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CNN Sunday Morning

Terror Videotape

Aired October 01, 2006 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

RICK SANCHEZ, CNN ANCHOR: In the news right now, terrorists on videotape. A British newspaper publishes new images of two 9/11 hijackers. The paper says it shows ringleader Muhammad Atta and hijacker Ziad Jarrah at the bin Laden hideout in Afghanistan.
That's Atta on the right, by the way, not the one smiling.

The time code is January 18th, 2000, yes, before 9/11. Details ahead, live from London.

Several news services are also reporting today that Yemeni anti- terrorist forces have killed two al Qaeda fugitives. They were fugitives who escaped from a Yemeni prison after being convicted on the attack on the French oil tanker in 2002.

In the Amazon jungle, there are no survivors in the crash of the civilian airliner. That's the word from the Brazilian ministry of defense. One hundred fifty five people were aboard the plane when it crashed Friday. Brazil's president has called for three days of mourning.

BETTY NGUYEN, CNN ANCHOR: Speaking of the possibility of survivors, not likely. That is the word from Canada this hour following yesterday's collapse of a highway overpass near Montreal.

Look at that. At least two cars were crushed in the destruction.

Earlier this morning, crews reached the cars, but there is no official word, just yet, on the fate of the occupants.

Now to Reynolds Wolf for a quick check of the weather outside.

Good morning, Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: Good morning. And it is a very damp morning this Sunday in parts of New York and right now up to midtown Manhattan, up to Albany, over in Manchester. Even in Boston, scattered showers, a few embedded storms.

Nothing severe, but it certainly looks like it's going to be a rainy time for you.

Coming up in just a few moments, I'll let you know how the rest of the weekend is going to fare. And at the same time, we're going to show you what you can expect for the work week ahead. That's moments away.

SANCHEZ: All right, looking forward to it.

NGUYEN: Well, we do run down the top stories every 15 minutes right here on "CNN Sunday Morning" with in-depth coverage all morning long.

Your next check of the headlines coming up at 9:15 eastern.

Coming up right now on "CNN Sunday Morning," the name of one of baseball's greatest pitchers surfaces in the steroid scandal.

Plus, a huge shift in the housing market. Find out how you can actually benefit from this.

It is Sunday, the first day of October. Does it feel like fall where you are?

Good morning, everybody, from the CNN Center right here in Atlanta. I'm Betty Nguyen.

SANCHEZ: And I'm Rick Sanchez.

There are some new images of terror emerging this morning. A British newspaper releases video of two 9/11 hijackers nearly 18 months before the attack on America.

Now, "The Sunday Times" calls it a martyrdom video of ringleader Muhammad Atta, seen there on the right, and hijacker Ziad Jarrah, seen on the left.

CNN's Paula Newton is tracking the story from our London bureau.

I understand, Paula, you've had access to this video. What can you share with us?

PAULA NEWTON, CNN CORRESPONDENT: You can view it on the website. And that's the way the "Sunday Times" chose to release this tape.

What is so disappointing, of course, is although it runs almost an hour, there is absolutely no audio.

We should say, as well, Rick, that while this is the first time the general public has been able to see this tape, we do understand, and we believe it's the same tape that has been in the possession of U.S. authorities for almost five years now.

And that, in fact, they have scoured the tape looking for clues as to what they could be saying or in how it links in to the rest of the 9/11 plot.

What is so chilling here is, when you see these two hijackers -- and keep in mind here, Rick, that these are dubbed the masterminds, the key players in the 9/11 plot. They were the pilots of two of the planes. You see them joking at one point. They're joking with each other, going over handwritten notes in Arabic, apparently going over their martyrdom speeches.

What is truly chilling, of course is when they turn to the camera and apparently, the "Times" reports that at that point, they are uttering their martyrdom wills.

It occurred a full 21 months before 9/11. And that is actually crucial in the sense that it really gave investigators a sense of how long it took to put together the 9/11 plot, and the fact that Osama bin Laden had direct control it, even going so far as to summon these two masterminds to his base near Kandahar in Southern Afghanistan, and make sure that they were fully aware of the task he wanted them to perform.

And to try to indoctrinate them, if you will, and say, look, I don't want anything to interfere with your loyalty to the task ahead -- Rick?

SANCHEZ: You know, people wonder, since there's no audio on it, there is so much that can be gleaned from this.

Is there any attempt to break it down? Maybe get an Arabic- speaking lip-reader or something? I mean, I know it sounds crazy, but I would imagine they're trying something like this, or are they?

NEWTON: Apparently, the U.S. authorities -- if it is the same tape that we believe is now the subject of media interest in the United States in that several media outlets have been trying to obtain it -- it's been months, perhaps years that U.S. authorities have been going through this exact tape trying to lip-read what's being said in Arabic.

I think the video itself is interesting because you see lots of faces in a crowd at one point when Osama bin Laden is giving the speeches. We are told that was very useful. Not so useful was the lip-reading. They really weren't very successful in trying to glean anything from it.

SANCHEZ: Yes, I guess it's tough to do.

Paula, thanks so much for that report.

Betty?

NGUYEN: Back here at home, the Foley fallout in Washington to tell you about.

House Republicans are coming under fire for their party's handling of a scandal that has forced one of their own from office.

Florida's Mark Foley resigned over allegations he sent sexually suggestive messages to a 16-year-old former congressional page.

The scandal triggers a high-stakes debate just weeks before critical midterm elections.

CNN's White House correspondent Dana bash explains.

DANA BASH, CNN WHTIE HOUSE CORRESPONDENT: House Republicans are now mounting an extraordinary effort to explain their own conduct in the Mark Foley scandal, and are suggesting there should be a criminal investigation of his.

A strongly-worded statement from the top three House Republican leaders came on a day they tried to answer key questions -- what did they know and what did they do about it?

We got some of those answers Saturday, including a correction of sorts from House Speaker Dennis Hastert.

He and his top aides insisted to CNN Friday that Hastert knew nothing about any questionable Foley conduct until late last week.

But on Saturday, Congressman Tom Reynolds, of New York, revealed he actually knew months ago about one e-mail exchange between Foley and a former page, and brought it to the speaker's attention.

Hastert says he has no reason to dispute that, but insists he does not explicitly recall this conversation.

Hastert's statement, released late Saturday, does go into detail explaining how, at the end of last year, several of his top aides were aware of one questionable, but not explicit, e-mail exchange between Foley and a former page, and set in motion what Republicans insist was an investigation.

That inquiry, which was nearly a year ago, consisted of two Republicans on the House Page board confronting Foley, telling him to immediately cease contact with the young man and be mindful of conduct with other pages.

Yet, late Saturday, the only Democrat on that three-person page board released his own statement saying he knew nothing about this. "I was never informed of the allegations about Mr. Foley's inappropriate communications with a House page. And I was and never involved in any inquiry into this matter." That that from Democrat Dale Kildee.

Now, while there are still open questions about what GOP leaders knew and the action they took to investigate, one thing the House Speaker and other GOP leaders all emphatically deny is any knowledge of sexually-explicit instant messages to young men that forced Foley's abrupt resignation.

That not only over-shadowed a handful of legislative victories Republicans got before leaving town full time to campaign. It also kept Republican leadership aides at work all day on Saturday coordinating their public statements, trying to limit political damage.

And to that end, late Saturday evening, the House Republican leadership released a harshly-worded statement calling Foley's conduct, quote, "unacceptable and abhorrent," and calling for Foley's resignation to be followed by the full weight of the criminal justice system.

Now, the GOP leaders said they're taking measures to protect pages and setting up a toll-free number for pages and family members to call with complaints and concerns.

Dana Bash, CNN, Washington.

NGUYEN: OK. That said, here is the White House response to the scandal.

Quoting now, "We're surprised and disappointed by the news and understand these allegations are being investigated by House leadership and that Congressman Foley has offered his resignation."

A White House spokesman goes on to say, quote, "We have confidence that the House of Representatives will address this matter appropriately."

Well, it is certain that the Foley scandal will be among the topics Wolf Blitzer will ask White House Counselor Dan Bartlett this morning. You can see his interview on "LATE EDITION." That begins 11:00 eastern right here on CNN.

And we want to hear from you about Foley's scandal. What do you think about it all? You've seen the e-mails. You're heard all of the talk. You've heard all of the responses. What is your view of this scandal? E-mail us your thoughts. Our address is weekends@CNN.com. We'll read some of the replies on the air.

SNACHEZ: Let's go over some of the other stories that we're following today as well.

Now, Foley's resignation has breathed new life into a long-shot campaign of his democratic challenger.

Tim Mahoney seized on his reversal of fortune at a fundraiser with his party's former presidential nominee, John Kerry.

(BEGIN VIDEO CLIP)

TIM MAHONEY, DEMOCRATIC CHALLENGER: It is now clear from all of the press reports that the Republican leadership team knew this was going on. And they had to make a choice. They had to do what was right for the children, that they were in the care of the government, or they could try to hold on to a seat. And they decided to try to hold on to a seat.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

JOHN KERRY, FORMER DEMOCRATIC PRESIDENT CANDIDATE: I was scheduled to come down here to be with him today weeks before any of these events had taken place. I'm here because Tim Mahoney is the kind of person who will represent the values of Florida, the values of the 16th district.

He's a person who understands the urgent priorities of everyday citizens who are struggling with higher gas prices, higher tuitions, higher health care costs and wages that seem to be frozen.

(END VIDEO CLIP)

SANCHEZ: By the way, Florida Republicans now plan to meet as soon as tomorrow to name Foley's replacement for his seat.

Apparently, Mr. Foley's name would still appear on the ballot. The Florida district is a heavily Republican area around Palm Beach County.

Other stories across America, investigators of North Charleston, South Carolina, are piecing together details surrounding the shooting deaths of five people. All five were found inside a mobile home. Police say they are talking to a suspect and expect to make an announcement about charges some time today.

In Massachusetts, where 70 Congressional Medal of Honor recipients were honored with a 21-gun salute and a ride aboard the USS Constitution. The Medal of Honor is the nation's highest military award.

Farm Aid is back with a new mission. The organization is mostly concerned now with connecting farmers and consumers in an effort to keeping farms commercially viable in this country. Singer John Mellencamp, Willie Nelson and Neil Young founded the charity in 1985.

NGUYEN: Well, baseball's ongoing steroid scandal is back in the news this morning. This, after published reports of accusations against superstar Roger Clemens.

That story is next, right here on "CNN Sunday Morning."

SANCHEZ: Also, a crown for the new Miss World.

NGUYEN: That's not her.

(LAUGHTER)

There she is.

SANCHEZ: There she is. She's the one not wearing a baseball cap.

(LAUGHTER)

And Reynolds is following the weather for us.

What have you got coming up, Reynolds? WOLF: Well, we're looking at a great day the first day of October in the Northeast with temperatures mainly in the '60s and '50s for highs. But look at Texas, going up to 93 degrees, in Dallas, Fort Worth area.

Coming up, I'll tell you how long the heats going to last. Sit tight.

(COMMERCIAL BREAK)

SANCHEZ: This story just in to us. It's a story that's coming in from the West Bank in Ramallah, apparently, Syria's problems between the Fatah faction and the Hamas faction there.

This is what we know. Militants from the opposition Fatah Party have set the Palestinian cabinet building on fire. This is to protest the Hamas-led government.

These are pictures that we've got just now coming in. There's part of the government building now.

Again, that's the cabinet building. And those are live pictures that we're looking at.

What we understand is that the torching of the building in the West Bank city of Ramallah came after Hamas militiamen started fighting a running gun battle with Fatah allied security forces in Gaza City. This is violence that has killed as many as three people.

We understand, as far as this building is concerned -- and let me read through here because I'm just now getting some information that the militant's lit an office on the second floor on fire. Soon, the entire floor was engulfed in flames according to witnesses.

The militants threw files out the windows. And witnesses could see pieces of the furniture actually being thrown out.

I'm not sure if we're able to see it there on these pictures as we look at the areas around the ground. But you certainly do see the plumes of smoke that are leaving the building.

Now, again, this is this situation between the two factions there, the Palestinian factions, the Fatah and Hamas, a story that we'll certainly stay on top of for you throughout the morning as well.

NGUYEN: And no word so far on whether anyone was inside the building, if anyone was injured. But we know smoke is coming from that building. We'll stay on top of this and bring you more.

In the meantime, though, a lot going on weather wise, not as much as we've seen in the past.

But, Reynolds, you've kind of got your hands full.

WOLF: Absolutely, yes. I mean, you can certainly pick your poison.

We've got things to talk about out there. One of those happens to be in the Atlantic. We're talking about Isaac. Isaac is a hurricane with winds of 80 miles per hour, gusting to 105. It's a Category 1 storm.

And the latest path we have from the National Hurricane Center keeps the storm away from the U.S. mainland. And it is expected to move deeper into the north Atlantic and then eventually die out, especially as we get into Tuesday and Wednesday. Not dying out all together, but it will be a tropical storm. So it is expected in the weekend. Certainly good news for us.

(WEATHER REPORT)

WOLF: That's a lock at the forecast. And we'll send it back to you at the news desk.

SANCHEZ: Thank you, Reynolds.

REYNOLDS: You bet.

NGUYEN: Well, new accusations this morning about steroid use in baseball. This time, one of the greatest pitchers in the game is in the spotlight.

SANCHEZ: And there she is, Miss World. More about the winner ahead on "CNN Sunday Morning."

First, though, this. In this morning's "Rules for Retirement," most people picture a secure, relaxed lifestyle. But many women are discovering these years are anything, but golden.

Here's Valerie Morris with this story.

(BEGIN VIDEOTAPE)

VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Gabriella Amorine is having a tough time facing retirement.

After raising three children and getting divorced, she entered the workforce for the first time at age 41.

Today, despite savings and investments, Amorine, now 65, says she can't afford to retire.

GABRIELLA AMORINE, OLDER WORKER: It's scary to think about it because every year the cost of living goes higher and higher. If God gives me good health, I'll keep working until I'm 80 years old.

MORRIS: Amorine is not alone. A recent retirement risk study, by the Society of Actuaries, finds most women will not be able to support themselves over a lifetime.

CINDY HOUNSELL, PRESIDENT, WISR: Women earn less. They spend time out of the workforce for care giving. And then, the biggest issue is that they live longer.

MORRIS: Despite those obstacles, experts say women need to take an active approach to saving for retirement.

HOUNSELL: You have to think about this early. Live beneath your means, save as much as you can.

You need to know what you have, which is one of the biggest mistakes -- is people not knowing whether they have a retirement benefit.

I think it's never too late to start.

Social Security pays you 8 percent a year when you reached the full retirement age. But you don't take your benefit until age 70. So that's a great way of getting a lot more income.

The most important thing is not throw your hands up in the air and say I can't do this.

Valerie Morris, CNN.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

SANCHEZ: And welcome back. There is more information on the ongoing steroid controversy.

There is now a published report that links some big names in baseball with allegations of using performance-enhancing drugs. The "Los Angeles Times" is reporting that based on statements from former pitcher Jason Grimsley allegedly made to federal agents in late May and early June.

Now, the report relies on information from two anonymous sources.

According to the newspaper, Grimsley implicates Houston Astros pitcher Roger Clemens. "The Times" says that Grimsley told investigators in an affidavit that Clemens, quote, "used athletic performance-enhancing drugs."

The paper says other names in the affidavit include Clemens' fellow Astro pitcher Andy Pettitte.

The agent for both players, Randy Hendricks reacted to the report.

Regarding Clemens, this is what his agent said. He tells the Associated Press -- we quote here, "I've grown weary of having to defend Clemens from innuendo and conjecture about every six months for the last several years when he's complied with all of the rules and all of the regulations."

Regarding Pettitte, that same agent says, of his client, quote, "Andy is just surprised and stunned and has no knowledge of any such activity."

Now according to "The Times" report, Grimsley also allegedly told investigators that Baltimore Orioles player Miguel Tejada used anabolic steroids. Tejada denied the allegations as well in comments to the "Baltimore Sun."

Now, he says -- this is a quote. "I know that I've never used that, and I know I'm clean. I'll get checked out for anybody, any time, any moment, whenever they want."

Grimsley, the former pitcher who allegedly made thing accusations, admitted using growth hormones, steroids and amphetamines.

"The Times" said its report is based on the affidavit investigators used to search Grimsley's house.

Player's names were blocked out in that affidavit when the document was originally made public. That was on May 31.

But the "L.A. Times" says it's located an unnamed source with authorized access to an unedited affidavit.

The paper was allowed to see the unaltered report briefly and read aloud some of what was blacked out in the affidavit that was made available to the public.

Let's get more now on the bigger picture here and what it could mean, and the concerns about steroids in Major League baseball.

Here's CNN sports anchor Mary Jo Mitchell. She's joining us now with some background on the whole steroids controversy.

And you can't help, but wonder whether this is going to be the next step on what is really a cascading situation for baseball in what appears to be its inability to deal with this controversy.

MARY JO MITCHELL, CNN SPORTS ANCHOR: I mean, it's really seemed to go downhill in the last couple of years, hasn't it? It's all anyone is talking about.

Major League baseball didn't even start testing for steroids until...

SANCHEZ: Until they were forced to the table.

MITCHELL: Right. Until 2003. Penalties weren't even enforced until next year. And they've had to up those penalties twice under the pressure of Congress just to try to squelch all of these...

SANCHEZ: Is it because as you watch more home runs, the games get more exciting. You get more fans at the games. And baseball wasn't willing to do anything to get in the way of that because that's the bottom line for them is making money, right?

MITCHELL: It is the bottom line. It's the bottom line for any professional sport is making money, of course.

But, you know, it's the big names that really seem to get interjected into this steroids conversation all of the time, with the Barry Bonds thing and, now, Roger Clemens coming out -- his name coming out anyways.

And, of course, he's denied. Bonds has said he never knowingly took steroids. But I think that that fuels it even more when it's guys like Clemens who's won the Cy Young seven times. And a guy like Bonds who's hit all these homeruns.

SANCHEZ: And we assume that all of them, of course, are not guilty in this case. All this is, is an accusation.

MITCHELL: Right.

SANCHEZ: But what is to stop any baseball player from trying to compete to be as good as the people around him if the people around him are taking it? Doesn't there seem to be almost a pressure on the average baseball player, whether it's a little rookie or a big name like Clemens, to do what the other guys are doing to be able to compete?

MITCHELL: Or even a high school player in today's day and age.

SANCHEZ: Right.

MITCHELL: Why aren't they, you know, thinking steroids might be the only way to get them into the big leagues at this point?

You know, even Jason Grimsley's attorney, the guy who is kind of at the root of all this, said Grimsley didn't give up these names. He was kind of forced into giving these names. He's backtracked off saying -- you know, but he wasn't there at the time. Federal investigators do say that Grimsley had given up these big names and maybe more names to follow, so.

SANCHEZ: So it would look like baseball needs to come up with a penalty that's severe enough to take away the upside. Because the difference between somebody who takes steroids and someone who doesn't could be $20 million, $30 million.

MITCHELL: Absolutely. And the penalties right now they believe are fairly stiff. Its 50 games.

SANCHEZ: Now.

MITCHELL: Now, its 50 games for the first offense, a hundred games for the second, and a possible lifetime ban for a third offense.

SANCHEZ: But there's no question in your mind, and most people who follow baseball, that many, many players, perhaps more than 50 percent of the players, at one time or another either tried?

MITCHELL: It appears that it's pretty rampant. And because they don't have testing for this human growth hormone, which you have to do blood testing for...

SANCHEZ: Yes, that's a problem.

MITCHELL: That's going to be a problem.

SANCHEZ: That's wonderful. Good stuff. We appreciate you coming by. MITCHELL: You bet.

NGUYEN: Well, here's a question for you. It has nothing to do with baseball. Is the super-hot housing market cooling off? A lot of you may be interested in that.

And if it is, is that a bad thing?

UNIDENTIFIED FEMALE: I don't know how long this is going go and how, you know -- I mean, I may have to just decide not to go anywhere.

NGUYEN: So is it time to buy or is it time to sell? A housing expert is going to give us her advice. That's next on "CNN Sunday Morning."

(COMMERCIAL BREAK)

SANCHEZ: Gun battles, ransacking and buildings torched. This is what is going on in Gaza, a day if chaos there where fighting has broken how the between Hamas militiamen and police loyal to President Mahmoud Abbas. This is Ramallah, you are looking at right now, it's an empty cabinet building. However the cabinet building was torched earlier in the day. Police and civil servants began to protest over unpaid government salaries. We'll certainly continue to follow this.

NGUYEN: And this story, terrorists on tape. A British newspaper publishes new images two of 9/11 hijackers. Now, the paper says, it shows ringleader Mohamed Atta, there on the right, and hijacker Ziad Jarrah at a bin Laden hideout in Afghanistan. The time code is January 18, 2000. This is just a still from that video. The tape could fill in some gaps about Atta's whereabouts in early 2000.

And there are new questions arising after republican Mark Foley resigns. The congressman from Florida allegedly sent inappropriate e- mail to a 16-year-old boy. The leading House Republican says he reported concerns months ago to the speaker of the house, but Dennis Hastert's office says they were only told the messages were, "overfriendly."

SANCHEZ: In the Amazon jungle there are no survivors in the crash of a civilian airliner. That is the word from the Brazilian ministry of defense. One hundred fifty-five people were aboard this plane when it suddenly just disappeared, eventually was found, crashed. Brazil's president has called for three days of mourning as a result of this horrible incident.

At least four people are dead, that's the word from Canada this hour following yesterday's collapse of a highway overpass near Montreal. Earlier this morning crews reached the cars. The cars were so flattened they barely came up to the knees of one of the firefighters at the scene.

We do run down all of the top stories every 15 minutes on CNN SUNDAY MORNING. In-depth coverage all morning long, as well. Your next check of the headlines is coming up at 9:45 Eastern.

NGUYEN: Well, after years of soaring profits, housing prices are now heading south in some places. So, does this mean the housing bubble is finally going burst? CNN's Gerri Willis explains.

(BEGIN VIDEOTAPE)

GERRI WILLIS, CNN CORRESPONDENT (voice-over): Kate and Hans Koning have been trying to sell their Eastern Connecticut house for nearly a year. So far there are no takers even though they cut their price, not once, but twice.

KATE KONING, HOMEOWNER: I started at $875 and at the time I thought that was really a reasonable price for the house given the size.

WILLIS: The Koning's are not alone. Sellers across the country are struggling with a weakening housing market, just how weak became apparent Monday when the National Association of Realtors released its monthly housing report showing the median prices for homes fell for the first time in 11 years.

Although the tumble was small, just two percent, it represents a turning point for a market that has been on fire for the past decade.

DAVID LEREAH, NATL ASSN. OF REALTORS: The housing markets just went through a very big boom. We need a correction. Prices got too high and now we need prices to come down to bring people back into the buying marketplace.

WILLIS: Back into the buying market so prices can go up again, but some say a rebound won't be that easy this time. Economist Robert Shiller correctly predicted the dot com bust of the late-'90s. Now he says it's housing's turn.

ROBERT SHILLER, AUTHOR "IRRATIONAL EXUBERANCE": If the U.S. housing market really starts to decline it will harm confidence and it will cause a possibility of downward momentum in the U.S.

WILLIS: And that means pain for some homeowners.

SHILLER: The people who bought at the top and sell at the bottom can get really hurt. And so there will be bankruptcies, foreclosures, and people out of jobs, but we'll recover from it and this is not nuclear war.

WILLIS: Evan Lereah, who had previously been optimistic, says prices are headed down with a while. Most places are big backlogs of homes and already high prices like Southern Florida, Southern California, Nevada and Washington, D.C. Some say recovery will be months in the future, others say it could be years. For the Konings, it can't come soon enough. KONING: I don't know how long this is going go and how, you know -- I mean, I may have to decide not to go anywhere.

Gerri Willis, CNN, New York.

(END VIDEOTAPE)

NGUYEN: All right. So, what is bad housing news, for some, could be good news for others and Jeanne Sahadi is the senior writer of cnnmoney.com and she joins us from New York this morning.

Good morning to you.

JEANNE SAHADI, CNNMONEY.COM: Hi good morning.

NGUYEN: All right, bottom line, it's the buyer's market, right?

SAHADI: It's the buyer's market for the first time in decades and thank goodness for the buyers.

NGUYEN: For the buyers, that is, not for the sellers. And why is it a buyer's market?

SAHADI: It's a buyer's market because sales have been weak, prices are down, inventories are up. That means, as Gerri Willis pointed out, that home sellers are strong make it enticing for buyers to seal the deal.

NGUYEN: And we'll talk about that in just a minute, some of these perks that they're throwing in to make it enticing. But let me ask you, is it the chase it's a buyer's market all across the country or just in certain areas?

SAHADI: It's -- you know, with real estate, it's never the case that it's the same story everywhere in the country. Real estate's a very local issue. So, you really need to know most about the neighborhood you're buying into. For instance, Michigan has the most affordable housing compared to the rest of the country. But the truth is if you're buying in or near Motor City, where Ford and GM have had a huge number of layoffs, you really have to question economic viability of the town you're moving into.

NGUYEN: Maybe that's why those homes are up for sale.

SAHADI: Yeah.

NGUYEN: And we're looking at a list of them, the most affordable homes in the buyer's market. You're seeing a lot in Ohio and Michigan, but what I find interesting, the least affordable markets all of them pretty much in California.

SAHADI: Yeah, well, that's, I guess, that's the price you pay for all that sun. I love California, but it's pretty unaffordable.

Although, I will say New York is on the list there at the very bottom. SAHADI: That's true. All of the rules about real estate they don't actually apply in Manhattan. It's true.

NGUYEN: OK, so it's a buyer's market and you say it just really it depends, though, I mean this doesn't hold true for everywhere, but here's what's interesting to me. Even though the prices have cooled down, nationwide they're still higher than they were last year. Is that true?

SAHADI: Actually, home prices -- the median price of homes h has fallen about two percent for the -- year over year for the first time in 11 years, and home sales are up a little bit, but not terribly much.

NGUYEN: Yeah, 10.6 percent higher nationwide than a year ago.

SAHADI: Right, but actually, it's -- are you talking about home sales? Because I think month to month is higher.

NGUYEN: Home prices. This according to cnn.com on September 21, it says "Despite a substantial cooling off of real estate markets, home prices were 10.6 percent higher nationwide than a year ago." That's according to the Federal housing Intersperse oversight.

SAHADI: Oh, OK. Well they may be taking a different measure than the National Association of Realtors. Each group looks at things very differently. It's that everything has become dirt cheap affordable. The problem has been in the last 10 years home prices have so far outpaced the growth in income that it's -- that's why economists are saying home prices need to stabilize now because in terms of economic cycles, incomes need to keep pace with home prices. So, that's why they're expecting a softening in home prices going forward. Yes, it may not be affordable in some neighborhoods, certainly not Manhattan in San Francisco where they're people are having a harder time selling homes and are willing to cut their price a little bit.

NGUYEN: Well, people are offering pretty big incentives to get people into these homes. And I guess the question now is, you look at the incidents and the fact that this is a buyer's market. If someone doesn't buy that house right now are they going to regret it later?

SAHADI: Not necessarily. In fact, what a lot of experts are saying it that buyers can take their time now. They're not going to be facing a lot of bidding wars and there are a lot of developers that want to unload their properties and they are offering all sorts of incentives to bring people on, including price discounts, including paying for closing costs, giving six months free payments. Offering to give them amenities like sub-zero refrigerators, granite counters, even...

NGUYEN: And plasma televisions. I heard about that one.

SAHADI: Yeah. Yeah.

NGUYEN: They're offering everything and the kitchen sink in some cases.

SAHADI: That's right.

NGUYEN: Jeanne Sahadi from cnnmoney.com. Thanks for your time today.

SAHADI: Thanks very much.

SANCHEZ: You what it is? It's not that the housing is cheaper, it's just that they're not so ridiculously expensive.

NGUYEN: That is probably what it is -- that's true. It has been a seller's market for a long time.

SANCHEZ: Semantics. "Going Global" now, we turn to Brenda Bernard at the International Desk.

What have you got, Brenda.

BRENDA BERNARD, CNN INTERNATIONAL DESK: Rick, Yemeni security forces say they've killed two al Qaeda fugitives. Officials say one of the men had been convicted of a 2002 attack on a French oil tanker in the Gulf of Aden. Both men were among nearly two dozen convicts who escaped from prison in Yemen earlier this year.

A rift between Russia and its neighbor Georgia is intensifying. Russian President Vladimir Putin today called for an urgent session of the security chief. He accuses the former Soviet Republic of Georgia of trying to provoke Russia and reportedly saying, according to wire services, that Georgia's actions are state terrorism with hostage taking. This sparring began when Georgia arrested four Russian army officers on spy charges.

And there she is. The world's newest reigning beauty, 18-year- old Tatana Kucharova is the new Miss World. The student from...

NGUYEN: What was that name, Brenda?

BERNARD: Tatana Kucharova.

SANCHEZ: Tatana Kucharova.

NGUYEN: He practiced.

BERNARD: That's right.

SANCHEZ: Are you sure it's not (INAUDIBLE)?

BERNARD: Well, just call her gorgeous. OK?

NGUYEN: Yeah. Call her miss world, would you?

BERNARD: Miss World, thank you very much. She's a student from the Czech Republic and she was crowned last night in Warsaw Poland, beating contestants from more than 100 countries. In addition to the judges this year, fans have a voice in picking the winner. They text messaged their votes from around the world.

NGUYEN: Imagine some of her high school students may have been in on that text messaging to get her into the top spot there as Miss World.

BERNARD: She probably got the whole country.

NGUYEN: Yeah, exactly. Forget the school, the whole country. Sounds good. Thank you, Brenda.

SANCHEZ: And she's got nothing on you.

NGUYEN: Oh, yeah right. She's a beauty, though.

SANCHEZ: I'll take that lunch now.

NGUYEN: OK, I'll pay you later.

SANCHEZ: You made it one of the week's most popular stories on the Internet, speak of the Internet.

NGUYEN: Yeah, next on CNN SUNDAY MORNING, a prison inmate gets a tattoo on his forehead, but look at that. Find out why it's such a big deal when we come back. You don't want to miss this story.

(COMMERCIAL BREAK)

SANCHEZ: This is what's "In the News" right now, chilling you images this morning of two September 11 hijackers. The "Sunday Times" of London released this video on its website of the 9/11 ringleader Mohamed Atta, he's the one on the right, and Ziad Jarrah, he's the one with the big smile over on the left. Paper says that the two were seen joking and laughing before recording their wills. The tape is dated January 18 of 2000.

House Republicans are facing questions over the Mark Foley scandal now. It's growing, yes, the scandal, that is, the congressman resigned his Florida seat after accusations he sent sexually suggestive e-mails to a 16-year-old boy. A leading Republican says he informed the speaker of the house months ago, but yet, Dennis Hastert, the speaker says no, no, no, the only messages I received were that they were, quote, the messages, "overfriendly." More on this.

NGUYEN: Yeah, and gun battle to tell you about, ransacking and then this. Look at this video. Buildings being torched, this is a live picture of the smoke coming from the building. It's been a day of chaos in Gaza where fighting broke out between Hamas militiamen and police loyal to President Mahmoud Abbas.

Now, the empty cabinet building was torched in Ramallah, you still see the smoke coming from it. Police and civil servants began the protest over unpaid government salaries.

At least four people are dead, that's the latest word now from Canada, this hour, following yesterday's collapse of a highway overpass near Montreal. Earlier this morning crews did reach the cars. Officials say the cars were so flattened, here's a visual for you, that they barely came up to the knees of one firefighters at the scene.

We run down the top stories every 15 minutes right here on CNN SUNDAY MORNING with in-depth coverage all morning long, your next check of the headlines coming up at the top of the hour.

SANCHEZ: During the week we show you an awful lot of -- hold on. All right. During the week we show you an awful lot of video here on CNN, some of it shocks. Some of it amazes and some of it just makes you want to laugh. Well, maybe you might say to yourself, hey, how can I see that again? I'd like to see that video or I'd like to look at some video that a friend of mine told me was on CNN yesterday. There is a way to do that. Nicole Lapin is joining us now. She can break it down for you.

NICOLE LAPIN, CNN.COM DESK: Ta-da!

SANCHEZ: She can do like the X's and O's like football coaches do, all right, to show you.

LAPIN: All right, so you're going to take some notes here?

SANCHEZ: Very carefully and diligently.

LAPIN: There you go. All right, Rick, the video is still around so let's check out, on cnn.com, we're run through a few highlights from this week so you can see maybe some of that video that amazed you , that shocked you is on this list.

Well, you can check out the scene caught by a surveillance camera last week in Manchester, New Hampshire. A convenience store clerk whacked a would-be robber with a (INAUDIBLE). Well, you can see the -- in this store, this is where it all went down and the robber was holding a customer at knife point and that's when the clerk reached for his bat and took a swing at the man.

SANCHEZ: Self-defense.

NGUYEN: Yeah.

LAPIN: And then a man in Indiana, serving life for killing a little girl and molesting her, Katie Coleman. The man was recently seen in prison with something written across his forehead. It was this, a tattoo that reads Katie's revenge. Well, it looks like other prisoners forcibly tattooed that on his forehead.

Maybe it was this one, Rick. A porn star for governor? Only in California. You can watch this video again of Mary Carey campaigning on the San Diego University campus just last week. Well Carey is running for governor for the second time around. You probably remember this, the first time, of course, was during the recall of 2003 and amazingly, she came in 10 out of a whole laundry list of candidates.

Well, you can see all of these videos and all of these stories, of course, at cnn.com or on the "On Demand" section of CNN "Pipeline."

SANCHEZ: So you just go to cnn.com and that's it. And you click "Pipeline," though.

LAPIN: That's it and then you type in your topic.

NGUYEN: You've taken very good notes, Rick. Yeah. We're very proud of you.

SANCHEZ: Yeah. I did that very well. Like the candidate in California.

NGUYEN: What's her name?

SANCHEZ: I don't know.

SANCHEZ: I've never paid attention to her name.

NGUYEN: You were watching something else apparently.

SANCHEZ: Riveted. Thanks Nicole.

NGUYEN: You know what, we're just going move straight on from that one, shall we?

SANCHEZ: Still a hot topic, in fact, no question this is the hot topic of the day. Coming up, your e-mail comments on the Foley fallout is next, right here on CNN SUNDAY MORNING.

(COMMERCIAL BREAK)

NGUYEN: It is time now to check in with Howard Kurtz in Washington to see what is ahead on CNN's RELIABLE SOURCES.

Good morning, Howard.

HOWARD KURTZ, RELIABLE SOURCES: Good morning Betty.

A jam-packed program coming up. The Uproar over a new Bob Woodward book portraying the Bush administration is almost dysfunctional over Iraq. We'll talk to "New York Times" communist Frank Rich and former presidential advisor David Gergen.

And Florida Congressman Mark Foley's resignation following sexually-explicit e-mails with underaged pages. How did ABC News break the story and why did the south Florida paper sit on it for months? Plus why anger gets on the air so much and gets so much attention. And going out on a limb here, we promise a few good laughs in our media minute. All ahead on RELIABLE SOURCES.

NGUYEN: You weren't getting angry with me then just then were you, Howard?

KURTZ: Just a little bit.

NGUYEN: I saw that. I saw it in your eyes. OK< RELIABLE SOURCERS at 10:00 Eastern. We will be watching. Followed by Wolf Blitzer and LATE EDITION at 11:00 and THIS WEEK AT WAR, that's a 1:00 Eastern. You'll want to stay tuned to CNN as we go in-depth with the stories of the day.

SANCHEZ: All morning long we have been asking you to let us how you feel about this e-mail sex scandal involving the GOP's Foley down in Florida. And the one thing that we know from listening to these e- mails, that you've been sending us is that many of you are very upset, angry may be a better word, about what's going on here. In fact some of the stuff that you sent us we just can't put on the air because it's a little too graphic.

NGUYEN: Too graphic, yeah.

Well, let's talk about Jerry from Florida. Because this is what he has to say. He says, "I think both parties should conduct some kind of background checks on their candidates prior to selecting them to run for office."

SANCHEZ: Good point. Also, this is George, he says, "Now maybe the Republicans will get over Bill Clinton's little escapade, whether gay or straight, neither should have happened, though."

NGUYEN: And Elliott brings up something that a lot of people have been talking about whether it's true or not, but he says, "It would appear that the Republican Congress had hoped to keep this quiet until after the election."

SANCHEZ: And then Bonnie is from New Rochelle, New York, and she writes us this, "I'm a mother and I'm outraged. He should be made an example of. The message should be sent that such behavior is unacceptable."

So there you go. That's just -- those are the clean versions...

NGUYEN: Many, many we received and we always appreciate you sending in your thoughts. And next weekend we will have another e- mail question for you.

SANCHEZ: Totally unscientific, by the way. Let's go to Reynolds Wolf now and find out what's going on with the part of the newscast that's very scientific.

(WEATHER REPORT)

NGUYEN: That day fire has been burning for almost a month now.

REYNOLDS WOLF, CNN METEOROLOGIST: It's unbelievable. One of the biggest in history, I believe.

SANCHEZ: Did we ever figure out why it's called the "day fire?"

WOLF: I believe...

NGUYEN: Because it started on Labor Day.

WOLF: Ding! We have a winner. There you go. That's the reason why.

NGUYEN: That's what I've learned. You learn a lot here at CNN, don't you Reynolds?

WOLF: Good times. You better believe it.

NGUYEN: All right.

SANCHEZ: Taking copious notes. RELIABLE SOURCES is next followed by LATE EDITION and THIS WEEK AT WAR, so don't go away. Thanks for being with us, by the way.

I'm Rick Sanchez.

NGUYEN: And I'm Betty Nguyen. Fredericka Whitfield is up next with the morning update. Stay with us.

SANCHEZ: Bye-bye.

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