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CNN Saturday Morning News

Countdown to U.S. Default; Tropical Storm Don Turns Into Tropical Storm Dud; Some Products; Actually Coming Down in Cost; Introducing the New Fiat

Aired July 30, 2011 - 07:00   ET

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

T.J. HOLMES, CNN ANCHOR: All right. Top of the hour on this CNN SATURDAY MORNING. Hello to you all.

And time is almost up. We are now just under three days away from a possible U.S. default.

Democrats and Republicans were scrambling last night on Capitol Hill, where they will be scrambling again today in Washington because nothing was OK'd last night. So, here we go again.

I'm T.J. Holmes.

We've been telling you about this clock that continues to tick and tick on Congress. And they have just been unable to this point to solve this debt ceiling crisis.

So, here is the rundown of what's happening on Capitol Hill today. The House gets started first. They get to work at noon. And after some debate, expected to vote on a proposal from Senate Majority Leader Harry Reid. But it is expected to fail.

But then on the Senate side, they open debate on the same Reid bill around 1:00 this afternoon. Now, they could be debating that bill for as long as 12 hours. And it might not being until we are asleep that the Senate gets to vote one way or another on the Reid bill.

The Senate has decided not to move on the bill from House Speaker John Boehner that passed yesterday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The ayes are 218, the nays are 210. The bill has passed. Without objection, a motion to reconsider is laid upon the table.

(END VIDEO CLIP)

HOLMES: Yes. So, to the average American out there, you hear that a bill actually passed and it sounded like a good thing. But they were told, you pass it if you want to, over here in Senate, it's going to DOA. And, in fact, it was. The House Speaker was able to wrestle up enough Republican votes to get it passed. All of the Democrats and some Republicans did vote against it. And they voted against and even after this impassioned and fiery plea from the House speaker.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: I stuck my neck out a mile to try to get an agreement with the president of the United States. I stuck my neck out a mile. I put revenues on the table in order to try to come to an agreement to avert us being where we are.

(END VIDEO CLIP)

HOLMES: That Boehner bill never got traction in the Senate as I mentioned. They are focusing on Harry Reid's proposal there. Now, Reid has floated a change to his original idea to include some elements from Republican plans, but Republican leaders could block a vote anyway.

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER (D), NEW YORK: The country is in crisis. This is not a time for politics as usual. I think we have shown that we are willing to give significantly in their direction. We are still waiting for Speaker McConnell and Leader Boehner -- sorry. We are still waiting for Leader McConnell and Speaker Boehner to move even a little bit in our direction.

(END VIDEO CLIP)

HOLMES: All right. Sources telling CNN that Senate Minority Leader McConnell wants the White House involved in any discussion on the debt ceiling. But as of right now, there are no plans for any face-to-face negotiations to break this stalemate.

Let us now say good morning to CNN's Athena Jones. She is at the White House for us.

Athena, good morning to you.

Is the president going to be in the middle of all this day, making phone calls, maybe trying to have some meetings? Or he just let them do their thing up on Capitol Hill?

ATHENA JONES, CNN CORRESPONDENT: Good morning, T.J.

Well, you know, the action is taking place on the Hill. Everyone at the White House is going to be paying close attention there. But they're not sitting on their hands. There are no public meetings on the president's schedule here, or on the vice president's schedule for that matter.

But we know that these talks are taking place b. One official told CNN that the president and vice president have been talking to members on Hill for the past several days. And so, we expect those conversations to continue not just on the higher level but also the staff level here at the White House and here with staff on the Hill and members of the Congress.

HOLMES: OK, Athena, we keep hearing -- here we are less than three days away. We didn't think we would get to this point. But you keep hearing members of Congress and the president saying we are confident we'll get something done, confident we'll get something done.

We'll I'm starting to lose confidence.

But is there a contingency plan in place in case we get to Tuesday and there's no deal?

Well, you know, T.J., it's really the Treasury Department that's going to be coming up with prioritizing who's going to get paid? What bills are going to get paid, whether Social Security checks will go out, or checks will go out to military families.

But the White House maintains that they're going to reach a deal. But common sense will prevail. I had one official tell me that there are different paths to a solution, different paths to a compromise and that they believe that one of those paths will be taken. But it's just unclear right now which one.

And so, they are not willing to give the idea that it's not going to happen, that it's not going to work. And that they're not going to reach a deal by August 2nd because the stakes are just too high.

HOLMES: And, Athena, did I hear you say common sense will prevail?

(LAUGHTER)

JONES: Yes, that's what I said. We'll see.

HOLMES: Yes. We will put up a breaking news banner if common sense prevails in Washington D.C., Athena.

All right. And it's good to have Athena with us this weekend, one of the new members here at CNN. I believe making your CNN SATURDAY MORNING debut. I'm sure it's a moment you'll never forget in your career.

(LAUGHTER)

HOLMES: But good to have you and welcome aboard. All right?

JONES: That's right. Thanks, a lot.

HOLMES: All right. We're at six minutes past the hour now.

Just what is it going to take to find a solution to the debt crisis? Well, Wolf Blitzer and Don Lemon looking into this and breaking it down. All the hurdles, all the options. It's called "Get It Done: Countdown to Debt Crisis," Sunday night, 9:00 Eastern, right here on CNN.

And in the midst of all this, the president has just lost 30,000 followers. Twitter followers, that is. The president sent out pleas for his followers to tweet their members of Congress about the debt ceiling debate. But, apparently, not everybody liked those messages he was sending out.

And according to the Web site Twitter Counter, 30,000 people jumped ship from the president's reelection campaign Twitter feed after he sent out those tweets.

And this has been the fear, that all of this uncertainty in the debt ceiling crisis would affect the markets. Well, it appears that it could be having an effect. The stocks yesterday ended their worst weekly showing in more than a year.

According to Wilshire, an estimated $700 billion worth of market value just vanished into thin air. The Dow fell 4.2 percent for the week. The NASDAQ was down nearly 3.4 percent.

Also, the government wants to solve its debt issues, start selling iPads. Take a look at this. If federal government needs some help here. What they need to do is to call up Steve Jobs and sees how he does it, because right now, Apple has more money than the federal government, $76 billion. That's how much Apple reported in earnings. The federal government only has about $74 billion on hand. Take it for what it is worth.

Seven minutes past the hour now.

Don was a dud for Texas. They were wanting a break from the state's drought. And they didn't get it.

And, Reynolds, we usually never see this. Everybody is hoping for a downgrade before a storm actually makes landfall. Not in this case.

REYNOLDS WOLF, AMS METEOROLOGIST: No, just the opposite. Everybody was really hoping for some heavy rainfall. We are in a point in Texas now where things are so desperate, especially among the agriculture community. We've got crops out there that are suffering. You've got a lot of animals and livestock that really need the rainfall.

It certainly was not the case. This was expected to possibly be a big rainmaker, maybe one to three inches of rainfall in some spots, if we're lucky. But like you said, T.J., a bit of a dud.

However, we have another possible bit of development across parts of the Atlantic. We're going to talk about that coming up in just a moment. Plus, the heat wave that never seems to end. We're going to talk about that also. It's straight ahead.

You are watching CNN SATURDAY MORNING.

(COMMERCIAL BREAK) HOLMES: Twelve minutes past the hour on this CNN SATURDAY MORNING.

And, Reynolds, they were -- they were hoping and praying for rain and a tropical storm and they got one. And it was a dud.

WOLF: It's incomprehensible to see a tropical system like this develop across the Gulf of Mexico. Everything looks so promising and then it is like deflating a balloon. It really is.

HOLMES: OK. And it seems odd to say that things look promising because a storm was coming. Usually, we're trying to get out of the way of the storm. We want it to weaken. But they needed this.

WOLF: Very true. Perspective is needed on something like this. They've had just a deficit rainfall and it's just been brutal in terms of the drought. They've got to have a rainfall and it just didn't happen for them.

In fact, while you're here. I want you to check this out. All right. We're going to go back a few frames.

And here's how it was. It looked great and it completely disappeared.

HOLMES: So, it looked like a monster for a second.

WOLF: I wouldn't say a monster, but definitely a rainmaker. They really, really need it. So, at this point, say, yesterday at this time, people in San Antonio and Houston and Del Rio and Corpus Christi and Brownsville were saying please make it here.

And what happened? It ran into an area of dry air. It was a vacuum in the atmosphere. It's gone.

So, hopefully, we'll see some rain develop may be farther back in the mountains and Big Bend area. But in terms of being what they really needed, a drought buster, not any clouds for them.

But what I'm talking about a drought buster. You first and foremost have to have drought in place. That was the situation you need here. Not just dry, not just moderate, not just severe, extreme or even e exceptional in parts of Texas with the dark reds and the bright reds you see. Everywhere from top to bottom, across the state, it's been absolutely brutal. Unfortunately, no relief.

However, there is a chance we may be seeing some additional development farther back in the Atlantic. We have an area where we weather geeks often refer to as the intertropical convergence zone. And the reason why is because you have converging air that rises in here in this area and that's where the water is very warm. We see development, there's a chance here, about 70 percent chance this may become a named storm. This system could become Emily. So, we'll watch that for you very careful.

All right. We got so much more weather-wise. We're going to chat about that coming up in the next weather updates. But that's going to be coming up in a bit. Just a little bit of a tease.

T.J., let's pitch it right back to you.

HOLMES: Reynolds, we will see you here actually in just a few minutes.

WOLF: Indeed.

HOLMES: We just got a nice little segment coming up. We'll see if you will be able to get into a car of a particular size. You want to stick around for this. That's coming up here in a few minutes.

But, right now, despite this bad economy, the prices for many products are reaching all-time highs. It's nice to get a break. There are items that are actually getting cheaper, including if you are in a market for a car. Volkswagen has lowered their prices and also the price of solar panels.

Maybe you're not in the market. You might think that's not something you're interested in. But, still, if you are, now is a good time. The prices of those dropped 15 percent.

Also Netflix has dropped the price of their one-DVD at a time service by $2. That's just a few. There are plenty more.

Our Clyde Anderson, our financial analyst. He's been doing some digging for us. He has at least seven other things that are getting cheaper. He joins me right after the break.

Stay with us.

(COMMERCIAL BREAK)

HOLMES: All right. Seventeen minutes past the hour. You know things are not cheap right now.

Gas prices are up. Food prices are up. Even the price of cup of coffee you're going to drink this morning going up as well. A lot of things are up or are about to go up, but there are some things you can buy right now that are actually getting cheaper. Clyde Anderson, do tell.

All right. First of all, why are some things getting cheaper? Is it just the particular market? What are they doing here?

CLYDE ANDERSON, FINANCIAL ANALYST: I think it's the combination. It's the particular market. It's a supply and demand issue as well. You know, when you look at some of the things that are in demand and some things aren't in demand right now.

And so, one of the things we talked about, Ikea is actually reducing some of their prices.

HOLMES: They're already cheap? I shouldn't say cheap. I'm sorry.

ANDERSON: Affordable.

HOLMES: Affordable.

ANDERSON: And that's their trend right now. That's what they do and that's the market that they are tapping into because people are staying in their homes longer. So, they want to remodel.

HOLMES: They want nice stuff in the home.

ANDERSON: They want nice stuff.

HOLMES: All right now. This is one, kind of no brainer here, but real estate.

ANDERSON: Real estate. Definitely, we watched it come down in several markets. You know, we always say real estate is local. So, it really depends on your market. But also, you can save $50,000 as compared to maybe a couple of years ago on some properties.

So, I always tell people, America is on sale right now so you need to tap into it.

HOLMES: America is on sale. Who is about to buy us, right now?

All right. Number three, the Amazon Kindle. We seen the commercials with these all the time.

ANDERSON: And they are getting more popular. When they first came out in 2007, it came out at $399. You can buy one for about 114 bucks. They're going to have some that they're going to roll out after Christmas around $100. And so, it's really affordable.

But that's technology. Technology is constantly is changing. Those prices are coming down and that's becoming more popular, so they don't have to charge much.

HOLMES: Does that appeal to a lot of people, too, who don't want to go spend 700 or 800 bucks on an iPad?

ANDERSON: Exactly, a lot of people.

HOLMES: All right. Let's go to this now, the 3D television. This one is supposed to be the next hot thing and it hasn't taken off.

ANDERSON: It hasn't. It hasn't taken off at all. So, you have seen them come down $300 to $400 in price compared to a regular 2D television. And so, that's coming down again.

That's the power of technology. Everybody thought it was boom, and take off, you know, but it hasn't taken off as quickly as they like to.

HOLMES: We should keep waiting.

All right. Explain this one to me, though, the prepaid debit card. ANDERSON: Prepaid debit cards. This is interesting because what's happening is a lot of people have challenged credit right now. Some people are un-banked or under-banked where they don't trust banks. So, they just don't bank. And so, they need that debit card.

So, you think about it. You still want to be able to buy things online. You still want to be able to buy things over the phone. So, you need that Visa logo, the MasterCard logo or whatever.

So, a lot of people are getting into this market. American Express even launched a new one. And what they do is you load money onto the card and it just takes it and uses it as a debit card. They charge generally a monthly fee.

And a lot of these companies are reducing their monthly fee and their reload fee, because that's where they make their money. You add more money, they charge a re-load fee. And when you use it, they charge a monthly, a kind of maintenance to have.

HOLMES: You know, and I have no idea here. But how exuberant are these fees?

ANDERSON: Sometimes, you're talking about $3 a month.

HOLMES: OK, not bad.

ANDERSON: The monthly fee. And to load, about $3. You know, to load it. Every time you want to put money on there.

So, it just depends. But you're seeing some of those slash and they don't even have that monthly just to really get customers.

HOLMES: OK. Last two here, and these are some bigger items. But pools, swimming pools.

ANDERSON: Yes, definitely. A lot of people are not going for the swimming pools anymore, you know? We're not seeing that.

So, what they've done is cut them 75 percent for a swimming pool. Now, imagine that. I mean, this may be the time for you to go get in and looking to get to a swimming pool, you know?

HOLMES: Thank you, Clyde.

ANDERSON: That's a huge discount.

HOLMES: OK, last one here and then we could kind of going off the reservation with this one, if you will. But space flight.

ANDERSON: Space flight, who knew? You know, we are at the point -- when this first was introduced, a lot of people thought it was farfetched, you know? When you go into space, you're traveling into orbit. They were talking about almost $200,000.

HOLMES: Some of these commercial space travels for some folks. ANDERSON: Yes, to go out there and go in the orbit. And now, they are talking about $100,000. That you'll be able to go into space for 100 grand. And so, some people are looking at this and already signing up to get their seats on these flights, you know? So, it is happening.

And so, now, you look at that and we see what happened with the Kindle over the last couple of years. Maybe the same thing will happen with the flight.

HOLMES: Well, you know what? Maybe it will cost us the same to cost of fly across the country these days.

(CROSSTALK)

ANDERSON: There you go.

HOLMES: Clyde, good stuff as always. Good to see you, man.

ANDERSON: My pleasure. Good to be here.

HOLMES: Thanks so much.

Well, 21 minutes past the hour now. Do we have this picture? We're going to show you something that's downstairs right out front of the CNN Center here in Atlanta. You recognize that ride? That's actually a Fiat and they are making a comeback here in the U.S.

We'll tell you how they are trying to corner the market and also if Reynolds can even fit in that thing. Stay with us.

(COMMERCIAL BREAK)

HOLMES: All right. Some stories making headlines this morning.

First, in Italy -- forensic experts testifying the appeal of convicted murderer Amanda Knox are ripping the prosecution's evidence and the way police collected it. Investigators are defending their department's work. Knox and her Italian boyfriend and another man were convicted of the 2007 murder of Knox's roommate.

Also in Killeen, Texas, the Muslim Army deserter accused of planting a bomb -- of planting two bombs in a restaurant near Ft. Hood is being held without bond and in undisclosed location. Police believe Naser Abdo wanted to replicate a second Ft. Hood massacre.

(COMMERCIAL BREAK)

HOLMES: All right. Folks, do you remember the Fiat? You know, the Italian car company. Well, they have taken over Chrysler. They want you to see their newest models.

Do you remember the image of the Fiat? Take a look at this. Remember that little thing there. It's -- that tiny car like that one. It was like in the '60s and '70s. They were cheap. They filled the streets of Europe. A few made it to the U.S. and a couple of new ones have made it downstairs in front of the CNN Center.

Reynolds Wolf is there. Reynolds, people love these cute little, you know, cars. So, please, introduce us to the Fiat -- the new Fiat.

WOLF: The Fiat is right here behind us. Just a beautiful to see, and thankfully, we got Shawn Evans of Landmark Fiat with us.

Shawn, can you give us an idea about these cars? Who exactly these things geared towards? Whose your -- what's your he focus group?

SHAWN EVANS, LANDMARK FIAT OF ATLANTA: They are geared toward everyone -- 18-year-old college students to the 80-year-old grandmother. The car is perfect for anyone who wants to get great gas mileage and have a fun car to drive.

WOLF: I got to be honest with you. I mean, it looks kind of fun. But a lot of times, small cars, one of the biggest things that comes up happens to be the safety.

I mean, how safe a thing like this?

EVANS: It's five-star crash rating. It has seven air bags standard on all models.

WOLF: All right. Well, let's open the door and let's take a peek in here. Now, obviously, the steering wheel is over there. I'm just getting in on this side.

I'm a big guy. I'm 6'4". So, I'm going to hop in here and see how this fits out. Surprisingly, there is a lot of room.

How has this been received so far?

EVANS: Nothing but great things to say about it. Customers love it. It's fun to drive. It's a very unique car.

WOLF: Well, you know this -- we have been talking quite a bit about how we have rising fuel prices. Now, people are very concerned about fuel efficiency.

How efficient is a car like this?

EVANS: It gets over 40 miles per gallon.

WOLF: Not bad at all. Pretty nice. And, you know, this one is the beautiful white model. And it's got -- not just convertible top. How would you describe this, what would this be called?

EVANS: It's a Cabrio model. Fully retractable roof all the way back to the rear.

WOLF: Oh, beautiful. Very nice. This pushes up, and the trunk pops up.

EVANS: You can open the trunk. WOLF: How about that? It just kind of fell into it.

And, of course, this pops up and this rolls upwards?

EVANS: Absolutely.

WOLF: Pretty nice. You got room for all stuff back there. Beautiful.

And you said they do come in a variety of colors?

EVANS: They come in 14 color options.

WOLF: Fourteen color options.

EVANS: We have a red one over here as well.

WOLF: Just beautiful.

All right. T.J., you are taking a look at the Fiat. We're going to send it right back to you upstairs. This is a beautiful car. Again, available on the road right now?

EVANS: Available now.

WOLF: And the price?

EVANS: It starts at $15,500 for the Pop model.

WOLF: Fifteen-five. And what is the biggest competitor you have for this car?

EVANS: Mini Cooper, Volkswagen, Toyota Yaris, biggest competitors.

WOLF: Beautiful car. Beautiful car. T.J., let's pitch it back to you upstairs.

HOLMES: And, Reynolds, you said that works for you. These things are going to be hitting the streets. But you said it works for a 6'4" guy like yourself.

You're going to be comfortable driving that thing?

WOLF: Plenty of room, plenty of head room. I'm more of a muscle car kind of guy. But this is neat. It's a nice novelty car and it seems kind of cool.

What kind of engine you got behind this thing?

EVANS: A 1.4 liter multi-air technology with 101 horsepower.

WOLF: A hundred and one horsepower.

HOLMES: A hundred and one horsepower? WOLF: A hundred and one horsepower, for a guy like me, I mean, I'm about a 200-pound guy. This gets you around pretty well? Pretty good acceleration.

EVANS: I had it on 85 on 85 this morning. So, yes.

WOLF: Eighty-five on eighty-five.

HOLMES: But how long did it take you to get to 85? All right.

WOLF: All right. Beautiful stuff. Hey, I'm getting the hard wrap. Lets it back to you, T.J. thank you.

HOLMES: All right. Reynolds, buddy, we appreciate you.

We'll be back at the top of the hour with more live news.

Right now to the good doctor.