Return to Transcripts main page
CNN Newsroom
Stocks Set to Ease after Rally; Asian, European Markets Rally; Nine Open Spots on Debt Panel; Perry to Make 2012 Intentions Clear; Four Wisconsin Senators Survive Recall; Insurgents Who Downed Chopper Killed; Stocks Plunge at Open; Britain: We Will Restore Order; Stocks Drop 200-plus at Open; First Black Secret Service Agent Dies; Town's $150,000 Refund
Aired August 10, 2011 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TJ HOLMES, CNN ANCHOR: Hey, good morning, ladies. And thank you so much. You all enjoy the rest of your day. And hello to you all.
It is 9:00 a.m. on the East Coast, 6:00 a.m. out West. Wherever you may be, glad you're here. I'm TJ Holmes, sitting in for Kyra Phillips today.
And boy, strap yourselves in, keep your arms inside the ride at all times, and hang on. The wild Wall Street ride continues at the bottom of the hour. The Dow rallies to a close yesterday but remember that was a day after a massive sell-off on Monday. What in the world is going to happen today?
Also people pouring to the streets of London once again but these folks weren't rioting like we have seen the past several days. They were actually there to clean up. But now the problem is that the violence, looting and arson has now spread to several other British cities besides London.
Also a nationwide manhunt for two brothers and their older sister accused of opening fire on a Florida police officer, then robbing a Georgia bank. You're seeing the three siblings there and authorities do consider them armed and extremely dangerous.
All right. Wall Street did a bit of a U-turn yesterday and thank goodness it did. We don't know exactly what it's going to do today. But we're waiting to see. And that's coming up for us in just about 29 minutes from now. But the Dow closed up 429 points yesterday. However, that was a reversal of fortunes from Monday's loss of 634 points.
Christine Romans in New York for us. Alison Kosik at the New York Stock Exchange for us.
Christine, 29 minutes away. What is going to happen?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, futures are lower and Alison can tell you more about that. But really you've got a market the day after a prehistoric Fed decision trying to figure out what it's going to do next, what investors are going to do next. They're still weighing the risk of we're just a rut or this is going to be another recession.
The Fed's decision yesterday was to keep interest rates, TJ, low through 2013. Putting a date on it. That was the news. Found weakness in the economy and jobs, housing and spending, and said things were weaker than they had thought even a few months ago, but also said that they have a range of policy tools.
That's code word, key word for we're going to keep rates really, really low but if we have to do something we might be able to do it. We will be able to do it and it's that, you know, one, two, three, four words right there, that was one of the reasons why things really got going on the upside yesterday.
But you got to be careful here because we still have a lot of people talking about how bad it feels in the economy and does this big stock market rout of the past few days says it set the stage for more weakness in the economy and just how weak will it get.
So I predict treacherous, treacherous politics and treacherous, treacherous markets over the next days and weeks -- TJ.
HOLMES: All right. Alison, you heard her say treacherous markets possibly over the next days and weeks. We're just trying to go day- to-day right now. And on this day, at least, you're keeping your eye on the futures.
Where do we stand possibly when this thing opens in a few minutes?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It looks like we're going to start with losses, TJ. In fact, those losses accelerated just over the past few minutes. The Dow could open down more than 100 points lower. And this, despite that, you know, we're seeing gains that happened overseas.
Take a look. We saw gains in the Asian and European markets up 1 to 2 percent. You know what we're really trying to see what happens, you'll see sort of this high turn if you wind up -- if you wind up getting smaller gains and losses at the close because that would wind up showing that the market is trying to find some equilibrium, some balance. Trying to find its footing.
And you have to admit these price swings are just dizzying that we've seen lately. You know they're huge and they're happening a lot. So we really want to see the market have smaller gains and losses throughout the session and especially at the close of the session.
You look at yesterday. The Dow crossed back and forth over the break even point. More than 30 times yesterday and analysts say guess what? We're going to continue to see these big moves in both directions. And despite yesterday's rally, we are still seeing signs of weakness in the economy overall.
Oil plunged below $80 a barrel yesterday. It's good for our pocketbooks but it's also a sign of a slowing economy. Now it is coming back just a bit today but it is just a relief rally. I'm talking about oil. Now we're also watching yields of 10-year Treasury bonds. TJ, they hit a record low. That's considered a safe haven. It's good news for us who have mortgages because that's where our mortgage rates are really based on. This is mostly a reaction to the Fed saying it's going to keep interest rates low another two years -- TJ.
HOLMES: All right. Alison Kosik, we're going to see you again plenty within the next couple of hours here. Again the markets open bottom of the hour. We'll be there for you.
Alison, thank you so much.
I want to turn to Washington, D.C. now. I need to tell you about this super committee being put together. You hear that, you go, OK, what in the world does that mean.
Well, it's important. These are the folks who are going to be confronting the deficit heads-on. Now more importantly these are the folks who are going to be deciding the cuts in the budget that could directly impact you.
Now what you're seeing there are three of the first members that we have found out about for the super committee. Now the Senate majority leader Harry Reid chose these three you're seeing there. You saw Senator Murray, you saw Senator Kerry and you also saw Senator Baucus.
Now a lot of people are already questioning the choice of Senator Murray of Washington. She is the one that they call the fundraiser- in-chief for Senate Democrats, already some controversy. But you see the other folks. Pelosi, McConnell and Boehner also are going to be weighing in with three choices each. They have a little time to make up their minds but we could be hearing from them soon.
Let me bring in Joe Johns who's in Washington, D.C. for us.
Joe, this is supposed to be a bipartisan committee that's supposed to end the deadlock we have seen in Washington and the first three picks we see already there's some bickering over it. Not a good way to start out with the super committee.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Right. Right. And I think you hit the nail on the head when you said why do we care so much about another congressional committee, and it's because they're going to make some very basic decisions about government spending that could touch you on main street.
Now this is Senate star power, these first three named by Majority Leader Harry Reid. The top party leaders in the House and the Senate each get to choose three people. That adds up to six Democrats, six Republicans. The question is, who's going to the tiebreaker if there is a deadlock?
The one senator on this list attracting a lot of attention, Patty Murray, Washington state, member of the Appropriations Committee, Budget Committee. But she's also the head of Democratic Senatorial Campaign Committee, which means she's supposed to help get elected to Senate. She's got to raise a lot of money to do that, spend a lot of money to do that.
And DSCC has been out front, for example, opposing Medicare cuts. So that could be an issue that comes up in these negotiations. The Republicans saying that should disqualify her from serving on the super committee.
Other people, Senator Max Baucus of Montana, chairman of the Senate Finance Committee, one of the true experts on taxes and tax breaks. He's known as something of a dealmaker. And the last man, of course, Senator Kerry from Massachusetts. Yes, the former Democratic presidential nominee.
"Politico" reporting he actually lobbied for a spot on this committee because he wants a big achievement in the domestic policy arena -- TJ.
HOLMES: All right. Joe Johns, appreciate you. Already some politicking on this super committee. We appreciate you as always.
I want to stay in Washington, D.C. right now because we could have somebody else jumping into the presidential race.
Let me bring in our deputy political director Paul Steinhauser with me now.
We're talking about, Paul, here, Texas Governor Rick Perry. If he walks like a Republican candidate, if he talks like a Republican candidate, and he visits primary states like a Republican candidate, he must be a Republican candidate?
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, it sounds like it, doesn't it, TJ? He's definitely going to be a frequent flyer this weekend. And we call Rick Perry's hat trick or trifecta.
OK, earlier this week, we learned that while the attention of the most campaign rule will be in Iowa for that crucial straw poll on Saturday Rick Perry is going to be in South Carolina Saturday afternoon giving a speech. And at that speech he's pretty much going to declare his intentions. He's not going to formally say he's running for president but he's pretty much going to make it obvious.
Then we learned he was going to go to New Hampshire later that day. Now we've learned, guess where he will end up Sunday? He -- back in Iowa. So he's going to be hitting all three of those crucial early voting primary caucus states this week and that's a pretty good indication that he is just about in for the race for the White House.
How about Mike Huckabee? Remember him? The former governor of Arkansas? He is not running this year. He made news early this year, said he's not going running for the nomination. But at that straw poll at Ames on Saturday he's going to be on three stages, TJ.
He's going to perform at Herman Cain -- at Herman Cain's tent. Then he's also going to perform at Rick Santorum's tent. Santorum, of course, the former senator from Pennsylvania, who's also running for the nomination. And he will perform at Tim Pawlenty's tent. Pawlenty, the former Minnesota governor, who's also running for the White House.
Huckabee, of course, a pretty good guitar player. He can really rock it. So we'll be keeping an eye on Huckabee this weekend -- TJ.
HOLMES: And Paul, you just mentioned Santorum. He hasn't gained a whole lot of traction necessarily. So why is he taking time off for the campaign trail?
STEINHAUSER: Yes, well, this is -- I guess a pretty picture. Check this out. This is Rick Santorum yesterday in Iowa -- Dyersville, Iowa, at the Field of Dreams. Remember that movie from 1989? "Field of Dreams." It's pretty popular movie, Kevin Costner and James Earl Jones.
Well, it's now a museum, I guess a place where you can visit in Dyersville. The set where they filmed that movie and that's where Rick Santorum and his family were doing as he was making the rounds in Iowa.
All f the candidates, just about all of them, out in Iowa this week for a debate and for that straw poll -- TJ.
HOLMES: All right. Paul Steinhauser, good to see you as always, buddy. We appreciate you. Thanks so much.
And we will have your next political update in just about an hour. A reminder, for all the latest political news, you know the spot, CNNPolitics.com.
I want to turn now to a story we have been keeping an eye on for the past several days in London. That is where the British Prime Minister David Cameron has been meeting with his crisis team after several nights of rioting and violence there.
It was much calmer at least in the capital of London last night. That's where most of this rioting and violence has been taking place. But the problem now is that the violence is spreading to other cities.
The prime minister is vowing to do whatever is necessary to restore order even though so far nearly 800 people have been arrested.
(BEGIN VIDEO CLIP)
DAVID CAMERON, BRITISH PRIME MINISTER: We needed a fightback and a fightback is under way. We have seen the worst of Britain but I also believe we have seen some of the best of Britain.
(END OF VIDEO CLIP)
HOLMES: Now he spoke about the worst of Britain and to a lot of our viewers you may just be listening to the TV for a second. I want you to stop and watch it. Because there is some video that kind of captures what has been happening there.
You've seen a lot of this riot video but this is a little different here. This is something that was posted on YouTube. It's a riot victim and it appears this person is injured and it appears that other people are starting to come over and help him. But that's not really what is happening. Take a look and listen to this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: They're actually helping him up. Oh, my god. He just took something from his backpack.
(END OF VIDEO CLIP)
HOLMES: Again, this coming to us from YouTube. You can see that individual, a young man looked like he was bleeding there, and got caught up in the riots, and people had come over. It appeared they were trying to help him and then they started to essentially robbing him.
But David Cameron, the prime minister, actually referred to that video today during his remarks. We'll have much more from London coming up this hour.
Also coming up this hour, Wisconsin Democrats, they fall short in a recall election, but the drama there is not over yet.
Also the markets, keeping a close eye on them. Monday, down 634 points. Tuesday, up 429 points. The ride starts again at the bottom of the hour. Hold on.
(COMMERCIAL BREAK)
HOLMES: About a quarter past the hour. Let's check some of the news "Cross Country" now.
Stop me when you've heard this before. A blond-haired American woman goes missing in Aruba. This time we are talking about that woman you're seeing, 35-year-old Robyn Gardner of Maryland vacationing there and was last seen August 2nd. The person she was traveling with says he hasn't seen her since they went snorkeling. Authorities now, though, have now detained him as the search continues.
Also, the first home built by Franklin Roosevelt? Look what's left of it. This is in Warm Springs, Georgia. It burnt to the ground. Lightning, we are told, may have caused this fire. Roosevelt lived at the cottage before becoming president.
Also, a Delta Airlines passenger says she couldn't get in her seat because there was an overweight man in the seat next to her and he took up both. Now, Amanda Parker says employees suggested she take a later flight. But they didn't say that to the man.
Now, she is upset that Delta is now responding and saying, quote here, "If the passenger seated next to a passenger of size raises the issue to a flight attendant, the passenger will be moved to another available seat, if available. If the flight is full, we work with both passengers to re-accommodate," in their words, "one of them on a later flight." Well, they are kicking politicians out of office in Wisconsin. Four of six Republican state senators in Wisconsin are able to hold to their jobs after yesterday's recall vote. The vote comes after a huge state political battle which stripped some union rights from public workers.
Our Ted Rowlands at the Wisconsin capitol.
Remind viewers why this is not just important for Wisconsin. This could have implications down the road for us all.
TED ROWLANDS, CNN CORRESPONDENT: Well, basically, T.J., this played out in Wisconsin but this had the country's attention and from both sides, money flowed into the state of Wisconsin during this recall process because there was a lot at stake.
And what was at stake was the issue of labor and union rights in Wisconsin. Now in Wisconsin because it is law, Governor Walker's budget repair bill at the time in February now law, restricted union rights for public employees. And that got the attention, as you might imagine, from unions across the country.
And the worry here from Democrats and union leaders was that if it happened in Wisconsin, it would happen in other states. So, what did they do? They said, all right, well, we are going to recall all of you Republicans.
They launched this recall effort. They were successful in getting the recall effort to the voters. However, last night, they were unsuccessful in that they didn't regain control of the state Senate. They need to win three spots. They only won two of those spots.
They are spinning it, of course, as a victory because they say they sent a clear message to people around the country, if you mess with labor, you're going to possibly pay the price with your job.
Republicans, on the other hand, are saying, hey, we won and there is no doubt about it. They tried to recall us. They tried to change the balance of power here in Madison and it didn't work out.
So, bottom line, $30 million spent, T.J., on these recall elections here in the state of Wisconsin. Most of that money came from out of state, played out here, but there were people around the country watching very, very closely. It remains to be seen what message will be sent now and if other states will follow suit in terms of trying to restrict union rights.
HOLMES: All right. Ted Rowlands there for us in the capitol -- Ted, good to see you as always.
Eighteen minutes past the hour now.
The value of your 401(k) is falling. That's bad. But mortgage rates are falling as well. That could be good. Maybe this is a good time for you to buy. Maybe refinance.
Clyde Anderson, one of my weekend buddies, is coming up with the advice you need to hear. Stay with us.
(COMMERCIAL BREAK)
HOLMES: Twenty-one minutes past the hour now.
We have some breaking news. And I want to go directly to our Pentagon correspondent Barbara Starr on.
And, Barbara, this has to do with that helicopter that was shot down, killing those 30 American service members.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: That's right.
We just stepped out of a briefing now being conducted by General John Allen, the top commander in Afghanistan, and he has just announced that the U.S. military has killed the insurgents they believe that were associated and responsible for the downing of that U.S. military helicopter on Saturday that killed 30 American troops. In fact, they have issued a statement saying that they have now killed, and I quote, "the insurgent who fired the shot and other Taliban leaders associated with all of this."
What has happened, apparently, is after the helicopter incident, they got additional intelligence about who these people were and they went and tracked them. They say that they called in an air strike as the top insurgents apparently were trying to flee Afghanistan back across the border into Pakistan. So, they called in an air strike in the last several hours and they are convinced that they got the people responsible for the shooting down of the U.S. helicopter.
The question on the table, that will be a question for investigators that we asked General Allen, is if you called in an air strike to kill them this time, why when you were looking for them the other day did you put so many Special Operations forces right into harm's way, bringing in a helicopter that was potentially, potentially vulnerable?
General Allen says he is comfortable with that decision that so many Special Forces were put into that position, but it is still going to be a question for investigators, regardless. You had a number of Army Rangers on the ground. You had 22 Navy SEALs, a big contingent of Special Forces and now, they got their target by an air strike -- T.J.
HOLMES: All right. Barbara Starr, we appreciate that important update this morning. You get more, by all means, let us know. We'll get you back in here, Barbara Starr. Thank you so much.
All right. Twenty-three minutes past the hour.
You remember talking about the downgrade of the U.S. credit. They said when that goes down, there's going to be an issue and mortgage rates, interest rates. We could see these things rise. You might end up having to pay more to borrow money.
But we are seeing the opposite right now -- at least in terms of mortgages. So is this a good time to buy or refinance?
Clyde Anderson, financial analyst -- good to see you here on a Wednesday.
CLYDE ANDERSON, CNN CONTRIBUTOR: Good to be here.
HOLMES: Why is this happening, first of all? Explain to people because it seems like the opposite we were told was going to happen.
ANDERSON: Right. Well, the main thing -- the main reason that is happening, a lot of people didn't realize, you know, the 10-year treasuries is really what dictates or is tied to mortgage rates with a 30-year mortgage rates. And everybody thought when we lost our AAA rating that these were going to go down.
And so, when those go down, mortgage rates go up. It's an inverse relationship. So, it's the opposite.
So, what happens is people are looking for security and so, they're going and still investing in these securities and these 10-year notes and so, the mortgage rates are going down.
HOLMES: OK. How much time do we have to jump on it if you want to jump on?
ANDERSON: Well, you know, everything so uncertain right now, we don't really know. I think the thing is, if you're interested in buying -- time now is to buy. You know, take advantage. These are historic low rates, so it's the time to do it.
We are talking about 4.3 on interest rate and now, the Feds are talking about keeping the rates low into 2013. I mean, we don't know how long the mortgage rates will stay low. But right now is the time to do it. Take advantage of it.
HOLMES: OK. The two years we are hearing, though. A lot of people might -- is it a mistake in your own mind to think, OK, I got a little time here.
ANDERSON: Oh, yes, definitely.
HOLMES: That's a mistake. You're saying jump on this?
ANDERSON: Jump on it. I mean, we can look and see what's happened over the last three days. It's a lot of uncertainty and we don't know what's going to happen in the market.
But right now, it's great. It's great as far as interest rates. It's great because house prices are low so it's the time to do it.
So, we are seeing refinances pick up but also purchases. This is a great time to go in and take advantage of these deals that are on sale right now.
HOLMES: One last thing to you here. A lot of people may be thinking about their credit score. We threw up a couple of nice interest rates there. But still, what kind of credit do you need to have to get those kind of rates that we put up?
ANDERSON: You need the AAA rating.
HOLMES: AA-plus?
ANDERSON: AA-plus may not get it. You will pay a little bit more.
But, again, credit is important. We talked about how banks are tightening up so credit is definitely important right now. You're going to have to have at least those mid 600 credit scores or higher to really take advantage of the good rates.
Rates are good across the board, so that means if you are lower on the credit score, you're still not going to be paying absorbent rates.
HOLMES: OK. All right. Clyde, good information. You still coming on Saturday, right?
ANDERSON: Yes, I'll be here. I'll be here!
HOLMES: All right. Clyde Anderson is with us every Saturday morning but good to see you here on a Wednesday, too. Thank you so much.
Twenty-five minutes past the hour. That means we are four plus minutes away from the opening bell on Wall Street. I hope you're strapped in. We certainly are here. Stick around for that.
We will be going there live.
(COMMERCIAL BREAK)
HOLMES: All right. Twenty-nine minutes past the hour.
We're less than a minute away from the opening on Wall Street. It makes you nervous these days, doesn't it? We have Christine and Alison standing by with me.
This is like the first part of that roller coaster and you're going up, click, click, click, and you don't know what is going to happen on the other side when you come over the edge. I don't know what to say here. Maybe we are being a little too dramatic here but after what we have seen the past couple of days -- Christine, this calls for a little drama right now, does it not?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes. I'll say if you want to use the roller coaster analogy hold on to your sunglasses and maybe your expensive watch because I don't know if you're going to have it by the time it's over. No.
What's different right now at 9:30 Eastern Time than 4:00 yesterday when stocks up 400 points, really not much, except more people are trying to weigh whether this economy is in a rut or it's in a recession and if -- or could be headed for a recession, I should say, and if all of this drama on Wall Street could cause a lack of confidence that could feed into even weaker economic growth.
So, we are at a negative feedback loop here and volatility is the story. Alison has been talking about it for days now -- fear and irrational behavior, although some would say it's pretty rational if you're worried about a double dip recession to be selling stocks. But we just -- you know, we just have a very complicated and nervous trading situation right now.
And after that euphoria from the Fed yesterday when the Fed said it was going to leave interest rates exceptionally low until the year 2013 it said it had every tool at its disposal, range of policy tools that it would use. They liked it yesterday and today, they're saying, OK, now what?
So, there is where we stand.
HOLMES: OK, Alison, and where we stand now. You were talking about this a short time ago. The futures weren't looking too bright for an opening that was going to be down a bit and here we go seconds into the trading day and we are down 130-plus points.
ALISON KOSIK, CNN CORRESPONDENT: Exactly. Not everything coming up pros, T.J., to say the least. The Dow down 138 points.
Just keep in mind, though -- you know, it's not a huge surprise to see a pullback after we had such a big rally and kind of get used to this because we are likely to see more of these really wild swings until the market finds a new trading range. Of course, we all want to know -- you know, when are we going to be finished with the downward spiral? And as we can see here, it doesn't look like it's going to happen anytime soon.
Expect the negative momentum to continue. So, really, volatility is going to be the word of the day yet again. But you know what? If you look at yesterday swings, you kind of have an inkling how things may go today. I mean, things were just out of control yesterday.
You look at the Dow between its lowest and highest points. It swung in a range of 640 points. It seesawed across the break-even point more than 30 times during the trading day. I mean, this is really, really crazy trading.
So, what we are looking to see happen today, TJ., we want to see if we can get smaller gains and losses throughout the day, but really at the close, because that would show that the market is finding some equilibrium. These huge price swings during the session and near the close that we are seeing happen a lot and happen in just this huge fashion. It's really not healthy for the market -- T.J.
HOLMES: What if -- Christine, I believe you're still standing by with me.
ROMANS: Yes.
HOLMES: What if we had not gotten the news from the Fed yesterday? That kind of turned things around. I mean, could that have made for not the rally that we saw necessarily, but could we still be dipping down and down and down. And please put in perspective, maybe I'll go back to Alison for this. People just turning on the TV and maybe don't follow the stock market every day and se a couple of minutes in and we're 200 points down. They think, oh, my goodness, it's going to continue like this all day long.
Sometimes this is just how things go and this is how certainly it went yesterday. So, give me some perspective as well for the viewer.
ROMANS: Well, let me jump in and say, T.J., it's like -- you know, we pulled a rubber band in that big, big market sell-off. We pulled it so tight that, of course, it's going to snap back and it's going to, you know, yesterday, we had a nice snap-back rally and didn't regain all of the losses but it snapped back.
Remember -- I mean, you've got the Dow down like 1,700 or 1,600 points from the peak in July. It has been a ferocious move. You're going to see days with triple-digit gains and triple-digit losses. It's going to be chaotic in the meantime.
I keep using the word "treacherous," because you have treacherous politics and you have sort of this treacherous discussion going on, are we in a rut or are we headed for a recession? Both of those are painful for people and also very complicated for stocks.
HOLMES: Go ahead, Alison. I know you want to jump in there.
KOSIK: And I think there's -- there is also something else to consider what's happening with the market moves. You know, when you see these kinds of moves, you think, oh, my God, what is happening?
But you have to realize especially with what the Fed say, expect the economy to be slower. Expect to see slower growth in the next few quarters. So, you're seeing the Fed downgrades its forecast for economic growth. That's not the only one who's downgrading that forecast. You know, we got companies doing that. We've got economists doing that.
So, what you also see happening here on Wall Street is kind of a re- pricing of stocks to fit that forecast which is now been downgraded. So, that is kind of why you see this momentum for a downward trend, T.J.
HOLMES: Alison, I want to stay with you for a second there. May be some individual companies at least who have some good news to report out there -- Apple may be being one of them.
KOSIK: Yes. Apple, the darling of Wall Street. You know what it did? It topped Exxon as the most valuable company yesterday, albeit very briefly. Yesterday, Apple's market cap was at $341.5 billion. Exxon's was at $341.4. But Exxon went back to number one by the close because of all of those wild swings.
But analysts say only a matter of time Apple is crowned the new king because, hey, if you look at its stock price, it's still soaring. You know, both companies, they got strong profit, revenue growth.
But investors have really been flocking to Apple. Its earning consistency blow expectations out of the water. You know, some proof of that, Apple sold 9 million iPads last quarter in just three months. Apple shares are up 4,000 percent since the iPod was introduced 10 years ago! If only we owned apple shares way back when when it wasn't worth as much now.
HOLMES: Speak for yourself. No, I don't. I don't have Apple shares. Let me make sure I'm being clear there.
But, again, to our viewers, and, Christine, we -- I'll try to inject humor, because right now, we are down 300-plus points, 320, 323-plus points now on this opening here.
And, Christine, I'll bring you in a little to some politics. We always inject a little politics --
ROMANS: Sure.
HOLMES: -- in a lot of these conversations because everybody is going to want to blame everybody else for what is happening. And we saw that happen in Washington, D.C., calling this, what was it? Some blaming the Tea Party for the S&P downgrade and other people say that downgrade caused all of the panic on Wall Street.
But a lot of this has to do with all of them in Washington, not giving the markets, the country, or the world any type of certainty or confidence that we are going to get ourselves in order.
ROMANS: Right. The people who are fighting about politics -- one group calls it the Obama downgrade. The other calls it the Tea Party downgrade.
The people on Wall Street, they say, heck, we knew a downgrade was coming and that's why the reason why stocks have been so horrible all summer, because the United States was not acting like a AAA country fighting whether it was going to pay its bills in the first place, right?
And at the same time, you have slowing growth and bigger and bigger deficits and public debt growing and growing and growing and you're not bending the curve on that.
So, there is politics in here and that's one of the reasons I think it's treacherous until that December 23rd deadline, T.J., for the super committee to come up with its choices for cuts. People on Wall Street are already saying it could be a Christmas crisis. They have already named a crisis that doesn't exist yet, and that uncertainty casts a shadow over Wall Street and investors who say I'm going to sit on my cash.
Companies say I'm going to sit on my cash. I'm not going to hire anybody. I'm not going to invest. I'm not going to do anything big until I figure what's going on in the U.S., how weak the economy is in the United States and whether the government is going to get its act together, come out with a plan and show the world the U.S. has its fiscal house in order and all of that uncertainty and waiting makes things worse.
HOLMES: Christmas crisis -- that does not have a good ring to it.
ROMANS: No. HOLMES: Appreciate you both. Alison Kosik at the New York Stock Exchange. Also, Christine Romans in New York for us. I'm going to be checking in with both of you all a little later. Thanks so much.
And as we have seen over the last couple of days, volatile market can reverse course at any moment. We do have our crews and our smart business folks who are covering this story on all of the angles, all of the dramatic turns that do happen.
And as we see now, as we look at the screen, 317 points, the Dow is down within about five minutes of the stock markets opening this morning. We are keeping a close eye on that for you here.
Also, keeping a close eye on London. The streets of London have just been chaos for the past several days. We will be going live to Scotland Yard for a report after the break on the violence, the riots and arson taking place in the streets of England.
(COMMERCIAL BREAK)
HOLMES: At 41 minutes past the hour and just about 10 minutes into trading day.
Keeping an eye on the Dow Industrials. You're seeing it there on the screen, down 270-plus points now. It did get down below 300 points but immediately went down when we opened the trading day here.
You know that saying works -- it's been a roller coaster ride on Wall Street this week, no doubt. After losing 600-plus points on Monday, then gaining 400-plus yesterday. We shall see how this today turns out. But we are keeping a close eye on the market for you.
Also, in London now. The British Prime Minister David Cameron is vowing to restore order to the streets after young people have gone out for fourth night of rioting.
Our Phil Black is live at London Scotland Yards.
Phil, good morning to you.
And some pretty strong words from the prime minister.
PHIL BLACK, CNN CORRESPONDENT: Yes, indeed, very strong words from the prime minister, T.J. He says fight back is now under way and so, he is very keen to show that he is once again in charge of Britain and the British police ruling the streets.
And so, over the last few nights now, more than 700, approaching 800, arrests in London alone. Hundreds more in other cities as well.
The prime minister, the government and the police here at Scotland Yard are promising that is going to continue in two-forms. In the form of a more robust approach to deal with the rioters if they continue with this sort of behavior as they run out of control on the streets. Last night, a surge of around 10,000 more police on the streets of London and the prime minister says that has made a real difference with the relatively calm night here.
And on top of that, hundreds of officers are now going through thousands of hours of CCTV video to try to track down the people they say were responsible for this. They say those arrests are already being made -- T.J.
HOLMES: Phil, you said a little quieter night there in London, but how much of a concern is it that it has spread to a few other cities outside of London?
BLACK: Yes, it's a good point. The momentum seems to have broken here in London for the moment. But you're right. It has spread to other major cities, including Birmingham, Manchester, Nottingham, among others. We've seen some big scenes of real violence there and hundreds of arrests just overnight.
So, the challenge continues if you like, and the British prime minister says that all police battling this, whether it be here in London or in those other cities, will have everything they need to bring it under control.
HOLMES: All right. Phil Black for us in Scotland Yard -- Phil, appreciate you as always. Thanks so much.
And at 43 minutes past the hour. And just about, what, 12, 13 minutes into trading day. You see it's down 248 points. The Dow Industrials. We're keeping a eye close on that for you today.
Stay with us.
(COMMERCIAL BREAK)
HOLMES: And there it is. We will continue to update you on this number, because as we know, it will continue to change throughout the day. Kind of starting like we started yesterday immediately down, but there was a rally yesterday and ended up 400 plus points but still early in the trading day and already down some 250 plus point on the Dow Industrials.
Meanwhile, at 46 minutes past the hour; I'll give you a look at some of the stories making news across country now.
And sad news out of Maryland, where you might not know his name, you don't know his face; but that man you're seeing on the screen is the first-ever black secret service agent. He has now died. His name is Charles Gittens. He was a law enforcement trail blazer when he was credentialed back in 1956. He died late last month at the age of 82.
Well, we turn to Haymarket, Virginia where it pays to live there. How does the -- how would you like your government to do this for you? The small town of about 1,500 people cutting checks for both the residents and the business owners there after discovering a $700,000 surplus in the city coffers. The town's council voted to take $150,000 of that and just give it back to the taxpayers. One condition -- you need to be current on your taxes right now. Good luck with that.
Also look at this in Houston. We're trying to figure out how in the world this happened. Maybe you can tell me. This is on Interstate 45 North. Last night, it was shut down for several hours and you can see why. Again, this is in Houston. This is a trailer on the 18-wheeler. It started rising, we are told, as it was going down the road. It clipped the overhead sign and ended up in that position.
All right, we're at 48 minutes past the hour now. We continue to keep a close eye on the markets. Where is my number now? 245 down, the Dow Industrials.
Right now, we were talking to our Clyde Anderson, a financial analyst, just a moment ago about mortgage rates and how they're going down. If it's a good time to buy, a good time to refinance possibly.
Well, tell me what we're seeing and always good to give perspective to people as --
CLYDE ANDERSON, CNN FINANCIAL ANALYST: Yes.
HOLMES: -- many, many turn on the TV, ah -- we're down 300 points almost instantly. But help people kind of understand what we're seeing right now and what we could see throughout the day.
ANDERSON: Correct.
Well T.J., I think a lot of people are probably wondering what happened like that 18-wheeler. I think they don't know what hit them right now. But again, we're on a roller coaster ride and we knew it was coming. And we're going to be on this roller coaster ride.
Just this whole -- this whole week, we have seen it. The markets has been down, the markets has been up. But again, investors are looking. They are sitting back and relaxing. Don't react. It's not time to react to the market.
Sit back and watch, enjoy the ride. I mean, I'm enjoying watching this. This is exciting.
This is -- this is reality TV at its best because, again, this is the market. If you're a true investor you're going to know you buy low, you sell high. You know? It's not time to sell all your investments right now, you're going to watch. And we had a huge rally yesterday.
HOLMES: Right.
ANDERSON: And so now this, again, we're offsetting some of that but it's not that bad. And so we really just kind of sit back and look. And I'll tell the people all the time. Know what you have and know what you're investing in and know where you are right now so you want to talk to your people but don't rally and just call your broker and everybody is calling that one time to panic. It's not the time to pull all your money out of the bank.
HOLMES: Ok, now and I don't know how important this is at this point. It will be politically at some point.
ANDERSON: Yes.
HOLMES: But you've heard people talk about this is a manufactured crisis.
ANDERSON: Yes.
HOLMES: What we're seeing on Wall Street right now, could this have been avoided if we didn't go through all of that uncertainty, if we didn't have our credit rating go down? I mean, just -- and we know the U.S. is going to pay its bills.
ANDERSON: Yes.
HOLMES: We know that. But still just that uncertainty and putting those questions in people's minds, did we create this week we're seeing on Wall Street?
ANDERSON: I think a lot of this was created. A lot of it could have been avoided. I mean look at the chain reaction that's happened with the S&P downgrade, the bonds coming down. You know, all of this information, the whole debt crisis.
S&P did what they did for a reason. They felt that they had to do something. And I still don't see that we've done something to correct what was done.
And so a lot of these things happen and we could have just coming to some terms early on and avoided a lot of these things that are happening.
And again, the market is going to correct itself. And so we -- we sometimes feel like we have to put our hands in it and do a lot of things to try to control it. But it's going to correct itself. It's going to work itself out.
But again, you know, a lot of these things definitely I feel could have been avoided.
HOLMES: All right.
Clyde, we appreciate you once again buddy. Thanks so much. Don't go too far.
ANDERSON: It's good to see you. All right.
HOLMES: Something might happen here, we might need you in a second, all right. Clyde Anderson, always appreciate you. Thanks so much.
And there it is, folks, as we get to 10 until to the top of the hour; just about 20 minutes into the trading day, the Dow Jones Industrials is down 253 points.
Stay with me.
(COMMERCIAL BREAK)
HOLMES: All right, some stuff we're watching later today, this morning scheduled arraignment for two men now accused of beating California paramedic Bryan Stow at Dodger's Stadium back in March is due in court at 11:30 Eastern Time.
Also the TSA Chief, John Pistole talks about the agency's goal for the future. That's at 2:30 Eastern.
And then later tonight, 8:30 Eastern Time, President Obama hosting an Iftar (ph) dinner at -- in celebration of the Muslim holy month of Ramadan.
We are also following a lot of developments in the next hour of the CNN NEWSROOM. Let's check in first with Christine Romans in New York. Hello there.
CHRISTINE ROMANS, CNN CORRESPONDENT: Hello there. So another wild day in the stock market, at least for now, the Dow Jones Industrial average down another 200 points. What are you supposed to expect from all of this? And what exactly has changed this morning from yesterday when the Dow was up? I'll tell you in just a few minutes.
PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: And I'm Phil Black in London where the British Prime Minister says a fight back is on against rioters across the country. There has been a surge of police in the British capital, but still violence continues in other cities. I'll have more at the top of the hour.
HOLMES: All right, Phil, Christine, thank you, both. See you both shortly.
Also coming up, former White House Press Secretary for George W. Bush, Ari Fleischer will be here with me live. We're talking 2012. We're talking about the Ames poll in Iowa. Is there a clear front-runner? And if not, is that a problem?
Stay with me.
(COMMERCIAL BREAK)
HOLMES: Well, as we get close to the top of the hour, this stock market may be giving a lot of folks indigestion. Even when it goes up as we saw in the rally yesterday; some even calling it a rip-your- face-off rally.
I'll let Jeanne Moos explain that to you though.
(BEGIN VIDEO CLIP)
JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): Better check your wallet, you may feel poorer as the Dow went down, down, downer. But hold on, on Tuesday the roller coaster headed back up; a rough ride for the parody e-trade baby created by college humor.
UNIDENTIFIED MALE: Oh God it just dropped 400 points. This is not happening, dear Lord.
MOOS: Until the market rallied Tuesday, it's hard not to panic.
UNIDENTIFIED MALE: Sell, sell, sell.
MOOS: When the whole world seems out of control.
UNIDENTIFIED MALE: More market mayhem.
UNIDENTIFIED MALE: London is burning.
UNIDENTIFIED FEMALE: Rioting, arson, looting --
UNIDENTIFIED MALE: The famine in East Africa --
UNIDENTIFIED FEMALE: Panic mode.
MOOS (voice-over): It's enough to make you want to crawl back under the covers. And even when the market goes back up and there's good news, they give it a bad name.
UNIDENTIFIED FEMALE: Could this be what they call a rip-your-face-off rally?
MOOS (voice-over): A rip-your-face-off rally does not involve Jim Carrey. It's defined as a market advance with extreme intensity, so much so that it takes facial skin and hair with it. And speaking of faces, trader body language inspired a Web site called the "brokers with hands with their faces" blog. People like Rush Limbaugh like to coin names when the market tanks.
RUSH LIMBAUGH, RADIO TALK SHOW HOST: Obamageddon. That's what we've witnessed this Friday. Barackalypse now.
MOOS: CNBC's Jim Cramer had his own name for a market caught up in emotion.
JIM CRAMER, CNBC HOST: I'm calling this a Beegees market because it's just emotion that's taking me over.
Talk about emotion taking over. Blurry photos circulated on Twitter showing a plane buzzing the offices of Standard & Poor's towing a banner saying thanks for the downgrade, you should all be fired. "Fortune" magazine reports it was paid for by an angry Midwestern broker.
WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Wall Street spending yet another day in what's being described as freak-out mode.
MOOS: Even comedians took cover from the carnage.
STEPHEN COLBERT, COMEDIAN: I'm just down here looking for my emergency hobo satchel. Ok. Now, remember, folks, just remember -- over the long-term stocks always increase in value.
MOOS: Hey, everybody's chicken. When the market goes down over 600 points one day and up over 400 the next, even the parody e-trade baby gets queasy.
UNIDENTIFIED MALE: I think I'm going to be sick.
MOOS: Jeanne Moos, CNN --
UNIDENTIFIED MALE: I'm going to jump out the window now.
MOOS: -- New York.
(END VIDEOTAPE)
HOLMES: Ok. We're going to try to get through this hour without puking. All right, folks? It's going to be ok.
