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CNN Saturday Morning News

Midwest Flooding Continues; Wildfire in California; June is the Deadliest Month for Coalition Forces in Afghanistan; Barack Obama and Public Financing

Aired June 21, 2008 - 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: You know, people love the islands, love an island vacation. But this is not what they had in mind.
BETTY NGUYEN, CNN ANCHOR: Absolutely not.

HOLMES: You don't want your home to be that island. Take a look at this video. Just amazing pictures still coming in to us from the flood zone. Also in the flood zone today, our Reynolds Wolf. He is live and we'll hear from his shortly.

NGUYEN: And check out this dramatic video coming in from northern California. Thousands of people have been forced to leave their homes and we are following that.

HOLMES: Also, we have been following for quite some time, "ISSUE #1," the economy, and it's not going so well for a lot of folks right now. But you know somebody out there is making money. Yes, so we got some tips for you on how you can be that person.

Good morning to you all from the CNN Center in Atlanta, Georgia. I'm T.J. Holmes.

NGUYEN: Definitely taking notes today and I'm Betty Nguyen and thanks so much for starting your day with us.

HOLMES: And we will start with that flooding. There is some hope today ahead of a long road of recovery in the Midwest. Forecasters are now projecting lower than expected crests as floodwaters make their way down the Mississippi River.

NGUYEN: But the economic toll, well it is far from being finalized. Iowa's agriculture secretary now says the floods will likely cause more than, listen to this, $3 billion, with a "b," in crop losses in this state alone. And that means higher food prices everywhere else.

CNN meteorologist Reynolds Wolf is in Old Monroe, Missouri, joining us now live. How are the levee breaks upstream impacting where you are right now?

REYNOLDS WOLF, CNN METEOROLOGIST: Yes, that's a fantastic question. You know, everything that happens upstream is going to affect what's been happening downstream. We actually had some levees that broke just north of say Quincy, Illinois, a few days back and that certainly had a bad effect would for certainly those communities, but actually much better effects in places farther to the south.

Now, on this particular area, we had a few levee breaks that happened just right behind me. Notice the water has been working around there and actually flowing up to where the camera stands and things have begun to recede a little bit. But the impact with the levee breaks farther to the north, had those levees not broken the water levels here could have actually been much higher when these were going to break.

Something else that's pretty interesting. Out by the St. Louis arch, which is again some miles downstream of the Mississippi, the water got so high up to the steps of the arch. Now, if these levees did not break, right here in Old Monroe, there's a chance that you could have had the water levels significantly higher in places like St. Louis. So what is bad for one community has been good for another.

Back to you.

NGUYEN: No doubt about that. Not only are people trying to survive this, also wild life, we've seen a lot of video of, you know, deer, pigs, all kinds of wild life, just trying to make it through, Reynolds.

WOLF: Oh, you're absolutely right. We were playing with some frogs earlier. We've seen all kinds of fish. Our photojournalist (INAUDIBLE) went out yesterday and took a look at some of these animals and check out some of the video that we have for you. We saw wild turkeys, saw a deer. There are all kinds of herons. I saw blue heron yesterday.

The wildlife has just been moving in places where it normally doesn't go. And what I mean by that is, for example, near some of these communities, you've had these animals trying to run and move and escape some of the floodwaters. They're going in spots wherever they can to try to seek shelter.

In fact, a couple days ago, I don't know if we have this on video, there's even some pigs on top of roofs in parts of Iowa. We are pig-free this morning in this area but still we've seen all kinds of weird things. Obviously, a catfish swimming to the railroad tracks, frogs everywhere, it's a crazy day.

Let's send it back to you.

NGUYEN: I remember when I was in Cedar Rapids last week, in a neighborhood, you would see fish swimming through what would normally be streets and I saw a few ducks swimming around as well. So, they're just trying, you know, get out of harm's way and make do as best as they can. Obviously, it's sending them to areas that they wouldn't normally be.

All right, Reynolds. Thank you for that.

WOLF: Everyone trying to survive. You bet.

NGUYEN: Absolutely. We'll be joining you live a little bit later in the show. Thanks.

HOLMES: Well, there are scenes like that one with Reynolds all along the Mississippi River. We got some more pictures. Amazing pictures really to show you here of the flooding. This is a common sight in many places. Pretty much those were streets as Betty was just saying. You got fish swimming along through neighborhoods instead of kids walking down the streets and playing. Those are homes you're seeing there.

Our Gary Tuchman shows us not everyone is letting the floodwaters get the best of them.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: With the Mississippi River pouring out of breached levees in Lincoln County, Missouri, some unusual scenarios have developed. Like this one. Three homes and a farm have literally become an island. All roads have been cut off. When we saw people on the island from a distance our curiosity was piqued. Why are they still there?

So, I put on my waders and started walking about a quarter mile to the house. And what I found were a boy, his dad and his grandfather. Three generations that woke up today to all this water. But are convinced their island will not end up like Atlantis.

How come you haven't left just to play it carefully?

HENRY DIEDERICH, WINFIELD, MISSOURI RESIDENT: I like it here.

TUCHMAN: You don't want to leave?

DIEDERICH: I would have to sleep in somebody else's house and I wouldn't care for that at all.

TUCHMAN: County officials have recommended that Henry Diederich evacuate but he has no plans to do so.

TUCHMAN: You're living on an island now.

DIEDERICH: Yes.

TUCHMAN: How does it feel?

DIEDERICH: I always wanted to live on an island.

TUCHMAN: So for now, when the 63-year-old wants to travel on Kideman (ph) road, he does it on a motor boat. He says because his land is on a relatively high point other people have left in their vehicles for safe keeping. His son and grandson actually live elsewhere and are just there visiting. You think it's okay for your dad to stay here?

UNIDENTIFIED MALE: Yes. He isn't going nowhere. Isn't going to hurt him. Hasn't hurt him yet. TUCHMAN: Fifteen years ago during the great Mississippi River floods of 1993, Henry Diederich said his farm was almost completely submerged by water and he didn't leave that time either.

Homes just a short distance away from Henry have now been devoured by the waters and the flood levels are not believed to have peaked yet. Henry has lost almost all of his crops. But he is proudly stubborn.

What would it take for you to get out of here or evacuate?

DIEDERICH: Oh, well, probably the sheriff would have a little influence on me.

TUCHMAN: As of now, Henry Diederich has not heard from the sheriff.

Gary Tuchman, CNN, Winfield, Missouri.

(END VIDEOTAPE)

NGUYEN: Goodness.

Well, firefighters are making headway on a wildfire in northern California this morning. Look at some of this new video coming into CNN of the flames. Several homes have already been destroyed and the Red Cross actually opened an evacuation center where some of the 2,000 residents forced from their houses. That fire is now only about 50 percent contained and firefighters hope to have it all the way under control a little bit later today.

HOLMES: All right. Bonnie Schneider is holding things down here for us in the studio while Reynolds is out covering some of that flooding. So, we got two extremes here. You got it really hot in some spots and other places got too much water that they don't know what to do with it.

BONNIE SCHNEIDER, AMS METEOROLOGIST: That's right. And where that fire is burning and watching the current temperature is 73 degrees. Notice the winds are not that intense but they are coming from the east and in California that's not a good thing when your fighting fires because it means the winds are coming from inland rather than getting a marine flow. That's not going to help fire fighters.

But at least the wind gusts themselves aren't that strong. Heat advisories in effect from noon to 8:00 p.m. today for that region. I'm going to show you some more of the heat advisories.

But first, current temperatures this morning, still early in southern California at 71 degrees, in Los Angeles, 83. It does feel even warmer than that by a little bit because again it's still early. In fact, in some regions between San Diego and Phoenix, we will see up to 118 today. We've had three days with record breaking heat. And it looks like today we're going to see some in some regions between San Diego and Phoenix, we will see up to 118 today. We've had three days of record-breaking heat and it looks like today, more of that is expected especially in the valleys in and around Los Angeles. With high pressure over the Great Basin, the jet stream way to the north, what happens is the winds come up from the south, coming right over the land, straight from Mexico, and that hot, dry wind will really make for temperatures to soar all the way above 100 degrees. And it's a widespread area that we're talking about.

Back to the flooding, our other big story. Many of the rivers have already crested but it's going to take a while for that floodwater to recede. In fact, look at this. As you can see here in and around St. Louis where Reynolds was talking about, the river has crested but the actual receding of water will occur straight through Friday. It's going to take a while for that water to get out.

We've had several levee breaks along the Mississippi River. That's managed to spread the water out on the sides, but the water still flows downstream in the Mississippi and many regions, including Quincy and Hannibal and Clarksville still looking at major flooding because that water is slow to recede. So, not over yet but slowly but surely getting better -- Betty, T.J.

NGUYEN: Well, that's a little bit of silver lining in all the dark clouds we've seen lately with the flooding. Thank you so much, Bonnie.

In India, nearly three million people are stranded, and at least 54 dead, from monsoon flooding.

HOLMES: Rescue workers struggling to get relief supplies to all of them. More than five days of near constant rains have triggered landslides, as well as blocked major highways. Authorities say the floodwaters have however started to recede a bit.

Well, a deadly combat on the rise again in parts of Afghanistan. Five coalition troops were killed today bringing the total for June to 32. 29 of those, I should say, are from combat. That is the highest monthly death toll so far this year.

CNN's senior international correspondent Nic Robertson is in Kabul. Nic, any indication that this fighting is going to subside? Are we just seeing the beginning of it now?

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: T.J., there's no indication about it subsiding. If anything, it could be on the verge of increasing loss. There was massive jail breaks in the jail in Kandahar, complex attack there, suicide bombers, car bombs blowing a hole in the jail which freed 1,100 prisoners. Four of those are described as pretty hard core Taliban.

We've seen an increase in the number of IEDs, rocket attacks, particularly in the south, that IED today that killed four soldiers in the south of the country, two soldiers killed in the south in separate incidents yesterday, one by a suicide bomber who threw himself on the vehicle of a passing patrol. This has been a trend that we've seen growing in the past few weeks. So, if anything, at the moment, the Taliban have more fighters at their disposal than they've had in the past. And a lot of Afghans we've talked to here say what they're interpreting is that the Taliban are getting better skilled at their attacks. They're learning, perhaps, how better to attack the coalition troops here.

Coalition commanders are having some successes. They have rounded up in various parts of the country the last 24 hours a number of Taliban suspects and have had gun battles with them. So, it's not just a one-sided fight, but the Taliban are definitely killing more coalition soldiers than they have been in the past, T.J..

HOLMES: And you speak on that point there, talking about how many soldiers they have been able to kill. What's the comparison? People, I guess there probably is just a natural perception, giving the news coverage, that Iraq is so much more violent and so much more deadly for coalition forces, but Afghanistan has proven that it can be a pretty deadly place for coalition forces as well.

ROBERTSON: It's a very striking comparison, T.J. , for the last few years we've looked at the high death tolls we've seen in Iraq on a monthly basis of U.S. and coalition troops there, as many as 100 a month. It's down now to less than 30 a month. 28 in the last month of May, I believe. 18 so far this month in Iraq. And there are about 140,000 coalition and U.S. troops inside Iraq.

Here in Afghanistan, there are less than 60,000 international troops and so far this month, more than 29 have been killed. That's much higher numerically and much higher per capita than we've seen in Iraq right now. That is a very significant change, T.J.

HOLMES: It absolutely is. And it's good to put those numbers in perspective and to hear what's going on in Afghanistan. Yes, there is still fighting going on, a violent time there. Nic Robertson for us there in Kabul. Nic, we appreciate your reporting this morning.

NGUYEN: There is also a tragedy in Mexico to tell you about today. Twelve people are trampled to death during a police raid on a nightclub in Mexico City. Police say they went to the club to investigate reports of drugs and alcohol being sold to underaged teens celebrating the end of the school year. Well, they say the crowd panicked, triggering a stampede and among the dead two teenagers and three police officers.

HOLMES: We are going to turn to a story about removing painful memories. It's a town that's honoring the victims of a horrible crime by wiping the slate clean. We'll tell you what steps they took this morning.

Also ahead, our Josh Levs on big money politics. What are you finding, Josh?

JOSH LEVS, CNN CORRESPONDENT: Obama's new position on public financing. A fact checking Web site is giving him three Pinocchios. I'll explain coming up right here at CNN SATURDAY MORNING. (COMMERCIAL BREAK)

NGUYEN: It is a somber vigil in Crandon, Wisconsin. Residents there gathered to remember six people gunned down last October. The victims between 14 and 20-years-old.

(BEGIN VIDEO CLIP)

SHARON PISAREK, VICTIM'S AUNT: It's painful. It needs to come down and something there for a place for people to come and sit and reflect and remember those kids.

(END VIDEO CLIP)

HOLMES: What she's talking about taking down there is the house where the shootings happened. It was actually torn down this morning.

NGUYEN: And the memorial to the victims will be built on that very site. It is expected to be completed in time to mark the first anniversary of the killings.

Why don't you take a look at this video coming up because the marks that you see right there, if you look pretty closely but on that arm right there have led to the firing of an Ohio school teacher. John Freshwater, a science teacher, used electrostatic with a device to burn temporary crosses on the arms of several students. It was also criticized for refusing to remove a Bible from his desk and for teaching creationism. His attorney says he will appeal the firing.

HOLMES: Well, as if Vegas can't be exciting and scary enough, several people there got a pretty scary ride that they did not expect when they got on to an elevator on the 30th floor of the Paris Hotel Casino and the cables broke. The elevator quickly dropped 15 floors before the emergency brakes kicked in. No one suffered serious injuries and they were just happy they got down to the casino floor quicker.

NGUYEN: How frightening down.

HOLMES: Come on. It's Vegas. You know they were probably all --

NGUYEN: But it's one thing if you're at an amusement park, you know what's going to happen but you're just stepping into an elevator. It has got to be even more difficult to because you can't see what's going on. You just feel yourself dropping.

HOLMES: It's Vegas. You expect the unexpected. They went back to the craft tables.

NGUYEN: And hopefully won some big money.

Well, Barack Obama is among those scheduled to speak at the Mayors' conference this afternoon in Miami. Mayors from all over the country are gathering to talk about the hardships and challenges that they face. Everything from rampant home foreclosures to climate change. The Democratic presidential candidate speaks at 12:30 Eastern.

HOLMES: Well, this morning, we have been fact checking some of the recent public statements made by the presidential candidates and that is interesting work. As you can imagine. In the last hour, we talked about Senator John McCain.

NGUYEN: OK. So, now let's turn the microscope on Senator Barack Obama. Josh Levs is here with part two of this morning's reality check.

LEVS: Yes, only there are two big doozys from him this past week. We had to take a look at today. Let's do this one. Obama announced this week that he would be giving up public financing, here is what he said.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: It's not an easy decision. Especially because I support a robust system of public financing of elections. But the public financing of presidential elections as it exists today is broke and we've faced opponents who have become masters of this broken system.

(END VIDEO CLIP)

LEVS: You may have heard this is a reversal from what he said previously he would do about financing in the general election. This behind me for example is an answer to a questionnaire from Midwest Democracy Action Network last fall. It's tiny print on your screen. You won't be able to see it.

But the question was if you're nominated for the presidency in 2008 and your opponents agree to forgo private funding, will you participate in presidential public financing system? You will be able to see his answer which is right here. Obama, yes. Now he did go on in this questionnaire to elaborate and he said he would aggressively pursue an agreement with the Republican nominee to try to preserve a public funding. There you go.

Now, let's get to the stuff you can see. This behind me is fact check from "The Washington Post." They have their own fact check site. I want to show you what they're saying today. They're saying it seems pretty clear that there never were serious negotiations between the Obama and McCain campaigns on preserving the public financing system for the general election and that is why, guys, they go with these three Pinocchios that is out of their four Pinocchio scale. So, that's what they're giving him for that today.

Now, let's take a look at what politicofact, which is another fact checking site, is saying about this as well. You have this here. We'll bring that up in the full screen. This campaign has "made the previous statements before they realized that Obama could use the internet to raise gobs of cash. They're saying at least this year, that seems to be the game changer when it comes to public financing that he can make a ton of money." So he had to make decisions about what would be best for him in that respect. Obviously, to get the latest on all this, go to cnnpolitics.com. We got fact checks on a regular basis there.

As you know, last hour we looked at John McCain, his changed position on oil drilling. Now, we're looking at Barack Obama and his position on public financing and you'll be able to read a lot more about both of them right here at cnnpolitics.com.

NGUYEN: So, it's an equal opportunity reality check.

LEVS: There you go.

HOLMES: And three Pinocchios. What do you have to do to get four Pinocchios?

LEVS: They call the four Pinocchios, the whoppers. I think it's if you stand up there and you know, you say, I am a Martian. I mean, you have to go pretty extreme to get all four.

NGUYEN: I don't think we'll see that.

LEVS: I don't think so.

HOLMES: A Martian. Well, he went all the way.

NGUYEN: That's a pretty high bar there, Josh.

LEVS: What else is a whopper? I don't know. I'm not going to venture a guess.

HOLMES: All right. Josh, we appreciate it. We'll see you again soon.

Well, the Dow at its lowest level in three months. Another sign of economic tough times.

NGUYEN: OK, but don't get too down about it because our guest says you can actually make some serious money in a bad economy and we're going to talk with stocks editor from Barons on-line right after this.

(COMMERCIAL BREAK)

NGUYEN: All right. So surprises are rising, the Dow at its lowest level in three months. So, how do you make some money in this bad economy? Actually, it can be done according to Bob O'Brien of Barons on-line. He joins us now from New York.

OK, Bob, let's get right to it. Because the Dow did close down 12,000 for the first time since March, close below 12,000. It looks like it's a really good opportunity for those so-called bottom feeders out there. So where are the bargains?

BOB O'BRIEN, STOCKS EDITOR, BARRON'S ONLINE: Well, Betty, obviously the bargains are to be found in names in the financial services sector, which has been the hardest hit part of this market. However, if I were going to start thinking about buying stocks and financial services, you know, historically when prices at some of these banks fall below book value which many have right now, that's historically been a good opportunity.

But if I were going to do that, I'd be nibbling at these things. I wouldn't be taking them in big bites and I'd also be aware that I would need a longer time horizon and the appetite to be able to withstand volatility. It's certainly going to be a volatile environment for financial services, at least through the next three or four months.

NGUYEN: OK. Specifically though, are we talking about energy stocks? What are some of the areas?

O'BRIEN: Well, what you basically want to do is take a look at the inflation indicators that are out there and buy the things that are on the positive side of inflation. That means raw materials like energy. It means base metals like aluminum or copper, things like coal.

It also means things that are exposed to the agricultural economy if you look at fertilizer makers, other crop nutrient makers, you know, some of the seed makers. These are all things that probably benefit from the economic backdrop. I think we're in a long-term economic cycle and so those are the sectors I would be focusing on as my buys.

NGUYEN: Are these just short-term investments or this good for the long haul?

O'BRIEN: No, they're good for the long haul. The global expansion story is a very long-term story that hasn't really begun to -- has not, by any means, fully played itself out here. So, even though I would look for opportunities perhaps for some of these stocks to pull back because they have had a pretty good run in stock prices and their value appreciation. So it would be good to see stocks retreat a little bit and so you can get a little more opportunistic in the buying. But I would buy these as long-time purchase and hold strategies.

NGUYEN: So, for those folks who really just want some short-term profits, some ability to make up for those losses, where should you go there?

O'BRIEN: Well, I'd think about shorting financials. I would take a bet that financial stocks are going to take another hit over the course of the next several weeks so if you're looking short term, I don't think taking long opportunities in this market, betting stocks are going to rise across the board. I would not, for example, buy the whole index. I wouldn't buy the S&P 500 with anything more than a day or two time horizon. But some of the short opportunities in financial services and technology, may continue to pay off for you.

NGUYEN: And as far as those stocks you really should try to stay away from in the down economy, what are those? O'BRIEN: Well, obviously things like airlines and automakers have an enormous exposure to rising crude prices. They're not hedged against them. They're completely a victim of what's going on there. I'd also stay away from things like for example, chemical companies, consumer product names that aren't -- that are going to face the prospect.

I mean, as we look at the flooding taking place in the Midwest. Let's think about what that's going to do to the price of corn flakes six months out. So, those are some of the names if they're going to end up having to be the ultimate consumers of some of those inflationary pressures on commodities, without the ability to pass those inflationary pressures on to their customers because we've seen consumers showing a real reluctance to pay up for products at the retail level.

You know, you go to the supermarket, nobody wants to pay $6 for a box of corn flakes these days. I would stay away from those names that have to buy those products.

NGUYEN: OK. Well, you have some really good advice for us. Hopefully it will make some money for those investors out there looking for a place to put some of that cash on the sidelines and actually make it grow in this economy. Bob, thank you as always.

O'BRIEN: Thanks, Betty. Good to be with you.

HOLMES: You know, women, maybe men don't give you credit enough sometimes which you'll have to go through.

NGUYEN: Sometimes.

HOLMES: Well, just on this particular issue.

NGUYEN: OK. All right.

HOLMES: With child birth. You have to give birth to the child.

NGUYEN: Not that I have any, but still.

HOLMES: But still. Well, there is one particular mother who we should be really giving a lot of credit too.

NGUYEN: And applause.

HOLMES: We should probably stand up and applaud this woman. She has given birth to newborn twins. Well, the thing here is that these twins might actually break a weight record. We'll explain.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We even asked whether it might be the Guinness Book of World Records for the largest babies.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HOLMES: All right, let's applaud this new mother. Of course, that's not ...

NGUYEN: Yay.

HOLMES: ...the new mother, but -- there's the new mother with the new twins, newborn twins in North Carolina, tipping the scales at 23 pounds, one ounce -- together now, not ...

NGUYEN: Wow, yes. Let's clarify.

HOLMES: They were born two minutes apart at a hospital in Winston-Salem this week. They are believed to be the second heaviest set born in the U.S. ever.

NGUYEN: Oh.

HOLMES: Something nice (ph).

NGUYEN: Congratulations to that mother.

HOLMES: Congratulations.

NGUYEN: She needs to go on vacation after that.

HOLMES: Yes, she does.

NGUYEN: Well, the fur, it is flying over a feline exhibition. The creators say another show stole their techniques. Cat fight coming up.

HOLMES: But first, "OPEN HOUSE" with Gerri Willis starts right now.