THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: That's a live shot of ground zero. The work goes on around the clock. I heard on the radio though that sometime probably before the end of the week this will change from a search and rescue operation to a search and recovery operation. The total missing and unaccounted for is around 5200 now.
Garrick Utley is standing by on the roof of this building with a nice view of the sky line. It's not as nice as it used to be. But he's got the latest news. Garrick, over to you.
GARRICK UTLEY, CNN CORRESPONDENT: Yes, Jack. In these early morning hours here in New York City we want to focus first of all on the FBI investigation, this massive search throughout the country. The FBI now says it's looking for 185 people, 185 who they believe have information about last Tuesday's attacks.
Of course, the one person everyone is looking for, the man topping everybody's most wanted list is Osama bin Laden. President Bush wants him dead or alive in the President's words on Monday. And Tuesday the leaders of Afghanistan are meeting to consider how they'll respond to the mounting pressure from Washington and around the world to hand over Bin Laden.
Kofi Annan, the Secretary General of the United Nations made a special plea for tolerance in this crisis.
(BEGIN VIDEO CLIP)
KOFI ANNAN, U.N. SECRETARY-GENERAL: We have to manage the response in such a way that it does not lead to new divisions within countries and between countries. Today almost every society is multi cultural and multi religious. And we have to make sure that we don't get into a division between the west and Muslims because you do have Muslims in all of these societies. You'll be creating divisions within the society.
(END VIDEO CLIP)
UTLEY: And on Wall Street, an unusual thing, a moment of silence as trading resumed. And then it was back to work, not the silence. The silence gave way to the din of normal trading at the New York Stock Exchange got under way after several days of being closed down. After the bell, the markets tumbled as expected. The Dow Jones toppled by seven percent and the Nasdaq heavily weighted with the technology stocks also took a nose dive on Monday. We'll see what Tuesday brings.
Of course the source of these events was just a few blocks away at the former World Trade Center in lower Manhattan. Relief efforts continue at this hour. All through the night, 201 confirmed dead, another 5000 missing, a little over 500 actually. Similar activity at the Pentagon. Here's a live view as crews continue to remove the debris there. And the death toll there at the Pentagon from that crash is 188.
Jack, a moment ago, we were talking about the FBI search, 185 people they want to get their hands on right now and talk to. Today an unusual thing happened, the director of the FBI, director Robert Mueller issued an appeal for help. There's a shortage in this effort. You'd think they'd have all of the resources. The don't have enough people who can speak or understand Arabic. And that's a strategic problem the FBI is facing in this investigation. The FBI now wants to have U.S. citizens or legal residents who speak Arabic to volunteer. Come on in. Just like giving blood or helping with the clean up down there in lower Manhattan.
Interesting aspect of this, a year or two I did some research on this. The State Department says there are four hard languages in the world Jack, there's Russian, Chinese, Japanese and Arabic. Hard because they're just tongue twisters and the grammar is -- well, forget about the grammar. You really can't learn it. It takes a lifetime.
Well, at any given moment in the United States there are about 15 to 20,000 Americans, young Americans, usually students studying Japanese, Chinese or Russian. How many are studying Arabic? About 2,000, 2,500 that's all. That's why there's a shortage. That's why the FBI needs help. Arabic is going to become I think a growth industry in this country if you want it, Jack.
CAFFERTY: I wonder too, Garrick, if it's not a symbol of the absolute lack of expectation that anything like this might happen. I mean it's not like there hasn't been a need to communicate with people that speak Arabic. I mean this problem in one form or another has effected other parts of the world for years and years and years. And yet, all of a sudden something like this happens here. And the FBI is asking for people who know how to speak the language of the part of the world that's involved in this, interesting.
U.S. officials say they do have evidence that additional would be terrorists are here in the United States. And that they may still be plotting additional acts of terrorism, most likely bombings. But yet there's a small but growing concern terrorists could be trying to acquire less conventional weapons designed to kill many, many more people. National security correspondent David Ensor reports.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): The most likely biological killer terrorists might use, experts say, is anthrax. It can be easily found in cow pastures. Agents made from it produce fever, stomach pain, then a horrible death. D.A. HENDERSON, JOHNS HOPKINS UNIVERSITY: It is spread -- well, let's say in a biological terrorist event, it would go by aerosol. You'd dry it and spread it as a spray and let it drift over a long way.
ENSOR: Still more terrifying, though much harder for terrorists to get their hands on, a disease that was eradicated in the 1970s -- smallpox.
MICHAEL OSTERHOLM, MINN. CTR. FOR INFECTIOUS DISEASES: (UNINTELLIGIBLE) smallpox simply means to have a device within a writing ink pen that could very easily pass at any custom's office, could very easily pass through any metal detector, and you're going to have enough smallpox in there to start the world's worst epidemic.
ENSOR: Smallpox spreads like wildfire. It is estimated to have killed 120 million people in the 20th century.
HENDERSON: Then there would be some small lesions on the skin. You wouldn't be sure what they were for maybe two, three, four days.
ENSOR: The only official stocks of the virus are in one U.S. and one Russian lab. There may be others.
JONATHAN TUCKER, AUTHOR, "SCOURGE": There is circumstantial evidence that Iraq, North Korea and Russia have undeclared stocks of smallpox.
ENSOR: In the Cold War, the Soviet Union developed smallpox and anthrax weapons that could be logged into the U.S. on an intercontinental missile. The Russians now insist they only have biological agents for vaccine research, but a defector says that is not true and that the weapons could end up in the wrong hands.
KEN ALIBEK, BIOLOGICAL WEAPONS EXPERT: In my opinion, it's a clear and present danger.
ENSOR: Still, barring leakage from Russia or help from, for example, Iraq, Osama bin Laden and his Al Qaeda group would have great difficulty getting their hands on a biological weapon.
TUCKER: We should improve our intelligence about what terrorists are doing in this area, but we shouldn't panic. I think the threat is still quite small.
ENSOR: The threat is small because biological agents are so hard to produce and hard to make into weapons. By contrast, the threat of a chemical attack may be greater, but the U.S. is relatively well prepared against it. The Sarin gas attack in the Tokyo subway showed six years ago chemical agents can only affect a limited area. If U.S. troops were to head into Afghanistan, though, going after bin Laden and his group, experts say they could need chemical protection.
(on camera): According to newspaper reports, satellite pictures of terrorist training camps outside Jalalabad in Afghanistan show dead animals on test ranges, suggesting the militants may have been experimenting with various chemical agents.
David Ensor, CNN, Washington.
CAFFERTY: When you say the threat is quite small, if memory serves me, I bet you two weeks ago they might have thought the threat was quite small that anybody could hijack two airplanes, fly into them to the World Trade Center and kill 5500 people. They probably thought the threat of that was quite small too.
So where do we go from here? And what about this war that the President and the Pentagon and Colin Powell and everybody's talking about? What kind of war does America need to get ready for?
Joining us tonight from Palo Alto, California is Thomas Henriksen. He is a senior fellow and associate director for program development at the Hoover Institution, which is a think tank out in Palo Alto. Mr. Henriksen, it's nice to have you with us. Good evening.
THOMAS HENRIKSEN, HOOVER INSTITUTION: Thank you. Good to be with you.
CAFFERTY: What about this threat of biological weapons, chemical weapons, nuclear weapons at some point? How real a threat is that?
HENRIKSEN: Well I think they're all very real. As you brought up correctly two weeks ago or a week ago no one would have imagined what has actually happened to the World Trade Center. So we have to be very prepared and it's a real possibility. There have been many intelligence breakdowns. There are in our past we didn't understand certain things were going to happen and in fact did happen.
So it's a real possibility that terrorists could get their hands on particularly biological weapons and also nuclear weapons. There are some parts of nuclear components and pose a real threat to the United States. In fact, there's a possibility they could even hit some of our own nuclear reactors and cause some sort of melt down or some sort of explosion. That's also one of the things that people are concerned about.
CAFFERTY: I was reading an article about that today, that security at the nuclear power plants is not that great. They are not particularly vulnerable to air attack damaging the core reactors, but what could be damaged from the air are the cooling systems. And that could lead to overheating, which could lead to the melt down and the exposure to the atmosphere of radio active steam. So -- and there isn't a whole lot of security as I understand it around the nation's nuclear power plants. Is that right?
HENRIKSEN: Well that's correct. Up until now we haven't thoroughly thought about it because no one would imagine this would happen.
CAFFERTY: Sure. HENRIKSEN: We've had a decade of small wake up calls as you know. And the terrorist attack on the World Trade Center in 1993. We've had the attacks on our embassy in 1998 in East Africa, in Nairobi, Kenya and also in Dar as Salaam. We've had the attack 11 months ago on the U.S. Cole. But we really haven't let this sink in until last Tuesday.
CAFFERTY: You know the -- it's very murky the kind, the form perhaps that this upcoming war is going to take. But the consensus is it's going to be different than anything this country has ever seen before. The Persian Gulf war was a well defined enemy and well- defined piece of geographical area. We amassed a big coalition, brought all our modern technology into play with smart weapons. And then went in with a massive and very sophisticated ground force and knocked the whole thing up with a minimum of casualties.
Your institute is involved in thinking about these kinds of things. What form might the upcoming struggle take?
HENRIKSEN: Well I think it's going to have certainly analogies to the cold war. That is not say we're not facing the Soviet Union again. But I think it will have certain similarities in the fact that it will be a very long struggle as the cold war was. It will be one it will have to marshal a lot of forces, not just military forces, but indeed it will have to be force such as our economic pressure. We'll have to enter into alliances. We'll have to increase our human intelligence.
And also, our technical intelligence in order to deflect terrorism. We're going to have to institute a number of things like we did in the cold war. And we're going to have to stay tuned for a long time. This is not something we can solve in simply one quick cruise missile strike, one bombing run. This is going to be a campaign of considerable time and a lot of patience. A lot of hard police work that's tracking people down.
CAFFERTY: You know traditionally this isn't a country that has a lot of patience. We want things when we want them. And we're used to getting them. Military victories included but even more to our standard of living and our style of living, the materialism in this country is overwhelming. And we are very used to self gratification.
I want to address what the poll numbers show about the willingness of this country to exercise the kind of patience you suggest might be necessary. But I want to take a phone call first. So sit tight and we'll do that in a moment. Yvonne in Texas is calling. Yvonne, good evening.
YVONNE: Hi, Jack. I just wanted to mention first of all the -- my heart just goes out to everyone there. And I live in Houston and every one in the area has been just totally distraught about it. And there is a lot of support from this area. So I'd love for all of the New Yorkers to know that and everybody in Washington and Pennsylvania.
CAFFERTY: What kind of job is your former governor doing? YVONNE: He's doing a fabulous job. I feel very confident with everyone that is in the cabinet and the way that Congress has come together it just -- it's just great. But one thing I wanted to bring up that you know obviously one -- after that happened in New York and Washington D.C. there as an immediate fear here in Houston because obviously we have so many refineries, chemical plants and so forth and the Gulf.
And I'm not really that sure about what the security is like around here at these places. We do have Ellington (ph) the 147th fighter wing. So I know they were in the air immediately. But I wondered about that and additionally I had heard that Atlanta had been targeted as possibly another city that would be hit. And my question about that was I had heard some people mention maybe the airport. But the first thing that came to my mind ....
CAFFERTY: That was dismissed by the way, but go ahead with your thought.
YVONNE: Oh, OK.
CAFFERTY: Well yeah, rest easy there was nothing to that. But what came to your mind?
YVONNE: Well what came to my mind is the headquarters for Colonial Pipeline which is the major headquarters for all of the refined products that go through the (UNINTELLIGIBLE). Those are some things that I just had questions about as far as our refineries or chemical plants and things of that nature.
CAFFERTY: One of the things you may see happening very soon as these big companies that have such tremendous investments in these physical plants are going to undertake probably out of their own pocket, additional and heightened security measures. So that's something you might watch for. But certainly something to be aware of and be concerned about. I appreciate your call.
Let's get Kelly Wallace on board tonight. We haven't heard from her yet. She is live at the White House. And one of the President's countryman down there in Houston, Texas giving him high marks for the way he's handling this. Hi, Kelly.
KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT: Hi, there. Good evening, Jack. Yeah, the President is getting high marks. You've seen the polls, extraordinary approval rating for how he's handling this. And a point, you were mentioning as well the American people certainly always wanting quick action. Very much there's a lot of pressure for the U.S. to retaliate quickly, and that is why you have heard the President as you've noted day in and day out as well as other top administration officials urging the American people to be patient. Saying this will be a long and difficult war, Jack.
It was very interesting today, really the first time the President said quote, there will be cost to this war. So he's preparing the American people for the sacrifices ahead. He is obviously as you've seen tough talk coming from the President, tougher rhetoric day in and day out, mulling over military options.
But also, focussing on the diplomacy. He's going to be meeting on Tuesday, today with French President Jacques Chirac. Later in the week British Prime Minister Tony Blair coming to Washington. Secretary of State Colin Powell meeting with a variety of foreign ministers as well. And then of course, Jack, there is this sort of domestic focus on the economy. The President met on Monday with his economic team and also talked to his staff about the airline industry. You'll see airline executives coming over to the White House on Tuesday to meet with the President's economic adviser. Lots of talk about this multi billion dollar aid package to help the industry.
So you're really seeing the President focussing a variety of roles on the economy, military planning, diplomacy. And then the public relations effort to keep the American people -- keep them patient as the administration takes whatever steps it plans to take in the days, weeks, months and years ahead -- Jack.
CAFFERTY: I was reading something Kelly in the paper today too, that they are going to be very, very careful about information getting out. They are not going to be talking to the news media about their plans. They are going to clamp down on access of reporters to any kind of military operations. Intelligence is going to come to bear. And they're not going to -- they're just going to -- they're going to change the rules on covering a war.
It used to be you know we -- the news media could go along. They could be on the battle field. They could be in the news conferences. Remember all of those briefings Norman Schwarzkopf and Colin Powell held during the Persian Gulf War.
CAFFERTY: My sense is from reading this that's all going to go away.
WALLACE: Absolutely. That was really an interesting development we learned today. A very limited number of people will have access to classified information. And certainly, the media not likely to get the detailed briefings that we did get as you noted in the Persian Gulf War.
You know, Jack, this administration though has always been a little bit more secretive. The president himself has continued to say that we will only find out about what is happening when it happens. No leaks coming from this White House or not many.
So there is a sense of more discipline, or at least and attempt to have more discipline even before this happens. You're obviously going to see tremendous focus on keeping that information in very few hands. And obviously there's a big reason for that of course, and that is intelligence is incredibly valuable.
So obviously this is important for this information to remain secret so that the administration can take whatever steps it takes and not obviously give a heads up to any terrorist or again any organizations or countries which harbor them -- Jack.
CAFFERTY: Yeah, good point. Nevertheless another fear that another a freedom rather that we take very much for granted. Freedom of information, freedom of the press going to changed not a lot, but it's going to change a little. Kelly we're going to swing across to the other side of the world now and get Tom Mintier on board. He's live in Islamabad, Pakistan. Tom what have you go for us tonight?
TOM MINTIER, CNN CORRESPONDENT: Good evening, Jack. There is growing concern here for people want to come to Pakistan and people who want to leave. The people coming from Afghanistan. The borders are sealed off. For the last 21 hours Pakistan has slammed the door shut. The refugees who want to get out of Afghanistan even if they have papers and VISAS cannot leave.
And here is also growing concern for people from the West wanting to come into Pakistan. Two governments, the United States and Britain have issued travel advisories. And also, the State Department has accepted a request for voluntary evacuation of non-essential personnel at U.S. diplomatic missions in Pakistan. So there is a good chance that we should see in the coming days evacuation of non-essential personnel from here.
Now, there is also concern, and not to raise an alarm or anything, but the Taliban, indeed, have made a very serious threat that any nation who joins the U.S. coalition would be considered an enemy of the Taliban.
They also have SCUD missiles, much in the same way Saddam Hussein did, and Islamabad, the capital of Pakistan, is within range of the border, if there are any SCUDs along the border.
So there has to be concern within the Pakistani government, within the community here and the population, of this threat by the Taliban to retaliate.
So, everyone is a bit edgy and nervous here, and a lot of the humanitarian agencies are concerned that these Afghan refugees who are massing along the border simply will not have the foodstuffs to survive, because the amount of food that was on the ground, left behind when the aid agencies evacuated was turned over to local staffs.
And if, indeed, the situation starts to get bad inside, people outside the refugee camps may come in and take the food away, which is right now going to last a couple of weeks. It would only last a couple of days if the general population made their way to it.
So, there is concern because the borders are closed, and those who want to come into Pakistan as refugees are not able to do so. They are behind the wire fence at the border on the Taliban side -- Jack.
CAFFERTY: All right, Tom. Thanks very much. Tom Mintier live in Islamabad, Pakistan. We're going to do a quick break. When we come back, we promised that, if you are an investor in the stock market, we would get Ned Riley's thoughts on how this market behave tomorrow.
And what you might be thinking about, if you are an investor -- buy, sell, hold -- if you're going to buy stocks, what kind?
So we'll get some more from Ned Riley, but I've got to do a break first. We'll be back. It's 1:22. You're watching HOTLINE from New York City.
CAFFERTY: Welcome back to HOTLINE, 1:24.
I want to check in with one of our guests, Thomas Nulty who joins us tonight from Denver. He's the President and Chief Operating Officer of Navigant services, which is a big business-related travel firm.
And Thom, before you get away from us, here, what advice would you have for people, for example, who were holding tickets for the last week, 10 days, maybe next week, you know, all these flights being cut back, routes being discontinued.
What if I've got a drawer full of airplane tickets at home? What do I do with them?
C. THOMAS NULTY, PRESIDENT & COO, NAVIGANT INTERNATIONAL, INC.: Well, the airlines are allowing you to exchange them, really, without penalty during certain periods. And those rules vary airline by airline.
But, for the most part, if you want to exchange them, you can. And that's probably good advice.
CAFFERTY: Are you, are you looking to have to have to lay off employees? You've got about 6,000 people working for you. And short term, I can't see where this couldn't, couldn't help but impact you to the down side.
Are you going to be able to keep these people?
NULTY: We, just like the airlines, will probably end up having to furlough some of our people, probably for a brief period of time until things start coming back to normal.
We're really in the same position that the airlines are in. The one good piece of news that we don't -- that we have -- is that we don't have these very expensive fixed assets that we're paying off, so it's a little bit easier for us than it is for them.
But we'll have to adjust our work force to the actual volume that's there.
CAFFERTY: What help can you give people who are traveling? I mean, you do it all the time and it's your business.
If I have to travel, or if I'm going to take that vacation that I booked eight months ago because it's my only chance to do it, help me out.
NULTY: Well, there are a couple of things when you go to the airport that'll help you a lot.
The one thing I have seen, I've seen customers get in these enormous lines that were out at O'Hare the other day when I was there. And I think that half the people in line didn't need to be there.
If you show up at the airport and you already have a ticket, or you have an electronic ticket receipt, either one of those things will actually get you through security with some identification.
And once you're through security, you can check in at the gate or at one of the airline clubs, just as you did before this crisis.
CAFFERTY: Can you take your baggage through the checkpoints and then check the bags at secure -- at the gate, as well? Or do you have to go to the counter to check your luggage?
NULTY: You can still take carry-on bags through the security area. Those that fit through the ...
CAFFERTY: The little (UNINTELLIGIBLE) ...
NULTY: ... screening devices.
CAFFERTY: ... right, OK.
NULTY: But the other thing that's interesting is, the sky caps, at least in Chicago, the sky caps moved from the curb into the terminal.
NULTY: So the sky caps are still checking bags and still issuing boarding passes, with identification, just like they did in the past. They're just not out at the curb. They're now inside the terminal.
CAFFERTY: So, and that -- you say you know that to be a fact in Chicago. If you're traveling other air -- airport, maybe call the airport ahead of time and find out.
Because I know, when I travel, I mean, I use that curbside check- in. It saves you a ton of time. You look through the front of the plate glass window out there at Newark Airport, and sometimes you can't even see the ticket counters, so ...
CAFFERTY: ... if the sky caps are working inside the building, that obviously would be helpful. NULTY: Yeah, it's varying airport by airport. I know at Navigant, we're putting out information on our Web site telling people, you know, kind of what it's like at every airport.
And every airport's different.
NULTY: L.A., for ...
CAFFERTY: What's the Web site? Give it to me real quick.
NULTY: It's navigant.com.
CAFFERTY: All right.
NULTY: N-A-V-I-G-A-N-T dot com.
CAFFERTY: And people can go there and ...
NULTY: People can go there and get information.
CAFFERTY: Terrific. Thom, I appreciate your being on the program tonight.
NULTY: It's our pleasure.
CAFFERTY: Good luck with this. Hope ...
NULTY: Thank you.
CAFFERTY: ... you come through it all right, and the business gets back to full speed.
Thomas Nulty. He is the President, COO at Navigant, a big, global travel management services company.
Quickly, Andrea in Indiana. Is she still there? We've got -- we'll do this ahead of the break, but we got to be fast, Andrea. Nice to have you on the program.
CAFFERTY: What's up?
ANDRE: Well, personally, I want to say that I ...
CAFFERTY: Andre, I'm sorry. They told me Andrea. It's Andre.
CAFFERTY: Excuse me.
ANDRE: Andre. It's OK. Firstly, I want to commend you, again, on doing a great job, because in this country that we epitomize as being a true democracy, I think this is a forum -- a, the proper forum -- for hearing America's true voice.
I wanted to just offer this. I guess diplomacy kind of went out the window with the attacks.
And not to underscore the tragedy that has taken place, but went to North Carolina, political science major, and if -- it's just evident that, right now, President Bush has a chance to validate his presidency, and ...
ANDRE: ... but it's not going to be an easy job.
I think, on one hand, he'll be criticized by the pacifists. On the other hand he'll be praised by the headhunter. But no matter what happens, I think when bin Laden dies, people will soon forget about the election scandal.
CAFFERTY: All right. Andre, it's nice to have you on the program. Keep watching.
We've got to do a station break. Back after this. You're watching HOTLINE. Stay with us.
(BEGIN VIDEO CLIP)
JOHN ASHCROFT, U.S. ATTORNEY GENERAL: ... ended, left a trail, created evidence after the fact.
In this situation we have a little tougher circumstance, but we're beginning to develop an understanding of who these people were, who their associates were, how this attack was perpetrated, and beginning to develop links of evidence that indicate the source of the, of the design against the United States.
(END VIDEO CLIP)
UTLEY: The stock markets are back in business, although some investors might wish and pray that they were not.
After the opening bell on the New York Stock Exchange on Monday, it was free-fall time for many stocks.
By the end of the day the Dow was down 684 points to 8920, the biggest one-day point drop in the history of the New York Stock Exchange for the -- the Dow, that is. The Nasdaq fell 115 points, closing at 1579.
And really hard hit are the airlines. They are struggling for financial altitude, so to say -- speak. And they took a major hit on Wall Street Monday.
Many of them say they are forced, now, to lay off thousands of workers. U.S. Airways announced it'll lay off about 11,000. American and Northwestern are both expected to announce layoffs later this week. Continental has already said it's furloughing 12,000 people.
And that's the tough news in the airline business.
And in New York City, live pictures, again. Thousands of volunteers and rescue workers still working on the job tonight.
So far, crews have removed almost 40 tons of rubble from the site. At the World Trade Centers. The disaster there, 201 people are confirmed dead by the City, and more than 5,400 are still there missing, buried beneath the rubble.
Jack, just one little story that we also saw today.
Remember, during the terrible traumatic period last Tuesday when those passengers were on those various airliners, and they were calling with the cells phones, and some were using those air phones in the back of the seat in front of you. You swipe a credit card through it.
Well, we now have some detailed information on what happened on two of those flights, United Airlines flights.
First of all, on that United flight, which was the second plane to hit the World Trade Center here, 10 calls were made from these air phones with the credit cards.
On the United flight that crashed over Pennsylvania, killing everyone on board, of course, there were 20 calls.
Now, all the calls went through except for one, where the credit card didn't clear. You can imagine the frustration of that passenger at that moment, but at least the operator came on the phone, heard about the problem, called the FBI. The operator says that she heard wailing in the cabin.
This is the United Airlines plane that crashed over Pennsylvania. And that was it. Thirty calls made by passengers on board.
And Jack, there's one question here. If you were a member of the family, a family member of one of those lost on that plane, and in a couple of weeks you get your credit card bill, and there is that phone call there, the final call, should one pay it? Should the credit card company even send out that bill?
CAFFERTY: I don't ...
UTLEY: I don't know.
CAFFERTY: I don't even want to open that bill when it comes, if it, you know, if that applies to me. I -- that's tough stuff.
But, that plane in Pennsylvania, by the way, that was the one that apparently the passengers retook control, Garrick, from the hijackers, and somehow got that thing into the ground in an unpopulated area.
Big time heroes on that flight probably saved, who knows how many lives by doing that.
All right. Garrick was talking about the stock market. It was day one. There were big losses, as he was talking about, 600 and some points, 684, I think, on the Dow Jones Industrial Average.
The S&P 500 Index, which is an index of 500 widely held stocks, it covers all different sectors of the publicly traded companies down on Wall Street, only down five percent.
That's not insignificant, but it could have been worse.
Ned Riley has been with us since the top of the program. I want to go back to him, now. He's the chief investment strategist at State Street Global Advisors, up in Boston.
And, Ned, we were talking earlier, you are, you are convinced the glass is half full here.
Talk to me about what you tell your clients who call and say, what should I do? Is this market going to keep going down? Is it going to turn around? And how should I, how should I approach my investments, here?
NED RILEY, STATE STREET GLOBAL ADVISORS: Well, the first thing we them, Jack, clearly is not to panic in this type of period, because we've seen other periods, whether it's the Persian Gulf War, or in 1973 and four in the midst of a global recession, or 1987 I think are all good examples of people panicking and creating the bottoms in the stock market.
And if you look at those points in time, you'll find that the stock market is considerably higher today than it was back then.
So, my first advice is to point out to people that clearly, short-term corrections are temporary. Long-term investment holdings have always done exceptionally well.
And if we go back 70 years, the stock market has compounded at 11 percent per year. I don't think there's anything to alter that going forward.
As a matter of fact, I said half full. I think interest rates going lower, inflation being low, a turnaround in the economy probably around the first quarter of next year, the liquidity provided by the Federal Reserve.
And I think a spirit among the people, and clearly a resolve to make sure that America will be sustaining at a very high level of production, and clearly a very high level of stock market values.
I think the other thing to impart on people is that, they should try to seek some professional investment advice.
RILEY: A lot of people in the past have probably done it on their own, and it's probably not the greatest strategy.
They should be very diversified in their portfolio. That means owning different types of securities, different sectors of the stock market, and owning bonds, as well, as sort of a mitigating influence of the stock market itself.
CAFFERTY: Let me ask you quickly about four different sectors of the market, three of which came under a lot of pressure today for reasons that relate directly to this tragedy.
That would be the airlines, the hotels and the insurance companies who are facing the biggest claims situation, probably in the country's history.
The airlines, in all likelihood, even though they lost tremendous valuations today, will not be allowed to simply not exist. The government won't let that happen.
Do you buy the airlines here?
RILEY: Well I think you do, Jack. And I think you do it as a part of a whole portfolio strategy.
I think you buy the insurance companies on adverse news like this.
We had an experience last week in Europe where the insurance companies fell quite dramatically, and then they've rallied subsequently. So, there is precedent just sort of short-term basis.
I think you go and look at companies that have been in the financial services area. Clearly, there's an emotional selling that's been taking place in brokerage stocks, as well as some of the banks. And I think those are offering opportunity.
And also maybe on the top of the list, too, is an earlier recovery to the technology businesses.
CAFFERTY: That was the one I was going to ask you, was about technology. With all of the systems that were wiped out, and the fact that all of a sudden there's an emphasis on back-up systems, firms like your own, the increased use of cell phones.
Is technology, perhaps, going to finally get a long-awaited break here, maybe?
RILEY: I think it will. But let me offer this piece of advice. Everyone's calling in tonight giving advice or giving out opinions.
RILEY: From Washington's perspective, and from congressional perspectives, I think this is a time to stimulate the business side of the economy.
Provide tax credits. Provide incentives for companies to spend. They are strapped right now because of profits.
And what we do need, we do need this technology in place, whether it's storage or networking equipment, or clearly, a new Internet structure, to allow us to do all of the things we want to do over the next five and 10 years.
CAFFERTY: Any chance we'll get a capital gains cut out of this thing?
RILEY: I think that would be less likely than we would get some kind of credits. But I would take both, as a matter of fact. I'll be a little greedy at this particular point in time. And I think it'll pay dividends down the road.
And I think that Congress will recognize that this kind of spending is actually a very productive spending. And that makes the technology stocks interesting, as well, Jack.
CAFFERTY: Ned, it's a busy time for you people on the Street. I appreciate it. It's a late hour. I want to thank you for hanging with us here for a couple of hours on CNN's HOTLINE.
You and I have had many visits on CNNfn, and I look forward to talking to you again, soon. Thanks a lot.
RILEY: Jack, it's always a pleasure to be with you.
CAFFERTY: All right, partner.
Ned Riley, chief investment strategist, State Street Global Advisors in Boston.
Debbie (ph) in Minnesota is on the phone. Debbie (ph), what part of Minnesota you from?
DEBBIE: Minneapolis, Jack.
CAFFERTY: What's going on up there?
DEBBIE: Ah, it's pretty scary. I'd like to just extend my sympathy to all those who have been affected by this tragedy, and I guess the question I have ...
CAFFERTY: ... going on up there?
DEBBIE: Ah, it's pretty scary.
DEBBIE: I'd like to just extend my sympathy to all those who have been affected by this tragedy, and I guess the question I have is, why do we still have people stationed in Saudi Arabia? And what kind of a risk are they at?
CAFFERTY: I, you know, I don't presume to be able to speak for the government, but I think, you know, we do have a military presence there.
They are also the biggest oil producer in the world. I believe that's right. Maybe, I don't know, maybe Russia's bigger. But we had, you know, a military presence there going back to, you know, the Persian Gulf War.
And they are considered a moderate Arab state, and have no small amount of political sway with the other countries on certain issues in that part of the world.
So, while American servicemen and women are arguably at more risk tonight wherever they are in the world than they were a week ago, of the Middle Eastern countries, as far as risk is concerned, I would think Saudi Arabia maybe is not quite as risky as some of the others.
But there are political and economic reasons why we have people stationed in Saudi Arabia.
Appreciate your phone call.
We're going to take a short break. It's 1:41. When we come back, we're going to resume our discussion with Thomas Henriksen, who is a Senior Fellow at the Hoover Institute out in Palo Alto, California, about how much patience may be required on the part of the American people to prosecute a war against terrorism, what form it may take, and the political liabilities that may accrue to President Bush and the administration if things don't go well, and our servicemen and women begin coming home in body bags.
You're watching HOTLINE. We'll be back in a moment.
CAFFERTY: At 8:20 last Tuesday morning, American Flight 77, a Boeing 757 with 64 people on board, lifted off from Washington's Dulles national airport bound for Los Angeles.
At 9:38, after it had been taken over by hijackers, it slammed into the Pentagon, killing everyone on board the airplane, and numerous people in the Pentagon.
We have obtained the 911 tapes that were recorded between the Arlington County sheriff's dispatcher and police officers in the field, as that plane was spotted heading for the Pentagon. Let's listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: OK. Anyone responding to check the area of the Pentagon, advise on channel one, please. I have Delta 35 cruising 34, Delta 35 two.
UNIDENTIFIED MALE: He went that route (UNINTELLIGIBLE).
UNIDENTIFIED FEMALE: (UNINTELLIGIBLE). Turn on it that way.
UNIDENTIFIED MALE: OK. One (UNINTELLIGIBLE).
UNIDENTIFIED MALE: Motor 11.
UNIDENTIFIED FEMALE: Motor 11.
UNIDENTIFIED MALE: I'm direct, and there is visible smoke coming from that area, high visible smoke.
UNIDENTIFIED FEMALE: Motor 11 direct. Meet us once again, this (UNINTELLIGIBLE). People, traffic on one Adam, restricted until further notice. Units responding to the report of the plane crash, advise on one Adam one at a time. I have motor 11, cruiser 34, cruiser 49, delta 10, delta 453, delta 35 and delta 452.
Any other units, stand by responder, and (UNINTELLIGIBLE) cruiser (UNINTELLIGIBLE).
UNIDENTIFIED MALE: (UNINTELLIGIBLE) 23. I'm going to be clear, 304, out, and standing by for further instructions.
UNIDENTIFIED FEMALE: (UNINTELLIGIBLE) ten-four, thank you. Cruiser 50?
UNIDENTIFIED MALE: (UNINTELLIGIBLE) 45.
UNIDENTIFIED FEMALE: Ten-four. Is that new FDS (ph) to respond for now, or do you request additional?
UNIDENTIFIED MALE: No, I'll stand by until we see what we got.
UNIDENTIFIED FEMALE: Ten-four.
UNIDENTIFIED MALE: Until we respond to the traffic.
UNIDENTIFIED FEMALE: Last (UNINTELLIGIBLE) responding for traffic?
UNIDENTIFIED MALE: Motor two.
UNIDENTIFIED FEMALE: Motor two responding for traffic also.
UNIDENTIFIED MALE: Motor (UNINTELLIGIBLE).
UNIDENTIFIED FEMALE: Motor 11.
UNIDENTIFIED MALE: (UNINTELLIGIBLE) 110, and it's a lot (UNINTELLIGIBLE).
(END VIDEO CLIP)
CAFFERTY: And thus began what promises to be a long national nightmare. How long and how expensive and how it'll all end, nobody knows.
But somebody who spends his time trying to figure these things out is Thomas Henriksen. He's a Senior Fellow at the Hoover Institute out in Palo Alto, California.
You were able to hear those tapes, I assume, Tom.
HENRIKSEN: Yes, I did. Thank you.
CAFFERTY: For the -- for the dramatic stuff.
HENRIKSEN: Very dramatic, indeed.
CAFFERTY: What's your best sense of how the rest of this story is going to play out? We -- you alluded earlier to possible economic warfare.
Economics and the wealth of this country, and the ability to perhaps put together a coalition of countries willing to really tighten the noose economically on states that have been found to harbor terrorism, is no small weapon in itself.
How effective might something like that be, do you think?
HENRIKSEN: Well, I think, on -- in itself, it won't be totally effective. It has to be part of a greater strategy, as was the Cold War.
We built up an alliance system, a military alliance, political alliances. We helped states rebuild after World War Two -- even former enemies, in the case of Japan and Germany.
And that's the sort of thing we'll probably have to turn to, but it will not be easy. And I'm doubtful we're going to have a lot of quick victories in the next few weeks.
CAFFERTY: The poll numbers are huge for President Bush, as they were for his father at the time of the Persian Gulf War.
The congressional move authorizing use of force in the Persian Gulf War passed on a slim margin of 52 to 48. The authorization to use force cleared the Senate 98 to nothing.
The question is, and we were talking about this earlier, America tends not to be a very patient nation.
How long can this overwhelming support hold? And what kinds of things may either serve to preserve it or erode it?
HENRIKSEN: Well, there's several things. Those are -- that's a very good question.
It will, right now, be -- the President's popularity is at its pinnacle. Americans have a tendency to rally around the flag, to support the president. And that's very good.
But we have to remember that things will go wrong in the future. We may not even kill innocent people. We may not, and just lose a few American soldiers. We may, in fact, kill some of our own people inadvertently. And some of the operations we undertake could well look farcical in retrospect. People look back at the Bay of Pigs, for example, when in 1961, President Kennedy launched a hair-brained invasion of Cuba, and it failed miserably. And we looked terrible.
There may be things like that will go wrong, and people are going to begin to attack the administration, the political parties will divide. The press will come down on him. And there'll be a great feeling of disenchantment, and we just have to go through those periods of low points and carry on the struggle.
But, as you indicated, this is not going to be an easy thing to do. And I think we all have to realize that, that this is history. We've had a holiday from it. It's not a game of chess. Things will go wrong, very unparalleled things none of us can imagine. And that's just going to be part of (UNINTELLIGIBLE).
How it ends and where it ends, we don't know.
CAFFERTY: Let me get Kelly Wallace in here from the White House. Kelly, and I don't mean to sound cynical, but you even -- you mentioned this in an earlier report, that one of the things that the administration is keenly aware of is keeping the public support for whatever operations this country may choose to undertake, in recent months and perhaps years ahead.
Politicians live or die by polls and they always watch the pools. How much emphasis, what sense do you have of how much emphasis is on preserving this overwhelming public approval here?
WALLACE: Well, certainly, I mean, the big strategy here and if you talk to senior Administration officials they say, the big strategy really is to make the case over and over and over again. That this will not be an overnight solution. That it will take time. That it won't just takes weeks. That it won't just take months. That it will take years.
And, the Administration is well aware that you have an anxious public out there, an anxious public for some sort of retaliation. So, that's why, I mean, it was a full court offensive on the Sunday talk shows, Vice President Cheney, Secretary of State Colin Powell, Defense Secretary Donald Rumsfeld, President Bush, too, all with that same message.
So, what you're going to see is they're really going to continue to use every opportunity they can to get the message out that this will take time, and that it's not just going to be a military campaign, that there's this political, economic, diplomatic offensive, as well. It might be tougher for the American people to see the results of that, you know, trying to choke off support to bin Laden's network, trying get more diplomatic support and alienate bin Laden and other terrorist organizations.
So, again, those results might not be very visible to the American people, the Administration will try to highlight them. But, again, you're going to see this, sort of, strategy continuing in the weeks ahead because, obviously, the White House knows that it needs to keep the support very high. And, one way to do that is to keep explaining and educating the American people about what it is doing and how long it will take, Jack.
CAFFERTY: All right, thanks. Kelly Wallace at the White House. We have a caller, Saphy (ph) in Florida. Welcome.
SAPHY: Hey, Jack, how are you doing?
CAFFERTY: Getting along, what's up tonight?
SAPHY: Not much. Not much. I just wanted to make a few comments on...
CAFFERTY: Go ahead.
SAPHY: I, myself, am born in America, lived here almost 34 years now. My parents are from Afghanistan. But, my main comments tonight were directed towards why I believe there are such strong resentments for the Muslims and the Arab American communities.
Basically, for the past 16,20 years, as far as I can remember, the media, inadvertently has always tied Muslims and Islam to terrorism. And...
CAFFERTY: Unfairly so, too. I mean, it's a very small minority.
SAPHY: Exactly, exactly.
CAFFERTY: It's a small minority that follow bin Laden's teaching. The large majority of Muslims are a peaceful people.
SAPHY: I also want to give kudos to the, to the, you know, the government officials. And, also the media, now, is doing the best they can to change those thoughts and those feelings. As far as, you know, how the whole religion is supposed to play out.
And, one quick example is the fact that when the Oklahoma bombing took place, everyone, was of course, pointing their fingers towards, you know, the Muslim terrorists, something like that. But, when it turned out to be Timothy McVeigh, they never once mentioned what his religion was.
CAFFERTY: Now, that's a very good point, and boy did we leap to conclusions. I remember that morning when the Oklahoma City building went up, and I, and people couldn't rush on the air quickly enough to begin suggesting that this was a terrorist act that had it's roots somewhere in the Middle East. And, it turned out not to be that at all. So, your point is well taken.
SAPHY: Exactly. And, I agree that it is going to be an all out effort from all different angles, be it military, be it economic, social attitude changes, all those things will have to take effect and I agree with the President and what everyone else is saying, now that it's not going to be done over night. This is going to take a couple of years. It may not even be completed in my lifetime. But, it is going to take them time, and it may even get worse before it gets better.
CAFFERTY: All right. I appreciate you calling in and it's nice to hear from you. Let me get back to Tom Henriksen out in Colorado.
We were talking earlier about how a lot of this operation, going forward, might resemble the cold war, that there could be a great number of covert operations. If you're going to try to get into Afghanistan, some caller raised the point earlier, how are you going to move men and materials in sufficient quantity across there, if you can't use Pakistan or some neighboring country to cross. It may be necessary to go in there with commandos units, the Navy Seals, that kind of thing.
And, we may be in a situation where we are not even aware that the war is being fought, because they're going to clamped down on the flow of information.
What sense do you have of how those kinds of operations might play out? And, to what degree, in your opinion, are they considering political assassination, now, as perhaps one of the ways to try to prosecute this. Particularly aimed, perhaps, at countries that refuse to cooperate in addressing terrorism.
HENRIKSEN: Well, there will be attacks and as you indicated there will be a lot of commando type things. We do think we can get some bases. There have been indications, for example, Pakistan, which borders Afghanistan, might be willing to let us use some territory.
They have their own problems with terrorism in their country, and they are, of course, looking to someone to help them. So, we may in fact get bases, temporarily. I'm not saying we're going to build huge airfields or we're going to build ports and this sort of thing.
But, it might be short term. Over several months, then we pull back out again. It would be nice to have small units in the area, which can strike fast rather than having to transport them several hours. So, that's one thing.
We may never know some of these things that are happening. We may not know for years afterwards. And, the information will come out.
That's going to be very disturbing, particularly for people like us who watch the news a lot. And, like, are somewhat news junkies. And, the media itself will feel shut out. Members of Congress will get angry when they're not briefed properly. They'll get very upset and that's what's going to cause a little tension.
CAFFERTY: Well, there was already one senator who was being criticized by some of his colleagues for some of the things he was talking about very shortly after this. And we don't need to go into names and things.
Tom, I appreciate your being with us. I hope as we go along we can call on your expertise again, as this thing unfolds.
HENRIKSEN: Please do.
CAFFERTY: Appreciate it. Thank you very much.
HENRIKSEN: Thank you.
CAFFERTY: Couple of quick notes before we wrap this thing up. The Asian markets have opened and they are sharply higher. The Nikkei is up 429 points. The Hang Seng, which is over in Hong Kong, up 231 points or a gain of about 2.4 percent.
Sounds like the stuff I was doing in the morning on the financial network. But, the markets are recovering over there. It remains to be seen what'll happen here.
This is our third night out on this thing and I want to thank all the people that contributed -- Kelly Wallace the White House, Alessio Vinci at Ground Zero, Frank Buckley for the report on the resumption of baseball, Tom Mintier over in Islamabad, Pakistan. Our guest Thomas Nulty of Navigant, the business service, travel service company, Ned Reily, Wall Street investment adviser, State Street Global Investors, and, of course, Tom Henriksen, who just left us.
I don't know what the key to this program is? But, this is your show. And, mostly I want to thank you. For calling and sharing your opinions and listening to the guests and maybe we can collectively kind of work ourselves through this thing, together. That being said, I think we'll be back here tomorrow night. Everything is moving and is very fluid here, as it is every place else in the country.
You've been watching CNN's HOTLINE. I'm Jack Cafferty, and as I say good night to you from New York City I want to leave you with the first effort on the part of the greatest city in the world to get back to work. We did that today. And we will tomorrow and we will every day from now on. And pretty soon it will be just like it was.
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