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Stocks Tank In U.S. and Europe; Virginia Tech Lockdown; Missouri Bill Focuses On Teachers And Students; Tiger's Back; Emily Bears Down On Haiti; Tracking Emily; President Obama in Full Campaign Mode; Q&A: Investing in Economic Uncertainty; Science Pushes Boundaries to Create New Form of Life

Aired August 04, 2011 - 13:00   ET

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

RANDI KAYE, CNN ANCHOR: Here is what brutal looks like on Wall Street. Take a look. Right now we want to show you the Dow. It is down 291 points. And so we turn to the man himself, Ali Velshi, to tell us what on earth is going on.

Ali, just yesterday we snapped this eight day losing streak --

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

KAYE: And now this. Why?

VELSHI: It's quite a strange day when I have to tell you the Dow to 90 or so is an improvement. We were down substantially more than that. I'll tell you what, this is the Italian job, Randi. What happened is that we've been seeing -- you know, we had this Greece problem and then we moved right into our debt ceiling problems and then in the middle, Italy showed up. Italy's got some very serious problems and there are fears of default in Italy.

Basically, the European -- the head of the European central bank, their equivalent of Ben Bernanke, gave a speech had morning in which he said that economic growth is slowing, and they are going to move in to try and intervene to shore up some of the economies there, and traders sort of took that as a note to say, boy, things are more serious than we thought.

You combine that with what's going on in the U.S., you combine that with the fact that the Japanese central bank intervened to prop the yen up, and there's this sort of global fear that everybody is kind of doing badly and no one's there to pick up the slack.

And basically, that's what's happening. Money is coming out of the stocks, usually when that happens, you see it coming out of commodities or gold, that's not even happening today. People are taking their money out of the stock market, out of gold, out of oil, this is the global equivalent of jittery traders taking their money out and putting it into their big global mattress. That's basically what's happening, Randi.

KAYE: All right, Ali, I want you to stick around. I also want to bring in Leigh Gallagher, she's the assistant managing editor of "Fortune" magazine. Stock market mood swings, of course, are her business as well.

Lee, we get that investors are worried about debt, they're worried about recession, but a thousand point drop in two weeks, why is the fear taking hold right now?

LEIGH GALLAGHER, ASSISTANT MANAGING EDITOR, "FORTUNE" MAGAZINE: Well, I think a lot of it today is what Ali said, it's the turmoil in Europe that is suddenly, you know, worse than we thought. There was a feeling the ECB was going to come in and rescue things and when that suddenly looked up in the air, the market right now is so jittery, that there's a lot of reaction and even overreaction. But hold back a couple days, I mean, the whole turmoil over the debt ceiling affected the markets late in the game.

It didn't really start to show until just a few days before the deadline, but boy did it show as soon as it did. And at the same time, it was kind of a one-two punch. We had some really bad economic data last week that came out. GDP for the second quarter was very low, and the first quarter was revised downward.

So -- we had poor auto sales figures. The ISM index, manufacturing index, hit a two-year low, so across almost all segments and all of the economic indicators that we look at, we're getting revisions downward and pretty gloomy news. And so, the markets are already so jittery, you know, it's just -- it's piling on top of that already.

VELSHI: And usually, Lee and Randi, what happens is generally investors are sophisticated enough to say, this isn't doing well enough so I will put my money here, or this part of the world isn't doing so well, so I'll move it over here.

What's happening right now, is there's so much uncertainty -- and let's not read this to mean everything is bad, but there is so much uncertainty as to where the next shoe will drop, that a lot of people are just taking the money that they would normally shift into different piles, and they're taking it out. Because they're saying, at least if I can have it somewhere where I can count it, it's safer.

And you're seeing that there's a lot of cash piling up. We see companies have been doing this for the last couple years, now you're seeing sort of global investors doing it. And I think Lee would agree with me on this that we should caution, this doesn't necessarily mean something bad is happening. It means investors do not -- smart investors, global investors, do not know where the logical place to put your money is at this point.

Would you say that that's a fair way to put it?

GALLAGHER: Yes, I think that's a -- that's exactly right, Ali. I mean, you talk about a lot of -- every day investors think, oh, should I pull my money out. Absolutely not, the market is reacting right now, but you never want to make these emotional moves. And yes, the institutional investors are trying to figure out where the safe watermark is.

KAYE: So, is this --

GALLAGHER: Don't forget, we thought we were going to have a relief rally after the debt ceiling was resolved, and that didn't happen. So, things are just out of whack right now.

KAYE: Is this correction territory, though, Ali?

VELSHI: Yes, it is. But remember, every -- almost every single day for the last five or six days we've seen the market do something other than what it did in the morning. Tomorrow was supposed to be the serious day because we're going to get our unemployment report for July which we're not expecting to be good. I wouldn't have even expected this big a reaction to that.

So, what happened yesterday, if you recall, we had a very rough market and I think right about when you were on air, late afternoon, things started to turn around. And while we didn't make much, the market turned upward. There are some investors sitting around thinking, well, let's wait to see where this thing goes then I'm going to get in. This might be -- go back to 2008, 2009, this is what these markets are looking like. A lot of volume, a lot of volatility, people getting in and selling out very rapidly.

KAYE: So Lee, what's your advice to those who might be sitting at home? I mean, usually, at least for retirement investors, you sit tight, you don't panic, does that still hold now?

GALLAGHER: That always holds in a crisis. I mean, if you think about the people that pulled their money out in September 2008, they missed a huge rally. And so, if you're going to talk about making dramatic changes, you have to be right twice.

You have to be right at the very moment you pull it out, and then you have to be right again on the way back in otherwise you risk big losses. So, as hard as it is, the best advice in a kind of crisis situation, which I don't think we're in right now, but it's always just a stay calm and steady, sit on your hands, don't do anything drastic.

KAYE: Ali, you mentioned the jobs report coming out tomorrow. What's your gut on that?

VELSHI: Well, the consensus is that we're going to have created 75,000 jobs in July, we'd like to be in the 150,000 to 200,000 range. I can tell you, while we'd like that to be the case, Randi, there's nothing around us that suggests that would be the case. We're not hearing big announcement where people are hiring, in fact, we're seeing more laying off in terms of announcements than hiring. So, I don't expect it's going to be better than that. It's not good enough, but it's going to be what it is.

To Lee's point earlier, remember look at the screen there, one of the reasons we focus on this is because we have a screen for the Dow. The bigger activity today, actually, is going on in bond markets, but we don't have a nice screen like that. And look at that percentage number, it's off 2.5 percent. That's a lot for a day, but again, let's keep it in perspective. This is a jittery market, there may actually be buying opportunities that a lot of companies making money, particularly those that make money on global consumers. We've been reporting on these earnings every day, so hopefully the earning stuff will offset the jobs report, but pay attention tomorrow morning at 8:30 a.m. Eastern.

KAYE: Oh, we certainly will.

All right, Lee, Ali, I know we're going to check back with you. We're certainly going to continue to watch the markets and we'll check back with both of you in just 55 minutes or so. So, thank you both.

And we will continue, of course, to monitor the situation unfolding at Virginia Tech right now. The campus remains under lockdown, people are still being told to stay indoors after some summer camp students reported seeing a man with what could have been a handgun, that was around 9:00 a.m. this morning. Police held a press conference a short time ago to say so far, they haven't found anyone matching the description the students gave them. But we expect them to hold a press conference to update us again around 1:30 p.m. Eastern time. When that happens, we will bring it to you.

Protecting students or a violation of freedom of speech. A new Missouri law bans teachers with becoming friends with students on Facebook. I'll speak with a lawmaker who sponsored the bill, right after this.

(COMMERCIAL BREAK)

KAYE: A new Missouri bill bands friendships between teachers and students. The law was created to prevent inappropriate relationships between the two groups under most circumstances. The law does allow teachers to use social networking sites like Facebook, but only if it is available to school administrators and the child's legal custodian, physical custodian, or legal guardian.

Critics have denounced the measure as a violation of freedom of speech. They also argue it removes a crucial educational tool.

The sponsor of the bill is the Missouri State Senator Jane Cunningham, and she joins us now from St. Louis.

Also joining us on the telephone is Randy Turner, an eighth grade teacher in Joplin. He opposes the bill.

Senator Cunningham, let me start with you, please.

Why did you think that this bill was necessary?

STATE SEN. JANE CUNNINGHAM (R), MISSOURI (via telephone): Because the A.P. did -- the Associated Press, did a national investigation several years ago revealing that there was six times more prevalent than the priest hood scandal sexual misconduct among teachers in our public schools. And in Missouri, we found that Missouri is the 11th worth state in the nation for educators losing their license for sexual misconduct. It has become prevalent enough that our department of educational officials call it passing the trash, meaning teachers, educators moving from one district to another because it's not disclosed what they were dismissed for.

KAYE: So, help us understand, if you can, just a little bit here. What type of friendships are actually approved here by the bill?

CUNNINGHAM: All of them. That was not correct information that you gave. In fact, the actual language of the bill says that we do not prohibit those types of interactions on Facebook or any other social networking, the only thing the bill prohibits is in there is hidden communication between a educator and student. All we're trying to do is make it appropriate so that third parties, like parents or like school personnel, can monitor it.

KAYE: How can you make sure it's always monitored?

CUNNINGHAM: That's up to the local school districts. We're allowing local school districts to make their own policy and decide with their own personnel what works best for them and how they monitor and police it.

KAYE: I want to bring in the eighth grade teacher I mentioned just a moment ago. Mr. Turner, how do you feel about the bill?

RANDY TURNER, EIGHTH GRADE TEACHER, JOPLIN, MISSOURI (via telephone): Well, I think it's a very poorly written bill, at least the part of the bill that concerns Facebook. There's much of the bill that I do not have a problem with. I don't see stronger sanctions against passing the trash, I think that's important. It's also important for every school district to come up with a policy regarding social networking.

But what I see with this wording in the Facebook part of the bill, I see it as kind of demonizing public teachers, public school teachers and saying that students need to be on the lookout for them, and the sad thing is I don't see how this bill, that part of it, actually protects anyone. If you think about it, any teacher -- and believe me, good classroom teachers want these people out of the classrooms as much as -- more than anybody else, because they bring shame on our whole profession.

If a teacher is going to cross the line and have an illegal relationship with a teenager, with a minor, with a child, why would this teacher follow this law? The only people who would be having to change the way they do things and be willing to do things are ones who are law-abiding teachers.

KAYE: Senator, would you say it might be a violation of freedom of speech as others have suggested?

CUNNINGHAM: No, because we do not -- the bill, by the way, does not mention the word, 'Facebook', and we do not deny any communication, it's just as appropriate so third parties can monitor it.

KAYE: And as Mr. Turner said, does it target teachers?

CUNNINGHAM: I don't believe so, in fact, I would say, no, it doesn't, because we have found problems with teachers, counselors, and coaches, principals, superintendents, they've all lost their licenses of those who have been found guilty. And so, I don't think -- no, it doesn't. I think we are trying to find perpetrators no matter where they are in the school personnel.

KAYE: Mr. Turner, let's face it, a lot of students communicate on Facebook. So, what does this bill mean for communication between teachers and students?

TURNER: Well, what worries me is there are a lot of things that we will still be able to do, if I am understanding the rulings here. We would still be able to have what they call fan pages where communication can be on the wall, and everyone will be able to see it, and there's no problem with that on most things. But when you have a student who has a problem, or a student who is even having trouble working on an assignment, that student often times is not going to want to reveal to the whole world that he or she is having a problem with the assignment. And if I could mention something --

KAYE: Just very quickly here.

TURNER: As Cunningham mentioned that the bill does not mention Facebook, no, but one of the reasons why people have called it the Facebook bill is it is obviously the most prominent social networking site now and it is one that is being used effectively, and in a good educational manner by teachers all over the state of Missouri.

KAYE: All right. Senator --

CUNNINGHAM: And we encourage that appropriate to continue.

KAYE: All right. Senator and Randy Turner, appreciate your time, both of you. Thank you.

We are live in Ohio where Tiger Woods is teeing off in his return to the PGA. Will he be the superstar of old or have injuries done him in? We will find out next.

(COMMERCIAL BREAK)

KAYE: Well, he's back. Love him or hate him, golf star Tiger Woods making his return to professional golf this hour at the Bridgestone Invitation. CNN's Ted Rowlands is there live in Akron, Ohio.

Ted, have you seen Tiger? And when is he expected to tee off, exactly?

TED ROWLANDS, CNN CORRESPONDENT: He's teeing off at 1:40. So coming up in -- within the hour here. And, yes, we have seen him, in fact. He just arrived to the course about 15, 20 minutes ago and is headed over to the practice range. And we had a camera there as he arrived at the course. If you had any question about whether the people here are cheering him on or not, take a quick listen at his reception.

Like I say -- like you said, Randi, love him or hate him, he is fantastic for the game of golf. The PGA, obviously, is very pleased that he is back here and competing after having to take a bit of a break. In May he walked off the course at the TPC. He had a knee injury and an Achilles heel problem. He says that he feels better than he has in years. He says physically he is ready to go. And now we'll see where the rest of his game is, if you will. How he does this weekend and how he does from here on out.

KAYE: Yes. And I'm also curious, I'm sure a lot of folks are curious about how he's going to do with his new caddie as well. This is, what, a high school friend of his?

ROWLANDS: Yes. Well, Steve Williams has been his caddie for 12 years. And we don't know the details but something happened between them and their relationship broke down. Tiger fired Williams. And that is absolutely another level of drama here because now Williams is working for another golfer and he'll be out here.

So they'll be face-to-face. They're teeing off sort of near the same time today. So another layer of drama with this whole Tiger Woods saga. Then you have Rory Sabatini (ph), who won the U.S. Open. He's here as well. There's big crowds here. Even bigger ratings this weekend if Tiger does well. So the folks at the PGA and CBS are very pleased that Tiger is back.

KAYE: We saw the fans are certainly pleased. Any sense of how the players feel about his return?

ROWLANDS: They're happy because they know what he brings to the game of golf. I mean, let's face it, not a lot of people like watching golf on TV unless you're a fanatic. But you bring Tiger into the mix, especially now with what he's been through over the past couple of years, and you've got non-golf fans tuning in to watch. So the players get that. Whether or not they like playing against him is another thing, but they absolutely understand that he is great for the game.

KAYE: All right. Well, 20 minutes until he tees off. Ted, I'm sure you'll be watching. Let us know how he does.

ROWLANDS: You got it.

KAYE: Thank you.

Tropical Storm Emily has just made landfall in Haiti, where hundreds of thousands are still living in temporary housing. We'll take you there live next.

(COMMERCIAL BREAK) KAYE: We are keeping a close watch on Haiti this hour. Probably the least equipped nation in the hemisphere for another natural disaster. Tropical Storm Emily has been churning off shore with top winds of 50 miles an hour and the potential to dump a foot or more of rain. It's expected to move northwestward any time now, bringing misery to Port-au-Prince where hundreds of thousands of people are still in tents after last year's earthquake.

Joining me on the telephone now from the Haitian capital is Yvetot Gouin. He's a local filmmaker who helped us cover the earthquake and now is watching Emily.

Yvetot, how is the weather in Port-au-Prince right now?

YVETOT GOUIN, FILMMAKER (via telephone): Well, Randi, right now, so far so good. It's fairly quiet. I mean today has been declared a national holiday, or it's a holiday to just sort of keep people at home. And the streets are quiet. It's not raining yet. It's getting a little cloudy, so, so far so good.

KAYE: Are people taking precautions? I mean is there a sense of calm or a sense of panic there?

GOUIN: Right now there's a sense of calm. You know, I mean as of yesterday, when we thought the storm was going to actually hit, people sort of flocked to the stores just to stock up on food and water. But then sort of last night and into early this morning, nothing's really happened. So as of today, which is now 12:25 local time, streets (ph) are fairly quite.

KAYE: All right, Yvetot Gouin, appreciate your heads up there for us on the ground and keep us up to date as well.

The question really, though, is, when will Emily show herself on U.S. shores. Meteorologist Chad Myers tracking the tropical storm from the severe weather center.

Chad, what do you see?

CHAD MYERS, AMS METEOROLOGIST: Well, it may not hit the U.S. at all. It may be a glancing blow and it may travel right along the Florida coastline for hours and hours. And still all the scenarios still within the cone.

The storm right there. That's the center of what is Emily. Fifty miles per hour. And what we're worried about for today is all of this wind as it comes around the storm will come into Port-au- Prince from the north. There is a large ridge line here and there's a huge mountain chain there. The rain will pile up on the mountain, and then all of a sudden it will start to run downhill.

Now, remember, they cut down most of the trees in Haiti and they used it for charcoal and for cooking. So basically the place is called (INAUDIBLE). It's just -- it's (ph) deforested. So when you start to see that, you will also see mudslides happening at the same time. Here's what it looks like here. This is what the radar should look like. Now there's not a radar in Haiti, but our computer can look at the satellite and say, hey, where are those big, thick clouds. So the big, thick clouds right now, getting into Port-au-Prince. And then eventually running over the Turks and Kakos (ph) and into the Bahamas.

I know it's hard to see, but somewhere right in there is where that forecast center would be as it gets close to the U.S. So for now, at least, there is not a U.S. landfall, although it's going to be very close because the U.S. is still well within the cone. That cone all the way from The Keys, all the way to the east of the Bahamas. So the rain is going to be heavy in Haiti, heavy in Port-au- Prince, heavy in the DR. And then over to -- that's Guantanamo right there. And then turn to the right.

If it doesn't turn in time, it does hit Miami. If it turns early, it doesn't come anywhere near us. If it snakes along the coast, it could parallel the coast with 70 or 80-mile-per-hour winds for miles and miles. That would be the worst case scenario because that's where most people would be influenced and damaged anywhere from Ft. Lauderdale, all the way up maybe even to Cape Canaveral. All those scenarios still in, but it's still two and a half days away.

KAYE: All right, Chad, we'll keep an eye on it, along with you. Thank you very much.

MYERS: You're welcome.

KAYE: And just a reminder, we are expecting a press conference from Blacksburg, Virginia. A Virginia Tech press conference, actually. That should be coming up in just a few minutes. That's because students this morning there attending a camp at Virginia Tech said that they saw a white male with a gun, some type of object that they thought was a gun, covered with a cloth.

As you all know probably at home, that is the site of the 2007 shooting massacre. So we're anxious to hear what authorities there on the campus at Virginia Tech have to say, whether or not the campus is going to remain locked down and if they've had any luck finding a possible suspect. We'll bring that to you as soon as it happens. Keep it here on CNN.

(COMMERCIAL BREAK)

KAYE: Let's check out some of the news and other headlines that you may have missed.

Despite a deal to settle the debt ceiling crisis, the Dow Jones index is taking a nosedive. By noon today it had dropped 350 points on what analysts say is a total fear of the market. You can see it right there. It's down now about 283 points. They say investors are running toward low risk options and away from stocks. The S&P was down 41 points and the Nasdaq was down 91 points at one point.

Police in Virginia have released this sketch of a man they say could be carrying a handgun right now on the campus of Virginia Tech. Three students say they saw a person that looked like this just after 9:00 this morning carrying what looked like a gun. The campus is now on lockdown as teams search for the possible gunman.

So far police have not been able to find a person matching the description. The university has issued an alert saying he was spotted outside of Dietrich Hall. That's next door to the site of the 2007 shooting, the deadliest rampage in U.S. history that left 33 people dead.

Tropical Storm Emily expected to unleash potentially life- threatening heavy rains across Haiti. About 12,000 United Nations peacekeepers are there to help with food, cholera kits, tents and much more. Right now rain is falling 90 miles south of Port-au-Prince. Hundreds of thousands of Haitians are still living in temporary quarters after an earthquake a year and a half ago. Emily may hit Florida by Saturday, but so far, no watches have actually been posted.

After one death and 76 case of sickness, meat giant Cargill is recalling 36 million pounds of ground turkey. Cargill fears it could be tainted with salmonella. Right now its Springdale, Arkansas plant has stopped processing ground turkey as the corporation figures out exactly where the contamination is. Cargill says other turkey products at the plant are not affected. The USDA reminds people to cook meat to 165 degrees.

Today the president turns 50. People have noted that Mr. Obama has more gray hair since he took office. You have noticed? He definitely didn't wish for the latest poll numbers which show the recent debt ceiling deal did not help his approval ratings in Florida. Might get some more gray hairs from that. But he did have a good time yesterday in Chicago at a fundraising event in Florida.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's true that I turn 50 tomorrow which means that by the time I wake up, I'll have an e-mail from AARP asking me to call President Obama and ask him to protect Medicare.

(END VIDEO CLIP)

KAYE: And once again we will let you know what's happening at the campus of Virginia Tech. I want to tell you that we are expecting a press conference a few minutes from now. This is a live picture there of the campus. We're waiting for university officials who have been searching for a possible gunman on the campus. Some students there attended camp alerted authorities to that. That news conference is expected soon. As you may recall, that was the site of the 2007 shooting massacre.

We'll bring that press conference to you live as soon as it happens.

(COMMERCIAL BREAK) KAYE: We have been watching the Dow and the markets as they've been sinking today. I'm sure many of you at home have been watching them along with us. There you see it right there, the ugly picture. The Dow now down about 300 points. It was down before noon today about 350 or so, so this is a little bit of an uptick, but certainly not much for investors, I'm sure.

The situation though isn't good. There's a lot of uncertainty in the markets, certainly about what's happening in Europe as the debt problem spreads from Greece to Spain to Italy. So really, you look at the picture here at home despite the deal to settle the debt ceiling crisis that's still taking a nosedive. Total fear of the market. And investors are certainly running towards low-risk options apparently with the big selloff and away from stocks.

We'll continue to keep an eye on that, as well.

We're also watching and waiting for a press conference on the campus of Virginia Tech, the site of the 2007 shooting massacre, which took the lives of 33 people.

We also know that just a little after 9:00 this morning, that a few of the students there attending camp on the campus actually spotted somebody who they thought was holding a gun. They thought it was covered in some kind of cloth.

Police have now put out a sketch of who this person might be. The campus is still on lockdown. They have not picked up anybody that resembles the suspect or anyone at all so the search goes on for that person. Apparently, a white male described as having light brown hair, 6'0 tall, said to be walking in the direction of the volleyball court. But again, there haven't been any more reports of this person on campus, nor has he been found.

So we'll bring that press conference to you as soon as we get it.

A teenager held for 10 hours with a bomb strapped to her neck. Turns out the bomb was a fake. Details of this girl's nightmare right after this.

(COMMERCIAL BREAK)

KAYE: Imagine if you can the sheer terror of having a bomb strapped around your neck for 10 hours. It happened to a Australian teenage girl. As it turns out, the bomb was a fake. The people responsible, still on the run.

Jacqueline Maddock has more from Sydney.

(BEGIN VIDEOTAPE)

JACQUELINE MADDOCK, 10 NEWS REPORTER (voice-over): Ten agonizing hours are written all over the tortured faces of Madeleine's parents.

WILLIAM PULVER, MADELEINE'S FATHER: We particularly want to thank all of the people last night that did an extraordinary job helping out beautiful daughter.

MADDOCK: Bill Pulver's only daughter, the apparent victim of his multimillion dollar success. The HSA (ph) student should have been studying inside the Mossman mansion. Instead she was attacked by masked men that strapped what she was told was a remote-controlled bomb to her neck.

SUPT. LUKE MOORE, NEW SOUTH WALES, AUSTRALIA POLICE: There was a letter attached to this device -- a note attached to this device that did make certain demands. We are treating this as an attempted extortion.

MADDOCK: The letter is believed to have made reference to a character in the novel "Tai Pan" by Australian born author James Clavell. As investigations began, bomb disposal experts worked tireless to free Madeleine held prisoner by the device inside her own home.

PULVER: Maddy (ph) particularly wanted to thank those few officers who spent many long hours sitting with her showing little regard for their own personal safety in her immediate vicinity last night. They were an incredible comfort during a horrific ordeal.

MADDOCK: And Madeline's private girl's school, trial exams are suspended and students offered counseling.

PULVER: She also wanted to thank an extraordinary group of friends, family and neighbors who were kicked out of their homes last night and a wonderful, wonderful group of friends from her school and teachers from her school who were just incredibly supportive. In particular, a few of her school friends were standing at the end of our street for about seven or eight hours wishing her well.

MADDOCK: The wealthy Mossman community left reeling wondering how this horrified deal which reads like a Hollywood thriller could have unfolded on this Dress (ph) circle street.

Jacqueline Maddock, 10 News.

(END VIDEOTAPE)

KAYE: The president celebrates his 50th birthday in style while also taking in re-election cash. Wolf Blitzer joins us with the details right after the break.

(COMMERCIAL BREAK)

KAYE: The first lady is throwing President Obama a 50th birthday party. Wolf Blitzer joins us from the political desk in Washington.

Hi there, Wolf. So were you invited to the party? The big shindig?

WOLF BLITZER, HOST, "THE SITUATION ROOM": I was not invited -- five-oh, it's a big number for anyone and the president is celebrating today. He's turning 50-years-old. He has just turned 50-years-old. In the Rose Garden, the party will take place later. Some invited guests. I have no idea who they will be but the president obviously deserves to celebrate his 50th birthday.

He was in Chicago last night for two major fundraising events, including a huge one, about 2,400 people at one event. And Jennifer Hudson among some of the performers singing happy birthday to the president. He was in full campaign mode already on the aftermath of the debt ceiling agreement.

He said, I hope we can avoid another self-inflicted wound like we saw over the last couple of weeks. We don't have time to play these partisan games. He said, we have too much work to do over the next several weeks. I hope Congress is focused on what the American people are focused on, making sure the economy is working.

That was one of the fundraising events he had. He had a smaller one, a dinner for a hundred guests, a hundred people attended that one. They paid the maximum, $35,800 per person in order to have dinner with the president.

The Republican National Committee not wasting anytime going after the president, taking a jab at him saying, with 9.2 percent unemployment, he could work on creating jobs, but I suppose the White House is thinking he should stick the part of his job that he really likes. Obviously, they are suggesting he likes to going out campaigning and fundraising as opposed to doing real work here in Washington. That's the RNC.

The president, by the way, is -- has got a lot of work to do if he wants to get reelected. Take a look at these latest Quinnipiac University poll numbers. In Florida, a battleground state, a state he carried, he beat McCain in Florida back in 2008, the Quinnipiac University poll shows that only 44 percent of the voters in Florida approve of the job he is doing, 51 percent now disapprove. Not encouraging. Florida is going to be a key battleground state.

By the way, the week of August 15th, he is going on this bus tour throughout the Midwest, as you know, Randi. He's and going to try and score some points in other key battleground states. I suppose he will be in Pennsylvania, Ohio, a few others that he will desperately need if he wants to get reelected in November of 2012.

It's going to be a big race.

KAYE: Oh, yes. It's going to be exciting one. Already is, actually.

Thank you, Wolf, appreciate it. Nice to see you.

Your next update from "The Best Political Team on Television" is just an hour away.

In today's "Q&A," we are talking about investing in the face of uncertainty and how diverse should your portfolio really look. Some experts say pay yourself first, others say use a Roth IRA instead of a traditional IRA, or just make extra mortgage payments with any tax refunds or bonus money you earn versus investing it.

So what exactly is the best way to ensure your retirement in secure, and where does the smart money go? For that, we turn to Richard Quest and Ali Velshi on how to invest in uncertain times.

(BEGIN VIDEOTAPE)

VELSHI: "QUEST MEANS BUSINESS" and so do I.

We're here together in the CNN NEWSROOM and around the world, literally. Richard is on the National Mall in Washington, D.C. watching this spectacle that is the U.S. debt debate and deal. As we do every week, we're here to talk business, travel and innovation, nothing is off limits. So today, we're talking about investing in the face of uncertainty, Richard.

RICHARD QUEST, HOST, CNN INTERNATIONAL'S "QUEST MEANS BUSINESS": And that is the problem, because in this market, with so many issues, we had a viewer's question that said where does the smart money go. How do you invest in these uncertain times? It's clearly a question from Ong Jun Wee. How should people invest with the American debt crisis, the euro's own financial crisis sprouting? Should we look towards Asia?

Ali, you have 60 questions on where does the smart money go this "Q&A."

(BELL RINGS)

VELSHI: Very good.

Richard, diversification typically means investing in stock, bonds, cash, some precious metals, throw in some so-called emerging markets. These days it's different, Richard. If you're not global, you are not diversified. And, Richard, being global doesn't just mean having a British accent and jetting around the world in first class like you do. It means understanding and participating in global growth.

China is growing economically at a rate that is several times that of the United States, so is India. Richard, even Africa's GDP growth is three times as fast as U.S. growth right now. That creates huge demand for goods, services and infrastructure.

Now look, if you invest in big national and multinational companies in the United States, in Europe, in Great Britain, you will have some exposure to these regions. Obviously, General Electric and Coca Cola all sell all over the world. But the smarter play I think is direct investment in actively managed mutual funds and exchange- traded funds that --

(BUZZER SOUNDS)

VELSHI: -- that trade stocks of companies whose names you can't even pronounce, Richard. I think you've got to get into Asia and other places. (BUZZER SOUNDS)

QUEST: Thank you.

(BELL RINGS)

VELSHI: I got double beeped.

QUEST: Typical. Typical. Give him an inch and he will take the whole mile.

Ali, once again, I have to point out that you got half the answer, but you are not all the way there.

Yes, a decent investment strategy does require that you have a balanced portfolio. A bit of this, a bit of that, and a bit of the other. And yes, it requires to have defensive stocks, some cyclicals, some counter cyclicals, because you want to make sure that when things move you're in a position to take advantage of them.

But, and this is the core point, only a fool makes their investments and goes to sleep. You have to manage your investments, move a bit here and a bit there. You have to read the business pages of the major newspapers and invest in some of those companies that Ali can't even talk about.

Ultimately, though, what you have to do is be prepared to take a little bit of risk. Why? Because it's with risk what comes the best rewards. We can all lock up our money and go to sleep for a rainy day --

(BUZZER SOUNDS)

QUEST: -- but who wants to do that in the long run?

VELSHI: I have to say I agree with you. You're right, you can't put it on autopilot.

All right, Richard, time to separate the men from the boys.

QUEST: Here we go. The Voice joins us to make sure we know where we are.

THE VOICE: Thank you, Richard. Thank you, Ali. Welcome, gentlemen. Let's get right to the game.

What is the world's oldest recognized stock exchange? Is it, A, Amsterdam; B, London; C, New York; or, D, Rome?

(BELL RINGS)

THE VOICE: Richard.

QUEST: I'm going to take a guess on this with Amsterdam.

(BELL RINGS) THE VOICE: That is correct, Richard, very good. It was established in 1602. The Bourse was actually established in Antwerp, but called Amsterdam. The first shares were sold in a shipping company.

Richard, you're up one to nothing as we go to question number two.

Which industry has the top three companies on CNNMoney.com's list of worst long-term investments? Is it, A, paper products; B, brewing; C, airlines; or, D, farming?

(BELL RINGS)

THE VOICE: Ali.

VELSHI: I'm going to go with airlines which haven't been profitable since the Wright brothers.

(BUZZER SOUNDS)

THE VOICE: That would be wrong.

Richard?

QUEST: I'm going to go with farming.

(BUZZER SOUNDS)

THE VOICE: Also incorrect.

QUEST: It's paper products. Oddly --

(BUZZER SOUNDS)

THE VOICE: No, it is all wrong. Brewing is the right answer.

VELSHI: Ha! Really?

THE VOICE: The top three -- Kirin, Carlsberg and Asahi -- are all on the top of the list. Google and McDonald's are the best investments.

Now to question number three. Ali, you still have a chance here.

What do people across the globe spend more money on? Is it, A, lottery tickets; B, casino gambling; C, sports betting; or D, self- help books.

(BELL RINGS)

THE VOICE: Ali.

VELSHI: I'm going to go with sports betting.

(BELL RINGS) THE VOICE: That is correct, Ali. Sports betting accounts for $350 billion in both legal and illegal betting. That's $100 billion more than lotteries which is number two.

So you end up tied one to one. Good job.

VELSHI: I've saved face, Richard. Finally. On my own turf I couldn't lose to you.

QUEST: And so a score draw, which is probably better than either the Europeans or the American economy can do at the moment.

That's it for "Q&A" this week. Join us each week and, of course, send us your questions -- Ali.

VELSHI: And we'll be in "Q&A" 18:00 GMT or NEWSROOM 2:00 p.m. Eastern time.

Keep the topics coming on our blog, CNN.com/QMB and CNN.com/Ali. Tell us each week what you want us to talk about.

Richard, see you next week.

QUEST: I'll see you next week when I'm back in London.

(END VIDEOTAPE)

KAYE: And we'll see Ali again in just a few minutes. He'll join us again at the top of the hour to talk more about the Dow, which is now down, as we look at the big board there, 326 points. Not a good day on Wall Street.

But before that, scientists have found a way to create new life. I'm not talking about humans, but an alien life form. It is a first of its kind, and we will explain it coming up.

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(VIDEO CLIP, UNIVERSAL PICTURES "FRANKENSTEIN")

KAYE: It's alive. No, I don't do it as well as he does, but it is alive. A new science project is trying to recreate that Frankenstein spark by creating a new form of life from scratch.

Dr. Gerald Joyce, a professor at the Scripps Research Institute is one of those scientists pushing the boundaries by trying to synthesize life using a thimble of liquid.

Well, you have our attention now, Doctor. How do we or you, I should say, create new life?

DR. GERALD JOYCE, PROFESSOR, THE SCRIPPS RESEARCH INSTITUTE: Hi, Randi.

Well, what we don't do is go borrowing parts from the mortuary. So the game here is not to make life from existing life, not to try to make another biology using parts from our biology, but to try to make a biology from scratch, and that means from chemistry because when our life form began on this planet it came out of chemistry. And so that's the goal of research in the laboratory is to starting with chemicals, non-biological components, build something that we would consider to be alive.

KAYE: So it starts as what? They have to self-reproduce? Is that where it begins?

JOYCE: Yes. So what it life all about? I mean, a key part of it is, of course, self-reproduction. So the parents need to make progeny and so on and so on. And we have that now. We now have molecules that can self-reproduce, that can indefinitely produce copies of themselves and those copies produce copies and so on.

But it's not just reproducing. It's also carrying genetic information, transferring genetic information down the generations, and that's also what's new in the laboratory. It's now possible for these self-producing molecules to transmit genetic information to their progeny.

KAYE: And what can a second form of life mean for us? Why is this important? Why should we care about this?

JOYCE: Well, you know, right now it's pretty low bit content, and I wouldn't call what we or others have done yet truly alive because it's not really evolving much yet, but the key is to understand how life works, it works through Darwinian evolution, and to have a system, a chemical system in the laboratory, that also undergoes Darwinian evolution, and that's what can happen now.

So then you say, what will it evolve next. And that's what's going on in the laboratory, to try to give the system more capability to evolve more complex functions, including some things that might have applications.

KAYE: So how can it help us in the future?

JOYCE: Well, you know, here we have little molecules, and I can -- they are not much to look at, but I can give you a sense here, little test tubes of molecules. And as I say, there's not much to see, but we track them with little fluorescent probes. And if you can see it on the left is the before and on the right the after. But the afters keep breeding and making more and more copies.

So what you have is kind of an amplification engine, something that can just make more and more copies. Now if that engine is triggered by some event in the environment, say the presence of a chemical or a drug or a metabolite then you have a sensor for that chemical. And so that's the application for this.

KAYE: It's fascinating, Doctor.

JOYCE: But I got to say --

KAYE: It -- wait, we can't have you say anymore, we're out of time. But, Doctor, we appreciate it and best of luck with it. Thank you.

JOYCE: Very good.