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CNN Saturday Morning News

Insurgents Again Use Chlorine in Iraq Attacks; Further Fired Attorney Fallout; Heavy Weather Again Hits Northeast

Aired March 17, 2007 - 09:00   ET

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

T.J. HOLMES, CNN ANCHOR, CNN SATURDAY MORNING: Some breaking news out of Iraq, fears of chemical warfare as hundreds of Iraqi civilians and several U.S. troops are treated for chlorine gas exposure. We're live in Baghdad.
BETTY NGUYEN, CNN CO-ANCHOR, CNN SATURDAY MORNING: Also, 50 shots fired and a young man killed. Now some New York City police officers await final word from a grand jury.

HOLMES: And Wall Street's rough ride and a mortgage meltdown. How can you actually benefit from a stalled housing market?

From the CNN Center in Atlanta, good morning to you all, I'm T.J. Holmes, and this is CNN SATURDAY MORNING.

NGUYEN: Well, good morning on this St. Patrick's Day. I'm Betty Nguyen. We want to thank you for starting your day with us.

HOLMES: We want to start with that breaking news out of Iraq. We're getting word of a chemical attack near Fallujah. The U.S. military says six coalition service members and hundreds of civilians are being treated for exposure to chlorine gas. This is after two separate suicide bombings. CNN's Kyra Phillips joins us now live from Baghdad with the latest on this for us. Hello to you Kyra.

KYRA PHILLIPS, CNN CORRESPONDENT: Hi, T.J. We're just getting information right now you're right, three separate suicide attacks, approximately 350 Iraqi civilians, 6 coalition force members treated for this chlorine gas exposure after these two suicide bombers detonated their dump trucks in separate areas of Fallujah. That first attack I'm being told was detonated at a checkpoint. You know by working stories and going through Baghdad those checkpoints, you never know if they are full of good or bad guys. A number of times this happens, you get a bad checkpoint, explosions occur. That second explosion happened just south of Fallujah near the town of Amariyah. We're told that blast killed two Iraqi policemen. Also injuring as many as 100 local citizens. And a number of them also showing exposure for chlorine exposure in that attack.

The third explosion, we're told, happened just south of Fallujah. That was in the Abu Issa Region. A suicide bomber detonated a dump truck, containing, we're told, 200 gallons of chlorine. That tank was rigged with explosives. Suicide car bombers have used chlorine against U.S. troops and also Iraqis in the al Anbar Province a total of five times since January. Why do they use this? Well, it's an easy scare tactic, that's what I'm told. There could be deadlier types of toxic materials that they could use, but it's easy to get this, T.J., it's easy to get chlorine. They use it for sewage treatment, they use it to purify the water, and they use it as a cleaning agent. They also use it on farms to clean the chickens where the food of Iraqi people, U.S. troops, and even the food that we eat here. So it's an easy agent to get a hold of, and it's a common scare tactic that the insurgents and the terrorists use here in Baghdad and in other parts of Iraq.

HOLMES: Kyra, that is certainly scary to think just how easy it is to get their hands on this stuff. Our Kyra Phillips in Baghdad for us. Of course, we'll check back with you, Kyra. Thanks so much.

Meanwhile, about Fallujah, the area where a couple of these suicide bombs went off, it's about 30 miles west of Baghdad. It's located in the Anbar Province. Population there about 250,000 to 300,000. It's mostly a Sunni Muslim area, and it is part of the infamous Sunni triangle.

NGUYEN: Well, a U.S. soldier has been found guilty of negligent homicide in the killings of three Iraqi detainees. A military panel also found army staff Sergeant Ray Girard guilty of obstruction of justice and conspiracy for trying to cover up the crime, but he was acquitted on a more serious charge of premeditated murder. His lawyer says Girard could get up to 21 years in prison. The sentencing phase of that trial begins on Monday.

Meanwhile, anti-war protests are planned all weekend long all across the country, but they kicked off last night in Washington. Thousands of Christians gathered at Lafayette Park, calling the war morally wrong. Some were even arrested after demonstrating on the sidewalk in front of the White House. President Bush was away at Camp David.

Want to talk now about kidnapping, torture, and murder. This weekend on an all new CNN "Special Investigations Unit," the brutality of Rogue Shia militias secretly operating within the Iraqi government security forces. Are they putting U.S. troops in danger and can they be stopped? Don't miss an all-new CNN "SIU: Death Squads," that is Saturday and Sunday night at 8:00 p.m. Eastern.

HOLMES: A political firestorm is brewing over the firings of eight U.S. attorneys. Congress wants to talk to key presidential aides, but the White House says slow down. At issue here, questions whether the firings were politically motivated. Our Kathleen Koch is at the White House this morning with more on this developing story. Good morning, Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Good morning, Tony. And there are increasing reports, first of all, of pressure on Alberto Gonzales, the attorney general, pressure on him to resign over this controversy, pressure from Congress, and pressure from Republican strategists. But White House Spokesperson Dana Perino says President Bush has no intention of getting rid of Gonzales, that he has full confidence in him, adding that "anybody that is close to the president and knows the president and his thinking realizes and recognizes that is not going to happen."

But still, lawmakers are angry over the changing White House story over the firings of the eight U.S. attorneys, first of all saying it was an internal justice department matter, then that it was the idea of Former White House Counsel Harriet Miers, now that it really doesn't know, only that top political strategist Karl Rove recalls Miers raising the issue. With emails now indicating that Rove was certainly involved in discussions over the firings as early as January, 2005, Congress is very interested in hearing him testify, also other White House officials. But the administration is saying it will not make a decision on whether anyone in the White House will be allowed to testify until early next week.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: There are conversations going on right now between the White House and leaders on Capitol Hill, and we've made it clear, we want to get them the information they need. And we've always said it has to be consistent with presidential prerogatives, but at this juncture, I think it's premature for me to try to make characterizations, including comparisons to previous administrations about how we proceed.

(END VIDEO CLIP)

KOCH: Now President Bush under fire has said that he wants Attorney General Gonzales to go to Capitol Hill to talk to Congress more about this matter. That, though, is not expected to happen until some time next week. Also not happening until at least some time Monday is the release of hundreds of pages of documents from the Justice Department also on this controversy that Capitol Hill is looking for lawmakers very interested in trying to really get a clearer idea why these firings occurred. Again, a lot of concern that they were politically motivated.

T.J.

HOLMES: All right, Kathleen Koch for us from the White House. Thanks so much.

KOCH: You bet.

NGUYEN: Well in trouble in New York. A police officer's attorney says a grand jury has indicted three of five officers involved in the shooting death of a groom just hours before his wedding. The district attorney's office will make the official announcement on Monday. Officers did fire 50 rounds at Sean Bell and his friends as they were leaving his bachelor party last November. Bell was killed, his friends did survive. And an investigation found that none of the three men was armed.

HOLMES: March madness! Thought that was supposed to refer to basketball, but it's referring to the weather now. Spring has been stopped cold in the northeast by a late winter storm. Snow, sleet, freezing rain, you take your pick and you've got it. Whether you're driving or flying, you may find it tough to get around from anywhere from Ohio to Maine. Right now we're going to go to the CNN Weather Center, where Bonnie Schneider is monitoring the storm from there for us, has the latest. Hello, Bonnie.

BONNIE SCHNEIDER, CNN METEOROLOGIST: Hi, T.J., you're right; this travel problem really exists throughout much of the morning, especially into New England. Take a look at this. We've got heavy snow warnings, winter storm warnings still in effect for parts of New England. Heavy snow for upstate New York, it's not over yet. This is where the nor'easter is right now, right off the coast of Massachusetts. So it's still pumping in the moisture from the Atlantic and then wrapping in those cold winds, brutally cold, producing snow, especially towards northern Maine, and rain for Boston, heavy rain at times. And that's also very well indicated when you look at the current winds coming out of the southeast along the Cape and then out of the northeast to the north of Boston and Newberry Port right now.

Now to the south, as we look toward New York City, we did have 5 1/2 inches of snow. Let's show you a live picture of New York at this hour, and we can show you that there is snow in Central Park, for sure. The problem is, it's very icy out there. We've had reports of ice across Nassau County on Long Island, so take it slow on the roads because it's really going to be treacherous, even though the snow has stopped. We had sleet and glaze on top of the snow, and that's what's making it so difficult to get around anywhere you have to go in the early hours.

Here's the way it all totaled out for our snowfall totals in the Catskill Mountains, 20 inches of snow, a lot there. We also had plenty of snow throughout central Pennsylvania. As we mentioned, you can see New York we had about 5 1/2 inches in Central Park, varying amounts across New York, and into Boston eight inches of snow.

Let's talk about the storm over the next 48 hours. Still looking at the potential for 4 to 8 inches of heavy snow through areas of Vermont, into Maine and Canada. Temperatures as a result of the nor'easter are super cold this morning. Remember that reinforcing blast of cold wind comes in behind the storm, so in Albany right now it's 21 degrees. It's 21 in New York City and only 28 in Philadelphia. Eventually, we'll warm up, but it's going to take a while. There is a lot of warm air to the south and west of New England, but it's not quite there yet. So we'll still be looking at windy, blustery, and cold conditions for that part of the country while it's pretty hot off to the southwest. How hot? Look at this, 97 in Phoenix. What a contrast there.

Betty, T.J..

HOLMES: Ooh --

NGUYEN: Yeah.

HOLMES: Twenty inches of snow, 97 over here. Thank you, we'll see you again here soon.

Well meanwhile the nation's mortgage meltdown, is it shrinking the value of your home? GERRI WILLIS, CNN CORRESPONDENT: We knew that prices were going to trend downwards here this year, probably through the third or possibly even the fourth quarter. Now it looks like the down side is going to be even deeper.

NGUYEN: OK, but just how low will they go? Gerri Willis from CNN's "Open House" tells us when we take an in-depth look at the sinking sub-prime lending market.

HOLMES: Plus, we'll explain why someone else's financial nightmare is hitting your wallet. Hear from a specialist about how to protect yourself and even what you can do to benefit. Stick around. We've got a quick break.

(COMMERCIAL BREAK)

NGUYEN: That's an interesting choice of music today. But let's talk about the treasure now, weighing down on overextended homeowners. It's now being felt by Wall Street and possibly even your 401(k). Warning signs surrounding the sub-prime mortgage market could be seen last year, but it really came to a head this Monday when New Century Financial warned of some serious economic problems that put its entire future into question.

New Century is the nation's number two lender to borrowers with bad credit. And on Tuesday the Mortgage Bankers Association recorded late mortgage payments shot up to a 3 1/2-year high in the final quarter last year. The new foreclosures surged to record levels as well and Wall Street reacted this week. On Tuesday the Dow Jones suffered its second worst day of the year, dropping over 240 points. That is on top of the 416-point hit the Dow took just over two weeks ago. So even if you don't have a sub-prime mortgage or you don't even own a home yet, this situation could still affect your finances. To explain how it's all connected, earlier I spoke with "Open House's" Gerri Willis. Good morning.

WILLIS: Good morning, Betty, good to see you.

NGUYEN: Great to see you, too. First thing we want to talk about is why one company's dire warnings about its future is having such a ripple effect on Wall Street.

WILLIS: I know you hear the name New Century Financial and you're like I don't even know that company, how could it be so important? But the reality is that companies all over the country, banks, brokers, Wall Street firms, they're all invested in the mortgage market. They either buy mortgages, sell mortgages, or they package them into investments that are sold to investors all over the globe. It's incredibly interconnected, and I've got to tell you, it affects everybody.

NGUYEN: Well, OK, so if you're a person with good credit, how is this going to affect your financial plans?

WILLIS: Well, this is a great question. Of course, we know about two dozen sub-prime mortgage lenders are in big trouble, which really hurts people who don't have great credit ratings, because they can't get loans. But for people who do have good credit ratings, I've got to tell you, there's not great news for them, either.

NGUYEN: Really?

WILLIS: It looks like lenders are going to tighten lending standards, probably across the board. So even if you have decent credit, if you try to borrow, you may find yourself paying more in interest rates, having to put more down. And it may affect those people just trying to get a home equity loan or line of credit.

NGUYEN: Well, you talk about homes, because that truly is a person's single most important and largest investment. So how is this going to affect the housing market?

WILLIS: Well, I've got to tell you, I've been talking to people all week about this, and the news could be better. You know, we knew that prices were going to trend downwards here this year, probably through the third or possibly even the fourth quarter. Now it looks like the down side is going to be even deeper. Originally, people were saying that prices would go down 2 to 3 percent on average for the country. Now they're saying 5 to 6 percent for prices.

But Betty, I'm got to tell you, if you're a homeowner and you're holding onto your house for a while, you're sitting in it, you're going to stay in place five, six years, ultimately, this may make very little difference to you. It's only people who are in the market right now, people who are trying to sell who are going to have really the worst time of it. And you know, the other side of this is, if you're buying, you're going to be able to leverage the price.

NGUYEN: Yeah, that's true.

WILLIS: So it's an advantage for those folks.

NGUYEN: That is very true, so I guess there is a little bit of a silver ling there. So on that note, can we continue to talk about some good news out of this? Want to talk about what's coming up on "Open House?"

WILLIS: Well, we're going to be talking about the sub-prime mortgage meltdown, more about that and what you need to know if you're in this situation. The protections that might be out there for you and we're going to talk about lowering your taxes. Doesn't everybody like to hear about that?

NGUYEN: Love that, yes. I haven't even filed yet.

WILLIS: Well, you'd better get on it.

NGUYEN: Yeah. Thank you, Gerri, always a pleasure.

WILLIS: A pleasure talking to you, Betty.

NGUYEN: So if you're shopping for a home or you just have to sell yours, what can you do right now to get ready for the market? We're going to talk with an expert. That is next.

HOLMES: And a teen on a mission while most students is on spring break, she's fighting for world peace. That's at 10:00 Eastern.

(COMMERCIAL BREAK)

NGUYEN: The average American family with at least one credit card has racked up more than $9,000 in charges. CNNMONEY.com has a few helpful tips to get you out of debt. You can control your spending by making a budget. This interactive tool can help you calculate where your money is being spent and help identify where you can cut back and pay the balance toward your debt. To avoid late fees, experts suggest you set up automatic payments online. It will help keep your credit score clean and avoid the excessive fees. And if you follow all the advice, how long will it t take you to become debt-free? You can crunch the numbers with this calculator and find out.

And share your stories! Whether it's a disaster or a success story, you can weigh in with how you are dealing with debt. Get the details at CNNMONEY.com/debt. And Veronica De LA Cruz for the Dot.com/desk

(COMMERCIAL BREAK)

MELISSA COHN, THE MANHATTAN MORTGAGE COMPANY: Everyone is at the moment losing their shirt in the sub-prime market, so we are seeing banks holding rates up, I believe in the prime side of the marketplace, in order to help make up for the losses that they're suffering.

HOLMES: Losing their shirts? This half hour, coming up in today's "Open House," we are taking a special look at what some are calling a mortgage meltdown and its impact on you. To explain how to protect yourself and even possibly take advantage of the situation is credit and financial specialist Clyde Anderson, author of "What had Happened Was" the greatest title in the history of books. Good to see you. Just quickly, tell people in one sentence what the sub-prime market is that we're talking about. What is that?

CLYDE ANDERSON, AUTHOR, CREDIT & FINANCIAL SPECIALIST: The sub- prime market is a market that really has been set up to help those that can't get loans in a traditional market what they call the prime market. Maybe they have challenges on their credit, so they need alternative financing.

HOLMES: We've been seeing the clippings all week, it's called crises, a meltdown, and people losing their shirts. Do we need to calm down? Is it that serious right now?

ANDERSON: It's serious, it's a serious thing and it has a trickle-down effect in different markets. So when you're looking at it, there are so many foreclosures on the market, so many houses sitting there, inventory is skyrocketing. So you really have to consider what kind of effect it is having on the economy as a whole.

HOLMES: Now a lot of folks will sit out there and say well, that's not my problem. I've got good credit, I'm fine. I don't have those issues, but it will trickle over to other folks. Is it a mistake for you to sit back and say well, I got good credit so I don't need to worry about this?

ANDERSON: Exactly. You have to look at it a lot of these prime lenders have investments in some of the sub-prime companies. So what's going to happen is they're going to tighten up their restraints, and so they're going to say, OK, we're going to have to raise interest rates, we're going to have to make you pay for what's happening in the sub-prime market, because we have to make money, we have to be profitable.

HOLMES: How can you protect yourself then? If it's out of your hands, pretty much, is there anything you can do? Or you'll have to bite the bullet?

ANDERSON: It is almost like you'll have to bite the bullet, you are going to have to wait it out. Hopefully, the market will turn around soon. I think that's what everybody's looking for, that house prices will at some point continue to go up or begin to go up, because they've been stagnant recently. When that happens, I think we'll see some loosening happening.

HOLMES: Fewer people are able to get the loans; fewer people are going to be buying houses. Fewer people buying houses, it's going to be tough for you to sell your house. All right, what are folks looking at? Right now they've got the house on the market, they are looking to sell it. We've known it's been taking people longer, so this is even worse news?

ANDERSON: Yeah. It's pretty bad news --

HOLMES: Oh, man!

ANDERSON: I didn't come with a rosy picture today. It's not -- I mean, when you look at it, houses are on the market longer. Sellers are really going to have to take some concessions. They have to realize they may not get what they wanted for the house if they have to sell it right now. They're going to have to hold on longer. I've seen houses on the market for a year in the last market. So look at it being prepared knowing that you may have to make concessions if you really do want to sell, and have a plan b. You know; when you're talking with the realtor that is helping you sell your property, have a contingency plan, knowing that this is what we have to do if the house doesn't sell in so many days.

HOLMES: Finally here on the flip side, I guess it seems kind of cold to take advantage of other people's misery, but the fact is that if people are having a hard time selling your home, you may get a good deal out there.

ANDERSON: Yeah. There are a lot of good deals out there. One, its a buyer's market. All this inventory has pushed it into a buyer's market. So if you're a buyer, you can find a bargain if you look. There's a lot of inventory, take your time, pace yourself, find a good deal and have some negotiation skills ready to go in there and get something. I mean, there's a lot out there. Take advantage of it if you're in that position.

HOLMES: We'll end on a positive note, somewhat of a positive note. My goodness, it's that bad, huh?

ANDERSON: It's pretty bad.

HOLMES: Well, we appreciate your honesty. Your blunt, brutal honesty.

ANDERSON: That's what I'm here for. It's a pleasure.

HOLMES: Good to see you.

ANDERSON: You, too.

HOLMES: Of course our in-depth look at the mortgage meltdown continues at -- five minutes, really, top of the hour with "Open House."

NGUYEN: And coming up at 10:00, an Alabama teen who turned her sweet 16 party into a protest party. Ava Lowry's Website has ruffled quite a few feathers. In fact, she gets some graphic images and sets that to war music. And one particular clip even sparked death threats, according to her Website.

HOLMES: And then coming up at 11:00 Eastern, can a potion really help heal AIDs patients? Some in Africa swear by it. We'll look at what's in it and just who came up with it. Stay here.

(COMMERCIAL BREAK)

NGUYEN: Want to get you an update on the breaking news today, dealing with the two suicide bombings near Fallujah, Iraq, which has let out some chlorine gas, causing some 350 people to seek treatment. Hospital sources, though, earlier did say eight people were killed and dozens became ill after chlorine gas was released into the air after those two bombings in Fallujah. Here's a map of the area. The attacks appear to mark a stepped-up campaign by insurgents to use unconventional weapons after those two bombings occurred.

Now the U.S. military said they discovered an Al Qaeda car bomb factory last month near Fallujah that was constructing bombs with chlorine, and do want to let you know that the gas can cause severe burns when breathed in, and obviously, death. We're being told by hospital sources that eight people have been killed, 350 people being treated for chlorine gas exposure. We'll bring you more information on this as soon as we get it.

HOLMES: And something else we're keeping a close eye on here, a late winter storm. Bonnie Schneider has an eye on that for us. Hello, Bonnie.

(WEATHER REPORT)

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