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Wall Street Tries to Rebound; Afghan Bombs Kills Five NATO Troops; European, Asian Markets Fall; Parliament Addresses U.K. Riots; Palin to Crash Party in Iowa; Sickness, on Top of Starvation; Maryland Woman Missing in Aruba; Making Money in a Volatile Market; Eyeing Michele Bachmann's Eyes
Aired August 11, 2011 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: Sometimes you have to laugh to keep from crying. We might be in tears in 30 minutes. Good to see you all. I'll take talk to you soon.
Hello to you all. We're at the top of the hour. It's 9:00 here on the east coast and 6:00 a.m. out west. Wherever you may be, we are glad you are right here.
I'm T.J. Holmes sitting in today for Kyra Phillips. Yes, in 30 minutes the markets will open once again. This is the week we have seen so far. If we stay true to form, that means we will see a huge rally today. Cross your fingers and hold on, folks.
Also this morning, five NATO troops killed in a bomb attack in southern Afghanistan.
Meanwhile, coalition troops have killed nearly 200 militants in recent weeks. Keeping an eye on Afghanistan, of course.
And also keeping an eye on what's happening in Great Britain. Britain's prime minister there says the London police waited too long to arrest rioters this past weekend. He said that when he was speaking to parliament in a special session on the rioting. We will have more on this in a moment.
All right, folks, it's just like that ride. You are having second thoughts about getting on that roller coaster, but you can't get off yet, folks. We are still on this ride on Wall Street and in 30 minutes, we will have that opening bell.
Yesterday, the Dow dropped some 500-plus points after the week we have seen, it has been literally down, then up, then down and today would be the up day, but we shall see here in just a few minutes.
We have you covered this morning with our correspondents who are in New York as well as overseas. But Christine Romans, let me start with you and I want to start the word volatility. Explain to our viewers how a bank in France they maybe never heard of and also rumors cost them money yesterday.
ROMANS: I'll tell you why because this is a fragile market, a fragile global economy. It does not take very much to send ripples throughout the system. It's a completely interconnected global financial system.
And the worry is if there is weakness in France, you know, France's debt problems become a problem for Europe then that will become a problem for the United States. Why? Because Europe is our biggest trading partner. It is a huge, huge economic powerhouse for the world and that, obviously, would affect us.
Now, one of the things to remember about this week is we have had the two worst down days and the best day of the year in just three days. So you're right to feel as though it has been very, very wild here, but I would caution people who are looking at all of this and thinking this is affecting them in the very near term.
It is if you are buying or selling your 401(k) or in your portfolio, but most of us who are watching this, it's better to take a look at, is your mortgage below 5 percent? It should be because interest rates are very, very low.
Do you have money in the bank? You should think about that, about a savings plan because, you know, two out of three people don't have a thousand dollars for an emergency, that's according to the National Foundation for Credit Counseling. New numbers out of there.
You need to take a look at some of the more personal things to draw it to the more micro of your finances than the big macro here. That would be my caution. T.J. --
HOLMES: All right, Christine, thank you. I want to turn now to our Alison Kosik at the New York Stock Exchange. It's even been kind of up and down in the futures this morning. So what are we looking like for an opening here in about 27 minutes.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: And you're right about that, because there is a lot of volatility right now and the market is not even open right now, T.J. You know, Dow futures, they were up 100 points earlier this morning then they were down 100 points and now they are flat.
So why is the market flipping all over the place? It's because of Europe. There is more talk of a downgrade of France's debt, which is currently at AAA. Now we have had heard all this chatter since last weekend.
This is after S&P downgrade of the U.S. credit rating and now everyone really wants to know, OK, where is the next shoe going to drop? You know what? It's a valid question since debt problems are not confined here to the U.S.
So as we get ready to start the day, I want to show you where stocks are ready to open. The Dow is at its lowest level since last September and every day this week, it's moved more than 400 points during the session. I mean, it's been crazy here.
In less than three weeks, the Dow has plunged 2,000 points. I tell you what, we haven't seen volatility like this since the financial crisis. It's leaving many people to want to know, you know, could this be an indicator of another crisis? T.J. --
HOLMES: All right, Alison Kosik, thank you. I want to turn to Anna Coren right now keeping an eye on markets overseas. She is for us in Hongkong.
Anna, can you tell us if the markets there are reacting pretty much like we have been seeing the markets in the U.S. as well as Europe react?
ANNA COREN, CNN ANCHOR AND CORRESPONDENT, CNNI: Yes. Well, T.J., you mentioned volatility a little earlier. That is certainly the name of the game here in Asia, but also in Europe.
Let's start with Europe because it began trading and just a sea of green. Some major indices up 2 percent, but throughout the day it has seriously dropped off. Let's bring up those numbers for you out now.
London's FTSE is down less than 4/10th of 1 percent. The German DAX is down 8/10th of 1 percent. But France, the CAC is down more than 2 percent. There is real concern about the debt and also the health of the financial services over there in the euro zone.
As Christine mentioned a little bit earlier regarding France, there were rumors about France losing its AAA credit rating. Well, the rating agencies, they came out and quashed those rumors, but the damage has been done and the havoc has certainly being felt across the markets.
So there is real concern about the health and the stability of Europe's second largest economy. Well, here in Asia, it was a similar story, although the losses weren't as bad as what we have certainly felt over the last couple of days.
Hongkong and certainly Japan were down. Australia was flat. The KOSPI in Seoul, it was down throughout the day more than 4 percent, but interestingly enough, T.J. Each managed to really crawl back and finish up two-thirds of 1 percent.
A similar story for China, it was up 1.25 percent. So Asia is really reacting, T.J. to what is happening on Wall Street and certainly what is happening in Europe.
HOLMES: All right, Anna Coren, this morning for us. Thank you so much as well. Reminder to our viewers we are just under 25 minutes from the opening on Wall Street. We will certainly bring that to you and keep a close eye on it throughout the morning.
I want to turn to England now. The prime minister there is calling what they have a new and unique challenge. The rioting and dealing with the violence in the streets we have seen for the past several days is what he is talking about.
He was talking about this in a special session of parliament this morning. He was addressing the four days of civil unrest we have seen there with the street gangs. CNN's Max Foster is live for us outside parliament. Max, good morning to you. This has been a unique problem. It's also becoming or has become an expensive problem.
MAX FOSTER, CNN ANCHOR AND CORRESPONDENT, CNNI: Yes, absolutely. Costing the British country hundreds of millions of dollars, this whole process because shops have been closing early, a lot of damage is being done and they are having to make huge payouts, but David Cameron actually saying that all businesses would get a payout of some sort if they are affected by this.
David Cameron talking about a broken Britain and he said that the problem, the heart of that problem was gang culture, boys from dysfunctional families. He is going to take advice, he said, from Los Angeles and New York on how to deal with that.
But a huge problem for David Cameron and a big debate here in the U.K., but still an ongoing problem. The police still on the streets and they came very close he said to using rubber bullets on the streets of Britain, which would have been extraordinary. But water cannon on the ready as well if there are more problems.
HOLMES: Max, we certainly have been covering this story here and our viewers and the American audience seeing it from this vantage point, but what are the headlines like there and around the world?
FOSTER: Well, everyone is really shocked about seeing these scenes on the streets of Britain, of course. The pictures played large around the world. Let's have a look at the couple of the headlines and see the analysis behind that.
"The Sydney Morning Herald" is talking about widespread policy failures have bred a feral British underclass that's how they're interpreting it. Going on to say this part has been simmering for a long time. Much is made of the income and inequality and social division in Britain and it is real and unhealthy, but so too is the culture of welfare dependency.
Going on to the "Belfast Telegraph" in Ireland, in northern Ireland. A rhetoric of revenge will not rid streets of rioters. The rioting tends to exhaust itself when the young have enjoyed the pleasure of destruction and theft as much as because of the restoration of order by the place. What matters more are the consequences and David Cameron saying the consequences will be severe.
HOLMES: All right, Max Foster for us. Thank you so much. We're at 9 minutes past the hour now.
Sarah Palin is crashing a party in Iowa. Our deputy political director Paul Steinhauser is with the CNN Election Express there in Des Moines. Paul, this is Sarah Palin. She doesn't need an invitation to show up to a party, does she?
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: She does what she wants, no doubt about that. The spotlight in the political world is definitely right here in Iowa. Why? There's a debate tonight, the first one in nearly two months since our debate in New Hampshire.
A lot on the line, Saturday, a crucial straw poll in Ames, Iowa for all the candidates and of course, the state fair right here, a must stop for anybody who's running for the White House.
And yes, as you said, we now learned, good reporting from our political reporter last night that Sarah Palin is coming here with her "One Nation" bus tour. Remember, she did that tour earlier this summer from Washington, D.C. up to New Hampshire. It is resuming.
Could be as early as today, maybe tomorrow, maybe Saturday, we don't know the details yet, but she is coming right here and maybe trying to hog some of that spotlight. Of course, Palin says she will decide by September if she is running for the Republican presidential nomination. T.J. --
HOLMES: The Ames straw poll, an important poll one is coming up on Saturday. But still other polls and numbers we have seen there and maybe even nationally what are they telling us about this race?
STEINHAUSER: Yes, we got brand new numbers ourselves from CNN and ORC. We put them out just a few hours ago. Check this out. This is for the battle for the Republican presidential nomination among Republicans and independents who lean that way.
Look at that, right at the top Mitt Romney, but right next to him, Rick Perry, the Texas governor who we think on Saturday is pretty much going to make his intentions clear that he is running for president.
He'll have a speech in South Carolina and then look at that, Rudy Giuliani, Palin and Ron Paul, the congressman from Texas, all at 12 percent. But let's take Palin and Giuliani out because while (inaudible) with the race for the White House.
They're not really have taken any concrete steps yet and look this is how the race looks at our poll, Romney at 23 percent, Perry at 18 and Paul 14 and everybody else in single digits.
T.J., we are here at the fair. You can get almost anything you want on a stick here at the state fair.
HOLMES: OK, I'm from Arkansas. I've been to a lot of state fairs. But what is the Twinkie Log over your right shoulder? What is that?
STEINHAUSER: Check that out right there. Twinkie Log is a deep fried Twinkies, of course, on a stick, but you know what? There is healthy food here too.
HOLMES: Right.
STEINHAUSER: You can get salad on a stick as well. Salad on a stick!
HOLMES: All right, well, good to see you as always, buddy. We will talk to you again soon. To our viewers, we have your political update. Another one coming up for you at the bottom of the hour and for all the latest political news, you can go to our web site, cnn/politics.com.
As you know, we are ticking down. We are minutes away from the opening bell. We will have live reports for you from Wall Street and also with the markets around the world. Again, 18 minutes away from the opening.
Also this morning, an important story, certainly hope you are paying attention to, a double danger for Somalia's children. Right now, Somalia in the depths of the one of the greatest humanitarian crises going on in the world right now. Our Dr. Sanjay Gupta will be reporting for us. Stay with us.
(COMMERCIAL BREAK)
HOLMES: Coming up on a quarter past the hour. Checking some of the stories making news cross country.
We start in Philadelphia where three young men have turned themselves in to face assault charges. This is where these violent flash mob attacks plaguing the city. Police say these men actually put a man in the hospital. The mayor there has promised crackdowns on the flash mobs and has strict curfews in place for minors.
Also, three siblings are expected to appear in court this morning. They were arrested after high-speed chase and shoot-out with police in Southern Colorado. The sister was shot in the leg.
We are talking about Dylan, Lee Grace and Ryan Dougherty -- the three you're seeing there. They were on the FBI most wanted list. They're accused of robbing a Georgia bank and also accused of attempted murder of a Florida police officer.
Also in Texas, they're having to take some drastic measures so hot and dry there. The Houston mayor says the city will cut back on its water usage, going to limit the hours that people living there can water their lawns.
It is the world's worst humanitarian disaster right now -- men, women, and children dying every single day in east Africa. We are talking about starvation and sickness. But no matter what it is, it's pretty much preventable.
Dr. Sanjay Gupta has seen this firsthand at a refugee camp on the Somali/Kenyan border.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: T.J., you've heard the numbers for some time. Still, the largest refugee camp in the world, 2,000 people still coming in every day -- that's what they expect.
And for many people, they are in search of a better life, obviously. But that's not saying much. Simply getting to the camp doesn't mean that their troubles are over. In fact, in some cases, the troubles can get even worse. And parents have had to do the unthinkable. (voice-over): The kids here will melt your heart.
UNIDENTIFIED KID: How old are you?
GUPTA (on camera): Wow. How old am I? I am 41.
(voice-over): They impress me with their English so I spoke a little Somali with them. They loved it.
(SPEAKING FOREIGN LANGUAGE)
GUPTA: Is that good?
UNIDENTIFIED KID: Yes.
GUPTA (voice-over): Rare smiles in a place too full of heartbreak. Amin (ph) and her 1-month-old daughter Addison (ph) came here in search for a better life, fighting so hard not to starve to death. But in the end, it made very little difference. Amin lost the one thing in the world she cared about more than anything else.
We are walking to her daughter's grave. They are really piles of dirt with no name plate, no flowers, no reminders of their lives -- just small sticks with color trash blowing in the wind.
She says she brought her healthy baby girl here with dreams of new beginnings but Addison died within a month.
(on camera): What went wrong?
(voice-over): "She started vomiting," she said. "Then diarrhea. It wouldn't stop for days and days."
Diarrhea illness, it has been the major reason 30,000 kids have died here over the past three months. So many tiny little graves like this one.
(on camera) : You know, part of the problem is even after you get to one of these camps, there is still not enough food here, not enough water and there's plenty of infectious diseases. There's viral illnesses. There's also diphtheria and pertussis.
And I want to show you something else. Something that's very frightening in a camp like this.
This is Osmond. He is 14 years old. You can tell here, he doesn't feel well. People are concerned here that he has measles. He had a high fever. He had the characteristic rash. He had conjunctivitis in his eyes.
He never got vaccinated. He never got any sort of treatment. And measles, as you know, is very, very contagious. He has nowhere else to go.
(voice-over): And so, hundreds of thousands of these adorable children unvaccinated are at risk for the same fait as Amin's daughter.
(on camera): Is there anything anybody can do?
(SPEAKING FOREIGN LANGUAGE)
GUPTA: It is with God.
(voice-over): It is with God. And so, there is nothing else these kids can do but laugh and play, surrounded by the dead.
(on camera): T.J., it's tough to think about, but it's happening all the time -- parents burying their children. Thirty thousand children have died over the last three months.
And you also learn that it's not just about food and water. It's about medical care. It has to be given quickly to make sure these types of tragedies don't continue to happen.
Back to you.
(END VIDEOTAPE)
HOLMES: All right. Thanks to our Sanjay Gupta and there will be a special report tonight from Sanjay, as well as Anderson Cooper from "The Frontlines of Famine." That's on "A.C. 360" at 8:00 p.m. Eastern Time.
And you may be wondering how you can help out -- maybe make a difference to help the victims of the famine in east Africa. You can visit our "Impact Your World" page. That's CNN.com/impact.
Well, at 19 minutes past the hour, we're going to turn back to the economy here in this country and recession is bad enough. But being caught unprepared could be even worse. The advice you need to hear is coming up.
Also, they have called off the active search for that missing American woman in Aruba. We will go there live to find out why, after the break.
(COMMERCIAL BREAK)
HOLMES: Twenty-two minutes past the hour now.
Police have called off the active search for a Maryland woman missing in Aruba. Thirty-five-year-old Robyn Gardner was last seen August 2nd.
Martin Savidge is in Aruba for us.
Martin, tell us first of all why they called off the active search. What exactly that means and also, tell us about this person they have in custody.
MARTIN SAVIDGE, CNN CORRESPONDENT: Well, the search went on, T.J., for a number of days. It was quite extensive at least by Aruban standards. They had two helicopters in the air, a plane in the air. Boats on the water, divers under the water, people walking to beaches. They did that for several days and they found no trace of Robyn Gardner.
This is that beach. It's one of the many postcard picture perfect beaches you'll find out of Aruba. It was here August 2nd, that Robyn Gardner, along with the traveling companion that she was with, Gary Giordano, were snorkeling, according to him. And at one point, they became separated late in the afternoon. He comes ashore. She is never seen again.
He calls the authorities around 6:25. That's when the big search begins -- but again, no trace of Robyn Gardner here on this absolutely idyllic beach. And the problem is, authorities think, there is enough discrepancy to the story, they detained him. He was arrested as he was trying to board a plane back to the United States. They don't call him a suspect, but they are investigating him quite intensely right now.
So, that's where this investigation stands. And, of course, Aruba is where Natalee Holloway disappeared in 2005. Two pretty women who disappeared in what they thought was a tropical island paradise -- T.J.
HOLMES: All right. Martin Savidge for us -- Martin, we appreciate you.
All right. We are six minutes away from the opening bell on Wall Street and hold on because after the week we've seen, who knows what's to happen? Lost another 500 points on the Dow yesterday. That essentially gave back all of the gains that were made the day before.
A lot of people are talking about the possibility of another recession. What should you be doing in the meantime to prepare for such a case?
Our Clyde Anderson, our financial analyst, is here with us.
Clyde, good to have you back here again. We hate to think that there could be another. But in the meantime, what should we be doing right now to get ready?
CLYDE ANDERSON, CNN CORRESPONDENT: Well, there's a couple of different things. And always tell people, recessions are personal. Meaning, if I don't lose my job during a recession, I'm going to be a lot better than the person that does --
HOLMES: You may not feel that way.
ANDERSON: You may not even feel that way.
HOLMES: Exactly.
ANDERSON: But now, to be prepared, in case you do, or you're feeling that this is the way you can do it. One of the first things I say is have an emergency fund. That can be three to six months. Some people say more. But at least start there, have a three to six months of reserves. I mean, how much you make on a monthly basis.
Have that stacked away. Cash is still king. So, you want to make sure we got that money put away so we can access it if we need it.
Number two is cut unnecessary expenses. These long term contracts, you know, that cell phone companies get us all the time, satellite companies get us all the time, with this two-year contracts that are hard to get out of, or you're going to have a lot of penalties if you try to get out them. That's one thing you want to get rid of it.
HOLMES: All right. Now, number three on your list was interesting there. Did I see that right? Can you put that back up for me? Become the most important person at your job?
ANDERSON: Yes. Now, this doesn't mean to stay at the job longer and look like you're busy.
HOLMES: OK.
ANDERSON: This means actually do things to help increase the bottom line. Maybe cut expenses, find different ways to grow the business or grow revenues. You become invaluable. You become that team player that they can't cut.
You want to make sure you're solidifying your position on a team, just like if you're playing sports. You want to be the most valuable player.
HOLMES: OK. I got some work to do on that one.
You said network as well. Go out there and shake the hands.
ANDERSON: You know, of course, do your LinkedIn, do your Facebook, and all those other things on social media. But being out there and being present is key. And it's a lot easier to network when you have a job as opposed to when you don't have a job.
So, you want to make sure you're doing it now.
HOLMES: This "invest with caution" -- what's that mean?
ANDERSON: Invest with caution -- don't use your bill money to invest. Investing is good and everybody is looking at the market right now and saying buy low, sell high. Of course. But you're not buying low with the money that you need to live off of or with that emergency fund that we talked about.
HOLMES: All right. Last thing, give me your reaction to 1,000. We just had a report come out said most people don't have that in the emergency fund.
ANDERSON: Yes. And that's the reality of the situation and it's getting worse. And so, really, that's where it's so crucial.
A lot of people think they need a lot of money to start saving. Just start saving something and it will build up over time.
HOLMES: Clyde Anderson, appreciate you as always.
Also to our viewers, just a few minutes away from the opening bell. We've got that live for you live. Stay with us.
(COMMERCIAL BREAK)
HOLMES: All right. We are coming up on the bottom of the hour.
I just found myself like maybe you're finding yourself -- taking a deep breath right now, because the markets are about to open. You see this happening on Wall Street.
I was here with you yesterday when this was taking place and we immediately lost several hundred points within a matter of minutes. It got down below 400 within a matter of minutes as well, ended up losing some 520 points on the day.
Our Christine Romans is here with me in New York. Alison Kosik as well. Leone Lakhani is watching the overseas markets for us, too.
And, Christine, there we go. We'll see what happens here in just the next few seconds. But as we take our viewers through this, help us understand. It seems that we are now transitioning from what has been a debt crisis in Europe and that now could become a banking crisis.
And when our viewers here hear a bank crisis, we've been down this road before.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Yes. I mean, it's already fragile and people have been -- we'll be watching banks and the big banking sector, the financial sector for some leadership today as well because big bank stocks, financial sectors down 30 percent and stocks are this year.
You know, the big banks, the banks have cut 30,000 jobs. So, on the one hand, you have a weakening U.S. economy hurting their business and that's hurting the stock and hurting concerns about these stocks. You also have the housing market still a problem for companies like Bank of America, which bought Countrywide Financial. Faces lawsuits over some of those loans that they wrote.
Then you add on top of that, what's happening in Europe. Why is what is happening in French and European banks matter to American banks? They are all interconnected.
When you have a sneeze in the global -- financial global banking system, everybody gets a cold. We know that because of the way the system is made and also because Europe is our biggest trading partner. It's a huge trading zone.
And so, whatever is happening there, definitely matters to you. Now, why does -- you can see stocks are up. It's been -- Alison can attest to that. The futures have been up and down all morning. It's been just nuts.
But stocks are up right now. And I'm betting if you look within those numbers, you'll see a little rebound for the banking stocks for some the leadership there because they were so beaten down yesterday, T.J.
HOLMES: And over to you now, Alison Kosik, who is at the New York Stock Exchange for us. And you find yourself almost giddy just to be in any positive territory, because it was immediately here with you yesterday. We were doing the same thing and we saw it plummet triple digits within a matter of minutes.
So, explain to us what we are seeing this morning.
KOSIK: Well, we are seeing green arrows which is a nice change of pace but don't think that this is going to last all day. I say, you know, tread with caution here because how we start isn't necessarily how we are going to end because the fact of the matter is, T.J., this is a market that's really trading on each and every headline. We saw that yesterday. We saw that the day before and the day before.
And we've had some really startling headlines come out that are really moving the markets and that's really what's going to keep things going today.
The good thing is volatility is down, at least a little bit right now. But not to say that is going to last forever -- meaning all day. So, we'll keep an eye on the numbers for you, T.J.
HOLMES: All right. And Leone Lakhani is keeping an eye on the international numbers for us as well.
What are we seeing overseas?
LEONE LAKHANI, CNN CORRESPONDENT: T.J., we've got market whiplash here in Europe as well. I mean, we started the day sharply higher, then they went sharply lower. And now, they are a bit up and down across the board.
And those French concerns that you were talking about earlier is what's really driving the markets at the moment because, obviously, we have the concern about whether France will be downgraded or not, even though the credit agencies have said they are sticking with that AAA rating.
But there are other issues with France as well. Their debts are high. Deficits high. Their growth is quite sluggish and we are expecting second quarter numbers on French growth on Friday so that will be key to watch.
And everyone is really concerned. You've got the banking issues here in Europe as well about how much exposure dot European banks have to the debt issues that we're seeing in Italy, in Spain, Ireland, Greece. No one really knows what's going on.
And all that uncertainty is what's really rattling everybody over here in Europe as well, T.J.
HOLMES: All right. And, Christine, as I bring you back in, and to our viewers -- we are just watching, just minutes after the opening bell on Wall Street, we seeing green arrows as Alison Kosik just put it -- 134, 142 points up on the Dow right now.
Do we have anything on the horizon we are standing by for that could be some good economic news that the markets could react to?
ROMANS: I'll tell you some good economic news we had today, what amounts to good economic news. We had a jobless claims number that was under 400,000 for the first time since April.
What does not mean? Well, the jobless claim figures measures how many people for the very first time lined up last week for unemployment benefits.
So, these are newly -- people newly out of work and it was below 400,000 for the week for the first time since April. So, that's something that was a good piece of information. That comes on top of Friday when we had more than a hundred thousand jobs created in the economy and more than 150,000 jobs created in the private sector.
So, that was a little -- not good enough -- but that was still a little bit of good information. So, we'll be looking for incremental signs that the economy, T.J., is not going into a recession, but is just in the doldrums. And that, for what it's worth, is a good economy if the economy is in a rut and not a recession because certainly you want to get back. Close to being a recovery if you're just in a rut, right?
But a lot of people take -- are making the odds. I mean, is it one in four chance, which is what CNN Money's verdict is, one in four chance of falling into a recession? Is it something more than that? Robert Reich, he is a well-known liberal economist. He says it's more like 50/50. Martin Feldstein, who is a well-known conservative economist, he says it's 50/50.
So, any kind of information that's going to give us more sense of what's happening in the economy. That will be a real mover. Alison is right. It's a headline-by-headline market.
HOLMES: Alison, to bring you back in here. Go ahead, Alison? You still with me?
KOSIK: I was going to say, kind of piggyback off what she is saying. You know, it is still earnings season and some of these companies are beating Wall Street expectations. Those are sort of the little glimmers of light we are seeing.
You know, we are also getting optimism from Cisco. Cisco reported after this closing bell yesterday, it shares right now are up 14 percent. It's the network equipment maker, that's what Cisco Systems is. It's making good progress on cost cuts.
And in normal times, it could lift the broader market for longer than five minutes. So, you know, we'll have sot see if this rally that we are having right now lasts. But, you know, investors are also looking to the bare bones of what makes Wall Street tick and that's the companies that make up the stocks here, for instance, at the New York Stock Exchange -- T.J.
ROMANS: T.J., and, Alison, let me make a quick point, because she is making a really good point about cost-cutting and the reasons why companies are able to have better profit and that's good for investors. But cost cutting means job cuts. And you look at Cisco, in Cisco's case, there will be job cuts.
So, on the one hand, this is still feeding into this whole idea of where there's two Americas. Something is happening for investors and for Wall Street and for corporate America that's not happening for Main Street and the middle class. And that's -- I mean, I think that's an argument and debate that's going to continue throughout the rest of the year quite honestly.
And, here, you got Wall Street being hit and investors being hit, and Main Street being hit. So, you know, if you got exposure to either, it's still kind of a tough place to be.
All right. Christine, Alison, Leone, I appreciate you all.
We're at 36 minutes past the hour. We will continue to keep a close eye on what's happening on the markets. But right now, just minutes after the opening on the Dow at least, we have seen it at least 168 points up.
This time yesterday, we were several hundred points down. But still, the way you start doesn't mean this is the way you're going to finish.
Well, stay with us because coming up: there are two things that one portfolio manager says are actually driving the markets. We'll tell you what those two things are. One of them, Gordon Gekko made famous. Stick around for that.
Also, Mitt Romney makes a big splash in Iowa after missing in action there. We are live from Des Moines for this morning's Political Ticker. Stay with us.
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HOLMES: All right. About 20 minutes to the top of the hour.
And, you know, you just want to take a little breather, don't you? I know it's early. So early we are only 10 minutes into the trading day but, still, it's nice to see positive numbers instead of negative ones like we saw yesterday at the same time immediately after the opening of the Dow right now, 1506 points up at least again.
An early start but still all eyes are on the markets today after it had been literally an up and down and up and down week. We will see how this day wraps up.
Meanwhile, we turn back to politics now. Many of the GOP presidential candidates are in Iowa this week.
CNN's Shannon Travis is there for us.
And, Shannon, they are not just in Iowa. They are all showing up at the state fair.
SHANNON TRAVIS, CNN POLITICAL PRODUCER: They are at the state fair or they will be coming here to the state fair.
And, T.J., you see that sign behind me in deep fried Twinkies. You can't come to the Iowa state fair and not have a deep-fried Twinkie fried. Also on the menu, deep friend Oreos and a stick of butter deep friend. I hope my doctor isn't watching.
But also on the menu, the heavy does of politics today. As you mentioned, some of the presidential candidates will be coming right here to the state fair.
Mitt Romney we're expecting him today, ahead of this debate later on tonight. Michele Bachmann and a few others, Herman Cain, will be coming here tomorrow. They'll all be basically lobbying for support.
You know, it's a crucial contest, the Ames straw poll on Saturday, and they want their supporters to get out there and cast a ballot for them.
Also, as I just mentioned, later on tonight, there's a debate tonight where the candidates will be there. Mitt Romney will be there. It will be Jon Huntsman, former Utah governor, his first time. It will be Tim Pawlenty who possibly might go after Mitt Romney and Michele Bachmann on stage, as he has been at campaign events.
So, this will be the first time that all of the presidential Republican candidates will be together again since the last debate that aired on CNN back in June, T.J.
HOLMES: All right. Shannon, we're going to be checking back in with you there. Thank you, from the Iowa state fair.
But we're 42 minutes past the hour now. Coming up, something I haven't seen yet and I intentionally didn't watch it yet because my team here, show team said I will not be able to keep from crying when I see this video. So, we are going to watch it together coming up in just a moment. Stick around for this soldier surprise.
Also this morning, there have been a lot of worried faces on the floor of the New York Stock Exchange but at least one guy is smiling. We will explain why. He is cleaning house right now. That's coming up.
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HOLMES: All right, we're about a quarter off the top of the hour. I'll give you a look at some of the stories making news "Cross Country". First, we'll have start in western Tennessee where the principal, that woman there of a small private school was found dead in a classroom. Investigators say 49-year-old Suzette York was found just lying in the room at Memphis Junior Academy and now a 17-year-old student is in custody in connection with her death.
Also the FBI wants to know who left a homemade bomb on a natural gas line in rural Oklahoma. The device was discovered yesterday in Okfuskee County, and was soon disarmed. Agents say they have few leads.
And now the story I told you and they told me I was going to be crying about. Now, look at this, this is Darla Harlow in Mississippi, she got to throw out the first pitch at a minor league game but now look at what happens when she realizes who she was throwing the ball to. Take a listen to this.
She had no idea. Look at that reaction again. Oh. That's her soldier husband who surprised her by coming home. His name is Michael; he has been deployed to Afghanistan. But a great story. She had no idea she was tossing out the first pitch to her own husband.
All right, here we go; 130 points up. Much different from what I was telling you right here yesterday. Literally, we were hundreds of points down at this point just minutes after the trading day started but right now, the DOW in the green. The other indices I believe as well are a little up as we speak. But again, just starting out the day, we'll keep a close eye on the markets.
But meanwhile, as we have watched the markets go down several days this week, Poppy Harlow joins me now. Poppy, somebody is getting rich.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: I couldn't have said it better myself.
HOLMES: Yes.
HARLOW: They certainly are. We -- we all hate this volatility, we hate to see the market go down because we're generally long-term investors. Right? Our 401(k), our pension, our IRA but there are folks out there called short sellers. And all that means is that they bet stocks are going to go down and go down big, they are making a killing right now.
I spoke with Ryan Bend, he is a portfolio manager with the Prudent Bear Fund, they are bearish on the market and they make a lot of money when this market goes down. Their portfolio up more than 15 percent in the last month. I asked him what on earth is driving this market.
Take a listen.
(BEGIN VIDEO CLIP)
RYAN BEND, PORTFOLIO MANAGER, PRUDENT BEAR FUND: It's all macro economics. It's -- it has nothing to do with -- with price earnings ratios and valuations. It's all macro economics. It's sovereign risks. It's France, Germany, Greece; that's really what's driving this market and it's -- it's greed and fear right now.
(END VIDEO CLIP)
HARLOW: Greed and fear driving this market. A lot of big fears about the state of Europe, T.J. And hopefully, we'll find out more about that today or this week, so we can get some sort of basis for -- for this market to move on.
I also asked him, T.J., are we nearing bottom? Are we trying to find a bottom here? His take is no, we've got a lot further to fall. So you asked it from people, they have different answers. But this is a treacherous market right now. We'll take the upswing right now but as you said we're only 17 minutes into the trading day. We've got a long day ahead.
HOLMES: All right, let me hold on to hope there, Poppy, let me hold on. Thank you so much, always good to see you.
Well, we're about 12 minutes at the top of the hour.
And U.S. soccer star goalie Hope Solo is set to appear nude in a magazine but we're not talking "Playboy" or "Hustler" here. We'll explain and tell you where you'll be able to see all of her -- that's coming up in just minutes.
Also next hour, the bus is making a stop right here in the studio. We're talking about Jerome Bettis. Yes, he's talking NFL, but also a project that's near and dear to his heart that could help protect your young football player.
Stay with me.
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HOLMES: All right; some things we're keeping an eye on for later today. Secretary of State Hillary Clinton talks about the ongoing famine in East Africa to the International Food Policy Research Institute; that happens around 11:00 a.m. in Washington.
Also President Obama will be back in Michigan this afternoon. He'll be talking about jobs of the future at a battery plant. That happens around 2:00 Eastern Time.
And then at 7:30 Eastern Time, we didn't know if it going to happen, but the NFL pre-season kicks off, yes football folks is back.
We're also following a lot of developments in the next hour of the CNN NEWSROOM. Let's check in with our folks and let's start with Christine Romans live in New York. Hello there.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Hi there T.J. We're going to give you the big picture of why what's happening in Europe and France in particular might make -- make a dent in your own 401(k). We'll draw he connection for you. That's coming up at the top of the hour.
JOE JOHNS, CNN SENIOR CORRESPONDENT: I'm Joe Johns in Washington. Be careful what you wish for after the wreckage of the debt ceiling debate. Four members of Congress actually want Congress to cancel their vacations, come back here and do even more. I'll have that coming up.
HOLMES: Right, Christine, Joe, we appreciate you; we'll check in with you all.
Also in the next hour, a controversial book about black maids is now a very controversial movie. We'll talk to an award-winning African- American author who's got a big problem with "The Help".
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HOLMES: All right, getting close to the top of the hour now. And the 93rd PGA Championship teed off this morning at the Atlanta Athletic Club. Now you have the U.S. Open winner Rory McIlroy. He is actually playing with this year's two other Major winners. Darren Clark and Carl Schwartzel (ph) but Tiger Woods, all eyes on him. He is on the course right now.
He's actually fallen to number 30 in the world on tour. He hasn't won a major since 2008 but he's trying to get his game back up the par, if you will.
We'll have a live report from the tournament next hour.
Also check this out. You can't beat the bottom of the ninth, right? This is Tropicana Field. Rays hosting the Royals. All right, that's Sam Fuld, knocks the hit to right center off the wall. All right. Tampa's Elliot Johnson comes around from first, ties the game up.
Now Fuld gets a triple out of it. That's great. But look at what happens. The ball gets away. Fuld ends up -- and the Tampa Bay Rays -- they kind of actually came down from five down in the ninth to win the game.
Also one other sports highlight for you, if you will. U.S. Women's soccer goalie Hope Solo says she will appear nude in ESPN the magazine's body issue. Have you seen this? They've been doing it for the past couple of years now. Other sports stars have posed for it, the previous issues including Serena Williams, Dwight Howard.
She actually sent out a tweet, Solo -- Hope Solo did, saying "Being naked outside is very liberating." If you haven't seen it, they do have them with all of their clothes off but some of the more important parts are covered, if you will.
Well, political controversy has raised about -- raged about what some see as an unflattering photo of Michele Bachmann on the cover of "Newsweek" magazine. It has now turned into, as you can imagine, comedy gold.
And here now is our Jeanne Moos. (BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): When it comes to this "Newsweek" cover, the eyes have it. At one newsstand, Michele Bachmann's eyes stare out right next to George Washington with a black eye on "Time" magazine.
All week conservatives have been saying "Newsweek" tried to make her look crazy. But the ones who are really crazy about the cover are comedians.
JON STEWART, COMEDIAN: I look at that picture and think, "Isn't that a little soon to be doing a female remake of "The 40-Year-Old Virgin".
UNIDENTIFIED MALE: Nancy Pelosi saw it and Nancy Pelosi said, "No, it doesn't look crazy to me."
UNIDENTIFIED MALE: Play some spooky music. There you go. I see you.
The editor of "Newsweek" told MSNBC they didn't try to make her look crazy or cross-eyed. Tina Brown's favorite word is "intensity".
TINA BROWN, "NEWSWEEK": The intensity in her eyes is in all the photographs of her. There's something about Michele Bachmann with the eyes looking out.
MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: Good morning, everyone.
MOOS: "Newsweek" released what it called the outtakes from the shoot, apparently to make the point that her eyes are pretty intense in all of them. Jon Stewart gave it back to "Newsweek".
STEWART: Shame on you, "Newsweek," and your editor, Tina Brown. No, too glamorous. That's it.
MOOS: The one person who hasn't bugged out over Michele Bachmann's eyes is Michele Bachmann. A voter asked her about it.
UNIDENTIFIED MALE: It was sort of wild-eyed photo with the headline, "Queen of Rage".
BACHMANN: Well, we'll have to take a look at that, won't we?
MOOS: But the campaign is not commenting. Blogs are. At BuzzFeed they compiled the "Hot Chicks with Michele Bachmann's Eyes", transplanted her eyes in to, say, Michelle Obama, Rihanna, Britney Spears, Beyonce, even a cat.
Now Bachmann knows what it feels like to be Steve Buscemi who had his eyes set to music.
The last time we in the media focused this much on eyes was back when "USA Today" got in trouble for retouching Condi Rice's peepers. The paper's Web site raised eyebrows when it said it brightened Condi's image though critics said it gave her devil's eyes. At least no one's claiming "Newsweek" altered Bachmann's, eyes though jokesters online enjoy intensifying them. Who needs fire in the belly when you have fire in your eyes?
Jeanne Moos, CNN.
