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Late Afternoon Rally on Wall Street; McCain/Palin One-Two Punch; Obama in Pennsylvania & Virginia

Aired October 28, 2008 - 16:00   ET

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


WOLF BLITZER, CNN ANCHOR: We certainly are, Rick, we're all over the breaking news.
Also happening now, John McCain and Sarah Palin delivering a one- two punch to Barack Obama on taxes and his definition of rich. With only a week to go, the Obama camp accusing the Republicans of getting more desperate by the hour.

Also, just in time for Halloween, are voters spooked by the prospect of Democrats controlling the White House and Congress?

And what's in a name? Why a misspelling or a misprint could cost some Floridians their votes. Civil rights groups say the minorities are being punished.

I'm Wolf Blitzer at the CNN Election Center. You're in THE SITUATION ROOM.

But let's begin with the breaking news. A lot of Americans are getting a little bit richer today. Stocks soaring over the past hour, a late afternoon rally on Wall Street.

Let's go straight to our Senior Business Correspondent Ali Velshi.

It's an amazing number when you think about it. Take a look.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: One hour ago we talked about this, Wolf. We're looking at a Dow that is up 890 points, trading above 9,000, but just a little above 9,000.

Now, the biggest gain we have ever had, you and I were here, Wolf, October 13th. The biggest point gain was 936 points on the Dow.

Now, on a deal this big, you have to wait a while to see how the numbers settle in. Probably the next 15 minutes or so.

There's not a fundamental reason underlying this rally. We know a couple of things.

We know for the last month or six weeks that last hour of trading has been very volatile. It often just emphasizes the trading that we've seen through the course of the day.

We don't have great news to report. Consumer confidence is at the lowest it's been since they started recording consumer confidence back in 1967.

We know home prices are down. The Federal Reserve is meeting today, and they might tomorrow cut interest rates. But even that couldn't have this sort of effect. And we are probably going to see a negative reading on GDP, which is the measure of all of our productivity and everything we create in the economy.

So there's not great news here, which leads you to believe that we are in this trading range where some professional investors, in many cases the people who run the mutual funds that are in your 401(k), are getting in, saying this is what looks like a bottom of a market. We're going to get in because stocks are cheap. And they have pushed this market higher today.

Again, no fundamental reason why the market should be up in this sort of percentage gain, almost 10 percent today. This would be the second biggest point gain in the history of the Dow. And it's up in the top 10. We're just waiting to calculate the numbers, Wolf. Up in the top 10.

BLITZER: Yes, 891 right now.

VELSHI: Yes.

BLITZER: Although that, as you say, could change. The biggest ever was on October 13th, 936 points.

So I hear you suggesting this all may be speculative. What does that mean?

VELSHI: Well, it means that the bottom line is there's a way to value stocks. And a lot of professionals are looking at this thing.

This economy has beaten down the stock market in such a way that stocks are cheap. They're at a discount. There's people walking in making purchases of those stocks and buying them for your portfolio.

So this is what happens when you're sometimes are trying to find the bottom to a market, Wolf. People buy in and hope that over the course of the next few months, you'll see an improvement in values -- Wolf.

BLITZER: The Dow Jones industrials over 9,000, now 891. Pretty impressive day. We'll stay on top of this story, Ali. Thank you.

Only a week to go before voters have their say. Barack Obama, John McCain competing to get the last word in states that could decide the race.

We're standing by to bring you live coverage here in THE SITUATION ROOM of Obama in Virginia, McCain in North Carolina, and Sarah Palin in Pennsylvania. Stand by for that.

All three began the day in Pennsylvania, braving some pretty nasty weather and some bitter attacks.

Jessica Yellin is in Virginia, but let's go to Dana Bash first. She's is in Pennsylvania watching this story for us.

All right, Dana, set the stage for us. Tell us what John McCain was up to today.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, John McCain was with Sarah Palin today. And he made sure to make his usual joke about the fact that they're two mavericks that often disagree. But he said that that was fun. But beyond that, they were really focused on Barack Obama and their final shots in their uphill battle here.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: And the next president of the United States, John McCain!

BASH (voice-over): Down double digits in a Democratic state he needs to win the White House, John McCain remained the gritty warrior.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I choose to fight. Don't give up hope. Be strong. Have courage and fight!

(APPLAUSE)

MCCAIN: Fight for a new direction for our country! Fight for what's right for America!

BASH: One week to go, and Pennsylvania Republicans are looking for some red meat to keep their energy and spirits up.

Sarah Palin was there, too, and delivered with the "S" word.

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: Joe Biden calls higher taxes, he calls that patriotic. But to "Joe the Plumber," Joe said it sounded to him like socialism.

BASH: McCain aides insist internal data shows him inching back up thanks to relentless rhetoric that Barack Obama will raise taxes. Always looking for a fresh angle, McCain seized on a Pennsylvania interview Joe Biden gave a day earlier.

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: What we're saying is an $87 billion tax break doesn't need to go to people making an average of $1.4 million. It should go like it used to, it should go to middle class people, people making under $150,000 a year.

MCCAIN: Senator Biden said tax relief should only go to middle class people, people making under $150,000 a year. You getting an idea what's on their mind? Huh? A little sneak peek. It's interesting how their definition of rich has a way of creeping down.

BASH: An Obama spokesman called McCain desperate, insisting Obama will only increase taxes on families making $250,000 or more. Still, McCain had plans to push on with his tax argument in critical Pennsylvania, but his visit was cut short. An outdoor rally abruptly canceled due to bad weather, even though a few diehards had trickled in to brave the rain. (END VIDEOTAPE)

BASH: And with such little time to waste in a huge struggle here, having to cancel a rally, really was a blow to McCain. But he tried to appeal on a local level, Wolf. He tried to appeal to Phillies fans.

He made a little bit of a dig at Barack Obama for buying 30 minutes of TV time tomorrow night. And he joked, "No one will delay the World Series game with an infomercial when I'm president" -- Wolf.

BLITZER: Dana, thank you.

Barack Obama tried to prove today that he can stand the political heat from his opponents and the cold and rain out of the campaign trail. In Pennsylvania today, Senator Obama rallied supporters who stood out in the mud and got soaked waiting for him to speak.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: My faith in the American people have been vindicated. That's how we've come so far, so close, because of you. That's how we're going to change this country, because of you. And that's why in this last week, we cannot afford to slow down or to sit back or to let up, whether it's rain or sleet or snow. We are going to go out and we are going to vote, because it's too much at stake.

(END VIDEO CLIP)

BLITZER: CNN's Jessica Yellin is standing by in Harrisonburg, Virginia, where Obama has a rally coming up in the next hour. We're going to go there live once he starts speaking.

Jessica, sort of unusual to see the Democrats in Virginia this late in the game.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It really is, Wolf. And Barack Obama is in one of the reddest parts of this one- time red state.

This county went for George Bush in 2000 and 2004 by more than 70 percent -- 7-0. And this particular city by more than 50 percent both years. But today, Barack Obama is here stumping for votes and making John McCain fight even harder in this state.

Now, we talked to a lot of Independent voters here in this audience of mostly students who tend to have a conservative bent. But many of them say they just don't know which way to go this time around because of the economy. And they say they're here because they actually keep hearing different things from the two candidates. They don't know what to believe, and they said they wanted to hear it from one of the candidates themselves.

Now, one of the things we're going to hear Barack Obama drive home in his comments just a short time from now is his difference with John McCain on health care reform. He's going to go after John McCain, accusing him of proposing a plan that would provide people with worse health care than they have now. And, well, they might take it a little bit of context, but they're going to quote a comment from one of John McCain's economic advisers suggesting that people will get better health care from their employers now than under the different proposal John McCain has in the future.

So look forward to hearing that from Barack Obama just a short time from now -- Wolf.

BLITZER: And he's in Harrisonburg, Virginia. I misspoke earlier.

Thanks very much, Jessica.

We're going to go there live once he starts speaking. We're now told it's going to be coming up this hour. So stand by for that.

This note to our viewers. I'll have a one-on-one interview with Senator Obama on Friday. And you can play a part in the interview.

Submit your questions for Senator Obama on ireport.com/obama. We'll try to use some of those video questions, get his answers. That's coming up this Friday here in THE SITUATION ROOM.

In Washington, anticipation is building right now for the return of Senator Ted Kennedy. He's expected to go back to the nation's capital for the first time since July after surgery for brain cancer. Weather permitting, Senator Kennedy was due to leave his home in Hyannis Port, Massachusetts, this afternoon to spend time at his D.C. residence. He hasn't been there for months. We're told Senator Kennedy hasn't decided whether to attend the lame duck session of the Senate after next week's election.

We wish him, of course, only the best.

Let's go to Jack Cafferty. I know he wishes him the best as well -- Jack.

JACK CAFFERTY, CNN ANCHOR: Absolutely.

So guess who's found himself all of a sudden right in the express lane on the Bridge to Nowhere? Alaska Senator Ted Stevens is now a convicted felon. Yet another public servant who wound up serving himself instead of the public.

Stevens was convicted on seven counts of fraud for concealing more than $250,000 in personal gifts. What a guy.

He's the first sitting senator to go on trial in more than 20 years, and just the fifth in history to be convicted of a crime.

Stevens is also choosing to continue to run for reelection. This arrogant, fraudulent, convicted felon saying that he's going to stay in the race and asking the people of Alaska to "Stand with me." Where you're going, Senator, nobody's going to want to stand with you. Larry Craig, maybe. And if you had any honor or decency about you, you'd get out of the race. But I guess you don't.

Alaska, one of the most conservative states in the union, playing a pivotal role in helping the Democrats in this year's election. Big time.

Stevens' conviction clears the way for the Democratic mayor of Anchorage to win his seat and move the Democrats closer to that illusive 60-seat filibuster-proof majority in the U.S. Senate. Alaska's governor, Sarah Palin, became John McCain's running mate. Evangelical Christians shouted, "Hallelujah!" Most of the rest of the country just laughed out loud.

And finally, Alaska's largest newspaper, "The Anchorage Daily News," has endorsed Barack Obama.

So here's the question: Should Alaska Senator Ted Stevens, who is now a convicted felon, resign his Senate seat?

The answer is, duh.

Go to cnn.com/caffertyfile. Post a comment on my blog.

BLITZER: It's interesting today that both McCain and Palin did urge him to step down. They apparently have had enough as well.

CAFFERTY: Anybody with the I.Q. of a walnut could see that this man is no longer fit for public service. But he apparently thinks not.

BLITZER: We'll see what the voters decide in Alaska on Tuesday. It was neck and neck going into this, so presumably this isn't going to help him.

Jack, thank you.

To hear some people tell it, the news media are downright obsessed with Sarah Palin. And some McCain aides giving Palin even more air time by accusing her of being a "diva."

Also, McCain is warning voters to be ware of one party rule by Democrats. Is the pre-Halloween scare tactic working?

And no match, no vote. The voting rules in Florida that could prevent some people from casting ballots. Are minorities being targeted right now?

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Today we heard John McCain acknowledge that Sarah Palin and he don't always see eye to eye. And reports of tension between the two running mates and their aides have been spreading through the news media over the past few days.

Let's go to Howard Kurtz of CNN's "RELIABLE SOURCES" and "The Washington Post." He's looking at this storyline that seems to be emerging.

What are you picking up, Howie?

HOWARD KURTZ, HOST, "RELIABLE SOURCES": Wolf, the hottest story in this final week of the campaign isn't about the top of the ticket, amazingly enough. The media are obsessed, once again, with Sarah Palin.

(BEGIN VIDEOTAPE)

ANDERSON COOPER, HOST, "AC 360": As a political observer said today, John McCain trying to stir up buyers' remorse. Advisers are already pointing the fingers at one another and at Sarah Palin. One adviser today telling CNN she's a diva.

KURTZ (voice-over): As some polls show, a majority of voters deeming Palin unqualified to be vice president. The finger-pointing in Republican circles is intensifying.

The press quoting unnamed Palin people as saying the McCain campaign has mishandled her. McCain loyalists blaming the Alaska governor for, among other things, "going rogue."

The latest example, Palin defending herself on those expensive designer outfits just when campaign officials were hoping the flap would fade.

PALIN: Those clothes, they are not my property. Just like the lighting and the staging and everything else that the RNC purchased, I'm not taking them with me.

KURTZ: The shootout among warring GOP factions has stunned even political veterans.

DAVID GERGEN, CNN SR. POLITICAL ANALYST: What is rare is to have campaign aides putting a harpoon in the candidate and then some of the candidates' friends firing back.

BILL KRISTOL, FOX NEWS: I think Governor Palin has been ill served by some of the staff, and she's now particularly ill served that they're shooting at her on background, saying things that I don't believe are true.

KURTZ: Others say the criticism is demeaning to a female candidate.

COKIE ROBERTS, ABC NEWS: Diva, right. You know I love that, as if there isn't some sexism there. Please. But at any rate, I think -- there is. Excuse me.

UNIDENTIFIED MALE: The last time I bought a suit...

KURTZ: And the unspoken assumption in many of these stories is that the McCain/Palin ticket is headed for defeat next week.

ROGER SIMON, POLITICO: She's absolutely running for 2012. She knows she's not going to be elected vice president this year.

(END VIDEOTAPE)

KURTZ: The most striking thing about this McCain versus Palin subplot is that nobody's names are attached. Journalists are allowing both sides to take their potshots from behind a curtain of anonymity -- Wolf.

BLITZER: Why do you believe, Howie, the media is paying so much attention to this reported spat?

KURTZ: Well, on one level, Wolf, it's juicy stuff. The Politico quoting yet another unnamed McCain adviser today as saying, "Palin isn't a diva, she's a whack job," something that nobody would say if they had to be on the record.

But more importantly, Wolf, I think that many journalists perceive and some of them project that Obama is pulling away in this contest, that the race is all but over. And therefore, the sniping on the Republican side is kind of filling a void that ordinarily we'd all be very, very focused on what's going to happen next Tuesday.

BLITZER: Howie, thanks very much.

Let's assess what's going on right now with Steve Hayes, a senior writer of "The Weekly Standard." He's also a member of the best political team on television.

Why, Steve, are some Republicans, including some inside the McCain/Palin camp, airing their dirty linen, if you will, only a week or 10 days before an election?

STEPHEN HAYES, SR. WRITER, "THE WEEKLY STANDARD": Well, I think any time you have a candidate that's behind in the polls as John McCain is, and the media, as Howie Kurtz says, sort of moving on to a new narrative, the McCain advisers, the people working for John McCain and Sarah Palin, are trying to get their version of the story out first. The first version of the story being often the one that sticks.

You know, it's terribly unhelpful to John McCain a week before the campaign. And I think, you know, Howie's point about the media coverage of this is very interesting, because if you remember before the New Hampshire Democratic primary, when Barack Obama was ahead in the polls, it was assumed that he was going to win, you had Bill Clinton essentially saying, look, we're the victim of a tidal wave of political support, and then Hillary Clinton coming back and winning. So there's a lot that can still happen, I think.

BLITZER: Is there going to be any retribution either in these final days or after the election irrespective of who wins?

HAYES: Yes, I think there will be. And I think we're likely to see a continuation of this finger-pointing no matter what happens.

But if John McCain and Sarah Palin are to lose, I think you'll certainly see the McCain campaign sort of split into several different factions. People who are pro-Sarah Palin, people who are John McCain loyalists.

You've got the Bush leftovers who were brought in to help advise Sarah Palin and John McCain. Yes, and I think it will, in a sense, be a free-for-all at that point.

BLITZER: If Obama were to win the election next Tuesday -- and he's ahead in the polls, as you know -- what happens to Sarah Palin? Does she automatically become the "leader of the Republican Party?"

HAYES: I'm not sure I'd say that she's going to be the leader of the party, but she will certainly be one of the leaders of the party. I mean, she's a charismatic person. She gives a great speech.

She has got -- you know, from my time watching her, traveling with her, looking at her giving speeches on the stump, she has a masterful sense of political timing. I mean, those are all skills that I think make it almost certain that she's likely to stick around.

On the other hand, she's got a lot of detractors. She's got people within the Republican Party, within the conservative movement who don't like her, who don't think she's smart enough to be a national leader. And I expect that we'll hear them say so.

BLITZER: Steve Hayes, thanks very much for coming in.

HAYES: Sure, Wolf.

BLITZER: And we're standing by to hear from the candidates. That's coming up here in THE SITUATION ROOM as well.

From a posh mayor's office to a bare jail cell. So why is the former Detroit mayor Kwame Kilpatrick smiling on the day of his sentencing? A sentence has just been handed down. We'll share it with you.

And some registered voters in one key state might see their votes challenged. It could affect minorities more than others. Is it the state you live in?

Sean Callebs standing by live to explain.

Stay with us. You're in THE SITUATION ROOM.

(NEWSBREAK)

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, the Alaska senator, Ted Stevens, convicted on corruption charges and facing jail time. But guess what? All of us could still end up still paying from him to collect his $122,000 federal pension.

Stand by for that.

Some religious extremists predict an apocalypse and a holocaust in the Obama presidency. Political experts are calling the attacks tragic.

And Sarah Palin bringing out the crowd. Some base Republicans drive hours in the rain to see her.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

John McCain says you should be very afraid. He says if Barack Obama wins and Democrats control Congress, you'll be looking at higher taxes and big government intrusion into your lives.

Our Senior Political Analyst Bill Schneider is standing by live.

Bill, are voters concerned about giving the Democrats right now too much power?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: A little, but they're also worried about getting things done.

(BEGIN VIDEOTAPE)

SCHNEIDER (voice-over): It's almost Halloween. John McCain has a scary story.

MCCAIN: Can you imagine an Obama/Pelosi/Reid combination? We can't let that happen.

SCHNEIDER: Are the voters scared? A little. Only 36 percent believe it would be better for the country to have a president and Congress controlled by the same party. Slightly more, 41 percent, prefer to see divided government.

In recent years, the public's experience with unified government has not been happy. Under President George W. Bush, Republicans controlled the White House and Congress for four years. That ended badly with a voter revolt in 2006. President Bill Clinton had a Democratic-controlled Congress for only two years. That ended badly, too, with another voter revolt in 1994.

In the old days, unified governments sometimes lasted a long time. The Republicans controlled everything for 12 years starting in the 1920s. When Democrats swept into power with Franklin D. Roosevelt in 1932, they controlled everything for 14 years.

Are voters becoming more inpatient? Or are the parties becoming more extreme? The argument for unified government is that it's a way to get things done.

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: With your help, we will add to the majority of Democrats in the House. And, yes, we will get a filibuster-proof majority of Democratic senators. (CHEERING AND APPLAUSE)

SCHNEIDER: The risk, Republicans argue, is that the Democrats will go too far.

MCCAIN: My opponent is working out the details with Speaker Pelosi and Senator Reid of their plans to...

(AUDIENCE BOOING)

MCCAIN: ... raise your taxes -- raise your taxes, increase spending, and concede defeat in Iraq.

SCHNEIDER: The Republican Congress got in trouble for abusing its power and moving too far to the right. Now they're arguing, don't let the Democrats do the same thing from the left.

(END VIDEOTAPE)

SCHNEIDER: The downside of unified government is the potential for abuse of power. The downside of divided government is gridlock. Either way, there's a risk -- Wolf.

BLITZER: All right. The voters will decide come a week from today. Thanks, Bill.

A real nightmare could come true on Election Day. In Florida, some voters waiting months to vote and perhaps hours in voting lines could be challenged based on technical difficulties that affect minorities more than others.

Let's go to CNN's Sean Callebs. He's in Miami watching this story for us.

It involves United States citizens who are registered, but what -- what's the problem, here, Sean?

SEAN CALLEBS, CNN CORRESPONDENT: Well, really, it affects the people who registered after September 8, and, of those people, just a pretty small percentage. But, really, the whole core of this is called the no-match law here. And both sides are digging in their heels, because only several thousand people are affected, but, in a state where just a few hundred people may be this -- the difference a number of years ago, a lot of people are going to be counting every single vote.

(BEGIN VIDEOTAPE)

CALLEBS (voice-over): Early voter turnout has been heavy. And many suspect polls could be jammed on November 4. But a law designed to thwart voter fraud is fueling controversy and possibly legal challenges.

The no-match law flags people whose name on their voter registration doesn't match the name on their driver's license or Social Security card. Concerns are coming into the CNN voter hot line.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: The main thing that had happened at the voter booth was my ballot was listed as provisional. And it was listed this way, I guess, because I recently moved, and my driver's license says one address, and my voter's registration card says another address. And, so, I think that -- you know, I just want to make sure my vote counts.

(END AUDIO CLIP)

CALLEBS: Anyone flagged can still cast a ballot, but must provide legal proof of identification within 48 hours. This caller has cleared up his discrepancy. So far, about 9,000 people have been affected. Opponents say the law unfairly punishes minorities.

MUSLIMA LEWIS, VOTING RIGHTS PROJECT DIRECTOR, AMERICAN CIVIL LIBERTIES UNION: Black voters and Latino voters make up, each group, approximately 12 percent to 14 percent of the registered voters in Florida. However, they make up a full 50 percent of voters caught up in the no-match limbo.

UNIDENTIFIED FEMALE: I have been dealing with this all day.

CALLEBS: Public hearings to explain the measure have been heated.

UNIDENTIFIED FEMALE: I'm thinking about Haitian Americans. I'm thinking about Latinos.

CALLEBS: Latin names with a tilde, or accent mark, hyphenated names, names with nontraditional spellings, those, the ACLU argues, are people who will have the most trouble. Election officials say, in no way is this an effort to keep votes from being counted.

BUDDY JOHNSON, HILLSBOROUGH COUNTY ELECTIONS SUPERVISOR: We want to welcome voters. And we're going to do everything we can to make sure that there is a match, rather than looking for a reason not to match.

CALLEBS: Florida is still hurting from the presidential election debacle eight years ago.

Ed Pozzuoli, a GOP attorney, says tougher registration standards are needed to ensure credibility in the system.

ED POZZUOLI, REPUBLICAN PARTY ATTORNEY: So, whatever the result is, whatever -- after we count the votes, whatever the result is, people can be confident, then, that that is the vote that reflects the voters of Florida.

(END VIDEOTAPE)

CALLEBS: Now, those people who are flagged can still vote, a provisional vote. They must go back in and prove their identification within 48 hours.

And, Wolf, of those who have been flagged so far, about 80 percent are Democrats. Still, we spoke with the Obama campaign, and they said, right now, they don't have a problem with Florida's no- match law -- Wolf.

BLITZER: Thanks very much, Sean, for that. Sean is in Florida working the story.

By the way, if you have any trouble over at the polls, you can call the CNN voter hot line. You can help us track the problems. And we will report the trouble in real time. Here's the number: 1-877- 462-6608. We're keeping them honest all the way through the election and beyond.

The Dow Jones industrials way up today, but a new report shows consumer confidence way down -- ahead, the factors making so many Americans so pessimistic. What's going on?

And Barack Obama has a lot of top campaign surrogates covering lots of ground right now. Coming up in our "Strategy Session": Why aren't Republicans doing the same thing?

And has the religious right lost its grip on American politics? James Carville and Leslie Sanchez, they are standing by to weigh in as well.

Lots of news happening today -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Barack Obama getting ready to speak in Harrisonburg, Virginia. That's one of the key battleground states. We will listen in once he starts speaking.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

BLITZER: The Dow Jones industrial's up a whopping 889 points today. It's the second biggest point gain ever, investors apparently brushing aside a very gloomy new report on consumer confidence.

Let's bring back Ali Velshi. He's working the story for us.

It's hard to understand...

VELSHI: Yes.

BLITZER: ... what's going on. Are they in a good mood, a bad mood? What is going on with these investors?

VELSHI: Well, investors are probably thinking, all this bad news adds up to the fact that we're probably near the bottom, at least on this market. Let me show you what happened. Consumer confidence, which is a very thorough measure of -- of how consumers are feeling -- it's five questions. They poll consumers every month -- at the lowest level since the reports started in 1967. Consumers are much more gloomy about the economy.

And let me show you what some of the questions are and how consumers responded. Specifically, consumers were asked about business conditions. Thirty-eight percent of them think they're bad. And a similar number think they're going to be bad six months from now. That's how the questions are posed. Thirty-seven percent think jobs -- think jobs are hard to get and will continue to be hard to get.

There is a little bit of a silver lining here. It's unrelated to this. It's the fact that we continue to see home prices dropping. And I will just show you. Existing homes, which are about 85 percent of the market, are down 9 percent, to a median of $191,600. That's the price at which half of all existing homes are sold above that and half are sold below that. New homes are also down. That number just came out from the Census Bureau, down to $218, 400.

And, remember, new homes are where all the jobs are, because there's construction. Why is that good news? Well, I will show you. As a result of these home prices being as low as they are and interest rates being as low as they are, meaning that, if you have good credit, you can still get a 30-year fixed mortgage for just a little more than 6 percent, existing home sales are up compared to last year 5.5 percent. People are moving back into the market.

And new home sales are up by 2.7 percent, which means we have got all this inventory of homes, and they're starting to get sold. So, bottom line is, prices are coming down to the point that some Americans are thinking it's time for them to get into the market.

And, Wolf, that combined with the fact that prices on the stock market appear historically very low to professional investors, people are getting into this market and thinking, as much as things are bad and could get worse, at least on the stock market, we might start to see companies make plans and start to become profitable, although we're probably still several months away from that -- Wolf.

BLITZER: Ali, thanks very much.

And the Dow Jones now ending at least over 9000 on this day. We will see what happens tomorrow...

VELSHI: Sure.

BLITZER: ... when there could be a cut in interest rates, the Fed getting ready for some sort of announcement tomorrow.

VELSHI: Right.

BLITZER: We will see what they do tomorrow.

VELSHI: We will bring that to you...

(CROSSTALK)

BLITZER: Ali, thanks very much.

John McCain has a new pitch to voters/baseball fans. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: By the way, no one will delay the World Series game with an infomercial when I'm president.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

BLITZER: Obama set to air a half-hour TV appeal tomorrow night. Will the big money ad buy be worth it?

And would McCain be doing better in battleground states if he spread his top surrogates around? Stand by for our "Strategy Session" -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: It will be a rare moment in history of American politics, the first time in some 16 years it's happened. Tomorrow night, Barack Obama will essentially hold millions of Americans captive with a 30-minute television commercial on multiple TV networks.

Let's discuss the strategy in our "Strategy Session." CNN political contributor Donna Brazile, a Democrat strategist, and Republican strategist John Feehery.

Thanks very much to both of you.

I don't know how much it's going to cost. I have heard one estimate, Donna, for the three broadcast networks that it's going to be on tomorrow night, maybe $5 million of campaign money. Is that what you're hearing, Donna?

DONNA BRAZILE, CNN POLITICAL ANALYST: I don't know the exact cost.

But I do know what Senator Obama is attempting to do. And that is to talk directly to the American people without interruption, to lay out what Senator Obama would like to see the next administration accomplish, to talk directly to the American people about the -- the -- the information that they need to know about what's important this election.

So, I think this is a great moment to hear Senator Obama uninterrupted, and to -- to allow him to speak to the American people, not as Democrats, not as Republicans and independents, but as Americans. This should be a good 30 minutes of time.

BLITZER: Well, they clearly have the money, John, but What about the strategy? Is this likely to help? Presumably, it can't hurt, right?

JOHN FEEHERY, REPUBLICAN STRATEGIST: Well, it's kind of risky. You know, I think it's -- 30 minutes is a long time to be invited to someone's house to explain all of your spending proposals.

I have an idea. Each time that Barack Obama promises to spend $1 billion, maybe people should have a drink, and make it a drinking game. And, then, I bet you, by the end of the night, you will have a lot of drunk people at the end of this 30 minutes.

Thirty minutes is a very long time to talk to the people, American people.

BLITZER: Well, it depends on how they produce it, though.

We don't know, Donna, do we, whether he's just going to look into the camera and read from a teleprompter and, in effect, deliver an address, if you will, to the nation, or if there's going to be some slick production in there. Do we have any specific information on what -- what's going to be included in that 30-minute infomercial?

BRAZILE: No, they haven't given any of us a clue.

But let me just say something to John about being drunk.

(LAUGHTER)

BRAZILE: We have seen some drunken sailors here over the last eight years, with the Republicans mismanaging our fiscal house.

So, I don't think this is about drunkenness. This is a moment of being sober and trying to explain to the American people exactly where he's trying to take the country.

BLITZER: At so many of these events that John McCain does, John, we see John McCain and Sarah Palin and Cindy McCain, even their daughter, Meghan McCain. They all go out together to event after event. Occasionally, they go out separately.

But isn't that a waste of human resources? Why don't they spread out and go to four different events, maybe, in four different states, or four different parts of one battleground state, as opposed to being out there together?

FEEHERY: You know, I talked to the McCain campaign about this. And they say that they do send their surrogates all over the place. For example, Rob Portman is doing something with Joe the plumber. Mitt Romney is in Florida.

(CROSSTALK)

BLITZER: I'm not talking about surrogates. FEEHERY: Well...

BLITZER: I'm talking about the -- the ticket and -- and let's say the children or the spouse.

FEEHERY: Well, you know, I don't think Meghan McCain is going to be doing too many campaign events by herself.

(CROSSTALK)

BLITZER: Why not? Why not? She's a young person.

FEEHERY: Well...

BLITZER: She could go out and get some young votes.

FEEHERY: You know...

BRAZILE: Karenna -- Karenna Gore did it eight years ago. I could tell you that much.

And John Kerry had all his kids out there four years ago. So, I don't know why. Meghan McCain has a wonderful blog. And she would be a great voice. But, for some reason, nobody wants to go out on their own.

FEEHERY: Well, you know, I think part of this -- and I talked -- I did talk to the McCain campaign about this -- they want to maximize the coverage. They know, if they have Palin and McCain together, you will cover it. If you don't, a lot of times, you won't.

So, I think that's part of their -- their frustration, is, a lot of times, they do have these surrogates go out there, and the media is just not covering it.

BLITZER: We're looking at a live picture. We're going to bring it to our viewers, Donna -- of Governor Tim Kaine. He's in Virginia. You see former Governor Mark Warner behind me. They're getting ready to introduce Barack Obama at a rally there in Harrisonburg in Virginia.

He's being sued, the governor, but the NAACP, because they're concerned that he hasn't done enough to get ready for huge lines and an -- an enormous voter turnout that could affect minorities, especially in Virginia.

What do you think about this lawsuit?

BRAZILE: Well, first of all, four years ago I know there were about 19,000 officials on the ground working Election Day. This time, Governor Kaine has doubled it. Almost 40,000 people will be working on Election Day.

Wolf, remember, we need ordinary citizens to volunteer their time and efforts on Election Day, to go out there and help these poll workers. Many of our poll workers have been doing this for 20, 30 years. And many of these young people who are engaged right now, if they have three or four hours to spare, volunteer. Help citizens navigate the electoral process on Election Day.

I think the NAACP will be pleased to know that Governor Kaine is working very hard to make sure that we don't have long lines on Election Day.

BLITZER: Are you worried about the enormous turnout that is expected, John, that could affect, you know -- could be frustrating to a lot of folks who have to work, but they're going to be stuck in line for a few hours?

FEEHERY: Well, you know, I think that overwhelming turnout is good for the American people. I'm not sure how it plays out politically, but I think it's good for the American people that come out and vote.

I think it's good for America that there are enough poll workers there. I also think it's good that -- that people who are eligible to vote do, and people who are not eligible to vote don't vote, and, you know, that we keep sure -- make sure that, with all the stuff with ACORN, there's so many accusations and so many concerns about voter fraud. And I think that that's one of the concerns that a lot of people have...

(CROSSTALK)

BRAZILE: John, you have a better chance of being hit by lightning than seeing voter fraud. People know they go to jail if they commit voter fraud.

But voter suppression, voter intimidation is not illegal. And that's something I'm concerned about, because too many people get to the polls and find out that they can't vote because have the wrong I.D., or perhaps they have been told to go to the wrong polling site.

So, let's eliminate all of the trickery, and let's make sure that every eligible voter gets a chance to vote this Election Day.

(CROSSTALK)

FEEHERY: I agree with you 100 percent, Donna.

BLITZER: All right. Do you see any evidence, Donna, that there is any organized voter suppression out there to try to limit, for example, African-Americans or Hispanics from actually voting?

BRAZILE: Oh, yes, Wolf, there are many cases across the country where we have seen people already getting robocalls, saying that, if you're a Democrat, vote on November 5, if you're a Republican, vote on November 4. I mean, we have seen that kind of silly stuff.

We have seen the flyers. We know about the robocalls. But I'm encouraging every citizen to call their voter registration office right now, make sure that they have the right information, go to their correct polling sites, so they don't have to cast a provisional ballot.

And there are numerous hot lines, including CNN, where you can report any problems you have, going up on to Election Day.

BLITZER: And John, I know you agree that let's hope that -- that all of these problems are resolved by next Tuesday, and that it's free and fair and smooth, and everyone gets a chance to vote who's entitled to vote.

FEEHERY: Who's entitled to vote, exactly right, Wolf.

BLITZER: Guy, thanks very much for coming in. We will continue this discussion.

Two campaigns battling in two battleground states -- we're awaiting rallies featuring Barack Obama in Virginia and Sarah Palin in Pennsylvania. We're watching to see what happens.

Also, things are getting extreme in the presidential race, so, why is one evangelical group warning that a vote for Obama will usher in potentially the apocalypse? Even seasoned political watchers are calling some of this discussion vicious and extreme.

And, if you're annoyed by those so called robocalls, there is a way -- yes, there is a way -- to stop them. Stand by for that.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: On our "Political Ticker" today: the final offensive in the so-called ad wars. As of Saturday, Barack Obama was running ads in 18 states, according to CNN's consultant on campaign ad spending.

The McCain campaign bought airtime in almost all those states as well, along with presidential ads bought by the Republican Party. But, in the past week, Obama has outspent McCain in every state where they both ran ads, except Iowa. Since clinching their party's nominations, Obama has made the most of his unrestricted fund raising, spending more than $205 million on ads. That's compared to $119 million spent by the McCain camp, which is subject to spending limits, because it's accepting federal matching funds.

President Bush has steered clear of the campaign trail, but he did drop by the Republican Party headquarters today in Washington to encourage workers to do their best to elect John McCain. The pep talk happened without cameras or journalists present. The White House says, Mr. Bush felt it was important to give party operatives some encouragement in this, the closing week of the campaign.

Remember, for all the latest political news any time, you can check out CNN politics.com.

If you live in a battleground state, your phone may be ringing off the hook right now with robocalls, as campaign season heads into the homestretch. Is there anything you can do to get -- to stop those political calls?

Let's go to our Internet reporter, Abbi Tatton.

Abbi, aren't their already so-called do-not-call lists out there?

ABBI TATTON, CNN INTERNET REPORTER: Yes, Wolf, viewers might have signed on already to this. It's the national do-not-call registry.

But they're still getting political calls, because those political calls are actually exempt from this registry. That gave a Virginia man, Shaun Dakin, the idea to set up this Web site. That's StopPoliticalCalls.org. It's an online registry. And, so far, this election season, more than 80,000 people have signed up here to try and stop getting the calls.

The thing is, if you have signed up here, they're not going to stop the calls either. So far, only two House members have taken Shaun Dakin's to stop robocalling people, despite his best efforts -- Wolf.

BLITZER: So, what can people do, if anything, to stop getting these calls, Abbi?

TATTON: Wolf, in terms of the presidential race, we talked to both the Obama and McCain campaigns. And they say, if voters contact them directly, they will actually take them off the list. They promise they will do this, the Obama campaign saying, call your local Obama campaign office, the McCain campaign saying, call the number that's actually contained within the call that you get.

But I think there are tens of thousands of people online that would wish that they wouldn't get that call in the first place -- Wolf.

BLITZER: All right, Abbi. Thanks very much.

I guess it's one of the advantages, Jack, in living in New York State or New Jersey, where you live. They don't care, because those states look like they're done deals.

CAFFERTY: Well, it doesn't matter in my house anyway, because I don't answer the phone when it rings -- ever.

BLITZER: All right. That's -- that's good, too.

(LAUGHTER)

CAFFERTY: And that works, perfect solution.

The question this hour: Should Alaska Senator Ted Stevens, who is now a convicted felon and all around general worm, resign his Senate seat?

"It's a trick question," Daniel writes from New Orleans, "right? You can't even vote in this country if you're a convicted felon, but, somehow, you can continue to run for the Senate. This lack of respect for our government institutions is sick. Stevens should resign immediately and save what dignity he has left."

Harold in Anchorage, Alaska, the state that Stevens has done such a marvelous job representing: "My state has been embarrassed by high- profile wing nuts and crooks way too long. Please, Ted, show some leadership. Quit. Maybe Sarah Palin and Don Young will follow suit and save the taxpayers the cost of more trials and shame."

Jerry in Columbus, Ohio: "Shouldn't he just be downright expelled? Or does the U.S. Senate now employ convicted felons? Whether the conviction is under appeal or not, he is still a felon now. He should be expelled without pension, or, at the very least, forced to resign."

Erik writes, "I'm not sure about the resignation, but I think he should come out and endorse McCain/Palin immediately."

Raj writes: "First senator convicted in 20 years? I wonder how many should have been convicted during that same time span."

Ryan in Ottawa, Canada: "Here's a thought to throw out there just for fun. He will hang on, hope against hope that he still gets reelected. Then, after the election, when he's forced to resign, Governor Palin, who won't be vice president, can appoint herself as a successor to fill the vacancy."

(LAUGHTER)

CAFFERTY: And Aaron in Champaign, Illinois: "He's part of the dying political breed of crazy old white guys. It's time for citizens to wise up, and it's time for him to leave."

If you didn't see your e-mail here, you can go to my blog, CNN.com/caffertyfile. Look for your e-mail there. We post hundreds and hundreds of them every hour -- Wolf.

BLITZER: Jack, thank you.

And, to our viewers, you're in THE SITUATION ROOM.