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CNN Saturday Morning News

Israel and Gaza Still Ignoring Calls For a Ceasefire; Obama's Economic Recovery Package Coming Up Against Some Hurdles; Winter Storm Warnings From Ohio Valley to Southern New England

Aired January 10, 2009 - 09:00   ET


T.J. HOLMES, CNN ANCHOR: From the CNN Center in Atlanta, Georgia, good morning to you all. I'm T.J. Holmes. And this is CNN SATURDAY MORNING.
BETTY NGUYEN, CNN ANCHOR: Yes. Good morning, everybody. I'm Betty Nguyen. Thanks so much for starting your day with us.

All right. Issue number one, the economy. Well, the President- elect economic recovery package is coming up again some hurdles.

HOLMES: Also, we'll have the latest on the investigation into serious threats against almost a dozen gay bars. This happening in one popular city.

NGUYEN: And this. Winter storm warnings in effect at this hour from the Ohio Valley through some of the southern New England areas.

HOLMES: We will start here with the tough economic times here in this country, and they appear to be getting tougher. No signs of things letting up. We got horrible job numbers, yesterday as well. The number of jobs lost in 2008, now the worse we've seen since 1945. 2.6 million people out of work. Unemployment rate at 7.2 percent. That's the highest we've seen since January of 1993.

NGUYEN: Well, the United Auto Workers, they are facing some tough choices. The union meets with Detroit's big three automakers starting Monday to talk about contract concessions. The Treasury Department says the union isn't barred from calling a strike during those talks.

HOLMES: Also some people at least pointing to gas prices saying, hey, at least there's some good news. Well, not so fast. We've seen this trend before. Get ready. Because yesterday AAA reported the national average for a gallon has gone up two cents from Thursday. But that's up another penny today. Now, it doesn't sound so bad a penny at a time.

However, this is the 11th consecutive day of increases. So if it continues like that, we could see prices shoot back up to those numbers we do not want to see.

CNN's Mary Snow now is going to talk more about which big companies out there are laying people off and also at least one industry where workers are being added.


MARY SNOW, CNN CORRESPONDENT (voice-over): The latest casualties to the weakening economy show just how widespread the losses are. Aircraft maker Boeing is slashing 4,500 jobs.

World Wrestling Entertainment is no match for the recession cutting 10 percent of its work force. The layoffs come on the heels of the worst yearly unemployment level since 1945. In 2008, nearly 2.6 million jobs were shed. That's roughly the population of Nevada. More than half a million more cut in December.

MICHELLE GIRARD, RBS GREENWICH CAPITAL: In the first sign of weakness, firms are quit to shed workers and I think in this case, a lot of it is coming in anticipation of, perhaps, further weakening in 2009.

SNOW: The unemployment rate now stands at 7.2 percent. And that's not including the millions of people who have given up looking for work and millions more who have been forced to cut back their hours or work part time.

BARACK OBAMA (D), PRESIDENT-ELECT: Clearly, the situation is dire.

SNOW: President-elect Obama warned the unemployment rate could reach double digits. Economist Michelle Girard doesn't think it will get that high but says it could reach 8.5 percent.

GIRARD: I think we're going to continue to see the declines in the manufacturing sector, the auto sector is going to remain under pressure and I think we're going to continue to see mounting job losses there.

SNOW: And it may come as no surprise that Michigan, the home of the auto industry, has the highest unemployment rate in the country, followed by Rhode Island, California, South Carolina, Oregon, Nevada and Washington, D.C., on the reverse side, Wyoming has the lowest unemployment rate followed by north and south Dakota, Nebraska and Utah.

Bucking the trend of massive layoff, health care. Recruitment firm Challenger Gray and Christmas reports 372,000 new jobs last year.

JOHN CHALLENGER, CHALLENGER GRAY & CHRISTMAS CEO: Those are jobs in medical practices, doctors' offices, hospitals, even pharmaceutical companies and medical equipment companies. That's the area of the economy that's really been the bulwark through this economic storm.

SNOW: And the sector hurt the most, according to Challenger, was the financial industry, which shed 260,000 jobs in 2008.

(on-camera): The concern now is that the next wave of layoffs could come from retailers following dismal sales during the holiday season. Compounding their problems as the unemployment rate rises, consumers keep tightening their spending.

Mary Snow, CNN, New York.


NGUYEN: Barack Obama wants quick action by Congress on a huge economic stimulus plan. In his weekly radio address this morning also carried on the Internet, he said he had a team of economic advisers to review his plan and then report back.


OBAMA: The report confirms that our plan will likely save or create three to four million jobs. 90 percent of these jobs will be created in the private sector. The remaining 10 percent, are mainly public sector jobs we save. Like the teachers, police officers, firefighters and others who provide vital services in our communities.


NGUYEN: The president-elect also says most Americans will get a $1,000 tax cut.

HOLMES: All right. Turning to the Middle East now. New developments to tell you about this morning. Had a so-called lull that we were seeing for the past several hours, it's about to expire this hour. Scheduled to, at least. Israel said they'd stand down at least three hours to allow Palestinian civilians to gather supplies. We did see however several explosions during that three-hour period.

Israel has been pounding Hamas targets in Gaza for the past couple of weeks now. They launched new air strikes overnight and have moved more tanks into positions at the border. Hamas in turn fired more rockets into southern Israel this morning. Well, both sides obviously ignoring calls for a ceasefire.

Our Ben Wedeman joins us now from the Israeli side of the border with Gaza. Ben, hello to you. We were talking about this three-hour lull, and a much-needed time period for people to really just get out, get supplies. And to get you know, daily everyday things done. What is the explanation for the explosions? The smoke we are seeing in the past several hours?

BEN WEDEMAN, CNN SENIOR CORRESPONDENT: Well, T.J., just to tell you that this lull, this three-hour lull, is over, as of five minutes ago. And we've already heard some heavy machine gun fire. One distant explosion, and there are Israeli helicopters in the air above me. Now, the Israeli army made it clear when it instituted this three-hour lull system that they would respond in the event that they are fired upon.

We don't know specifically those puffs of smoke, those explosions you saw in Gaza City itself, but since this, these lulls were first instituted, it's clear that it's not exactly a rock, solid lull. That there continues to be military activity during that three-hour period, which, as I said, just ended a few minutes ago. And this morning we're hearing from Palestinian medical sources that in the town of Gabalia which is in this northern area behind me, an Israeli shell hit a house in which nine Palestinians were killed, all from one family. We're also hearing from the Southern end of the Gaza strip that the Israeli air force has dropped leaflets in that area warning people that they would intensify their military activities.

Specifically, they're going after the tunnels in that area, in addition they said to rocket launching sites. So we have had this three-hour period in which there was a marked reduction of military activity, but T.J., those three hours are over.

HOLMES: Yes. Three hours are over. Ben Wedeman again on the Israeli-Gaza border. Ben, we appreciate you this morning -- Betty.

NGUYEN: Is a new tank on air mail? I want to show you these pictures from a U.S. Navy helicopter. What they show, let me get them up for you is a small plane, not a U.S. Navy, but this plane dropping a ransom package, payment, whatever you want to call it, on to an oil tanker. There's a wider shot of that, you see it.

Well, that tanker owned by a Saudi firm was taken over by Somali pirates nearly two months ago. Now the tanker and its crew had been set free. It's still not known, though, how much the ransom was.

HOLMES: All right. That is not how the neighborhood is supposed to look. This is in the northern U.S.. It's an avalanche to tell you about in Snoqualmie Pass, Washington. It was too strong for that house you see there on your right. It ripped from its foundation, moved a bit. So it's putting another house in danger that's close to it.

Other picture from (INAUDIBLE) Washington, where heavy snow slowed traffic down a bit. Parts of that state got eight inches of snow.

NGUYEN: Look at this. Snow plows on the move right now in Cleveland. Show you that video right now. Ohio is just getting smacked by a winter storm today.

HOLMES: All right. Reynolds Wolf keeping an eye on things. Reynolds, we were talking a little earlier and, yes, this winter so far is a little more severe than the one we saw last year.

Well, Reynolds can't hear me. So we will continue with the weather here.

NGUYEN: Reynolds got snowed in right now.

HOLMES: Here in Atlanta, apparently the snow is so much that Reynolds can't even get out from under it. But we will get Reynolds up and going shortly. I see Reynolds now, he's working the phones. He got his ISB (ph). Reynolds has got a lot going on there over there folks and for good reason. Because we got mess all around the country. We see him stepping in front of the screen there. Reynolds, you got me.

REYNOLDS WOLF, CNN METEOROLOGIST:: Absolutely, man. I was just actually talking with some viewers in parts of Ohio. They've been dealing with all kinds of things this morning. Mainly a little bit of snowfall. Before the day is out, some parts of central Ohio could easily see up to five, ten, maybe even up to a foot of snowfall in some locations including Cleveland.

Right now, let's zoom in on a couple of key locations. We're seeing in a few spots mainly from Chicago back to Fort Wayne, even south of Toledo, you're going to see a big range, anywhere from three to six inches of snowfall. But in places like Toledo, that's where it could get especially deep in a few spots. We're going to be talking about that coming up in a few moments.

I believe we have a tower cam that is going to pop up and this is going to show you, again Toledo, visibility not that good. I would not expect it to improve any time in the near future. We're going to have more on all of this coming up in a few moments. Showing you more video, more images around parts of the country.

You know, parts of the northeast this morning, if you happen to be in New York, earlier and you're taking a shot at, take look at this -- the Statue of Liberty and things look pretty good there. A little bit of sunshine but later on this afternoon, we could see anywhere from three to seven inches of snowfall. But I will tell you in the higher elevation, especially in Berkshires and Massachusetts, yes, you could see up to a foot of snowfall in those locations and that's certainly something to watch out for.

Something else to watch out, the thermometer. Right now, temperatures again chilly in Minneapolis, headed for a high temperature of 17 degrees. 38, your high in Salt Lake City. Seattle and Portland still drying out. We got temperatures there mainly into the 40s. But take a look at what we can anticipate as we get into the end of the weekend, and into next week. We got a big area of cold air up in parts of Alaska and into the Canadian Rockies.

That's going to actually pull its way down into parts of the Midwest. We're going to see a big change in the jet stream, big trough, that's going to allow all that cold air to funnel it's way in to portions of the Midwest, in places like Chicago, back into, say, Illinois even into the areas like the twin cities.

You're going to see those temperatures really begin to pummel. In fact, take a look at what you can expect in the next five days as we look at the twin cities. As we roll out the days for you from today into Sunday, Monday and Tuesday, best chance of snowfall is going to be as we round out the weekend and going into Monday and Tuesday, but take a look at those temperatures.

Single digit temperatures expected into Tuesday into Wednesday and the nighttime lows dropping to 14 degrees below zero on to Wednesday. But then you bring in the wind, from the north 13 miles an hour. It's going to feel like it's 20 below in many locations. Expect that to stay into perhaps Thursday and then Friday. Maybe rebounding a little bit into next week with positive temperatures going back up into the 20s and 30s.

So big cool down and expecting of course the snowy conditions in parts of the northeast. Let's send it back to you guys. Mind numbing, isn't?

NGUYEN: It is. With all of that out there, people are digging out. And then you got the avalanche problems. Whew. What a January it's been already.

WOLF: Yes, rough times.

NGUYEN: Thank you.

HOLMES: All right. Thanks, Reynolds.

NGUYEN: So you're looking for some help finding work. A lot of folks should be ...

HOLMES: A lot of folks are right now.

NGUYEN: Definitely in need.

HOLMES: And the numbers we heard, 2.5 million jobs lost last year, over 500,000 in the month of December alone. Well, a lot of people looking for help and suggestions about it. Well, Clark Howard, you know that name from the radio, maybe. Consumer adviser. Well, we're putting him on TV, here at CNN. He's got a new show on "HLN," but he's still continuing to give you advice on how to survive in this tough economic times. Stay with us.


NGUYEN: You know, more and more people are out of work, and it is not over. Listen to this. Aircraft maker Boeing says it will cut 4,500 jobs this year. The job cuts take Boeing back to its employee numbers one year ago which is just about 63,500.

Halliburton also says it will cut jobs but it's not saying how many. A company spokesperson says several positions will be eliminated, adding that 2009 will be a challenging year. And employers cut 524,000 jobs in December. The nation's unemployment rate now 7.2 percent.

HOLMES: Now, with all that tough economic news, a lot people looking for a lot of help. Clark Howard is one. He is a consumer advocate who is out there pushing for consumers giving you advice. Talked to him yesterday. He has a lot to tell you by creating a safety net for yourself, but also, listen to what he has to say about credit cards. What you should do with them? Maybe some advice you're not used to hearing.


HOLMES: Is a lot of your advice directed to those folks who still have a job, or are you out there trying to help those folks who are out of a job as well? CLARK HOWARD, HLN MONEY EXPERT: Well, I've been getting calls from every circumstance there is, and I'm hearing from a lot more people who have gone through lengthy periods of unemployment already. You know, we forget the recession actually started in 2007. So there are people who have been unemployed now for a lengthy time who have exhausted a lot of financial possibilities.

And I'm getting calls from people at all stages of either unemployment, facing a layoff or already in layoff. And the key thing is triage. You know, if you think about a hospital emergency room, and you have a lot of people come in from an accident or whatever, the first thing that happens is the triage nurse assesses who should be treated first, who should not be treated, and in between.

We need to do that with our own wallet. We need to triage what we're going to do about our future. And if I'm laid off, what do I pay, what do I not pay? And how do I husband(ph) cash? And so it's varies some from person to person, but if you need, first and in most metro areas, you've got to have a car. You know, if you don't have a car you're not going to be able to get to the job that you're going to take the interview for, or if you get the job, how are you going to get there?

So you need to take your unemployment compensation, your savings, whatever, keep your car payment current. Second, you have to have a roof over your head. But if times have been really tough, that may mean moving in with a friend or a relative. You know, it may not necessarily mean keeping the roof over your head that you have right now.

Food. Obviously you have to pay for that. The things that people have been falling behind on, credit cards. And actually that's a smart thing. If you don't have enough cash coming in, you just got to let the credit card company sit and wait until you're back on your feet. Tell them. I mean you just tell them. I'm broke.

And the other thing that people have been letting fall by the wayside, health insurance. And you know, that is actually a game of roulette. Because health insurance is there for when you get sick. But if you have bills you have to pay and you've got food you have to put in your mouth tomorrow, that's not a prospect. That's a reality. So letting your health coverage go is distressing as that can be, is really for most people a smart, logical decision, once they start running out of cash.

HOLMES: Let's go to this credit card thing for a while. We hear so much talk about that and you wonder what to do. We hear some people say pay those down as soon as you can. If you happened to just pay the minimum, do that. If you want to keep your credit score. I mean you don't want to be a late payment. What should people do? I mean, I don't think I've ever heard anyone put it as frankly and as bluntly as you have. You know what, if you can't pay that bill what are you going to do about it?

HOWARD: Exactly. Because you know, you have your greatest strength when you have a lot of money or when you have none. I mean, if you don't have a job, then you can't squeeze blood from a turnip, but if you are employed, you don't want to owe credit card companies even one cent. You know, unfortunately, 70 percent of Americans who have credit cards use them in the wrong way. They charge things to them. They can't pay when the bill comes in the next month.

The real mission you should have with credit cards is, if you have credit card bills that show a balance every month that you can't pay off, your goal should be over the next 30 months to take your credit card bills, figure out what you're going to need to pay per month and take those balances down to zero. Nobody ever got rich paying Visa or MasterCard 10 percent, 15 percent, 20 percent interest.


HOLMES: You're at 24, you said, Betty?

NGUYEN: No. I'm not at 24 percent. I've heard of people at that. in fact, if that is your rate, you should definitely call your credit card.

HOLMES: Give them a call and ask for it. And you know, I think people are intimidated and don't want to call, but oftentimes you call and you ask, and you get it.

NGUYEN: Usually if you don't ask, of course, you're not going to get it. But if you ask, they will usually drop it, is what I've heard.

HOLMES: So Clark Howard there. He has a lot more advice. You can catch his show on "HLN" today and tomorrow. It will be your way at noon Eastern.

NGUYEN: That is good information there.

In the meantime, listen to this. Speaking of the economy. Have you heard? There's a new promotion out at Hyundai. And those dealerships, especially one of them, says we're going to help take some steam off the recently unemployed customers. So here's the deal. They will allow people who have been handed pink slips to simply hand in the keys if they just bought a car.


JIM YATES, ALLEN SAMUELS DODGE/HYUNDAI: You know, people are just hesitating, and I think this is maybe something that might give them a little encouragement to go ahead and make that purchase.


NGUYEN: All right. So here's how it works. You buy a car. You get laid off. You can return the car. But the program is good for the first year after purchase, and, you remember, the dealer does need to resell the car after refunding you. And they also say if it's got excess mileage on it, you're going to have to pay for it. Or if there's damage on it, you're going to have to pay for it, but what a deal. You know, you need a car, just like Clark Howard said. You make sure you got a car to get to and from work. But say you lose your job and you can't make that payment? Well, this dealership, this Hyundai dealership says, you know what, you can turn in your car.

HOLMES: Well, hopefully that will work for somebody.

NGUYEN: They're hoping it will entice people to go ahead and buy a car.

HOLMES: Buy a Hyundai.

NGUYEN: And not be afraid in this economy.

HOLMES: So that's one way to go.

NGUYEN: You know, we all know tax time can be confusing and frustrating.

HOLMES: Yes. Any day for you now, you got to hit the planning but what about folks out there who lost their job during the year? Well we got some tips on how to help sort out all those taxes. What you should do now. Stay with us.


NGUYEN: Hey, we're going to talk about kicking the habit. Finding a way to get out of that debt spiral in the new year. CNN personal finance editor Gerri Willis has some tips.


GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, Betty. 2008 was a tough year for so many folks, from 401(k) losses, layoffs, foreclosures. But 2009 doesn't have to be the same way. There are a few things you can do to kick your debt habits.

First off, review your spending habits. Credit card debt. It's expensive, and only paying the minimum each month can dig you deeper into debt. Instead make fix payments each month to wipe out credit debt as quickly as possible and to save on interest. And when possible, pay in cash.

Shoppers spend 12 percent to 18 percent less if they're not charging their purchases. And when it comes to a credit card, don't be afraid to call the company to negotiate a lower interest rate. Look, you have a good shot at getting it lowered if you've made your payments on time for six to 12 months, your APR is over 12 percent. Your rate has been raised in the past and your balances are consistently lower than 30 percent of your limit. Look, people who call to negotiate succeed more than half the time.

Coming up on "OPEN HOUSE," how to shore up your finances in 2009. A look at where the housing market is headed and the best college values. How to get the most bang for your buck. That's "OPEN HOUSE," 9:30 a.m. Eastern -- Betty. (END VIDEOTAPE)

NGUYEN: Very good information. We were just talking about calling your credit card company and asking to lower the rate.

HOLMES: Yes and we were also talking about taxes. We're three months away from that deadline. Sorry to have mention to mention it so early. You might want to be on it. Right now, even a little help might go a long way.

NGUYEN: Yes. You probably have questions. Well, we do have some answers for you. And if you're wondering, do I still have to pay taxes if I was out of work in 2008? The answer -- probably yes. Anyone who made at least $8,950 has to file a return.

Now, do you have to pay taxes on unemployment checks? The answer is, yes to that. Unemployment compensation is taxable on federal and most state tax returns.

HOLMES: Also, let's say you took money from your 401(k) last year. A lot of people don't recommend doing that but people during hard times people have been doing that. So do you have to pay taxes on that money you took out? Sorry. Yes, you do. That's taxable income. For more on tax tips you can go to We have plenty of experts answering your tax questions.

NGUYEN: Well, a nationwide Salmonella outbreak is something we're going to be talking about.

HOLMES: Yes, one state says they know the culprit but still maybe too early to tell for sure.


HOLMES: Well, 9:30 here. We're coming up on some of the stories we're working on here at CNN. So many people injured by gunfire from a Chicago high school late last night. One of the victims in critical condition. This morning, Chicago's police superintendent says it appears to be gang related. As many as 200 officers now involved in this investigation.

NGUYEN: And the FBI has joined Seattle police investigating letters sent to several gay bars around town. The anonymous letters threatened the release of a deadly poison ricin in the bars on Saturday.

HOLMES: Also, one person has reportedly died after Salmonella outbreak. The CDC says about 400 people have been sickened in 42 states over the past few months. Minnesota health officials say one person had die from Salmonella. They are blaming a brand of peanut butter, but the CDC hasn't traced the outbreak to a single source.

NGUYEN: Well "OPEN HOUSE" with Gerri Willis starts right now.