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Stocks Rebound as Federal Reserve Cuts Discount Rate; Aftermath of Peru Earthquake; Utah Mine Collapse

Aired August 17, 2007 - 12:00   ET

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

HALA GORANI, CNN INTERNATIONAL ANCHOR: Bodies lined up in the streets. Hospitals overwhelmed. The ground continues to shake after a massive earthquake kills hundreds in Peru.
JIM CLANCY, CNN INTERNATIONAL ANCHOR: Rescuing the rescuers. The mission to find the missing Utah miners turns tragic, raising new concerns about the safety of the search.

GORANI: And taking out the trash. We look at what happens when a consumer nation just simply runs out of space.

CLANCY: And saving what is left of the Berlin Wall. Why some want to preserve Germany's most divisive symbol.

GORANI: Well, it is 6:00 p.m. in Berlin, 11:00 a.m. in Lima, Peru.

Hello and welcome to our report. We're broadcast around the globe this hour.

I'm Hala Gorani.

CLANCY: I'm Jim Clancy.

From Kandahar to Washington, London to Moscow, wherever you are watching, this is YOUR WORLD TODAY.

A very busy Friday here at the CNN Center. The U.S. Federal Reserve taking action to calm the financial markets. We're going to see if it's working.

GORANI: The unfolding disaster in Peru as well. A powerful aftershock is rattling rescuers and survivors amid the rubble.

CLANCY: And a disheartening setback in Utah. Some rescuers now the victims of the same kind of collapse that trapped their fellow miners.

GORANI: But we're going to begin with your money this hour.

U.S. and European markets are making a dramatic comeback today, ending the week on a positive note, perhaps, as investors react to a surprise rate cut by the U.S. Federal Reserve. Stocks are rebounding after the Fed stepped in to stem what's been a global stock market meltdown. The Fed cut the discount rate. That's the rate at which banks can borough from the Fed. And this is not the benchmark rate we often talk about.

Let's get the latest now from New York, where our Stephanie Elam is standing by.

Tell us about why it's significant that the Fed decided to cut the rate by half a point, Stephanie.

STEPHANIE ELAM, CNN CORRESPONDENT: Well, Hala, the main thing that we have to look at here is the fact that when you look at the discount rate, it's not the one that affects consumers, the day-to-day rate. That's the Fed fund rate that we look at every month. But the reason why we're paying more attention to this discount rate is because it shows some things about the Federal Reserve.

They're showing that, hey, for one thing, we have confidence in the economy. It says, hey, we are believing in this economy, we're willing to act as well, and that's why we have seen this change here.

It's a little bit more of a confidence boost even though it's not the one that directly affects us. It allows the bank to go ahead and borrow money from the central bank and so that they can keep helping out with that liquidity crunch that we've been seeing and add some relief there. That's why we care about those -- Hala.

GORANI: All right. Now, if it's not, as we said, the benchmark rate, if this is the discount rate, why did it have such a strong impact? Is it because investors essentially are hoping that this will trickle down back to consumer?

ELAM: That's the main reason, is that a lot of people now are saying, OK, well, if they cut this rate -- and this was a surprise, right? This was not a time -- and it is very rare for the central bank to come out, for the Fed to say, hey, we're going to cut a rate outside of our normal meetings.

So, if they're going to do this, then people are saying, hey, well, maybe that means we might see the rate cut as far as the Fed funds rate when they do meet in September. And so that's why you see people saying that this might be a good thing and why we've seen the markets go up today.

GORANI: All right. Stephanie Elam in New York.

Thanks for the explanation.

ELAM: Sure.

GORANI: Jim.

CLANCY: We're going to cross over to one of our major stories this day that we're following, Peru, where strong aftershocks now triggering brief spells of panic across the country, especially in the area that was devastated by a powerful earthquake. Rescuers are sifting through what is left of homes, churches and stores, hoping to find anyone still alive.

The scene especially grim in Pisco, a town that was hit hardest by Thursday's earthquake. Hundreds of people were attending a special mass when the church collapsed around them. Bodies lining the streets. They're in bags, sheets and blankets, as they're being pulled from the rubble. The injured, too, being wheeled in after they have been plucked from the rubble.

Civil defense authorities now putting the death toll at 447. They say more than twice that number, more than 1,000 people, in fact, have been injured.

Peru is appealing for international help. It says thousands of people have been left homeless and hungry. Many countries now answering the call, including the United States. It is sending a team of military doctors. It has pledged $100,000 in emergency aid as well.

Camay Zeram (ph), has more now on the relief and recovery efforts.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE (voice over): Magnitude 8.0 on the Richter scale. This quake had no respect for person nor place.

The church tower in Pisco's main square somehow still standing. And for the able-bodied and horrific task, picking through the dead to try and find those still living.

Stretchers fashioned from scrap bits of carpet and then placed on market trucks (ph). The priority, for survivors to get them to hospitals.

The emergency room in Chincha, now it's part of the car park. The patients that make it here are desperate.

UNIDENTIFIED FEMALE (through translator): My mother was buried by a wall and it fell on my son's back. My mother broke her leg and died. I'm almost destroyed. I've lost my family.

UNIDENTIFIED MALE: The Peruvian president, Alan Garcia, now comforter-in-chief. But what this country needs is aid.

A U.N.-backed assessment expected sometime today. With up to 70 percent of this coastal city leveled, no wonder people are on the move.

Long into the evening, people fled the disaster zone, an untold number now found homeless. Beds found wherever there was open ground. Here on the side of the Pan American Highway, no doubt it was a sleepless night.

(END VIDEOTAPE)

CLANCY: Now, if you would like to help people who have been affected by this earthquake in Peru, you can log on to CNN.com/impact. You will find a list of agencies that are involved in rescue and relief work. Many of them are going to be active in Peru in these initial hours when it's so important to get critical aid there.

Also, for a wealth of information and additional links, just turn to CNN.com/international.

Here's a look now at some of the other stories that we're following this day.

(NEWSBREAK)

CLANCY: Rescue workers in the state of Utah facing a heartbreaking decision. They either give up the search for six miners they know are trapped deep below the ground who may or may not be alive 11 days after the cave-in, or they risk losing more lives in what has become an increasingly dangerous rescue operation.

Brian Todd joins us now from Huntington, Utah, with the latest.

Brian, and this a rescue that turned tragic overnight.

BRIAN TODD, CNN CORRESPONDENT: It certainly did, Jim. What we know now is that three rescue miners have been killed, six others injured Thursday night when they experienced another one of those so- called mine bumps, those seismic shifts underneath the mine some say are caused by the drilling inside the mine.

One of those happened again on Thursday night. This one very tragic, causing at least a partial collapse that killed the three and injured the six.

Now, in the next hour, we're hoping to get some information about where they're going to proceed from here. We know that the main underground rescue operation, the digging through that main tunnel, which was what was going on when that last mine bump occurred, that part of the operation has been suspended indefinitely.

We also are told that the drilling operation, the boring of some relatively small holes from the top of the mountain down into chambers where they believe these missing miners might have retreated to for air, that facet of the operation is going to continue, we're told. But the governor of Utah weighed in a short time ago about when he expects the main rescue operation to begin and what his overall thoughts are on that.

(BEGIN VIDEO CLIP)

GOV. JON HUNTSMAN (R), UTAH: I, for one, as governor of the state, feel pretty strongly that we shouldn't let another person in the underground mine until we can guarantee their safety. We've seen too much over the last week and a half, and we need to begin to learn from some of these lessons.

(END VIDEO CLIP) TODD: And I also spoke with the brother of one of the trapped miners a short time ago. He told me that he believed that officials here were doing all they could up to that point last night to try to make this rescue operation as safe as possible. He also says that he's, of course, concerned about his brother's possible fate now that they have suspended that main underground rescue operation.

But also, a lot of the tough questions are coming about what led up to this point. The fact that they did experience these mine bumps several times over the past two weeks, and what they were doing to shore up that main tunnel.

We got a demonstration of that a couple days ago. The mine owner, Bob Murray, took pains to take a camera down there so that he could show us and show the families of the missing miners just what they were doing to try to shore up that main tunnel.

Here's a clip from the video he shot.

(BEGIN VIDEO CLIP)

BOB MURRAY, PRESIDENT & CEO, MURRAY ENERGY CORP.: Here they are setting one of these water jacks or rock tops (ph) that we use to support the roof. First, they dig out into the solid bottom. Then they can get down into solid rock.

Then they set a base under the top. Then they hook a water line to the prop. Then the prop in the base.

(END VIDEO CLIP)

TODD: Now, in that process, they were putting up what they called water jacks to shore up the roof, the sides and the floor of the tunnel. They thought at the time that that was enough to at least keep that main part of the tunnel stabilized.

Clearly, we know now, that it was not enough. They experienced another mine bump on Thursday night. It proved to be tragic -- Jim.

CLANCY: You know, there was a picture this day that was shown of one of the daughters of one of the men that had gone in there to rescue. And it's just a compelling photograph of a little girl, about 12 years of age, there crying on her mother's shoulder.

Her father, she didn't know at the time, he's OK. But at the same time, the anguish of the families of the rescuers, as well as those that are known to be trapped, the six originally trapped down there, this has got to be a horrible day for them. All of them.

TODD: It really is, Jim. This whole operation has consumed this area. It's consumed everyone who lives in this town.

This is a mining town. Everybody lives around this industry. If you don't work in the mine, you work to support it or you work in one of the service industries that supports the mining industry here. This whole town is caught up in it. We talked to one of the wives of one of the rescue miners the other night. She said that her husband has been up here, you know, probably at least 12 hours a day, that he's preoccupied even when he comes home. It is something that has eaten up this town.

The families of the trapped miners are caught up in the anxiety over their loved ones, but they're also incredible concerned about the injured and the families of the deceased miners. This is really a tragic setback and it's raising a lot of questions about where they go from here.

CLANCY: All right. We're going to hear a little bit more. There's going to be a press conference coming up probably around an hour from now, a little bit less than that now.

Brian Todd, thank you for working around the clock without a day off on this story and bringing us all the latest. Brian Todd there in Huntington.

Well, still to come right here, Russia flexing its military muscle.

GORANI: Why Moscow? We'll be asking that question, why is it saying that it's resuming Soviet-era practices of flying bomber aircraft way beyond its borders? We'll be speaking to a former Yeltsin adviser.

CLANCY: NASA decides not to have astronauts repair a gouge in the shuttle's thermal shielding. Was that a good call?

We're going to ask that question.

GORANI: And, who's got the most bling? We'll tell you who makes the "Forbes" list of the richest artists in the world of hip-hop.

You're with YOUR WORLD TODAY, and don't go away.

(COMMERCIAL BREAK)

GORANI: Russia and China are flexing their military muscle. Troops from the two largest armies in the world have kicked off their first war games on Russian territory.

The presidents of Russia and China watched the drills. You see them there. And they were joined by leaders and military forces from four Soviet central Asian nations -- Jim.

CLANCY: All right. Welcome back to CNN International and YOUR WORLD TODAY.

GORANI: All right. We are covering the news the world wants to know.

We're giving you some perspective, and we're going to talk again about the Russian military. In addition to the Russian-Chinese military exercises, Moscow took another symbolic step today. President Vladimir Putin authorized flights of bomber aircraft beyond Russian borders in response to what he calls security threats.

Let's get more now on Putin's move to revive a Soviet-era practice. We're joined by journalist Alexander Nekrassov, who was a former adviser to Russian president Boris Yeltsin.

Why is Vladimir Putin doing this now, resuming long-haul bomber flights very far from Russian borders? What does it mean? Why now?

ALEXANDER NEKRASSOV, FMR. ADVISER TO PRESIDENT YELTSIN: Well, basically, it's part of the image-building exercise that the Kremlin has been taking for quite a while now. You know, it comes back from the Munich speech of Putin. It also includes that flag at the North Pole.

So, basically, the message is going to the domestic audience mostly and saying that Russia is strong again, Russia can withstand any attack. Russia is actually, you know, projecting its power over the whole world.

GORANI: But is Vladimir Putin also sending this message to the Americans? One of the things he said, well, we unilaterally suspended these long-haul bomber flights 15 years ago, but not everybody followed suit. Was that sort of a way of saying that America didn't follow suit?

NEKRASSOV: Well, I think it's mostly -- you mentioned yourself, it's a symbolic move. Basically, the Russian armed forces are not that well-equipped to be -- to be, you know -- be on the par with American forces. So every time they make a statement like that, it's basically playing into the hands of the, you know, domestic audience.

And there's a buildup going on before the elections in December and the presidential elections in March. And the rumors are abounding that President Putin will stand for the third term. And even if he won, he will probably advise the Russian public to vote for somebody he will offer.

So, basically, we are looking at the public relations campaign. And I don't think the American public and the American government should be worried about that.

GORANI: A quick last question. What does this change strategically, diplomatically for Russia? Anything at all, or is this just show, is this just P.R.?

NEKRASSOV: This is basically P.R. You know, I, myself, was an adviser to Yeltsin on election matters, apart from other things. And I'm looking at those small things together, and I'm seeing an election campaign running.

I would be very surprised if we don't see any more steps like that being taken by President Putin and the Kremlin. And I actually find some of those steps quite bizarre, just like that flag in the North Pole or him undressing in front of the journalist and so on.

I suspect that we're going to see a third term of President Putin.

GORANI: All right. Alexander Nekrassov, a journalist and a former adviser to the former Russian president, Boris Yeltsin.

Thank you for joining us.

CLANCY: All right. Evidence of a Cold War boundary sole disappears.

GORANI: Coming up...

(BEGIN VIDEO CLIP)

FREDERIK PLEITGEN, CNN CORRESPONDENT: In most of Berlin, this row of brick is all that commemorates the Berlin Wall. And most tourists that come here to the Berlin Brigade don't even realize they're constantly walking over what used to be the Iron Curtain.

(END VIDEO CLIP)

CLANCY: A growing movement. A movement to save a symbol detested by many Germans, why some say it's important to keep pieces of what was once communist East Berlin.

GORANI: Also ahead, no need to repair the shuttle in orbit. NASA's decision, we'll tell you why it's raising eyebrows among some space enthusiasts.

Stay with YOUR WORLD TODAY.

(NEWSBREAK)

(COMMERCIAL BREAK)

GORANI: Welcome back. This is YOUR WORLD TODAY. I'm Hala Gorani.

CLANCY: I'm Jim Clancy.

And these are some of the stories making headlines around the globe. Rescuers in Peru looking for any more survivors from Thursday's powerful earthquake. Civil defense officials putting the death toll now at 447. Warning it will rise. Other agencies say it's already over 500. Many countries are answering Peru's call for emergency assistance, including the United States. It's sending a team of military doctors. It has already pledged $100,000 in aid.

GORANI: Also in the headlines, authorities in Utah are debating whether to resume underground drilling operations after three of the rescue workers died during a dangerous effort to reach six trapped coal miners. The dead were among nine rescuers who were inside the mine during the collapse. The other six were injured. The trapped miners have not been heard from since the cave-in 11 days ago. CLANCY: Well, it certainly looked like a dramatic turnaround for U.S. markets. They shot up like a rocket after the opening bell on news that the U.S. Federal Reserve had cut one of the key interest rates by half a percentage point. It was really a step in to stem the global market meltdown. It affects the banks the most, not consumers. The gains have been moderated a little bit right now. This was not the actual benchmark rate that is often talked about on Wall Street.

GORANI: OK. Now, no need for repairs that's the word from NASA after a piece of foam struck the belly of the shuttle "Endeavour" into its ascent into space. The result of the gouge, you see there on those pictures, about 3 1/2 inches long and 1 inch deep. Right into the liner that is glued to the shuttle's skin. But NASA is confident with its decision.

(BEGIN VIDEO CLIP)

JOHN SHANNON, MISSION MANAGEMENT TEAM CHAIRMAN: It was not unanimous, but it was pretty overwhelming to go with a use as-is condition. In other words, not to do the tile repair. So we will not be doing the tile repair on EBA-4.

(END VIDEO CLIP)

GORANI: Now, here are two views of the actual foam strike during the launch. NASA is stressing that a space walk to fix the gouge in orbit would also be quite risky. There you have a view. I'm sure Jim with his guest will explain to us, Jim.

CLANCY: So that's the question, should "Endeavour" actual endeavor the trip home. A severe incident led to the loss of the shuttle "Columbia" in its seven member crew. Has NASA made the right call somewhere with his perspective, we're joined by Keith Cowing from NASAwatch.com. Keith, as briefly as possible, do you agree with NASA, don't repair, fly home?

KEITH COWING, NASAWATCH.COM: Based on the way you make decisions on an operational sense it makes sense, yes.

CLANCY: All right, no bell physicist and a guy who was on the "Columbia" disaster review trying look at that accident, Douglas Osheroff says this is the wrong decision. They've got to use it to test and make sure it works well.

COWING: Well there's a logic to that and indeed that came up during the internal reviews. I probably would have said from a pragmatic point of view, yeah if you don't need it now, you got to test it because you may need it sometime in the future and it would be nice to know it does indeed work.

CLANCY: OK. Given all of these things, people are concerned saying this is a dangerous space walk to carry this out. Why is it dangerous fixing it in space?

COWING: These tiles are not the exactly most dynamic and robust things and seem to get gouged easily. And the concern is that when you're going out underneath the shuttle on the end of the long arms and you've got tools that you need to use on the orbiter itself, just the other day, they actually damaged the glove on the outside of the shuttle, they're sharp objects.

You can inadvertently bang into a tile and actually do more damage. The question is, can they fly home, get home safely, they believe they can, and therefore, is it worth going out and making damage worse elsewhere. They felt, no, it was not worth that risk.

CLANCY: Now, there was one element of the people on the review board trying to make this decision that said yes, there was a Houston element there, the people involved with the structural safety of the shuttle. They were saying yes, that structure safety, it could require a lot of damage repair when it gets back.

COWING: That's the concern. I sort of wondered about that, even though the way the shuttle comes back through the atmosphere, a lot of the heat will be spread around the vehicle. There's still going to be rather high temperatures. It's possible that "Endeavour" will not fly for a while if they have to repair the damage during re-entry.

CLANCY: Just one final question, how will we know, how will the astronauts inside be second guessing this making the decisions about the right things?

COWING: They've been involved. These days with Internet going back and forth, these guys knew what was going on into the meetings, they had input at the meetings and they had a say-so toward the end. So they're the loop.

Keith Cowing from NASAwatch.com, he said it's the right call. Bring the shuttle home. No repairs in space. Thank you.

GORANI: Now, hip hop superstar Jay-Z is topping the "Forbes" list of richest rappers. Ironically it's his talent outside the world of music that have boosted his bank balance to the tune of $34 million. As well as having some lucrative endorsement deals, Jay-Z is also the boss of a sports bar franchise.

Rapper 50 Cent, also known as Curtis Jackson, although I'm not sure he's known as that, earned $32 million from his businesses. Sean Diddy Combs, aka Diddy, comes in at number three with $28 million. He owns the Sean John clothing label and cologne that he licensed to Estee Lauder.

Number four belongs to music producer Timbaland with earnings of $21 million and Dr. Dre rounds up the top five earning $20 million last year.

CLANCY: They say one person's trash is another person's treasure. We're not talking hip hop here. Hauling trash is creating treasure for a new generation of entrepreneurs. Not only is there plenty of money to be made, you won't believe what some Americans toss out with the garbage.

Here's Jill Dougherty. (BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN CORRESPONDENT: It didn't fit in the house, so it's in storage for 20 years. Today, it's out of here.

UNIDENTIFIED MALE: It will be easier to tell once we pack it in there. We'll get this stuff out of there, all right?

UNIDENTIFIED FEMALE: Sounds terrific.

DOUGHERTY: The guys from 1-800-got-junk set to work. Carting away golf clubs, a bike sickle, even a fur coat. Sue Wagner will pay $498 to get rid of it but she says she's relieved.

SUE WAGNER: We're kind of a disposable people, we just buy stuff and we think we need it and it has no use and you just store it somewhere. Then you decide, let's move it here and then it ends up here for 20 years.

DOUGHERTY: Sam Schick ran an optical business in England and Ireland. But he found his real calling in junk. He and his wife Gail, a former computer programs analyst now live in Oregon Park, Illinois, a Chicago suburb. They run a franchise for the Canadian based company 1-800-got-junk. He said, he's seen people throw away the most amazing things. Like new flat screen TVs.

SAM SCHICK: Apparently what's happening is they're too small, the flat screen TVs, so they want to go to the larger ones.

DOUGHERTY: Gale says when it comes to junk, there is a difference between Europe and America.

GAIL SCHICK: People come here and say, oh, the homes are so big, we have big basements and three-car, four-car garages and these are great places to save things.

DOUGHERTY: Sometimes, people throw away thousands of dollars worth of stuff. They simply don't have room for it because they've gone out to buy more stuff. Denise Vidor is getting rid of two couches she's been store for a friend. He didn't know what to do with it. Did you ever think of recovering it, or using it, the better one?

DENISE VIDOR: Yes, I did. I just don't have the time. I don't have the expertise. I would have to pay somebody to come and get it and take it to place to get recovered.

DOUGHERTY: 1-800-got-junk recycles about 40 percent. Giving some to charity, some to metal recyclers and the rest goes to dump. The Schicks have 1.2 million people living in their territory, lots of potential customers, they say, after all, in America, junk is a growth business.

Jill Dougherty, CNN, Oregon Park, Illinois.

(END VIDEOTAPE) GORANI: I remember had I had a laptop, I got it to be repaired. And they're like, why are you repairing this laptop, just buy a new one, it's cheaper to get a new one.

CLANCY: Well, because of the different chemicals and poisons inside of it.

GORANI: Absolutely. The disposable society, now the Berlin wall hasn't just fallen, it's falling apart.

CLANCY: You don't want to throw everything out. We're going to tell you about efforts to save the remaining part of the symbolic wall that divided Berlin during the cold war.

(COMMERCIAL BREAK)

GORANI: Welcome back, everyone. You're with YOUR WORLD TODAY, on CNN international.

CLANCY: And in U.S. politics, international affairs don't often figure prominently, but they're going to on Sunday. The democratic candidates for U.S. president are gearing up for a debate Sunday in the key election state of Iowa.

Now, former senator John Edwards is one of those candidates. In an article for "Foreign Affairs" Edwards explains how he if elected would handle the ongoing tensions with Iran. He wants a radical shift in the Bush isolation policy and says direct talks are the best way to contain Iran's nuclear ambitions.

GORANI: Another democratic candidate Barack Obama said he would meet with leaders of the so-called rogue nations. That comment setting off squabbles with candidates, most notably Hillary Clinton. John King reports on the most important challenge facing the youngest entrant in the presidential race.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT: It is the question handy knows it.

BARACK OBAMA, PRESIDENTIAL CANDIDATE: Well, I think it's time to turn the page on conventional foreign policy thinking.

KING: In Council Bluffs, Iowa, Barack Obama attempted to turn his lack of Washington experience into an asset, lumping rival Hillary Clinton with vice president Dick Cheney in making the case that Iraq war is proof.

OBAMA: After the all, the war wasn't cooked up in Council Bluffs. It was organized by politicians in Washington who said they knew better than you did and that's what conventional thinking on foreign policy amounts to. Conventional thinking has to change.

KING: State fair draws all of the presidential hopeful it's to Iowa, made for TV moments at every turn. And a chance to mix and mingle with the voters who get the first say. Among the democrats it's snarl Obama perhaps the most improved at the moment, under attack for several statements they say for the 46- year-old first-term senator doesn't grasp the complexities of foreign policy.

UNIDENTIFIED MALE: This is no time for on the job train for this next president coming in.

PETER HART, DEMOCRATIC STRATEGIST: Senator Obama's biggest challenge is to answer the question is he ready to be the foreign fellows leader and commander in chief. He's yet to do this. And he has to do it before the primaries.

KING: There's time, but veteran democratic strategist Peter Part says Obama must first demonstrate post-9/11 leadership ability, convincing democrats that Hillary Clinton scientist real risk.

HART: Hillary Clinton polarize voters. Democrats love her, republicans hate her and independents are split. Any election she's involved in is going to be a close election.

KING: It's not just democrats forming the state, Friday will mark the Iowa debut of Fred Thompson who have won't officially join the republican race after labor day who is stopping by and coming by fair known for its corn dogs, deep-fried Twinkies and presidential candidates.

John King, CNN, Iowa.

(END VIDEOTAPE)

CLANCY: John McCain has experience aid slide in the polls, that's partly due to well-publicized problems he's had. Earlier, McCain smoke with Kiran Chetry.

(BEGIN VIDEO CLIP)

KIRAN CHETRY, CNN ANCHOR: You your campaign was highly publicized. You ran out of money. What went wrong?

JOHN MCCAIN, PRESIDENTIAL CANDIDATE: Budget decisions on my part. It's all my responsibility. We're back on track again. And every campaign has problems from time to time. And I'm really happy where we are right now. I think most will start deciding sometime isn't September or October as to how they want to support. I'm confident to do the campaign they want to support, recognizing it's very tough.

CHETRY: You said earlier this week since 1980, every nominee has won two of the three key early races that being New Hampshire, Iowa or South Carolina. You're not leading in any of these states right now. If you were to not win at least one or two of those states would you consider dropping out?

MCCAIN: I'm sure we'd have to see what the circumstances were at the time. But I'm confident we will win two of the early three states. But I would imagine, it would be extremely difficult without that. You'd be defying history.

CHETRY: When it comes to Rudi Giuliani as well, he was the only one on the stage actually willing to say he was pro-choice, do you think a pro-choice can win the GOP ticket?

MCCAIN: I think it's very difficult because it's one of the principles of our party. But he seems to be doing pretty well so far.

(END VIDEO CLIP)

CLANCY: All right. For the latest on the campaign, it's the long way to the election, but this one was ignited interest, not only in the United States, but around the world. No matter where you are you can go to our Web site at CNN.com, and get all of the latest political news from the best political team that is covering this race.

GORANI: Well, speaking of politics, the first family in the U.S. is getting a first son-in-law. I should say speaking of family. One of the president's twin daughters is now engaged. The White House says Jenna Bush is set to marry her long-time boyfriend Harry Hager. The White House says there's no details on when or the wedding will be. Take your time, 25's young.

CLANCY: Well, coming up -- it's probably not your ideal easel since it's constantly shipped away.

GORANI: Some say it's worth preserving.

(COMMERCIAL BREAK)

GORANI: Never underestimate the power of weather. Nine months ago, a blizzard hits parts of Colorado.

CLANCY: And what do you do in a blizzard, Hala? Well, you sort of cuddle up. As a result today, the area's maternity wards are overflowing with customers. Coincidence, I don't think so.

Colin Campbell investigates.

(BEGIN VIDEOTAPE)

COLIN CAMPBELL, CNN CORRESPONDENT: Fresh out of the maternity ward, little Connor sees his first glimpses of the world.

MELISSA BENSON: He's great. He's a good baby. He's very happy.

CAMPBELL: He's putting smiles on nurses here, too, just one of dozens of babies born this month at Parker Eventest where there's been somewhat of a baby boom.

UNIDENTIFIED FEMALE: It's been chaotic but organized.

CAMPBELL: Nurses here delivered 75 babies this month, 25 more than usual. The reason for the increase? Why, mother nature, of course. Late last year, abundant snowstorms and blizzards forced shut-ins. Forcing couples like Melissa and her husband to find creative ways to pass their time.

MELISSA: I guess we were bored. Being stuck in the house, I guess, can't go anywhere.

CAMPBELL: To accommodate the birthing boom, Parker Eventest opened up rooms on the first floor.

JAMIE BLAIR: They brought us down here, they actually canceled us to get induced.

CAMPBELL: But Jamison finally arrived, child number four for the Blairs, the result of a canceled trip.

BLAIR: We were going to take the trip to if Florida and it snowed here and now he's here.

CAMPBELL: With dozens of couples calls in, this is only the start of a long birthing season.

(END VIDEOTAPE)

CLANCY: Colin Campbell there. On a not so mysterious connection, Hala, between blizzards and babies.

GORANI: Now, let's move on to something a little bit different. And who said this from the Stenten in the Baltic to the Adriatic, an iron curtain has descended across the continent.

CLANCY: Winston Churchill phrased the whole phrase "the iron curtain." Talk about the divide in World War II.

GORANI: With the Berlin wall, we all know what happened in 1989. But what about since then.

CLANCY: Frederik Pleitgen gives us a look at the wall today and what's happening.

(BEGIN VIDEOTAPE)

FREDERIK PLEITGEN, CNN CORRESPONDENT: Souvenir hunters can't seem to stop picking away at the Berlin wall, a major problem because there's not much left. Connie Allawi is trying to save the wall, he's an Iranian painter who is one of the many artists to leave his marks on this section of the wall. When he comes to see his work he finds it vandalized. They keep chipping away. They start hammering away, he says.

This is the east side gallery, the longest piece of the Berlin wall still standing and an open-air exhibition by works of artists from all over the world, paints in the early '90s now withering away. He's fighting for funds to renovate the east side gallery. It would cost over $2 million to bring back the artists to paint their work. Even officials admit the move is long overdue. The east side gallery is a disastrous state. Much of it has never been preserved. It's just falling part, Franz Shultz says. In most of Berlin, this row of brick is all that commemorates the Berlin wall, and most tourists who come here to the Brandon Brigade don't realize they're constantly walking over what used to be the iron curtain. When the gate and the wall opened in 1989, Germans began tearing it down. They wanted it down as fast as possible. And souvenir hunters were glad to oblige.

With almost all of it gone, he says it's more than important to teach them about the dangers of oppression and totalitarianism, something that he experienced firsthand in his country in Iran. In countries like Iran there are walls in people's heads, religious walls, and people saw they had to tear it down. We have to preserve the evidence of this, he says. And Allawi says he will keep fighting, a race against the clock to keep the Berlin wall from vanishing altogether.

Frederik Pleitgen, CNN, Berlin.

(END VIDEOTAPE)

CLANCY: Yes, he is that tall, by the way.

GORANI: All right. At the top of the hour, there is a news conference regarding the trapped miners in Utah. We'll be covering that live, I'm Hala Gorani.

CLANCY: For now, I'm Jim Clancy, and you are watching the world's news leader, CNN.

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