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CNN Wolf Blitzer Reports
Surrender Deal Falls Apart in Kunduz; How Could a Connecticut Woman Die of Anthrax?
Aired November 23, 2001 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Today on WOLF BLITZER REPORTS, "America Strikes Back": Holed up in their last northern stronghold, the Taliban have agreed to surrender, or have they? As fighting rages on, a surrender deal falls apart in another town while the Northern Alliance moves south.
The mystery deepens in Connecticut.
(BEGIN VIDEOTAPE)
JOHN ROWLAND (R), GOVERNOR, CONNECTICUT: A number of tests have been conducted at the victim's home, at the Seymore Post Office and at the Wallingford postal facility. So far, all samples have tested negative.
(END VIDEOTAPE)
ANNOUNCER: So how could a 94-year-old woman contract the anthrax that killed her?
Are you crawling into a cocoon instead of flying to Cancun? How homeland security effects the economy. We are live at Minnesota's Mall of America.
And the latest from our correspondents on the ground in Afghanistan as "America Strikes Back."
MARTIN SAVIDGE, CNN ANCHOR: Good evening to you. I'm Martin Savidge in for Wolf Blitzer.
Northern Alliance troops are trying to flush out forces in two areas of Afghanistan. We will take you to five different places in that country to highlight the challenges of uniting a nation that seems divided.
And the mystery is growing in the latest anthrax investigation.
And what day after Thanksgiving would be complete without a trip to the mall? We will go to the nation's biggest and talk to a couple of economists on what it's going to take to pull the nation out of its economic slump.
First though, today's developments in America's new war. Well, despite reports of a surrender deal, Northern Alliance rebels backed by U.S. air strikes are pushing ahead with their attack on the northern Afghan city of Kunduz. It is the only northern town still controlled by the Taliban. Some 3,000 Taliban and non-Afghan Islamic fighters are holed up in Konduz.
At the same time, a top Northern Alliance commander says an offensive is underway to capture the provinces of Helmand and Kandahar, two of the last areas under Taliban control in the south. The Taliban leaders say they will fight until the last man.
Talks on Afghanistan's future: they are set to begin on Monday in Germany, but now they have been delayed until Tuesday. The United Nations officials will meet with Afghan factional leaders in Bonn to try to form a transitional Afghan government. Officials cited travel difficulties for some Afghan delegates as the reason for the delay.
In this country, officials say no anthrax has been found -- none -- in the mail or the mailbox of a Connecticut woman who died of the inhalation form of the disease. Preliminary testing on local post office facilities also negative. More tests will be carried out at the home of the victim, 94-year-old Ottilie Lundgren, died Wednesday.
From the State Department today, extended restrictions on a travel ban by Americans to Libya for another year. The ban has been in force since Washington cut diplomatic ties with Tripoli in 1981. Libya, said to be one of the countries the U.S. government claims supports terrorism.
Bargain hunters out in force in the malls across the U.S. today, the traditional start of the holiday shopping season. Some say they plan to pay more often with cash instead of credit. One shopper may have voiced the opinion of many, declaring, "We're not going to let the terrorists rule our lives." The retailers, obviously, happy about that.
In Afghanistan, the fighting, though, rages on in many fronts. There maybe talk of Taliban surrenders and of a united front of Afghan faction leaders, but for the most part, that is all it is.
We have reports from several key areas now: Konduz, the only northern town still controlled by the Taliban; the Afghan capital of Kabul; Spin Boldak, near the besieged Taliban stronghold of Kandahar; the strategic western city of Herat; and Kulum in the eastern part of the country.
But we begin with Konduz and what may become a turning point in the war. CNN's Satinder Bindra is there.
(BEGIN VIDEOTAPE)
SATINDER BINDRA, CNN CORRESPONDENT (voice-over): Waiting patiently for the big battle to begin, the strain shows on the faces of these Northern Alliance soldiers.
They have been ordered by their commanders to hold off attacking Konduz until Saturday, to allow thousands of trapped Taliban soldiers, both Afghans and so-called hardcore fighters from overseas, the chance to surrender.
On Thursday, 300 Afghan-Taliban soldiers defected to the Northern Alliance. But the Northern Alliance says it will not be easy to entice thousands of trapped Taliban troops, from Pakistan, Chechnya, Uzbekistan, and other Arab countries to surrender.
MIR MOHAMMED OSHAL, NORTHERN ALLIANCE (through translator): The Pakistani and Arab people will not defect to us. We will have war.
BINDRA: One senior Northern Alliance general tells CNN hardcore Taliban fighters are now gathering around Konduz airport, waiting to be rescued. Northern Alliance sources say over the past few days, they have been hearing planes coming in to land at the airport, but can not say where they are from. On Thursday, anti-Taliban forces launched a massive rocket and armored attack against Konduz.
(on camera): After hours of fighting, the Northern Alliance says its forces captured the village of Sauka (ph) just four miles away from here. A short while later, the Taliban launched a massive counteroffensive and recaptured Sauka (ph).
(voice-over): Many on these frontlines believe the Taliban still have plenty of fight left in them. So the Northern Alliance looked to the skies and to U.S. planes for help.
UNIDENTIFIED MALE (through translator): The bombardment must hit the exact target. And the bombardment must eradicate the al Qaeda group.
BINDRA: Washington agrees. It says the trapped al Qaeda fighters must either be killed or they can surrender. But they can not be allowed to get away.
Satinder Bindra, CNN, on the frontlines near Konduz, northern Afghanistan.
(END VIDEOTAPE)
SAVIDGE: Let's move on.
Outside the Afghan capital, Kabul, a battle of a different sort is being fought. Triggering the fight, a deal that was supposed to end the fighting.
Tim Ewart is there with our report.
(BEGIN VIDEOTAPE)
TIM EWART, CNN CORRESPONDENT (voice-over): On the dusty hillside south of Kabul, Northern Alliance armor was taking up position for the latest battle with the Taliban.
In the village of Maidan Shahr beyond this ridge, a renegade group of up to 1,000 Taliban are under siege. Their leader, Goulan Mohamed (ph), accepted $200,000 to change sides, took the money, but changed only his mind. As tanks shells hit the hillside overlooking the village, there was heavy fire from weapons mounted on elderly Russian trucks.
A Northern Alliance commander told me they had given Taliban chance to surrender. But the offer was rejected.
UNIDENTIFIED MALE: They said we will continue to do the fighting and entered their -- elimination we will continue our fighting.
EWART: So, it's a fight to end?
UNIDENTIFIED MALE: Yes.
EWART: In fact, as the day wore on, it was the Alliance which withdrew, its troops streaming back down the hillside.
(on camera): We are about 30 minutes outside Kabul and the fighting here has been fierce and relentless. It shows just how fluid the frontlines in Afghanistan can be.
(voice-over): Hostilities will resume before long. And its hard to see the Alliance suffering a lasting setback. For now, the only losers are civilian refugees, more families driven out by the machinery of war.
Tim Ewart, ITN, Maidan Shahr, Afghanistan.
(END VIDEOTAPE)
SAVIDGE: The town of Spin Boldak, it's near the Pakistani border and about as close as journalists are getting these days to the Taliban stronghold of Kandahar.
Bill Neely and other journalists were taken there by the Taliban for a first-hand report on the situation there. It almost turned out to be the last trip of their lives.
(BEGIN VIDEOTAPE)
BILL NEELY, ITN (voice-over): In southern Afghanistan, as further north, conflict and a little chaos. As quickly as the Taliban had taken us into their camp, they ordered us out. We were given one hour to leave. They have lost most of their weapons and most of their territory. Today, they lost patience with scrutiny from the inside.
(on camera): It is not at all clear why we are being expelled. The Taliban say it is for our own security. But exactly how our security is at risk, and from whom, they are not saying.
(voice-over): They had said they would take us to their stronghold of Kandahar, but we could see American planes on their way to bomb it. The Taliban's difficulty in keeping control was soon clear. They took us on convoy towards the Pakistan border. But when we stopped at a town, the locals turned on us, almost pulling me out through a side window, then attacking the car.
UNIDENTIFIED MALE: Lock it. Has he got the key?
UNIDENTIFIED MALE: This guy is here, he's still....
NEELY: Trapped inside the car, we watched perhaps a dozen Taliban gunmen surround it and fight off a mob of angry locals. The very sight of foreigners clearly enrages many Afghans who have been bombed for months. As we left, more Taliban fighters were heading for their besieged base at Kandahar, further conflict there inevitable.
Bill Neely, ITN, in Pakistan.
(END VIDEOTAPE)
SAVIDGE: There has been a lot of talk about a role, if any, of Afghanistan's former king. But a recent rally in support of the king in the western city of Herat did not go over too well with local Northern Alliance commanders.
CNN's Kasra Naj is in Herat.
(BEGIN VIDEOTAPE)
KASRA NAJ, CNN CORRESPONDENT (voice-over): "Long live Zahir Shah", they shout in this rally here in Herat earlier this week. The rally, an indication of the growing significance of the former king in the post-Taliban Afghanistan. The rally had been organized quietly for the fear of provoking the anger of the Northern Alliance in control here.
They said, "We support the U.N. plan for a broad-based interim government and a Loya Jirga." That's the grand council of elders. They urged the U.N. to immediately bring in a multi-national peacekeeping force.
He says, "We want the U.N. peacekeeping forces here to ensure security, to collect the weapons and free us from those wielding guns." There is a growing fear that the Mujahedeen factions will soon turn on each other and the people.
(on camera): Their number is not great, not yet anyway. But the fact that they have managed to get together under the circumstances speak of the good deal of support here for the former king, Zahir Shah.
(voice-over): But the Northern Alliance took the rally as a threat, or at least a challenge. They swiftly moved in to disperse crowd. The Mujahedeen gunmen said they had orders from high up. "Any rally has to be authorized," they said.
And shortly afterwards, the Northern Alliance's strong man of Herat is Mail Han (ph), describing the demonstrators as mercenaries of foreign powers. He said, "We will launch a jihad against mercenaries", hardly a recognition of the changing times in Afghanistan.
The supporters of the former king now say they have pinned their hopes on the international community. He says, "If the international community decide to leave us alone again, there will be a return to chaos and killings. If they want peace and respect for human rights, the international community should stay with Afghanistan."
Kasra Naj, CNN, Herat, western Afghanistan.
SAVIDGE: All right. Now let's take you to some place different.
As strange as it may seem, an area in eastern Afghanistan could pass as something of a paradise. But the plague of war is everywhere and the people suffer not just from the current war, but past wars and other disasters beyond their control.
CNN's Bill Delaney reports from Kulum.
(BEGIN VIDEOTAPE)
BILL DELANEY, CNN CORRESPONDENT (voice-over): Stable, immaculate in eastern Afghanistan, where most nothing else is. Mountains bridge the (UNINTELLIGIBLE) plains ragged moonscape to a sky no rain has fallen from in four years. In the nearby village, Fateh Abeh (ph), catastrophic drought, tempered now only by for most the end of the rule of the Taliban.
UNIDENTIFIED MALE: (UNINTELLIGIBLE) are gone. The situation is here very good.
DELANEY: Speaking relatively, where wheat corn cotton all but evaporated without rain; Taliban have not. As many as 1,500 mostly Arab fighters, local authorities say, still stalk the serene mountains, including the Black Mountains, concealed in wild reaches near the destroyed village of Kulum. Local people there say 200 people died in a U.S. coalition bombing raid a month ago.
(on camera): Fragments of the bombs that hit Kulum still litter this place, but nothing, except the fact that there was a tragedy here, in the end is for sure.
(voice-over): We asked local people whether Arabs ever trained in Kulum.
UNIDENTIFIED MALE: Never.
DELANEY: Off camera, though, some said certainly Arabs had been in the region, and likely still were. After all, a nearby cut through the mountains used by fighters for generations to reach front lines, for supplies, including 20 years ago, battling the Soviet Union.
These craters from Soviet SCUDs, not the U.S. bombers. Local people say killed among others, a little girl who first lost an arm and a leg.
Valjan (ph) says he lost everything in the raid, his wife, two sons, a daughter, a sister-in-law. "I'm too poor to take revenge," he says. "I would if I could."
Why Kulum was bombed, whether Arabs ever trained there or simply passed through or were never there at all -- unknown. Only clear that somewhere between the hope and Fateh Abeh (ph) in the plain and hate in Kulum in the nearby mountains, eastern Afghanistan's fate now plays out.
Bill Delaney, CNN, Kulum, Afghanistan.
(END VIDEOTAPE)
SAVIDGE: There are a lot of questions at this hour. If Konduz falls to the Northern Alliance, what will happen to the hundreds of non-Afghan Islamic fighters that are holed up in the city with Taliban? And is the Northern Alliance strong enough to take the southern city of Kandahar now that the Taliban vow to fight to the very last man?
Joining us to talk about all these questions and related issues, former NATO supreme commander, now CNN military analyst, General Wesley Clark. General, good evening to you.
GENERAL WESLEY CLARK, CNN MILITARY ANALYST: Evening.
SAVIDGE: Let's first talk about the situation in general. We have had a whirlwind tour there and the situation not looking particularly good. Is the euphoria of the quick victories now over and are we on that dangerous slippery slope for the U.S.?
CLARK: I think that is exactly right. The euphoria is over. There are isolated pockets of Taliban. And everyone always knew it was going to be a different war in the south.
So we've got to settle down. We've got to balance our expectations against reality and gird ourselves for a difficult fight here. This is going to be a struggle, a diplomatic struggle and a military struggle.
SAVIDGE: Well, let's talk about Konduz now. Is this vitally important to the U.S. mission and where should the U.S. be standing as far as surrender or the turn over of troops that are Taliban there?
CLARK: Well, our interest is twofold. First, to see the Taliban decisively defeated. That could come either on the battlefield or through a surrender. And secondly, to make sure that if it is a surrender, that the leadership there, the al Qaeda elements, don't get out or do more damage elsewhere. So we've got to stay with the Northern Alliance. We have got to encourage them to persist as they tighten a ring around Kunduz. If necessary, we are going to provide firepower for them. And if they can negotiate a surrender agreement, then we want to be sure that those non-Afghan Arabs get detained and filtrated and interrogated.
SAVIDGE: You don't want them around to fight another day, in other words?
CLARK: We don't, absolutely not.
SAVIDGE: You think that's a real possibility if they were allowed to, say, leave the city?
CLARK: Certainly, if they are allowed to leave, the Arab members from Chechnya, from Pakistan, from Saudi Arabia, Yemen, elsewhere, they will go and fight with the Taliban and with al Qaeda somewhere else.
SAVIDGE: Now we understand there is going to be this meeting in Bonn. It is to talk about a government that is going to take over. We have seen all this factional fighting. We've seen the land grab in the north. Now the debate going on in the south. What does this say for the meeting that is going to take place, now been delayed by one day?
CLARK: It's going to be a difficult meeting. And meetings like this always are.
They always reflect the existing distribution of power. And that is why the fighting is going on right now around Konduz and around Kabul, because the stronger the Northern Alliance is, and then there are factions within the Northern Alliance who are struggling for dominance, then the diplomatic outcome will reflect the battlefield realities. These, the Pashtun tribes that are Pakistan's agents in this discussion or connected with Pakistan in this discussion, are going to have to show their strength by attacking Kandahar and supporting the Northern Alliance.
And of course, the Iranians and the Pakistanis, the Russians, the U.S., all of these countries are on the sidelines. The U.N. is there to broker. And it is an exploratory set of talks. Hopefully, some decisions can be made about a structure that can make decisions. But, underneath that exploratory discussion of structure, all of the issues will be present. Who has power? Who has authority? Who is going to give it up? What about the Taliban itself? Who is going to continue the offensive?
SAVIDGE: But what does the U.S. do to make sure that everything it has fought so hard for doesn't fall apart and we have a civil war?
CLARK: Well, on the battlefield and inside Afghanistan, we keep our special forces there. We continue to provide air support. We are working and coaching behind the scenes. And we are going to do the best we can to maximize our own leverage to bring these factions together peacefully.
At Bonn, we'll have diplomats there who are working behind the scenes. And they are going to sharpen the issues. They are going to try to broker compromises. And they are going to try to shape an agreement that will stop the fighting and focus the attention on getting rid of the rest of al Qaeda and tracking down Osama bin Laden.
SAVIDGE: What if the Northern Alliance says, "OK, we have our territory and we are not leaving." What does the U.S. do?
CLARK: Well, the Northern Alliance does have that territory and it will probably say that. But, the tribes in the south will say, "Well, we have our right to participate in the government."
SAVIDGE: And the U.S.? CLARK: The U.S. will say, "You've got to give them some participation in the government." And there will be a discussion of what participation, what authorities, what positions, when, how soon. And there will be gives and takes and compromises. And something will be cobbled together or can be cobbled together if we are artful in what we are doing in Bonn.
SAVIDGE: General Wesley Clark, thank you very much for your insights. We will look forward to talking to you again. Thanks.
CLARK: Thank you.
SAVIDGE: Checking some of the other international stories now: British Foreign Secretary Jack Straw -- he held talks today on Afghanistan's future with Pakistani President Pervez Musharraf. Straw said he and the Pakistani leader agree that a transitional, broad- based Afghan government should be put in place as quickly as possible.
In the Middle East, Palestinian demonstrators clashed with Israeli soldiers in the West Bank town of Ramallah. Protesters threw rocks at the troops. They responded by firing rubber-coated bullets. At least five Palestinians were wounded. Palestinian sources say at least three Palestinians were killed in an Israeli helicopter missile attack, that near Nablus. The Israeli army isn't saying anything.
Amid tight security, leaders from Latin America, Spain and Portugal today opened an economic summit in Lima, Peru. Delegates there expected to pledge support for the U.S.-led war against terrorism. Also high on the agenda, drug trafficking and Argentina's economic crisis.
More assessment on the war in Afghanistan at 7:00 p.m. Eastern in the WAR ROOM. Retired Air Force General Don Shepperd will be among my guests. You can participate by going to cnn.com/wolf. Click on send questions and we'll ask those questions to our panel.
Also, tune in tonight for "LIVE FROM AFGHANISTAN" with Christiane Amanpour. It begins at 8:00 Eastern, 5:00 Pacific.
Here next, the clues found in this house that may help solve the mystery of how a woman contracted and died of anthrax.
And the shopping season, it's underway. How war and recession affect the economic equation, ahead on WOLF BLITZER REPORTS.
(COMMERCIAL BREAK)
SAVIDGE: Now the latest on the anthrax mystery, and what a mystery it is, today, more puzzling perhaps than ever before. CNN's Michael Okwu in Oxford, Connecticut, the home of the elderly woman who died this week. The fifth death from anthrax nationwide. Michael, good evening.
MICHAEL OKWU, CNN CORRESPONDENT: Martin, good evening to you.
You know more than 110 samples were taken from 94-year-old Ottilie Lundgren's home, and from two postal facilities that essentially distribute mail to this community. Now preliminary test results came back negative, but as Governor John Rowland conceded this afternoon, it just means that the work of investigators is far from over.
(BEGIN VIDEO CLIP)
GOV. JOHN ROWLAND (R), CONNECTICUT: I've got a lot of confidence in the FBI and the CDC, but this is tough, tough to find and tough to track. So I'm cautiously optimistic that we could get lucky and find out how it happened, but it's going to take some exhaustive investigative work.
(END VIDEO CLIP)
OKWU: Now investigators spent more than two days, combing through Ottilie Lundgren's home, essentially sifting through that home and taking samples, testing every square inch of her house. Now the FBI and the CDC, were also taking a look at the entire neighborhood, specifically the church she frequented and we understand they also this afternoon, and we are hoping to bring you fresh pictures here, this afternoon they took swabs of a beauty salon that she frequented. We also understand that they took swabs just this afternoon of town hall, essentially investigators and specifically the CDC is looking at every place that she may have visited within the past 60 days.
And the CDC is recommending that friends and relatives, anyone who might have been in very close proximity with her be put on antibiotics, strictly as a precautionary measure. Now, the postal facilities which appear to be clean are a major distribution center in Wallingford, Connecticut and a post office in Seymour, which is some 10 minutes from Oxford. A majority of the 1,200 postal workers, for the postal employees, who work at those two facilities have opted to begin a 10 day course of Cipro. This is what at least one postal worker had to tell us this afternoon following the governor's press conference.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's been weighing on mind with the holiday and everything like everyone else, and I was just very relieved, you know.
UNIDENTIFIED FEMALE: I'm going to go about daily business. And do my work.
(END VIDEO CLIP)
OKWU: In less than two hours from now, at 7:00 p.m., we are told that there will be a town meeting in Seymour, Connecticut. Local officials as well as members of the state health department, will be on hand to answer any questions that town residents might have. And also, be on hand to ease any anxiety that they might be feeling -- Marty.
SAVIDGE: And that could be a job ahead of them. CNN's Michael Okwu, joining us from Oxford, Connecticut tonight, thanks.
Joining us now from Washington to talk more about this, CNN bioterrorism analyst Javed Ali. Good evening to you, Javed.
JAVED ALI, CNN BIOTERRORISM ANALYST: Good evening, Martin.
SAVIDGE: What do we know about this particular case, this strain of anthrax. And what do we know, if anything, about how she could have contracted it?
ALI: Unfortunately, Martin it appears there are still -- there are more questions than answers, at this point. But some of the clues that might help investigators over the coming days, if not weeks, is to determine, obviously, where was -- what was the source of the material that caused the infection? But then sort of going beyond that -- and hopefully that can be found -- but then going beyond that was the material of the same quality that was found in maybe the letter to Senator Daschle or the letter to Senator Leahy, or even the letters to the "New York Post" and "The New York Times"? Was the strain the same? Of all that evidence congeals as sort of one point.
Than it's more suggestive that the same perpetrator is behind these incidents. If not, than I think it just throws another wrench in sort of whatever channels the investigation is going down at this point.
SAVIDGE: Investigators have checked the house, they say no sign of anthrax there. They went through the mail, no sign of anthrax there. Where did it come from?
ALI: Well, that's the $64,000 question right now. But -- but without stating the obvious, what must have happened is that the material got deposited on something, and finding out what that thing is, is very difficult right now. And whatever that amount of material was, it was infinitesimally small. It must have been the hundredth or thousandth of a gram, or even smaller...
(CROSSTALK)
SAVIDGE: How do we know that?
ALI: ... than that.
SAVIDGE: How do you know that's true?
ALI: Well, we -- we can sort of deduct that by the fact that no one else around her has been exposed to the disease or have been exposed to the material. Nothing else has tested positive, no object or building or structure -- so somehow she came into contact with a very small amount of material that was rendered airborne and then caused her to contract the pulmonary form of disease. But that amount of material was very small.
SAVIDGE: Well, this seems very alarming to me, because the alternatives -- the options, here, are either, one, you got a cross- contamination in the mail, which means everyone's mail could be suspect or, somehow it was released in the environment near this woman are those cases as they stand right now?
ALI: Well, I think if there was a larger scale release, some kind of aerosol release, you would have seen more people testing positive for even the exposure to the spores. Or a wider area of land or even in an entire building or buildings, testing positive for the spores. And we haven't seen that evidence emerge yet. So I would be more, I'm more leaning in the direction of the cross-contamination theory than a larger scale release.
SAVIDGE: So tonight are you more fearful, less fearful than you were say several weeks ago on anthrax?
ALI: Well, the bottom-line is that the perpetrators of these events have not yet, or perpetrator we're still not sure if it's a single person or a group -- haven't been caught yet. And we don't know how much material they have either, that's another unanswered question, so until we have some clarity on that until we find out specifically who's doing this, we may have to live with this uncertainty for a while.
SAVIDGE: All right, CNN bioterrorism analyst, Javed Ali, thank you.
ALI: Thank you.
SAVIDGE: One other quick note, Chile has become the first nation outside the U.S. to have a deadly strain of anthrax in its mail. The anthrax was sent to a Santiago physician. It was postmarked Switzerland, the letter bore a return address, though, that read Florida. The Chilean doctor has not tested positive for anthrax, but he and 12 others are taking antibiotics as a precaution.
Now from the CNN "News Wire", Slobodan Milosevic will stand trial for genocide. The former Yugoslav president was charged today in The Hague by the U.N. war crimes court. The indictment links Milosevic to thousands of murders of Bosnian Muslims and Bosnian Croats.
A decommissioned tanker is floating adrift off the coast of Oregon and may be sunk by the Coast Guard. The ship was being towed to China when the towline snapped in turbulent weather on Tuesday. At last word, a team of salvage workers hoped to rappel to the tanker's deck. They're trying to reattach the vessel to a tugboat.
Cosmetics mogul Mary Kay Ash has died at her home in Dallas. With $5,000, she founded Mary Kay Cosmetics. Nearly 40 years later, it's America's second largest direct seller of beauty products and boasts of making millionaires of scores of women.
An update on today's developments in America's new war, that is coming up next -- and then taking aim at what people are buying: the comfort economy created by the September 11 attacks.
(COMMERCIAL BREAK)
SAVIDGE: Here are some of the latest developments in America's new war. No word yet on the expected deployment into Afghanistan of hundreds of U.S. Marines. They are there to help in the hunt for Osama bin Laden. The commandos have the means to establish a base, which would give the United States a more forceful ground presence in Afghanistan.
The Pentagon says it is continuing air attacks. They are largely focused on caves, tunnels and other potential hideouts, mostly in Southern Afghanistan. In the north of the country, though, the United States is targeting Taliban and al Qaeda forces surrounded in the city of Konduz.
The U.S.-allied Northern Alliance now is on the move into Southern Afghanistan toward ever-shrinking areas held by the Taliban. Reports say an advance unit of the Northern Alliance has entered Helmand Province on the road that leads to the Taliban stronghold of Kandahar.
Meantime, the stalemate appears to continue in and around Konduz, where the Taliban have agreed to surrender this weekend. United States officials continue to have their doubts about that surrender agreement, which specifies the arrest of thousands of hard-core fighters directly linked to Osama bin Laden.
In Connecticut, officials says no anthrax has been found in the mail or the mailbox of the fifth person to die of anthrax; 94-year-old Ottilie Lundgren died this week. Acquaintances say she rarely left home. And how she contracted anthrax continues to baffles authorities.
This holiday shopping season may shape up to be a bargain- hunter's delight. But are the sales enough to lure shoppers during this economic slump? We'll go live to the Mall of America when we come back.
(COMMERCIAL BREAK)
SAVIDGE: With Thanksgiving over, 'tis the season to shop. Some Americans woke up before dawn today to take advantage of some of the most aggressive discounts and sales in recent years.
CNN's Ed Lavandera joins us live from Bloomington, Minnesota. And in case you don't know, that is the home of the Mall of America.
Ed, are the deals drawing in the shoppers?
ED LAVANDERA, CNN CORRESPONDENT: Yes, well, you know, they have been offering deals all day long here. And the idea is to hope that the shoppers have been enticed enough to spend money here. And that's exactly what a lot of these retailers are hoping, of course.
But being here, throughout the day, it has been whether or not this is going to be a barometer for how the holiday shopping season will go the rest of the -- in the coming weeks. And, of course, it's a very important time for the shoppers that are coming here, but also for the retailers in this mall and retailers across the country. And you can see the mall, they have expected more than 100,000 people to make their way through the mall today. And we've been talking a lot of serious issues throughout the day. And now as we're winding down toward the end, we thought it might be a good opportunity to just ease up a little bit. And, of course, Santa is here at the mall. And we're going to listen in, talking to a family from Chicago here.
And we're going to listen to Santa, exactly what he's telling these kids now.
SANTA CLAUS: Hello there. What would you like for Christmas, honey? What's that, honey?
UNIDENTIFIED CHILD: A Barbie.
SANTA CLAUS: A Barbie. Barbie is fun, isn't she?
All right, we'll put that on your list. How about you. What would you like?
UNIDENTIFIED CHILD: A baby.
SANTA CLAUS: Baby. Babies are a lot of fun aren't they?
All right, how about you? What would you like?
UNIDENTIFIED CHILD: (OFF-MIKE)
SANTA CLAUS: You want a watch, two watches. OK, good for you. So you like to tell time.
And how about you? What would you like?
UNIDENTIFIED CHILD: A hot lava lamp.
SANTA CLAUS: A hot lava lamp. Cool, cool, cool.
Now, you guys help around the house sometimes? OK, that's high- fives. And you're brushing your teeth for mommy, too?
UNIDENTIFIED CHILD: Yes.
SANTA CLAUS: High-fives.
LAVANDERA: Santa, let's ask you real quick while you have this beautiful family here in front of you.
Given everything that has happened in the last couple months, how are the families that are coming to see you? What are you telling them?
SANTA CLAUS: The kids are wonderful. As we heard, what they are wanting is dolls and watches and games and things like that. And we're having a lot of fun with that. That's what the kids want.
LAVANDERA: Is it kind of fun to see this innocence up here among you?
SANTA CLAUS: It sure is. There is nothing better than seeing the sparkle in their eyes and the smiles on their faces. It is just a joy to watch that all day long.
LAVANDERA: And it's not a secret. We've been here for about 20 minutes and we've seen a lot of adults come and sit next to you as well.
SANTA CLAUS: Oh, sure.
LAVANDERA: What are you telling them?
SANTA CLAUS: The adults. Some of them, let's see here. They want peace.
LAVANDERA: And what does Santa want this...
SANTA CLAUS: Ho-ho loves cookies. Ho-ho loves cookies.
LAVANDERA: And what does Santa want this holiday season?
SANTA CLAUS: Cookies.
(LAUGHTER)
SANTA CLAUS: I'm having a lot of fun with the kids. You know what I like is toys. I love toys. Do you know I own a toy factory? And at my toy factory, I have 860 elves and they are making toys for these guys. And that's what we're having a lot of fun doing.
LAVANDERA: All right, Santa, thanks so much. Thanks, guys.
And, of course, Marty, as I mentioned, we have talked all day long about so many serious issues. Every once in a while, it's kind of good to remind ourselves that life is still fun, I guess. Right, Marty?
SAVIDGE: Well, that's right, Ed. But we know that the retailers, they want customers.
But the people you see there -- and you see a lot of numbers -- are they shopping or are they just looking?
LAVANDERA: You know, this mall is so large. This is kind of a good indicator. There are so many people from outside of Minneapolis that come to Bloomington to shop at this mall. We have seen a lot of people.
We were at one store this morning that opened at 5:00 a.m., a toy store that opened at 5:00 a.m., offering early bird specials to people who came out to shop today. We saw people walking out with four or five bags full of toys. In fact, they were handing out garbage bags for people to fill up as they were shopping.
It kind of depends on what kind of stores. We also spoke with one economist who said that some of the higher-end stores seem to be hurting the most, with sales being sluggish there. We spent some time in a Macy's. And they said that they were going to meet their quota for today. But at the same time, it was something that they were still working toward when we were there a couple hours ago.
So it's a day that will probably take a few weeks to register and be able to gather exactly how this day will affect the rest of the holiday shopping season. And it might take some time to figure out what all of this means.
We will see. Ed Lavandera joining us live from the Mall of America, where he is making his list and checking it twice -- thanks very much, Ed.
Not all sectors of the economy are hurting following the September 11 attacks. The horrific events prompted many Americans to focus on home and family, turning the country into a nation of homebodies. That's prompting all sorts of shopping sprees.
CNN senior correspondent Brooks Jackson has that story.
(BEGIN VIDEOTAPE)
BROOKS JACKSON, CNN SENIOR CORRESPONDENT (voice-over): If this is such a tough economy, then why are these pool tables, costing an average of $3,000 to $4,000, selling so well? Brunswick Billiards says October sales were up 20 percent over last year despite September 11 and a bad economy. Or, perhaps because of September 11.
This woman is shopping for a pool table after canceling a vacation to Cancun, Mexico.
DOREEN EDELMAN: But this particular item probably replaces an opportunity that we wanted to have to travel. But at this point in time my husband is insistent about not getting on an airplane and definitely not leaving the country.
JACKSON: September 11 hurt airlines, hotels, restaurants. But for some, there's a silver lining.
DAVID WYSS, STANDARD & POOR'S: I think there is also this cocooning effect. People are spending more time at home. They don't want to go out as much and that means they want a new television set.
JACKSON: And they're buying. October sales of DVD players were up 23 percent over last year, according to the Consumer Electronics Associate. People are renting more videos, too, rentals up at Hollywood Video and at Blockbuster. And what goes with the video? Domino's pizza deliveries are up 22 percent in the Washington, D.C. area since September 11, all evidence that Americans are cocooning.
We asked the consultant who coined that term what it means.
FAITH POPCORN, TREND EXPERT: Well, it means people wanting a safe environment, being afraid of the outside world, really wanting to have a little protection and especially post 9-11 this trend is growing like crazy.
JACKSON: And so it seems. Comfort foods are selling well. Campbell's Soups says it saw significant acceleration of sales after September 11. Sales are up seven percent over last year. And when people stay at home, they want it to be nice. So they're spending more money on home improvement. The Lowe's chain reports seeing more shoppers in its stores since September 11 and says sales are running four percent ahead of last year.
REGGIE SUMMERS, LOWE'S MANAGER: Well, that could be because maybe people aren't spending the money flying and aren't spending the money going out of town and are staying at home and finding projects to do around the house.
JACKSON: Home products are also moving well at Wal-Mart, where sales are running almost 15 percent ahead of last year, and hot selling items includes housewares, household chemicals for cleaning and such, pet supplies, home electronics. And when people do go out, they're still staying close to home. Families are flocking to the movies. Movie attendance since September 11 is up eight and a half percent compared to the same period last year, 16 1/2 million more tickets sold, according to the Exhibitor Relations Company, which keeps daily tab on what's happening at the box office.
(on camera): And the current movie favorites? Harry Potter, of course, and Monsters, Inc., two family films in first and second place. When was the last time that happened?
Brooks Jackson, CNN, Washington.
(END VIDEOTAPE)
SAVIDGE: Well, "The Wall Street Journal" is saying that the National Bureau of Economic Research will likely determine that the country has officially entered a recession. For many economists, that issue is already moot. Some are now debating how quickly the country is going to recover.
Joining us now to do just that from Atlanta to discuss the question is Rajeev Dhawan, the director of the Economic Forecasting Center at Georgia State University, and from New York, Dan Kadlec, who writes "Your Money," a column in "TIME" magazine.
Good evening to you both. Thanks for being with us.
Mr. Dhawan, let me start with you. Obviously, you think we're in recession. So how low will we go in this economic limbo? And when do we get out of it?
RAJEEV DHAWAN, DIRECTOR, ECONOMIC FORECASTING CENTER: I think by late spring you will start seeing some signs of recovery. That means a little bit of a job growth. And by early summer, you will see some decent job growth.
I think the basic fundamentals of the economy, such as the -- interest rates are low. People are still shopping. But that does not make up for the problems of the travel, tourism, the commercial real estate sectors. So it takes a while for things to turn around.
SAVIDGE: Are we at the bottom, though?
DHAWAN: No, I think the bottom will come around another few more months. There is still more problems. I think the war on terror has been going OK so far. But, you know, we still have to keep our fingers crossed.
SAVIDGE: Mr. Kadlec, you think we are in recession, but you also think we have hit bottom.
DAN KADLEC, SENIOR WRITER, "TIME": I really do. There's a lot of market indicators out there that suggest that the recovery is not too far away. We've got -- the stock market is up 21 percent in the last few months. Long-term interest rates have been soaring. These are the kind of things that happen when you expect a recovery. Now, that doesn't mean we're through it, but it means that the worst is probably behind us.
SAVIDGE: But how can we be so sure, in these uncertain times, especially when some sort of other terrorist attacks, say something that strikes commercialism, retailing, could greatly upset the applecart here?
DHAWAN: That's exactly my point, that the amount of uncertainty that is grabbing the economy is still very high. We have been able to dodge the anthrax bullet, but what's up ahead? That is the question on everybody's mind. And that's keeping people back holding back on their purchases -- and more so for the businesses, who are not hiring people, who are not doing any investment.
And that delays the kind of recovery we thought would come around in January before September 11. Now it's going to take some time. And on the point about the stock market, there is a feeling that the stock market recovers six to eight months in advance of a recovery. Even if that's correct, you don't see a recovery, a proper one, until summer by that (UNINTELLIGIBLE)
SAVIDGE: Dan, you want to strike back?
KADLEC: Yes, I mean, I agree. You can't be sure you're going to get the recovery.
And I would say that we could bounce along the bottom here for a little while. It just think it will come quicker than the middle to end of next year. The markets can be wrong, but they are very often right. And you've got a lot of IPO activity suddenly. And you see some investors coming back to that market. Weight Watchers went public not long also, and it's up 30 percent. There has been a whole string of successful IPOs.
And you're also seeing some M&A activity on Wall Street, which is another sort of leading indicator, where you've got CEOs willing to get moving and make some deals. They can't sit on their thumbs forever. And that's the kind of thing that you see right before a recovery buds. SAVIDGE: Mr. Rajeev, let me ask you this. Is this a weird recession that we are in? In other words, have we had precedent for this before or are we in uncharted waters?
DHAWAN: I think, to some extent, we are in the uncharted waters, because, you know, we have never seen terrorism, this kind of terrorism before on the home soil. And so, in that sense, there's no precedent.
But at the same time, if you go back '57, '58, the time of the Korean War, the economy really dipped very sharply. And once the war was over, it recovered. So the same thing you saw in 1991, too, although the recovery over there was a little bit late. It took more than a year for the recovery to come about.
And I want to add a point over here. What I heard was recovery in the stock market. That may or may not imply recovery in the real economy, which -- well, what I mean is job growth, actual number of people getting jobs. And that is where I think it will take some time.
SAVIDGE: Mr. Kadlec, when you write for your readers, do you try to put a nice spin on it and say things are really pretty good, or do you tell it like it is? What are you saying?
KADLEC: No, I would say that I could be criticized for being the other way around. I like to look for the turning point. When things were going really well, I was trying to warn people that the good times had to end. And I think now that you've got this bad feeling out there, I think, again, you need to look for the turning point. And things aren't always going to be bad.
I think possibly we're at the point of maximum pain in this recession right now. And that's tough. But what it means is, it gets better from here. It's just a question of how soon.
SAVIDGE: Dan Kadlec, with "TIME" magazine, Rajeev Dhawan, the director of economic forecasting with the Georgia State University, thank you both for being with us this evening.
KADLEC: Thank you.
SAVIDGE: You can get a clearer picture of holiday shopping with the CEO of Sharper Image on "LOU DOBBS MONEYLINE." That will be at the top of the hour at 6:00 Eastern, 3:00 Pacific.
A check of other stories in today's "Newswire" -- that's when we come back.
(COMMERCIAL BREAK)
SAVIDGE: Let's check other stories from today's "Newswire."
Pope John Paul II, in his first online address, apologizes for past abuse by Roman Catholic clergy. In an e-mail sent to churches around the world, the pope expressed regret for injustices committed against native people of the South Pacific, including sexual abuse.
The U.S. government may face a lawsuit in the case of that Japanese ship that was sunk by a U.S. submarine. The families of two people killed on the Ehime Maru are reportedly planning to sue for compensation -- a final decision expected next week.
China has announced plans to conquer the next frontier. State- run media reports that China will send a manned craft into space before 2005 and is preparing for a mission to the moon. China also plans to launch three satellites next year.
Let's go to New York now and get a preview of "LOU DOBBS MONEYLINE," which begins at the top of the hour.
Jan Hopkins sitting in tonight for Lou -- good evening to you, Jan.
JAN HOPKINS, "LOU DOBBS MONEYLINE": Good evening, Marty.
Coming up tonight on "MONEYLINE": Surrender talks continue in Afghanistan, but so does the fighting. We'll have a live report. We'll also go live to Macy's in New York City. It looks like a good start to the Christmas shopping season, but will it hold up? And we'll have a special report on country music. Right now, it is red- white-and-blue hot. Don't miss that story.
Martin Savidge will be right back.
(COMMERCIAL BREAK)
SAVIDGE: All right, bear with me now, but you are looking at the largest train in the world -- that is, largest Scale-G train that is portable. It's on display right now at Washington Union Station, part of the kickoff for the holidays and the travelers who are passing through that train station.
By the way, this is the train that is going to take us out of here. I'll be back in one hour with the WAR ROOM. Retired Air Force General Don Shepperd will be among those talking about the progress or lack of it in the war of Afghanistan.
In the meantime, I'm Martin Savidge. CNN's coverage of America's new war continues with "LOU DOBBS MONEYLINE," which begins right now.
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