Bahamas on Thursday and we'll start to feel tropical storm force conditions in parts of south Florida probably by Thursday morning.
What happens after that, models bring it towards of the north and curving back. Look at this huge area where this cone of uncertainty is. It includes parts of Georgia and all the way up into the north eastern United States and there you can see the Carolinas are in the bull's eye at this time.
So things are not looking good for the U.S. Great to see that video, Ali, to see everybody getting ready in South Carolina.
VELSHI: Best thing you can do. we can't control the hurricane. You can only control how you're going to react to it. Jacqui, thanks very much. We'll, of course, be in touch with you and we'll be staying on top of this with CNN's team.
ROMANS: All right, the president of Standard & Poor's is stepping down. S&P's parent company McGraw-Hill announced Deven Sharma will leave his post by the end of the year. He'll be replaced by the chief operating officer of Citibank.
Besides S&P's downgrade of America's credit rating the agency is also being investigated by the Justice Department for allegedly overrating mortgage-backed securities at the height of the housing bubble.
In politics this morning, new evidence that next year's presidential election could be too close to call. According to a new Gallup poll, President Obama is running neck and neck with the top four Republican presidential candidates.
He's ahead of Congresswoman Michele Bachmann by four percentage points, 48 to 44. He's tied with Texas Governor Rick Perry at 47 percent. The president leads Congressman Ron Paul by two percentage points, 47 to 45. And the president actually trails former Massachusetts Governor Mitt Romney by about two percentage points, 46 to 48 percent.
VELSHI: Speaking of Mitt Romney, it might be fair to say that Mitt Romney's renovation plan is going to do little to change some people's perceptions that he's -- he lives in a rarefied environment.
The Republican presidential candidate is reportedly planning to demolish his $12 million, 3,000 square foot ocean front home in California and replace it with a property that's nearly four times larger.
These are pictures of the home he's planning to tear down. A campaign official says the two bedroom home, $12 million two bedroom home, is no longer adequate.
COSTELLO: Isn't it La Hoya. Is there anything less than -- I'm just saying. It is a very --
VELSHI: It is a very expensive part of California.
ROMANS: Two bedrooms.
COSTELLO: I don't think he's going to start renovating now. He's going to wait until the proper time, which would be --
VELSHI: Yes. You know, people can renovate all they want. Just from a perception perspective, this is a guy who I said corporations are people, which by the way, was not incorrect. It's just he's definitely not saying the man of the people stuff.
COSTELLO: Just saying.
VELSHI: Yes. COSTELLO: OK, now is your chance to talk back on one of the big stories of the day. The question for you this morning, why isn't America more excited about its presidential contenders?
Marching toward 2012 and the first Republican primary, some of the most talked about candidates are those who aren't even running. Want proof? Young gun Republican Congressman Paul Ryan, to the chagrin of many in the GOP, the architect of the Republican budget that would cut federal spending by $6.2 trillion, has issued a definitive no.
Ryan says while humbled by the encouragement, I have not changed my mind and, therefore, I am not seeking our party's nomination for president. The desire for alternative blood is as fresh as it ever was.
When supporters were begging New Jersey Governor Chris Christie to run and they continue today even after Christie made his lack of desire crystal clear.
(BEGIN VIDEO CLIP)
GOVERNOR CHRIS CHRISTIE (R), NEW JERSEY: I said what do I have to do short of suicide to convince people I'm not running. Apparently, I actually have to commit suicide. To convince people I'm not running.
(END VIDEO CLIP)
COSTELLO: Why can't Christie and company just be because in the recent CNN poll, only 14 percent of Republican voters say they are very satisfied with the field, ouch.
It's not like Democrats are jumping up and down either, 28 percent of Democrats would rather see a candidate other than President Obama nominated. A record high or low for him. There have been calls for Hillary Clinton to run in 2012.
It makes you wonder, is there anyone out there who could inspire the entire country, anybody who would want to be president when the economy is in the toilet, and two wars continue to drag on.
So the talk back question today, why isn't America more excited about its presidential contenders? Facebook.com/americanmorning. I'll read your comments later this hour.
ROMANS: I wonder if it's a reflection of the people in the field or a reflection of the times we live in that no matter what you're not going to be satisfied because the problems are so insurmountable?
VELSHI: Right.
COSTELLO: Who in his right mind would run in 2012 with things the way they are in the country? Lot of tough hurdles to jump over.
VELSHI: It's kind of like buying stocks at the bottom, right? I mean, if things so bad and you run in 2012 and get elected, it has to get better, right? COSTELLO: Isn't that what we thought --
(CROSSTALK)
ROMANS: Ahead on AMERICAN MORNING, the rape charges against Dominique Strauss-Kahn made headlines worldwide. But it turns out prosecutors had a bigger problem, namely the credibility of the accuser.
VELSHI: And one of Wall Street's powerful CEO is lawyering up. We'll tell you who it is and why after this.
COSTELLO: And with Gadhafi's regime on the brink of collapsing, we could see oil production restored in Libya. But will that be easy? And what can we expect to see with gas prices here in the United States? We will break it down. It's 16 minutes past the hour.
(COMMERCIAL BREAK)
COSTELLO: Welcome back to AMERICAN MORNING. The sex assault case against Dominique Strauss-Kahn has been falling apart for weeks now. And in just a few hours the entire case could be history.
VELSHI: At a court hearing in New York today, prosecutors are expected to tell the judge that they cannot prove that the former IMF chief raped a hotel maid. They're planning to ask to have the charges dismissed.
Making the recommendation, the Manhattan D.A. says if they couldn't believe the accuser, Nafissatou Diallo, beyond a reasonable doubt, how do they expect a jury to do so?
ROMANS: CNN's Susan Candiotti has been following the story since the beginning. She's now live outside the courthouse in lower Manhattan. Good morning, Susan. What will happen later today?
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Good morning, Carol. We'll find out whether the judge will accept the motion from prosecutors to dismiss the case. It boils down to two things, according to prosecutors they simply didn't believe Miss Diallo and they couldn't an actual prove a rape occurred.
In terms of the credibility issues they said, in their words, "She simply wasn't truthful in matters big and small," and when it came down to it they couldn't prove that a rape occurred. There wasn't enough physical evidence and the case would simply come down to a he said/she said.
This is how the district attorney summed it up. Quote, "Whatever the truth may be about the encounter between the complainant and the defendant, if we do not believe her beyond a reasonable doubt we cannot ask a jury to do so."
Obviously this is not sitting well with Miss Diallo or the lawyer who has been representing her. He maintains that she is completely believable, that she did have enough evidence in this case, and that she cooperated fully with the authorities. And he said what is happening here simply sends the wrong signal to victims.
(BEGIN VIDEO CLIP)
KENNETH THOMPSON, NAFISSATOU DIALLO'S ATTORNEY: Manhattan district attorney Cyrus Vance has denied the right of a woman to get justice in a rape case. He has not only turned his back on this innocent victim, but he has also turned his back on the forensic, medical and other physical evidence in this case.
(END VIDEO CLIP)
CANDIOTTI: And Mr. Thompson, Miss Diallo's lawyer, still has another motion out there, asking this judge to appoint a special prosecutor and throw the district attorney off the case. We'll see what happens.
Now obviously the lawyers for Dominique Strauss-Kahn are pleased. We haven't heard from Strauss-Kahn yet, but they issued this statement, quote, "Mr. Strauss-Kahn and his family are grateful that the district attorney's office took our concerns seriously and concluded on its own that this case cannot proceed further."
We'll see what happens in court this day. Prosecutors say it boils down to this, quote, "A prosecutor's duty is to seek justice, not simply to win cases." But really in the end, is there any winner in this case? Guys, back to you.
ROMANS: What a mess. Susan Candiotti live in lower Manhattan, thanks.
Remember the beginning how the prosecutor said this is an unimpeachable witness, we believed her from the beginning, this case is so solid, you know, we would never go after someone of his stature without having such a solid case? What an amazing turn of events.
COSTELLO: And for Dominique Strauss-Kahn, it totally trashed his reputation.
ROMANS: Absolutely. Still to come on this AMERICAN MORNING, it was a drastic attempt to stop violent flash mobs, but is it working in one of America's biggest cities?
VELSHI: And we're following the story of hurricane Irene. It is a hurricane tearing through the Caribbean right now, and it's gaining speed and intensity. The water is warm. That's making it worse. And the path, it's on a path that may hit the United States. Jacqui Jeras is tracking Irene in the CNN hurricane headquarters. We'll have an update after the break.
(COMMERCIAL BREAK)
ROMANS: "Minding your Business" this morning, right now U.S. stock futures trading significantly higher ahead of the opening bell. Markets posted modest gains to start the week. Yesterday the Fed chief speaking in Jackson hall at a bit Fed conference later this week. The last time that happened last year it signaled a big Fed stimulus. Some hopes in the markets that Bernanke could make some sort of announcement on Friday.
Gold prices keep going up. Another record last night, $1,900 an ounce, up $100 in two weeks. The week over week rise for gold has analysts a little worried this could be a bubble ready to pop. We've heard that before, haven't we, say the last, I don't know, $700? But investors flocking to the precious metal for security in this shaky economy.
Goldman Sachs CEO Lloyd Blankfein has retained counsel related to an investigation by the justice department. The DOJ said in April the bank misled clients and Congress about its housing market activities. Lots of buzz about this because this lawyer also represent World.com CEO Bernie Ebbers during his downfall.
Swiss bank UBS announced this morning it's slashing 3,500 jobs as part of cost cutting measures. That puts the year to date total at about 33,000 job cuts in banking. Some of the biggest banks shedding jobs still, Bank of New York Melon, Goldman Sachs, Credit Suisse, HSBC all announced restructuring plans that included massive layoffs this year.
And Bank of America stock, wow, taking another beating, shares down near 52-week low as investors remain nervous about the bank's balance sheet and its explosive to the mortgage crisis. Stock in the bank fell nearly eight percent by the end of trading yesterday. Stock in this bank is down about 50 percent over the past year. Bank of America shares cut in half. It's the nation's largest bank.
Rivals Ford and Toyota making nice, joining forces to develop a hybrid system for pickups and SUVs. The deal means they'll share development costs to make the technology more affordable to customers, to you. Working together, the companies hope to meet the 2025 deadline set by the White House for new fuel economy standards.
Don't forget, for the very latest news about your money, check out the new CNNmoney.com. AMERICAN MORNING will be back after this quick break.
(COMMERCIAL BREAK)
VELSHI: Hurricane Irene is intensifying into a category 2 storm. It could get bigger, expecting it to become a category 4 storm in just days. No one along the East Coast isn't paying very close attention to this -- on this AMERICAN MORNING.
(MUSIC)
VELSHI: Good morning. It's Tuesday, August 23rd. Welcome back to AMERICAN MORNING.
Boy, busy today.
COSTELLO: It is busy today. We have hurricane Irene out there. We have the situation in Libya, which is really, really strange.
So, let's get right to this morning's top stories. The Arabic TV network Al Jazeera reporting rebel trucks loaded with heavy machine guns have now surrounded the compound where Moammar Gadhafi is believed to be hiding.
ROMANS: Meantime, Moammar Gadhafi's son Saif al-Islam holding an impromptu interview with reporters at a hotel yesterday. I mean, clearly, he's not captured like opposition leaders had claimed only hours before. The rebels say they're still in control of 90 percent of Tripoli, but Saif al-Islam Gadhafi is saying that they've broken the back of the insurgency. So, it just gets a little more chaotic in Tripoli.
Meantime, a 5.3 magnitude earthquake hit southern Colorado, near the New Mexico border overnight. It was the largest quake to hit that area in almost 40 years. There were reports of rock slides along a highway, some damage to structures but no word of many injuries.
VELSHI: Hurricane Irene already carving out a destructive path through the Caribbean. Forecasters say Irene is only getting nor intense, could turn into a category 4 hurricane. Irene may hit the United States by the week's end.
Jacqui Jeras is tracking Irene from CNN hurricane headquarters.
Jacqui, what are we looking at?
JACQUI JERAS, AMS METEOROLOGIST: Well, it's just north of Hispaniola now and it's interacting with that land, which is very mountainous, by the way. So, it doesn't look all that impressive on satellite, but we're still talking about 100-mile-per-hour maximum sustained winds. It will be slow to strengthen today, but as long as the center stays over the open waters, we'll watch that thing start to ramp up.
Now, this will be moving through the Bahamas by tomorrow and through Thursday. And then we'll start to feel those tropical force winds, we think, across south Florida as early as Thursday morning. The storm expected to move northerly then and take a head maybe towards the Carolinas, still too early to tell exactly where. But the southeast coast needs to be prepared for a major hurricane this weekend.
Back to you, guys.
VELSHI: All right. Jacqui, thank you. We will be watching this as we always do at CNN very, very closely. And as Jacqui says, you can't control the hurricane. You can control your behavior and your preparation for it.
COSTELLO: Absolutely.
World leaders are looking to free up billions of dollars of Libya's overseas assets. They were frozen because of sanctions against the Gadhafi regime. Now, the money could go to the National Transitional Council to help the rebels' revolution.
Our foreign affairs correspondent Jill Dougherty joins us live from the State Department. Hi, Jill. So, who's going to manage this?
JILL DOUGHERTY, FOREIGN AFFAIRS CORRESPONDENT: Well, it's going to be the NTC. And the NTC is a work in progress. As we know it's the opposition, the rebels' leadership, political leadership. And they are going to be creating, at least that's the plan, they're going to be creating a transition government, a transitional authority, which would then, you know, put in place elections and the constitution.
But, you know, sometimes we focus on the fighting on the streets. But what's really important, really important, to the people of Libya is getting essential services back on -- water, electricity and other things.
So, the State Department is focused, as they said in a briefing, focused like a laser in speeding up the amount of money they can get to Libya.
Now, that would be money from the international community, some of it would be for humanitarian concerns, health concerns, et cetera. But the other part is that 30 -- roughly $30 billion. It was frozen by the U.S. and now, they want to unfreeze.
And here's how Victoria Nuland, the spokeswoman for the State Department, explained it.
(BEGIN VIDEO CLIP)
VICTORIA NULAND, STATE DEPARTMENT SPOKESWOMAN: This is Libya's money that was frozen because it had been under the control of the tyrant Gadhafi. As we are able to unfreeze it, we need to work with the Libyan government, we need to work with the Libyan people, on how they would like this money spent.
You know, the first priority, I think, that they will have is for the humanitarian needs of their people to ensure no more Libyans suffer at this time and we'll go from there.
(END VIDEO CLIP)
DOUGHERTY: All right. So, Libyan money, 10 percent of it only is basically in cash liquid. The rest of it is in assets. It could be property and other things.
So, that NTC will have to decide what they want to do with that. And also, the rules are complicated because you have to, in some cases, they have to go to the U.N. to -- because of the sanctions or the U.S. could do some things unilaterally by itself.
COSTELLO: Complicated stuff. Jill Dougherty, live at the State Department this morning -- thank you.
ROMANS: Carol and Ali, with the Gadhafi regime nearing an end, one question at hand: what does this mean for oil prices? Libya has one of the largest oil reserves, frankly, the largest in Africa, at one time producing 1.8 million barrels of crude oil a day. That accounts for about 2 percent of the world supply. And it's light sweet crude. It's easier. It's cheaper to refine. It goes right to the European markets. It's exactly what they like to run their factories and their cars with.
But that civil war that started back in April, oil production shut down, causing oil prices to spike. And even though it was only 2 percent of world supply, it really had an effect. The U.S. even tapped into its Strategic Petroleum Reserve. Middle Eastern countries increased production as well to compensate for the Libyan oil that was off-line.
So, how long before you start to see oil production resume again? Analysts say once the country becomes stable, Libya could be producing over a half a million barrels a day in a few months. And even though its largest oil customers are in Europe, the impact on gasoline prices, analysts say, could be felt here, could be felt worldwide. One energy expert saying drivers in the U.S. could expect to save 4 cents to 6 cents a gallon.
But that's a timetable quite frankly that's really up for debate because there are a lot of factors at play here, including how quickly a secure government is in place and the extent of the damage to the country's refineries, pumps, its pipelines, all as a result of the fighting.
Now, we're going to take a closer look at Libya's oil reserves and what it could mean for the country's progress later. Peter Beutel, president of Cameron Handover a real expert in oil prices and energy risk management service, and former Middle Eastern presidential adviser Marc Ginsburg are going to join us live at 7:30 Eastern.
And, Ali, and, Carol, something really interesting, part of all of those -- the billions in wealth of the Gadhafi regime amassed, part of it is in gold.
VELSHI: Yes.
ROMANS: So, everyday, that part of the Gadhafi portfolio is getting more and more valuable. So, gold -- he had a thing for gold. It turns out that was a safe haven that worked for the country maybe but not for him.
VELSHI: Yes, I don't know if it was as much as a wise investment as Gadhafi having a thing for a lot of things, but gathering stuff. But we will be keeping a close eye on that. It's going to be a good discussion at 7:30 about oil prices and how this could hit you at home. Thanks, Christine.
ROMANS: Yes.
VELSHI: All right. A Roman historian once said, quote, "The best day after a bad emperor is the first." The Libyan rebels hoping to topple Moammar Gadhafi's regime and rebuild, but they face numerous challenges even if they succeed. And, recently, the opposition's credibility and progress has come into question.
Director of the Middle East Center at the London School of Economics, Fawaz Gerges joins us now from London.
Fawaz, thanks for joining us. You always help us clarify some of these issues.
First of all, I suppose it's not atypical that there's going to be confusion, particularly at this point, where rebels clearly -- our own reporters on the ground are saying -- have said made substantial advances right into the capital. But it does seem there have been claims made by the rebels, including the capture of Saif al-Islam, who we saw clearly not captured, that have brought their, you know, their statements into credibility, questions into credibility.
Is that -- is that par for the course? Are they lying? Is it just bad information getting out? Is it because it's not centralized? What do you make of the information we've had in the last 72 hours?
FAWAZ GERGES, LONDON SCHOOL OF ECONOMICS: Ali, good morning.
As you well know, we call the fog of warfare. I mean, the dust has not settled. The fight is very intense. And the reality is, the rebels have made some significant advances.
If you had asked me a few days ago, I would have said the battle of Tripoli would be costly, prolonged and messy. The rebels control significant quarters of Tripoli.
And you're absolutely correct. The rebels have not been forthcoming with us, not because they're lying to us, I think it's part of what we call the propaganda that's taken place in Libya. They're trying to demoralize the remnants of Gadhafi.
And also, as you know, Ali, the rebels have not really institutionalized their movement. There is no unified command and control, no unified army. So, you have desperate militias among the rebels saying whatever they would like, doing whatever they want, and that's not good.
That's not good because, in fact, as we talk you and I, the rebels are not coordinating in Tripoli. You have now the front lines in Tripoli are expanding. But the reality is, even though there are many battles to be waged in Tripoli, in Sirte and other places, I think Gadhafi has lost the war. I think the reality is, this is a significant historic moment for Libya and I do hope, as you suggested, Ali, that basically the rebels will rise up to the occasion and basically seize the moment and begin the process of reconstructing state and society sooner rather than later.
VELSHI: Well, let's go back to how I started this discussion where we, quoting the Roman who said, the best day after the fall of a bad emperor is the first. These folks are going to have a lot of work on their hands, if they succeed in toppling Gadhafi, because Gadhafi made Libya a mess. It's a country rich with natural resources.
Do we know who they are and what they are likely to do to take Libya in a better direction? GERGES: Well, now, again, this is a very critical question. All we know that the council, the rebels council, they made of disparate groups, shades of opinions. So, you have elements of the Gadhafi regime, the old regime, the head of the council, Mustapha Abdul Jalil, was the justice minister. You have tribal leaders. You have revolutionary leaders. You have Islamists. You have nationalists.
And that's why the next few days and next few weeks are very critical, Ali, because the rebels must establish a transparent, functioning and an inclusive government.
The most difficult challenge facing the rebels is to bring in more and more shades of opinion, because Libya is one of the most diverse societies in North Africa. You have regional divisions between the east and west, you have tribal divisions within the east and west, you have ideological divisions between Islamists and between nationalists, and that's why what Libya needed today, even though there are many battles to be fought, to be waged, I think the political question, the institutional challenges, inclusiveness, rather than exclusion, should be the order of the day.
Libya should not go the Iraq way. Exclusion and --
VELSHI: And you hit the nail on the head. That is, of course, the concern, that it doesn't go the Iraq way.
Fawaz, thanks very much for your input on it. Good to talk to you again.
Fawaz Gerges is the director of the Middle East Center at the London School of Economics.
ROMANS: Difference with the Iraq way is that the Iraq way was we -- we got in there and got Saddam Hussein out and put the pressure on Saddam Hussein. This is coming from within.
VELSHI: Them with help from the outside.
COSTELLO: There wasn't any planning either for what happened after the fall of Saddam Hussein.
VELSHI: Often isn't, yes.
COSTELLO: But American officials have been in Libya with some sort of political plan, so we'll see what happens.
Just ahead on AMERICAN MORNING: why isn't America more excited about the field of presidential contenders? We'll have some of your responses to our talkback question of the day.
It's 42 minutes past the hour.
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COSTELLO: It is 45 minutes past the hour. Welcome back to AMERICAN MORNING. We asked you to talk back on one of the big stories of the day, and you did. We asked you this question, why isn't America more excited about its presidential contenders?
This from Ha Lemon. I hope I pronounced that right. It says, "People are sick of politicians who are controlled by large lobbying groups and special interests. It seems no matter who we put in the office, we don't get the change we voted for."
This from crystal, "Because they all promise the world but never deliver. There are some things out of control of the president. Why can't they just admit it? I would rather hear someone say that really depends on Congress and to say, yes we can, when they know we can't."
This from Doug, "Because there isn't even one that looks, acts, or talks like they are in touch with any American making less than one million dollars a year. Not one of them can relate to actual working class people."
Keep the conversation going, facebook.com/americanmorning. We'll read some more in the next hour.
ROMANS: And I go back, it's still hard to feel good about anybody or anything when you look around you and people are hurting.
VELSHI: You're saying it's not the candidates as much as it's --
ROMANS: I'm saying that the bad economic condition and the bad -- the lack of opportunity makes people even that much more pessimistic about what their candidates can or can't do.
COSTELLO: Quite possibly. We'll see what people have to say.
ROMANS: All right. The morning's top stories coming up right after a quick break. It's 47 minutes after the hour. You're watching AMERICAN MORNING.
(BEGIN VIDEOTAPE)
RICHARD BLAIS, CHEF: Hi. I'm Richard Blais, and I'm chef here based out of Atlanta. I'll probably clock around 130,000 miles this year. I'm a chef with many restaurants here in the southeast and might know me from "Top Chef." So, this is a day in the life Richard Blais traveling. One of the things that I have to pack is knives. It's my light saber, if you will. These are great head phones.
Even it if I'm not listening to music, I can pretend that I'm listening to music. No one usually, usually will bother you. I like to drink carbonated water, that's my thing. This is a gadget that carbonates your water. If you're a modern chef like myself, I travel with many miscellaneous white powders. It's important that they're labeled so that everyone kind of understands what they are.
The most important thing for me is hair product, of course. This is the magic maker right here. I have a wife and two young daughters. The way we stay in touch is face time on our iPhones, usually, and that's kind of neat.
What do you think about the hair? It really enables us to feel like we're together even though we're thousands of miles apart. So, thanks for hanging out with me and spending some time. I'll see you at one of my restaurants soon or at an airport near you.
(END VIDEOTAPE)
VELSHI: Fifty minutes after the hour. Here's what you need to know to start your day.
The hurricane center predicts Irene could grow to a Category 4 storm as it approaches the Carolinas later this week. The storm is passing just north of the Dominican Republic this morning, knocking down trees and flooding streets.
The Arabic news network, Al Arabiya, reporting explosions near the compound where Moammar Gadhafi is believed to be hiding as rebel fighters try to finish off Moammar Gadhafi's forces. Meantime, one of Gadhafi's sons who was said to be in custody resurfaced yesterday. He spoke to reporters outside a hotel in Tripoli.
The 24-year-old woman injured in that devastating stage collapse at the Indiana State Fair has died. Meagan Toothman has been on life support, had been on life support, since August 13th. Six other people were also killed when the stage collapsed.
Philadelphia reportedly extending its strict curfew to crack down on violent teen flash mobs by two weeks. The city says the 9:00 p.m. weekend curfew is sending a strong message and will now last until school starts in early September.
That's the news you need to know to start your day. AMERICAN MORNING is back right after this.
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VELSHI: How did a dusty old wallet become a symbol for courage and commitment for four generations, four generations of U.S. soldiers? It all started when a Vietnam veteran decided to share his good luck, good luck charm as it were, with a fellow soldier.
ROMANS: This is such a great story. The small act of comradery has started a bonding tradition in the military that is going to warm your heart. Jason Carroll joins us with this touching story of a dusty old wallet bringing all these guys together.
JASON CARROLL, CNN NATIONAL CORRESPONDENT: Yes. I'm going to tease you with something because I'm going to tell you how we found the story on the tail end of this, but you know, it all started when a soldier in Vietnam actually lost his wallet in the jungle of Vietnam and had to get a new one. So, it began something that would last through four wars and create an enduring friendship between four men.
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CARROLL (voice-over): They look like old friends, but this is the first time David, Keith, Dennis and Patrick, all war veterans, have met. Thanks to something special to all of them.
CPT. DENNIS SHERIDAN, VIETNAM TROPHY CLUB, TX: It is the wallet.
CARROLL: That wallet, carried by Dennis Sheridan, throughout the Vietnam War.
SHERIDAN: Seen both the good and the bad of combat.
CARROLL: When his tour ended in 1970, Sheridan packed it away.
SHERIDAN: In Vietnam era, you wanted to forget. You didn't wear your uniform. You just wanted to leave it all behind you.
CARROLL: The wallet sat in a trunk until more than 20 years later, when "Operation Deserts Storm" began under the first President Bush.
SHERIDAN: I wanted to send something. I didn't know what to send, and we went to the trunk.
CARROLL: What's in your hand there? Is that a beer?
(LAUGHTER)
CARROLL: Completely different war.
SHERIDAN: There you go.
CARROLL: Sheridan passed his wallet on to his old bravo company.
UNIDENTIFIED MALE: Our platoon leader received, basically, a random letter, dear, platoon leader.
SHERIDAN: This is from me. This was carried in Vietnam, you know, be proud to carry it in "deserts storm."
UNIDENTIFIED MALE: When I saw this, it was just like, you know, in the letter, it was like, you know, I had been entrusted with the holy grail.
CARROLL: Captain Keith Young (ph) added his pictures.
What year was this taken?
UNIDENTIFIED MALE: This was taken some time in 1990.
CARROLL: Young carried the wallet throughout his deployment in Iraq holding on to it well after.
UNIDENTIFIED MALE: We kind of jokingly said, well, the next time, you know, we'll pass it forward.
CARROLL: A decade later, "Operation Iraqi Freedom" under the most recent President Bush was beginning.
UNIDENTIFIED MALE: I got the wallet in the mail from Keith, and he had a letter attached that, you know, it basically outlined, you know, that Dennis had carried it in Vietnam and that he carried it through "Desert Storm," and now, it was my turn.
CARROLL: Captain David Granly (ph) did his part.
UNIDENTIFIED MALE: To have two gentlemen, you know, complete strangers, tell you that we're counting on you to see this through and to take care of this, was pretty overwhelming and I had one of the soldiers to snap the picture of me real quick.
CARROLL: And last year, during the war in Afghanistan, the wallet changed hands once again. This time, to Captain Patrick Rest.
UNIDENTIFIED MALE: I felt like I didn't really deserve it. You know, I hadn't really done anything in the army yet, but yet, there's so much trust and faith that's placed in you.
UNIDENTIFIED MALE: What it represents for us, at least for me, is it's sort of like a promise and a good look piece for him knowing that he'll get through these tough times ahead of him.
CARROLL: A war weathered memento that now bonds these men.
(END VIDEOTAPE)
CARROLL (voice-over): Well, Patrick will keep the wallet. The men hope he will not have to pass it on again. If there is another war, it will go to another soldier in the 3rd platoon of the Bravo Company. And I told you, I was going to tell you how we found the story. I was actually in a hotel lobby and Captain Keith Young was talking to my producer, and I said, what you guys are talking about? So, he goes into this whole story, and I said, you know, that is a story we should do on CNN. And that's how I found the guy.
COSTELLO: Oh.
CARROLL: It's just sort of fate, I suppose. Four great guys and complete strangers. First time they had gotten a chance to actually meet altogether. So, it was nice to be there for that meeting.
COSTELLO: Has it become sort of a good luck charm for them?
CARROLL: I think it has. I think it has. I think that's what it's become for them, you know, for all four of the men. And what's interesting is, you know, when many of the men came home from Vietnam, you know, a lot of them felt as though they couldn't actually feel good about what they had done for obvious reasons at that point in time, and this was the first time, you know, he was actually able to feel like I can actually now feel good about something that I did.
COSTELLO: Yes. They're all embracing each other through generations.
CARROLL: It's incredible, but once again, the hope is that they won't have to turn it over one more time.
ROMANS: I hope not. Jason Carroll, thanks, Jason.
COSTELLO: Just ahead, tracking hurricane Irene. It could be a Category 4 storm by later this week. People on the east coast, especially in South Carolina, they're already stocking up. We'll be back.
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