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Market Meltdown; Obama on Track to Nominate Hillary Clinton as Secretary of State?

Aired November 20, 2008 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Tonight, breaking news: reports that phone workers hacked into president-elect Barack Obama's cell phone records. We're trying to discover exactly what they were looking, what, if anything, they found. And who are these people? We have got a live report on the way.
But, first, shock waves spreading from more market losses and a chilling new read on the economy. It is worse, much worse, than economists thought it would be even a few months ago, raising the possibility of a deflationary spiral, falling prices, falling profits, falling wages, and growing misery, this as lawmakers today officially slammed the brakes on a Big Three bailout and, once again, markets crater, the Dow losing another 445 points, on top of yesterday's bloodbath, closing near the $7,500 mark -- excuse me -- 7500 mark.

One market watcher this afternoon grimly joking that 7000 is the new 8000. Another way to look at it, the Dow industrials today are worth exactly the same as they were at the close of trading 11 years ago. Asian markets, meanwhile, right now tanking as we speak.

It is your money. It's your future we're talking about.

CNN's business, chief business correspondent, Ali Velshi, has the latest -- Ali.


Let's take a look at what happened in stocks. You gave us a little bit of a lead-in. Before we show you what happened here, remember this bar I have been telling you about, this is 8500 to 9000. That's what we were talking about as the potential bottom to this market for so long.

Well, look at this. All week, we have been below that. Today, another day we're floating around below it. And by the end of the day we're above 7500. So, after 8500, the bottom was thought to be maybe 8000, then 7800, then 7600. We have blown through all of that.

The S&P 500, a broader index than the Dow -- the Dow is 30 stocks -- the S&P 500 is 500 -- down 6.7 percent to more than an 11-year low. Let's take a look at this. The Dow -- the losses on the Dow this year, if your portfolio looks like that, you're down 47 percent. It was just a over a year ago that the Dow was just over 14000, closing today above 7500, a little above that -- Anderson.

COOPER: And there's staggering new unemployment numbers out today.

What does it mean?

VELSHI: Yes. Now, we get an unemployment number once a month, but every week, we get an update. And it's the weekly unemployment claims, the number of new people who went to the unemployment office for the first time to collect unemployment insurance. That number hit a 16-year high.

I want to pull you back to January. This is not our unemployment rate. This is the number of people every week who go to file for unemployment. Around the beginning of the year, it was around 300,000 people per week. So, we were losing jobs. We have been losing jobs all year. But that weekly number has been relatively steady. It started to tick up now. It crossed around 400,000 in July and it's been hanging around that, then 500,000, and now 524,000 people.

More than a quarter of a million -- more than half a million people last week went to the unemployment offices for the first time to file for new claims. Now, what that brings us to is the number of people who are on unemployment insurance right now. That's not as big as the number of people who are unemployed, but the number of people on unemployment insurance right now in the United States more than four million people.

We haven't seen a number like that in more than a quarter of a century. And just to give you a sense of four million people, that's bigger than the state of Oregon -- Anderson.

COOPER: So, there's not going to be a Big Three auto bailout, at least in the near future, in the next couple of weeks. How is that going to continue to impact Detroit or impact Wall Street?

VELSHI: Well, part of that is a problem, because all of this, all of this market activity, sure, Citigroup down about 25 percent today. There are lots of concerns about the financial sector.

But, fundamentally, this society, in order to get out of a recession, depends on consumer spending. Well, how do all these people who have been laid off spend? How do the more than 1.2 million people who have lost their jobs so far this year spend money? And the fear that there might be more people laid off because of an auto industry failure, maybe another million people, that is what has got everybody worried.

If all these people are out of work getting money from the government, they're not net spenders or contributors to the economy. They're not net taxpayers. It means it's going to be a lot longer to get us out of this recession -- Anderson.

COOPER: All right, Ali, stick around, a lot more to talk about. More on Detroit.

No relief for the automakers until and unless -- until next month, because the votes simply are not there yet, thanks in part to the CEOs' tone-deaf performance in Congress, over the last two days. As for the unless, unless those same CEOs can tell Congress how much they need and what they're going to spend it on.

The "Raw Politics" tonight from Dana Bash.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A hastily arranged news conference to announce that struggling auto companies will get no federal assistance until they present viable business plans.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Until they show us the plan, we cannot show them the money.

BASH: Well aware that they risk blame for leaving Washington and doing nothing, Democratic leaders emerged from a closed-door meeting determined to put the onus on Detroit, a December 2 deadline for auto companies to present a business plan. Congress would return in mid- December, only if lawmakers deem the Big Three proposals acceptable.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Yes, we are kicking the can down the road, because that will give us the opportunity to do something positive. But that will only happen if they get their act together.

BASH: Lawmakers are frustrated that auto CEOs spent two days pleading for help, but could not answer key questions.

RICK WAGONER, CHAIRMAN & CEO, GENERAL MOTORS: ... total availability against that facility to GM of $10 billion to $12 billion.

REP. PAUL E. KANJORSKI (D), PENNSYLVANIA: Maybe I am dense or something, Mr. Wagoner. I don't quite understand what the hell you just told me.

BASH: And executives undermined their quest for taxpayer money by flying to Washington on private jets.

REID: I know it was not planned, but these guys flying in their big corporate jets does not send a good message to people in Searchlight, Nevada, or Las Vegas or Reno, or any other place in this country.

BASH: The decision to reject an auto bailout now undercut lawmakers pushing a compromise idea to help the industry immediately.

SEN. GEORGE VOINOVICH (R), OHIO: If we don't get this done, and they do go under, I believe that we're going to have a deep recession, and, quite frankly, from what I can pick up, we may just go over the cliff.

BASH: But Democrats leaders said, because of skepticism towards Detroit, no compromise could pass.

REID: What kind of a message do we send to the American people by having a bunch of failed votes here? BASH: Auto companies released statements saying they welcome the chance to address Congress' concerns. But some Democratic sources quietly suggest to CNN Detroit may not see a bailout until Barack Obama takes office.

(on camera): But, remember, Obama called for assistance now. So, why didn't he use his considerable influence to break Congress' deadlock? Well, one of his closest confidants told us, it's because this is still the old Congress, which is bitterly divided, so Obama intentionally stayed out of the debate, no phone calls, no arm- twisting, nothing.

Dana Bash, CNN, Capitol Hill.


COOPER: As Dana said, nothing yet from president-elect and no sign yet of his pick for treasury secretary.

Let us dig deeper with Ali Velshi and CNN senior business analyst...


COOPER: Excuse me -- political analyst David Gergen.

I almost changed your job there, David.


COOPER: So, David, Barack Obama has said frequently that there's only president at a time. Are you surprised, though, that he hasn't spoken out more on the bailout and on the economy?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think it was understandable he hasn't spoken out more until today.

But, Anderson, I think the last two days have really set off alarm bells in the financial community. I was on a conference call today with investment advisers across the country. And I have never heard as much fear as expressed today.

I think, as Ali has reported, sort of the bottom feels like it is falling out for many people. And they feel -- they sense there's a total lack of leadership in Washington, that the White House is silent, the treasury secretary has been battered, the Federal Reserve can't speak up. These automakers come up to Capitol Hill and fail. And the president-elect is silent in Chicago.

Somebody has to speak up soon. I think Barack Obama has to do it from behind the scenes to push Congress to at least give a -- some sort of bridge financing to these auto companies, which accounted in part for the fall today. And the White House has to be much more active than they have been.

COOPER: Ali, has a president-elect or even a president ever faced in our lifetime an economic crisis like this?

VELSHI: Not now. I mean, Roosevelt came into something of this nature.

But this is a major, major economic crisis. It may also be a remarkable opportunity for Barack Obama, if he gets that treasury secretary named quickly and they start to talk about implementing that green economy that Barack Obama says is going to drive our economy for the next 15 or 20 years. That is going to take workers to build electrical grids and to build, you know, alternate forms of energy.

We now have workers. We have lots of unemployed workers. And there's no chance that these manufacturing workers who have been laid off are going to get work anywhere else. So, we need to see if this is an opportunity we can turn around into the new New Deal.

COOPER: All right. We're government more from Ali, more from David in just a moment.

Let us know what you think of Washington, Detroit, the markets. Join the conversation, live chat happening now, I will be joining there in a moment.

Also, check out Erica Hill's live Webcasts during the breaks.

Up next: Is now a time to buy stocks? Hear what Suze Orman is doing -- that and what might happen if Detroit goes under.

Plus, we're working the Obama cell phone hacking story. It just broke about an hour, an hour-and-a-half ago. We're trying to learn exactly who did it and what they were searching for. CNN's Ed Henry, gathering the latest, he's going to join us soon.

And Sarah Palin pardoning a turkey, but wait until you see what was happening behind her. Let's just say a bunch of turkeys that didn't get pardoned got the axe. We have the video ahead.



SUZE ORMAN, AUTHOR, "WOMEN & MONEY: OWNING THE POWER TO CONTROL YOUR DESTINY": In the long run, the stock market will always be the best investment, if -- and you better underline that if -- you have time on your side. I have to tell you the truth. I bought stock today.


COOPER: The buy sign tonight from Suze Orman, a rare show of confidence in a sea of gloom.

Our breaking news: more financial bloodshed overseas, on top of a punishing day at home, lawmakers not happy, telling carmakers today no money until you show us a restructuring plan. That presumes that a bailout is a good thing. But the question is, is it? 360's Tom Foreman running the options tonight.


TOM FOREMAN, CNN CORRESPONDENT: Anderson, the problem is that the economy right now is in the deep woods. No one has a reliable map to safety. And economic analysts say, new dangers are arising every single day that we delay picking a path out of our trouble.

So, let's look at one of these paths. We will call this one over here the path to bailout town.

(voice-over): If we go this way, and a deal is pulled together to save the Big Three automakers, we might avoid a potential loss of three million jobs, and stabilize a cornerstone industry.

But down the trail, this could be next: more cries for more bailouts from Internet firms, insurance companies, telecommunications, airlines, local governments. That list is growing fast. And, on top of that, many economic analysts say, on this path, we could be throwing our dollars away, if we give these bridge loans without insisting that these businesses change the way they operate.

PETER KAUFMAN, MANAGING DIRECTOR AND HEAD OF RESTRUCTURING AND DISTRESSED M&A, GORDIAN GROUP, LLC.: Taxpayer money can be used here and I think can used effectively, but only if all the problems are fixed. And I think that we all need some intestinal fortitude if we're going to do it. Otherwise, it will be a bridge to nowhere.

FOREMAN (on camera): So let's look at the path over here, the one to marketville. The idea here is to let these companies fail, get bought out, restructured, and our economy will emerge stronger.

(voice-over): But the dangers here are also multiplying. You saw what the market did today, lowest level in more than a decade. Unemployment keeps rising. Farther down the trail, those trends will do nothing to ease the continuing wave of loan defaults that started this whole mess. Remember, that problem is not over.

And possibly looming ahead, a frightening prospect; deflation. Just this week, leading economic indicators showed all sorts of prices either falling or rising very little. That sounds good, but economists say it can signal a downward spiral that is difficult to stop.

Under this scenario, companies slash prices because no one is buying. Then they slash jobs. Then those unemployed workers buy even less.

(on camera): That is why it is so hard for lawmakers to pick either one of these paths right now, because, even though many of them truly believe the economic woods are getting darker by the day, they just don't know which way safety lies -- Anderson.


COOPER: Tom, thanks.

More on Detroit ahead, and what Obama is doing about the economy, and new developments on the Hillary Clinton front.

David Gergen, Ali Velshi, and Gloria Borger join us for that.

And, later, a live report on the breaking Obama cell phone story, his records hacked. We're learning new details right now. Ed Henry will join us shortly.

And Sarah Palin back in the headlines, not so much for what she did for a turkey, but what she did while a guy in the background was doing something else to a turkey.

Gobble, gobble -- when we come back.


COOPER: CNN has just confined that Barack Obama is on track to confirm Hillary Clinton as secretary of state -- or to nominate Hillary Clinton as secretary of state after Thanksgiving. This is just coming out now.

Let's dig deeper with our panel. David Gergen, Gloria Borger, Ali Velshi join us.

David, what do you make of this? It's not all that new, I guess. but -- and I'm not sure about the wording. But we're being very precise on the wording, saying that he's on track to do this after Thanksgiving.

A, why wait? And do you think it's done deal?

GERGEN: I think it's not done until they have done all the vetting, Anderson.

And -- and the Obama people are being very careful about reviewing facts and figures on everybody. But they had a story in the last 24 hours that relationships were souring between the two sides, that things -- that the slowness of this, and the contentious quality of some aspects of it are wearing on both sides, especially on the Obama people.

I think this now puts in a better perspective, a more positive perspective, no, they're trying to make this work. I believe that, given the negotiators on both sides, who are very strong, they will work it out. I believe that she will be secretary of state.

I do think pressure is on him to get a treasury secretary in place before Thanksgiving, if he possibly can.

COOPER: Gloria, I know you are hearing from some of your sources on this. What are you hearing?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes. Actually, our colleague Jessica Yellin has confirmed, Anderson, from two transition sources that they are on track to nominate Hillary Clinton after Thanksgiving.

And I think this is an outcome that many have expected since we first learned that she had met with Barack Obama. I also think that, if that's the case, it kind of opens up a logjam, in terms of all these appointments that David was just talking about.

It may make it easier, for example, for Obama to decide who he's going to put in the Treasury slot. And he could do that earlier than -- than the -- the Hillary Clinton nomination.

COOPER: Gloria, explain to me. This just happened literally during the commercial break.

BORGER: Right.

COOPER: So, I'm trying to follow up on what you...

BORGER: Right.

COOPER: ... I know you all have been working your sources on. I know we're being very specific in the language, saying that Obama is on track to nominate Clinton.

What does that mean? Does that mean he has asked her? Does that mean she has indicated she's definitely interested.

BORGER: Well, I...

COOPER: Do we know?

BORGER: You know, it's funny. I just -- I just sent a source a question: Does this mean he has proposed and she has finally accepted? And I haven't gotten the answer to that yet.

It's always been the question. But, you know, Anderson, this is kind of a delicate Alphonse-Gaston routine that you play. And I think that's what's -- that's what's going on now. I think Obama is not going to ask her until he's sure that she will actually say yes. And, so, I think we're moving one more step down the road to seeing them together, with Obama nominating her as secretary of state.

COOPER: David, there was a report by "The New York Times" today that, because Clinton has -- or Hillary Clinton has stormy -- or some stormy relationships with some Obama allies, that some key appointments are actually being delayed until this whole matter of secretary of state is resolved.

GERGEN: Well, I think that's right.

Again, important, as Gloria was suggesting, this is a jigsaw puzzle. And -- and you want to figure out -- before you figure out who's going to go in each position, you sort of want to know what the team is going to look like. And it may matter to you whether it's Hillary as secretary of state or not, and it may affect who you think you can put in Treasury.

For example, I continue to believe, if Hillary Clinton is the secretary of state, then it's easier to name Larry Summers to the Treasury Department, because a lot of the feminist objections to Larry Summers might fade into the background, especially given the grimness of the economic situation.

But there -- there are other factors. I must tell you, Anderson, that, as much as we like to speculate, there are some on the inside -- there are some facts -- there always are -- I have been there for this before -- that we don't know. And they're not going to tell us. And we just -- and, to some extent, we have to be patient.

COOPER: Well, I'm all for -- for patience, and I'm all for -- for accuracy. And I actually kind of like the fact there are some facts we don't know, because I -- if they were leaking so much that they let out all this information, I would be worried about the security of this information.


COOPER: But, Gloria...

GERGEN: I agree with that.

COOPER: ... there have been a fair number of leaks coming out of this.

BORGER: Right.

COOPER: And I read this thing in "The Times" today, and they said -- a quote saying, "Aides in each camp have grown increasingly sour toward the other," and some think that -- quote -- "strategic leaks by the Clintons are aimed at boxing in Obama, trying to force him to offer the post."

Is that true? Do you hear this?

BORGER: Well, I think there's a little bit of a sense of -- you know, here's the Obama campaign, that has been kind of like a steel chest throughout this entire campaign, known not to leak unless it wants to leak. And, suddenly, there's talk of Hillary Clinton. And the Obama folks are sort of scratching their heads, saying, where's all these stories coming from about Bill Clinton willing to do whatever they want, headline in "The New York Times" today, Bill Clinton will do whatever it takes?

And they're -- they know that -- they're saying they're not leaking that stuff.


BORGER: But it's sort of a...


BORGER: It's a problem. It's a problem. And we may see more of it.

GERGEN: Yes, Anderson...

COOPER: Ed Henry -- sorry, David. Go ahead.


GERGEN: Yes. Sorry. Yes.

There are factions within the Obama campaign, some of whom are much more strongly for -- for Hillary Clinton than are some of the close-in Obama supporters from the past. And there are two different cultures trying to mix here. The Clinton campaign -- the Clinton culture is much more open, a lot of leaks, a lot of strategic leaks, a lot of maneuvering.

And the Obama culture is much more sort of closed and professional and close-in and loyal. And integrating the cultures is almost as hard as getting the two personalities together.

BORGER: Right.

COOPER: Well, if there already is tension, I can only imagine what is going to happen if she actually takes the job.

Ed Henry, I know you have been working your sources as well.


COOPER: what are you hearing?


We now have three sources total close to the transition saying, in fact, that Hillary Clinton is on track to be nominated as secretary of state after Thanksgiving. My colleague Jessica Yellin here in Chicago, as well, has two sources close to the transition saying that. I have one -- three separate sources saying that.

And what they're laying out is, the key here is that, essentially, the hurdles that were up there about Bill Clinton's charitable foundation, about the presidential library, the indications from people in the Obama camp now is that those hurdles have been all but cleared, that they have been satisfied with the information they have been getting over these last few days, these intensive negotiations between lawyers for both sides.

So, that's the key that is clearing this, according to the sources close to the transition. And they say that -- that Barack Obama will be moving forward with this after Thanksgiving, so, obviously, the key part to his national security team, and then all eyes will be on who he picks at Defense, a lot of speculation that Robert Gates, the current defense secretary, could actually stay on -- Anderson.

GERGEN: Yes, Anderson, but I cannot stress enough that, while we go through this Kabuki dance about Hillary, will she, won't she, will she be there or not, the issue, increasingly, for the senator-elect -- president-elect is the economy.


GERGEN: He cannot sit there for the -- through Thanksgiving with no action, with no signals.


GERGEN: There have to be reassuring signals sent out from him...

COOPER: Let me bring...

GERGEN: ... and from the White House.

COOPER: Let me bring in Ali on this.

How likely is it that he will name a treasury secretary quickly, before Thanksgiving, and how important is that?

VELSHI: It's crucial.

There's been a lot of speculation that it will come next week, before Thanksgiving. At this point, as David said, this has become matter of crisis proportion. If Barack Obama wants to sit back a little bit, and let this play out, he needs to know -- he needs Americans to know there is a team.

So, on some level, if they have decided on Hillary Clinton as the secretary of state, maybe they can completely turn their attention to who the treasury secretary is going to be. But it might be advisable that this happen very soon...

BORGER: Right.

VELSHI: ... tomorrow or Monday.


BORGER: And, by the way, the Obama folks are very well aware of that.

I mean, I'm surprised, honestly, that they haven't put in a treasury secretary yet. I think Hillary Clinton may have had something to do with that, trying to get that settled. But they're very well aware that they need to have a point person doing the economy right now, particularly because Barack Obama hasn't been sworn in yet.

COOPER: We're going to have more coming up.

Thank you all for working your sources on this. I appreciate it. This literally happened during commercial break. We got word of this.


COOPER: Up next, we have got a little more breaking news: president-elect Obama's cell phone records hacked. Ed Henry jumped on the air about an hour-and-a-half ago, broke this story for us.

Former vice presidential -- and, so, we will talk to him about that, what -- what he has -- learning. There's now an apology, I think, from the phone company. We will tell you about it.

And, also, on a lighter side, former vice presidential candidate Sarah Palin pardons a turkey at a turkey slaughterhouse. And wait until you see what was happening behind her. You kind of can't make this kind of stuff up.

We will be right back.


COOPER: We have a number of stories actually breaking tonight.

And, so, our -- we have asked our panel to stay around to comment on some of them down the road.

We have breaking news. Attorney General Michael Mukasey has collapsed while giving a speech tonight in Washington, D.C. This is file footage of him. We don't yet have the video of the speech he was making, though we do anticipate that.

He was speaking at the Federalist Society dinner at the Marriott Wardman Park Hotel. We understand he is still on site. EMTs are there. That's, frankly, all the information we have -- Attorney General Michael Mukasey collapsing while giving a speech a short time ago.

We also have more breaking news. We have been hearing how Barack Obama will have to give up his BlackBerry when he takes office -- that was the story the last couple of days -- for security reasons, and also because of the threat of subpoenas.

Well, tonight, there's breaking news on an actual, not a potential, security breach of the president-elect's cell phone records.

CNN's Ed Henry has the latest.

Ed, what is -- what's breaking?

HENRY: Well, Anderson, we learned this, this evening from an internal company e-mail by Verizon Wireless.

And, basically, the -- the CEO and president disclosed that, in fact, some company employees may have been rifling through the records of the -- basically, cell phone records for a personal cell phone that Barack Obama was using earlier this year. I have since confirmed that with the Obama transition team -- Robert Gibbs, an Obama transition spokesman, saying they were notified yesterday, but that -- by Verizon Wireless -- that, essentially, these employees improperly accessed the president-elect's information.

They believe that it was essentially the billing records. So, these employees could have basically gotten the phone numbers of who Barack Obama was calling, who was calling him, as well, and the frequency of those calls and whatnot.

We're told by Verizon, they're acknowledging tonight that they're now investigating all of this. They're trying to get to the bottom of how many employees actually accessed the records, and whether or not they then leaked them to people outside the company. They say they're treating this very seriously. And Verizon has just put out a statement, just in the last few minutes, basically, apologizing to the president-elect about this.

One specific detail: this is just a flip phone, I'm told, so there was no BlackBerry or e-mail device attached to it. So as far as we know, there was none of the president-elect's e-mail that was accessed, but it was basically just the billing records for his personal cell phone.

And I should note, it was a cell phone he gave up a few months ago. So it was not any telephone calls he was making in the last couple of weeks since the elections. It was a few months ago.

And another point to finally wrap up with is that, basically, we're told that they were -- these employees were not accessing the voice mail or any other privacy like that. Instead, just the billing records, Anderson.

COOPER: So they weren't listening to voice mails, as far as we know. They were just looking at raw data, what numbers he had called?

HENRY: Right. And that's why it's possible -- and I stress possible -- these employees could have figured out Barack Obama's home number, a cell phone number for close friends or staff or whatnot, because if you had that bill, you'd be able to see who he was calling, how frequently he was calling. But that is what Verizon Wireless is trying to get to the bottom of tonight, is just how extensive this was.

COOPER: What's amazing about this is it reminds us of the story of a couple months ago State Department officials looking into passport records of Barack Obama and others. And even people checking out Joe the plumber's records inappropriately, and there's a story about that today, someone being penalized for that.

You've got to wonder, if these workers are doing this to incredibly famous people. I mean, are anybody's records safe? If Barack Obama's records can be looked into by workers at Verizon, I mean, who knows who else, you know, has their records being examined?

HENRY: Absolutely. And I can tell you, in this e-mail, the CEO at Verizon Wireless made the same point you're making right now, that basically, if the president-elect's information, his privacy can be violated, then people -- anyone walking into a Verizon Wireless store today or tomorrow will think that theirs could be breached, as well.

And there's a good analogy to compare it to the State Department passport situation. There again, you have Barack Obama's other passport files as being rifled through by people who had access to this information. It's very alarming, obviously.

I can tell you that the transition officials are stressing that they don't think there was, you know, any specific piece of information that could threaten Barack Obama, thankfully. But still, nonetheless, it's a privacy breach, and that's why it's being investigated so thoroughly tonight, Anderson.

COOPER: OK. Ed, stick around. We're going to have more with our panel with David Gergen, Gloria Borger and Ed and Ali Velshi. Not just on this Hillary Clinton story that is breaking now, as we speak.

But also the economic news of the last couple of days, it has simply been disastrous, much worse than previously thought. Talk of whatever the recession is going to be, being at least a year longer than previously estimated. A lot more bad information today about unemployment. We'll talk about all that ahead.


COOPER: And welcome back. We're continuing to follow this breaking news story that we just learned about, probably about 10 or so minutes ago. Word that CNN has confirmed that Barack Obama is on track to nominate Senator Hillary Clinton secretary of state after Thanksgiving.

We're joined again by our panel, David Gergen, Gloria Borger, Ali Velshi and Ed Henry, as well.

David, why not do it sooner? I mean, is it just a procedural thing that there are still details to be worked out?

DAVID GERGEN, CNN POLITICAL ANALYST: Again, Anderson, the Clinton financial records are pretty complex. And they not only contain names, but you've then got to do background checks and see what kind of headlines might come out of any particular, you know, donations to his library, to his foundation, and the like.

And what you want to do in these nominations is to make sure that, when the news breaks officially, and people start digging into the records, that you're prepared for any -- any surprise and you've got it covered, in effect. So that takes staff time. And there's a lot of -- it takes a lot of lawyering on both sides.

I think that the Clintons, when she was in a position of thinking about whether she was going to be vice president. Indeed, when she was thinking of running for president, there had to be some consideration by both of them that either one of those positions would have forced all of this into the open. So they had to have been mentally prepared. But even so, getting the records together, especially in this day and age and knowing that the Obama team is very, very careful.

They have -- we talked about in the past, this -- this questionnaire they've been giving to people who are thinking about signing up for a government job. And it's extremely invasive. I've never seen anything like this at the presidential level before.

The FBI asks these kind of questions, but to have the presidential transition team asking these questions requires somebody like Hillary Clinton to come forward and her husband to come forward with great volumes of records that have to be checked out.

COOPER: Gloria, if there's already a question about leaks and resentment between camps, I mean, is -- Obama was known, you know, for no drama -- No Drama Obama -- during the campaign. Is he ready for dealing with this, as president, with Hillary Clinton? I mean, he must be if he's offering her the job.

GLORIA BORGER, CNN POLITICAL ANALYST: Well, welcome to Washington. Yes, I think he's -- he's obviously ready for it. Because this, I think, shows that he's a pretty self-assured guy. It's clear that he's the boss. He's going to be the president. He's going to be directing foreign policy.

And I think the news we're getting tonight, that's been confirmed by Jessica and by Ed, really shows you that the transition team believes that those large issues that David's talking about, the financial disclosure issues, are behind them and that they need to, you know, dot the "I's" and cross the "T's." And the -- but it's very clear that they're feeling more confident that this can actually happen and become a reality, and that they're more confident in a way that she would -- that she would take it.

COOPER: And it must be confident, Ed Henry, that she could pass confirmation. I mean, obviously, if they feel they're going to -- she's good enough to nominate.

HENRY: Absolutely. And partly, that's based on the fact that, in the initial reaction, it's almost been somewhat surprising. There have been a lot of prominent Republicans like Jon Kyl, the Republican leader in the Senate, from Arizona, who immediately came out and said they believe Hillary Clinton would be a very strong candidate to be secretary of state.

There's no doubt Republicans in those confirmation hearings will still throw all kinds of things at her, as people in each party do whenever there are these contentious confirmation hearings.

But I have to say, the early signs from some very senior Republicans in the Senate has been an acknowledgement that, on the international stage, Hillary Clinton is someone with a lot of clout and someone who brings a lot of credentials to the table, Anderson.

COOPER: Ali, talking to financial experts in the last couple of days I get the sense that there's a lot of folks who kind of believe like we're all just whistling in the wind, that you know, we can talk about Hillary Clinton as secretary of state and we can talk about foreign issues and stuff. But there is this huge thundercloud that is erupting all around us. And are we even aware of how big this thing is going to be?

ALI VELSHI, CNN CORRESPONDENT: Yes, and I think what might be happening, they may be assembling that whole team so that everything else is shored up, all the potential problems, like those in State, like those that the attorney general would be handling. Those things get shored up, and then they -- they attack the economy full bore. And I think that's part of the issue here.

David said earlier that there's a feeling there's an absence of leadership from the current administration. There's a feeling that there's an absence of input from the incoming Obama administration. And there's a feeling that we really are -- we don't know what's going on. Everything seems to be collapsing around us.

So whatever this administration can do to say, "We are a solid, complete team." But at this point if we can have somebody come in and say, "This is how we're going to handle this thing," the strategy about waiting until the inauguration to take over the economy is not going to work.

COOPER: I was just -- Ali, look at Citibank. What, is it down to $5?

VELSHI: A little over $5. Citibank today is worth less than Home Depot is, as a company.

COOPER: And Bank of America...


COOPER: ... JPMorgan have lost something like 25 percent of their value in the last two days.

VELSHI: Yes. And Citigroup, by the way, is off more than 80 percent this year. This is a serious, serious problem. You can't understand why these things continue to happen day after day when there's utter confusion at every level of the market.

We're not talking about retail investors, people like us who panic and tell our brokers to sell our stocks. We're talking about people at every level. There's a small minority of people, professionals, who are going in and saying this market is cheap right now, because companies will do well. Most people are running for the hills.

GERGEN: Yes, Anderson...

BORGER: Anderson, imagine how difficult this is in the transition, when you have an outgoing treasury secretary, in Hank Paulson, who is making decisions every single day. And what does he do? He doesn't have an incoming treasury secretary to check with. He's still in charge, but he doesn't really want to do anything that the incoming administration is going to -- is going to disagree with, right?


BORGER: It's really a difficult situation.

COOPER: David, I'm going to give you the final thought.

GERGEN: Well, I think that -- two things. One, I think there's another thing on Hillary. And that is they have to figure out the sub-cabinet question, too? Is she going to select all her sub- cabinet, or is the Obama team going to be able to select some of those people? That's a pretty sticky issue here for them, as it has been with Bob Gates.

But the other thing on this economic issue, I think that the hamfistedness we have seen in Washington over the last couple of days, partly through the auto hearings, I mean, what you showed on television last night were those jets coming in and that PR disaster they had. Just to read the blog site, the AC360 blog site last night, Americans were deeply offended by what they saw.

I think that helped to derail these auto talks and, in turn, the collapse of the auto talks with Congress contributed in the last hour of trading today to the nose dive that went on in the economy.

And the fact that -- that Paulson reversed himself on the toxic assets. We've seen a huge falloff in the value of those assets. They've been blown-out since he reversed himself a couple of days ago. So there's been this quality in the -- in the economic, the private economic community that, not only is there an absence of leadership in Washington, but they've been hamfisted in the way that they handled it in the last few days.

COOPER: Scary stuff. David Gergen, Gloria Borger, Ed Henry Ali Velshi, thanks.

We're going to be right back. A lot more news ahead. Stay tuned.


COOPER: Breaking news, Attorney General Michael Mukasey collapsed while giving a speech tonight in Washington, D.C. We learned this just a short time ago. He was speaking at the Federalist Society dinner at the Marriott Wardman Park Hotel. He is now on the way to George Washington University Hospital, we understand. We'll have more information as it becomes available.

More headlines. Erica Hill joins us with a "360 Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, a federal judge today ruled five Guantanamo detainees must be released because the government has failed to prove the men were enemy combatants. The five men, all of them Algerian, were arrested in Bosnia in 2002. Somali pirates are reportedly demanding $25 million in ransom for the Saudi tanker they seized last week. The tanker, Sirius Star, has a crew of 25 and a cargo of oil worth -- worth $100 million.

Back in the news today -- we knew he couldn't wait long -- Stan Wurzelbacher. You probably know him better as Joe the plumber. An investigation concluded that a state agency director in Ohio who went snooping into Joe the plumber's records had no legal basis for doing it.

Although his privacy was violated, Joe may get the last laugh here, because the currently unemployed plumper signed a book deal for a quarter of a million dollars for his take on American values.

And in Wasilla, Alaska, today Governor Sarah Palin pardoned a turkey. That's the nice, warm, fuzzy part of the story. Then there's the other part. Look at this video in the background there. That guy, clearly, is the lucky one, because he seems to be doing something like stuffing a turkey in there. We're not really sure what's happening.

I want to warn you the video is a little tough to watch. And I have a feeling that the turkey in his hands, Anderson, was not pardoned. He takes it away. He brings it back.

COOPER: He's cleaning the turkey. Yes.

HILL: And he keeps -- he keeps looking like, she done? Is the camera still on? Or can I chop this guy up?

COOPER: The entire video actually...

HILL: It's awful.

COOPER: And it seems like the turkey is still alive.

HILL: I can't tell. I have one word for you.

COOPER: We were going to play the whole video, but frankly, we just ran out of time.

HILL: Tofurkey. And maybe the airport (ph).

COOPER: No doubt, you'll be seeing it all over the Internet tomorrow.

Just ahead, what really sets successful people apart from the rest of the pack? The answer, according to a fascinating new book by author Malcolm Gladwell, might surprise you. It also might explain why Barack Obama ended up in the White House.


COOPER: On January 20, Barack Obama will become one of the youngest presidents in American history. And his climb to the most powerful job in the world has been meteoric. We hear that a lot. But author Malcolm Gladwell believes much more -- there's much more to it than that. His new book, "Outliers: The Story of Success," is about what makes some people successful while others never reach their potential. He did a lot of research and came up with some intriguing answers. He's also the past author of the hit books "Tipping Point" and "Blink." We talked yesterday. Take a look.


COOPER: I want to read something from your book. You're writing about outliers, people who have achieved extraordinary things and how they've been able to accomplish it. And you said, "It makes a difference where and when we grew up. It's not enough to ask what successful people are like, in other words. It is only by asking where they are from that we can unravel the logic behind who succeeds and who doesn't."

So success is not just a matter of someone being born with genius or born with luck?

MALCOLM GLADWELL, AUTHOR, "OUTLIERS": Yes. I want to get away from that idea. And I want to kind of -- I very consciously set out to write about all the people around successes and not the successful person themselves so much.

COOPER: Because nobody accomplishes success by themselves?

GLADWELL: Yes, which is, in itself a kind of cliche, it takes a village, you know, that kind of idea. But I don't think we take it all that seriously. We kind of acknowledge it: yes, yes, they must have had help along the way. Yes, yes, they must have had a supportive family. But they don't actually sit down. All they want to do is sit down and say -- try to enumerate what are those specific factors that go into extraordinary achievement?

COOPER: It does sort of cut against the American ideal of the self-made man, the self-made woman.

GLADWELL; My favorite line in the book is -- is a quote from Jeb Bush, you know, the brother of a president, the son of a president, the grandson of a U.S. senator, who calls himself, when he's running for governor of California, a self-made man. I mean, we are now throwing that phrase around without any kind of justification.

COOPER: Right.

GLADWELL: And it's a dangerous phrase, because it allows the successful to kind of congratulate themself.

COOPER: Is -- what is an outlier? What does that term mean?

GLADWELL: It's a term that scientists use to describe phenomenon that lie outside of everyday experience. Had it been 100 degrees today in New York City, we would have called that -- today an outlier. It's not normal. And so I thought, you know, one of the best ways, perhaps one of the most interesting and best ways to learn something about success is to start with people at the fringes. Right? If you want to learn about swimming, start with Michael Phelps. Don't start with me. And that was the kind of principle behind the book.

COOPER: So is Barack Obama an outlier?

GLADWELL: Yes. I think he's an extraordinary outliner -- outlier. He is the kind of -- you know, he's a pioneer in so many respects. And he has -- what I think is interesting about his story is how complex it is, how complex his family background is.

And you know, I spent a lot of time in the book talking about the effect of cultural legacies. Talk about a cultural legacy. I mean, that man has got a, you know -- there's a million things going on back there. I'd love to kind of sit down with him.

COOPER: And you talk about the 10,000 hour rule, that it's not just a matter of, well, this person is a genius, this person has amazing ability. It is actual practice and hard work.

GLADWELL: You know, so a bunch of -- a group of really brilliant psychologists in the field of expertise research have sat down and tried to figure out how long do you have to work at something before you become really good? Right?

And the answer seems to be, it's an extraordinarily consistent answer in an incredible number of fields. And that is you need to have practiced, to have apprenticed for 10,000 hours before you get good. So every great classical composer, without exception, composes for at least ten years before they write their master work.

COOPER: Mozart.

GLADWELL: Mozart is composing at 11, but he's composing garbage at 11. I mean, he doesn't produce something great until he's 22 or 23, "Concerto No. 9," I think, to name one (ph).

If I asked you how long did it take you, when you were doing this job, before you felt comfortable doing and good at what you were doing?

COOPER: Ten years at least.

GLADWELL: Ten years. And the same with me, right? It's an incredibly consistent finding. And it's really important, because it says that we are far too impatient with people when we -- when we assess whether someone has got what it takes to do a certain job. We always want to make that assessment after six months or a year. That's ridiculous, you know.

The kinds of jobs we have people do today are sufficiently complex that they require a long time to reach mastery. And what we should be doing is setting up institutions and structures that allow people to spend the time and effort to reach mastery, not judging them prematurely.

COOPER: What is the takeaway? What is the lesson for people who want to be more successful? What is -- in some ways, it's good news that they don't have to be geniuses.

GLADWELL: Yes. I've been, you know -- I'm very anxious that this book not be seen as a self-help book but be seen as a kind of community help book. Because lots of it -- what I really want people to do is start thinking about how can we, as a society, build institutions that provide opportunities to work hard.

COOPER: It's a fascinating book, "Outliers." Malcolm, thanks.

GLADWELL: Thank you very much.


COOPER: Malcolm Gladwell.

Still ahead on 360, there's been a lot of depressing economic news tonight. So something to make you smile ahead: the new Beyonce music video that has a lot of people dancing online. It's not just the single ladies who seem to love this song.

And then at the top of the hour, back to reality. The latest on the economy. Now economists talking about the possibility of dreaded deflation. We'll be right back.


COOPER: All right, Erica. Time for "The Shot." You've probably heard that Beyonce has a new album out.

HILL: The one that's blaring out of your office everyday?

COOPER: I don't know what you're talking about. Do they still call them albums, by the way? I don't know what the kids do.

HILL: I think they do. And they say they drop when they come out.

COOPER: They drop. All right. Well, I guess it's dropped. Well, the first single has dropped, I guess. It's called "Single Ladies" -- parentheses -- "Put a Ring on It," apparently. A bouncy tune, as Lawrence Welk used to say. I'm quite partial to it myself.

We noticed on today that the video is creating a lot of imitators online. So here's the actual music video released by Beyonce. Take a look.




HILL: I think maybe those came from our floor crew.

COOPER: Very possibly. So then this guy posted his version on YouTube, where he's become a huge Internet hit. Take a look.





HILL: I'm glad you shared that with us.

COOPER: Then, this weekend, Justin Timberlake got in on the action on "Saturday Night Live." Take a look.




COOPER: He's on the far left in the leotard and high heels. So Justin Timberlake in no doubt a tough act to follow. But then there's this guy who works for some radio station, who tries to follow him in his high heels. Take a look.




HILL: Yes, work it, honey.

COOPER: So there you go. The trend, I think, is just beginning. Where this ends, who knows? There you go.

HILL: Yes. Maybe it should end right here. It's just a thought.

COOPER: I don't know. Maybe the floor crew. We'll see.

You can see all the recent "Shots" at

Coming up at the top of the hour, sad news, breaking news, grim new numbers on the economy. And global reaction after another brutal day on Wall Street. That and more, ahead on 360.