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Dismal U.S. Jobs Report; Will Politicians Compromise On Debt Issue?; asey Anthony Acquitted of Murder; "She's Tough, She's Got Guts": Casey Anthony Lawyer Speaks Out; Surgically Implanted Bombs; Hunt for Terror: Al Qaeda's Comeback; Unusual, Outrageous, Over-the- Top

Aired July 9, 2011 - 18:00   ET


CANDY CROWLEY, CNN ANCHOR, THE SITUATION ROOM: A new punch in the gut for jobless Americans and the Obama White House. This hour the cold hard numbers in a very disappointing jobs report. Its new ammunition for your again talks to prevent America from defaulting on its debt.

Also this hour one of the best selling newspapers on the planet is shutting down, tainted by a phone hacking scandal. And the political and legal short fallout gross with the arrest of a former aide to the British prime minister.

And a chilling new threat to air security. Terrorists bent on blowing up planes using bombs surgically implanted in their body. Welcome to our viewers in the United States and around the world. Wolf Blitzer is off. I'm Candy Crowley and you're in THE SITUATION ROOM.

A lot of pain and not enough gain in the newest snapshot of unemployment in this country. A new report shows 18,000 jobs were created in June. That is so far short of the as many as 125,000 jobs that economists were predicting. The unemployment rate unexpectedly rose to 9.2 percent, up from 9.1. That brings the total number of unemployed people in the United States up to a whopping 14.1 million people. Here's what president Obama said about the numbers.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today's job report confirms what most Americans already know. We still have a long way to go and a lot of work to do to give people the security and opportunity that they deserve. We've added more than 2 million new private-sector jobs over the past 16 months but the recession cost us more than 8 million. And that means that we still have a big hole to fill.


CROWLEY: We're joined now by our Chief White House Correspondent Jessica Yellin.

Jessica, there is just no way to pretty up the report.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Now, these jobs numbers-the economy as a whole is a dark cloud hanging over the White House and the re-election. They know that.

But the White House is pointing out, and they keep trying to, Candy, that they were handed a disastrous economy. That they took major steps to correct it. And that they are now blaming Congress, in essence. They say that the House of Representatives, in particular, the Republicans in the House of Representatives are blocking them from using what they view as their remaining tools to get jobs growing, specifically investment in infrastructure, speeding up the patent process, and extending the payroll tax holiday, which is also now on table as part of the debt talks.

CROWLEY: Now that you mentioned the debt talks I want you to listen to what John Boehner had to say.


REP. JOHN BOEHNER, (R) SPEAKER OF THE HOUSE: After hearing this morning's jobs report I'm sure the American people are still asking the question, where are the jobs? The stimulus spending binge, excessive government regulations, and our overwhelming debt continue to hold back job creators around our country. Tax hikes on families and job creators will only make things worse.


CROWLEY: Not sure people always se the connection between the debt talks and their lives, the debt talks and unemployment.

YELLIN: Or anything, right?


CROWLEY: Right, exactly.

How does the White House see this jobs report figuring into the debt talks?

YELLIN: OK. So let's talk about what the folks in the White House are saying and then the bigger picture of reality. So, my sources in the White House believe that the job numbers really do put pressure on all sides to get a deal done on debt talks. That is because voters do blame everyone in Washington for not doing enough to kick start the economy, and stalled debt talk looks like more Washington gridlock.

The White House is banking on fact that Congress's approval ratings are already lower than the White House, or the president's, so members of Congress might worry that they will get even more blame if the debt talks don't go anywhere, and that could motivate a deal.

On the other hand, this could harden positions. Republicans already oppose raising taxes. Democrats have been wary of touching entitlements. Those positions could get more dug in with the sputtering recovery. One point I would add there does seem to be great deal of optimism that if there is a debt deal it, in itself, will help juice up the economy by encouraging major corporations to have faith in investing in the U.S. This is something I hear from both by members of Congress and by the White House. I wonder if they think they don't know what else will do it, so let's hope this will.

CROWLEY: That's part of the problem we see on Capitol Hill and the White House. They have done a lot, poured a lot of money into trying to create jobs. We're sitting here at 9.2 percent. You got to go on faith at some point. They keep saying, oh, what the corporations-

YELLIN: Don't have confidence in Washington to get things done. And that if they do this there will be more confidence in Washington to run the economy, so maybe corporations will start investing now.

CROWLEY: We'll see. They have to get the deal first. Jessica Yellin, thanks so much. Even before the latest shocking employment numbers, a recent poll showed strong disfavor for President Obama's record on creating jobs. Asked how the president is doing on that score, only 38 percent approved; 57 percent disapprove. That can only encourage Republican presidential candidates as they pounce on these job numbers. What will be the impact on the 2012 race? CNN's Jim Acosta is here.

I did see just a veritable blizzard of press releases after the jobs report came out.

JIM ACOSTA, CNN CORRESPONDENT: Yes. These press releases came out and shot up about as quickly as the Space Shuttle Atlantis, Candy. They were coming every few minutes and it was the closest this presidential campaign came to looking like past presidential campaigns. In terms of campaigns responding to what is happening at the White House in real time.

And I want to talk about what Mitt Romney had to say about these unemployment numbers and about this jobs report. He seized on something that the president's senior political advisor over the White House, David Plouffe said, at a Bloomberg breakfast a couple of days ago. I want to put this on screen and show you what David Plouffe had to say.

He said, quote, "People won't vote based on the unemployment rate they are going to vote based on how do I feel about my own situation? Do I believe the president makes decisions based on me and my family?"

And Mitt Romney, in his statement today, responding to the jobs report, said, basically that he would fire David Plouffe. He said, quote, "If David Plouffe were working for me I would fire him and then he could experience firsthand the pain of unemployment. His comments are an insults to the more than 20 million people who are out of work, underemployed, or who have simply stopped looking for jobs. With their cavalier attitude about the economy the White House has turned the audacity of hope into the audacity of indifference."

And at the White House press briefing on Friday, Jay Carney, the White House press secretary, he essentially defended what David Plouffe had to say, basically doubling down and say people don't look at unemployment numbers when they vote for the president. And so at this point doesn't appear the White House is going take Mitt Romney's lead and fire David Plouffe. CROWLEY: Yes, that much I would doubt. It would be interesting to see because it does-Jessica and I were talking about it-it does seem sort of add to the general feeling of angst, when you watch that unemployment rate go up. Even if you've got a job, I think that is a problem for them.

But you know, we got all of these independent groups out there, just already pouring cash into the campaign, and making their being known. Have they weighed in on these jobless figures?

COSTA: You know, it's interesting because you would think that with these jobs report numbers that are out today that all of these outside shadow groups, that will be going after the president, in this upcoming campaign, would have ads sort of ready to go. And it is not clear whether or not Karl Rove's group, Crossroads GPS, was planning to put this ad together, you know, hoping that this jobs report would be bad. But it is a pretty sharp take on the unemployment situation right now and just want to show you a clip of that right now.


UNIDENTIFIED FEMALE: I supported President Obama because he spoke so beautifully. But since then things have gone from bad to much worse. He said spending hundreds of billions on a stimulus would create more jobs. But now all we've got is a lot more debt and more people out of work.


ACOSTA: So that ad shows a woman, you know, lying awake at night worrying about her kids, and saying I supported President Obama because he spoke so beautifully during the campaign. But now it looks like things aren't going so well.

Candy, this ad is planning to be run, by Crossroads GPS, in battleground states where people like Claire McCaskill are vulnerable in the upcoming 2012 election. So, yes, these outside groups that can raise all sorts of money, unlimited amounts of money to not only target Democrats, but the president, they are already getting their powder ready for this upcoming campaign. And this jobs report gives them more ammunition as the days go forward.

CROWLEY: It does indeed. Jim Acosta, thanks very much.

ACOSTA: You be.

CROWLEY: Appreciate it.

So why is the employment picture so shockingly bad? Joining me now economist Mark Zandi of Moody's Analytics. Economist were predicting as many as 125,000 jobs would be added. What the heck happened here, Mark?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, you know, I think business people are just really very nervous. Shell shocked. And if anything doesn't stick exactly to the script they freeze. It is not like they fire people, layoffs are actually quite low. But they stopped hiring. And we need more hiring to get more job growth. So, I think, fundamentally the fact that business people are just really nervous.

CROWLEY: Sometimes I think we ought to stop forecasting because that always makes the reality look so much worse than, you know, you say oh, 125,000, and you come up with 18,00 it looks bad. To your point, why are businesses reluctant to hire? Is there a main reason or is it everything?

ZANDI: Well I think part of it is the severity of what we've been through. This was a very, very severe recession. It's been very debilitating. And you don't forget that nightmare quickly. Businesses are-this is going to take time for businesses to overcome that.

I also think businesses are nervous about various policies that have created a great deal of uncertainty. And the most pressing problem right now for business people is they can't construct a narrative in their mind with respect to how we'll address our fiscal problems. Whether we are going to raise the debt ceiling in a timely way, and how we are going to just solve our very significant fiscal issues. Until they can get a story line that makes sense to them, they are just not going to be very aggressive and hire people.

CROWLEY: I wouldn't think that that scenario and what they need fits very well into an election cycle-which we're in, basically.

ZANDI: Well, that's true. But we have an opportunity. We do have this now very significant debate with regard to the debt ceiling. And I think the talks are moving in the right direction, at least from what I can tell. Both parties are talking about $4 trillion in deficit reduction over the next decade. They are talking about significant spending cuts. And I think it is also appropriate to consider increases in tax revenue by eliminating or scaling back the deductions and credits in the tax code.

These are all the right things to be talking about. They will be very good for the economy if they can actually sign on the dotted line. Do these things, raise the debt ceiling in the next couple of weeks, I think that will lay the foundation for much better confidence and much better job numbers towards the end the year into next.

CROWLEY: There is also a push out there, particularly among Democrats, for another stimulus program. Although I don't think they actually call at it stimulus program.

ZANDI: Right.

CROWLEY: But spending some more money. The president's talking about these building bridges, getting some of these construction workers back to work. Regardless of whether that can pass Capitol Hill is that a good idea?

ZANDI: Well, I think there's some things we should do. Yes. For example, we have a payroll tax holiday, 2 percent this year. It expires at the end the year. Probably would make sense, given the context of these job numbers, to extend that for another year. There's also some discussion about providing a payroll tax holiday for employers. That may also be something to consider.

The infrastructure spending idea, you know, from my perspective that's good policy, if we can figure out a good way to finance it, where it doesn't add significantly to the budget deficit. And I think there are ways to do that. I think everyone should realize that's not going to address our job problem in the next month, in the next six months, probably not in the next year. That's a solution to the job problem over the next three to five years.

CROWLEY: Right. No such thing as shovel-ready is one of the things we've learned from the last stimulus plan.

ZANDI: I think that is exactly right.

CROWLEY: Mark Zandi, thank you so much for your insight. We appreciate it.

As outrage grows over the alleged phone hacking of murder and terror victims the owner of Britain's biggest tabloid takes extraordinary action. And a defense attorney for Casey Anthony tells about the first thing that came to mind when he heard the words "not guilty". You're in THE SITUATION ROOM.


CROWLEY: Now the demise of one of the most widely read English language newspapers on the planet. Britain's "News Of The World" will shut down after Sunday's issue. The tabloid tainted by allegations that reporters hacked the phones of several thousand politicians, celebrities and even murder victims. The tabloid's former editor was arrested this week in connection with the scandal, a huge embarrassment for the British prime minister because the man, Andy Coulson, is his former press secretary. More on end of "The World", here is CNN's Senior International Correspondent, Dan Rivers.


DAN RIVERS, CNN SR. INTERNATIONAL CORRESPONDENT (voice over): It didn't take long for staff from "News Of The World" to end up in the local pub. In Britain losing your job normally results in drinking a pint. And these now unemployed journalists had a lot to reflect on.

JULES STENSON, FEATURES EDITOR, "NEWS OF THE WORLD": It was completely unexpected. And there was collective devastation right across the newsroom.

RIVERS: The 168-year-old tabloid is a British institution. But the phone hacking scandal had left it in a political vortex, from which it couldn't escape. Its owner, media mogul Rupert Murdoch realized his entire empire was at risk of being tainted. One can only imagine the conversation he had with his son, James, who runs the U.K. business.

JAMES MURDOCH, CHAIRMAN, NEWS INTERNATIONAL: I feel regret. Clearly the practices of certain individuals did not live up to the standards and quality of journalism that we believe in, and that I believe in.

RIVERS: It was the revelation that murdered school girl, Milly Dowler, had been a targeted by journalists from the paper who eavesdropped on her cell phone messages that was the beginning of the end for the paper.

Hacking in to cell phone messages is illegal in the U.K. The scandal that "News Of The World" had been systematically eavesdropping dropping on people for years was swirling around Westminster, with Murdoch's executives initially telling politicians phone hacking was the work of a rogue reporter.

LES HINTON, NEWS CORP.: I believe that he was the only person, but that investigation under the new editor continues.

RIVERS: But there was a lingering suspicion that form editors, like Rebekah Brooks, who remains chief executive of the parent company, must have sanctioned the hacking. Something she always denied. She's a close friend with Prime Minister David Cameron, an awkward fact. But that didn't stop him saying this.

DAVID CAMERON, PRIME MINISTER OF BRITAIN: What this government is doing is making sure that the fact the public and I feel so appalled by what's happened. Murder victims, terrorist victims, who had their phones hacked is quite disgraceful.

RIVERS: One thing that went spectacularly wrong for the prime minister was the decision to hire this man as communications guru. Andy Coulson is a former "News Of The World" editor, who has lost his job at No. 10, and who may now be facing criminal charges.

For Rupert Murdoch, the dramatic decision to close "News Of The World" doesn't mean the scandal is over. There is still a police investigation to be faced. But on Sunday one thing will end, the "News Of The World" printing presses will stop for the very last time. Dan Rivers, CNN, London.


CROWLEY: The phone hacking of crime victims has rocked a media empire, but it all started with celebrities. We'll hear from an angry actor, Hugh Grant.

And airlines are warned of the next big threat. Terrorists with bombs surgically implanted in their bodies.


CROWLEY: Actor Hugh Grant was among those targeted by snoopers and he is calling for a full public inquiry into the tabloid phone hacking scandal. He spoke with CNN's Richard Quest.


HUGH GRANT, ACTOR: It began with just a personal grievance, because I was a victim of phone hacking. And then I had this extraordinary piece of luck where I ran into an ex-features editor from the "News Of The World", itself. And there was an unlikely scenario where my car broke down, it is a long story.

But anyway he started boasting about hacking me, hacking everyone, all the dirty tricks of the "News Of The World". Their sinister relationship with the metropolitan police, their relationship with the prime minister, and I thought it was all both fascinating and utterly repulsive. And so subsequently I went back to see him, you know, runs a pub in Dover. I dropped in for a pint and a chat. And bugged him, I bugged him back. I was wearing a wire and got him talking all the stuff again. And I published it all in a British paper, "The New Statesman".

And that was the beginning of my sort obsession with this, and my outrage. Because, you know, it is one thing for there to be a very bad newspaper in the country, but when you start to realize it is not one, it is all our tabloids, who have been shockingly out of control for a long time. And when you realize how much collusion there has been from the police, and how much collusion there has been from our lawmakers, from our government, who need these tabloids, especially the Murdoch press, to get elected. You start to think, I'm not proud of my country anymore. This is not the democracy I thought I was proud of.

QUEST: What do you now want from the authorities? You said you have no confidence in an investigation by News International and News Corp. I suspect you don't have a huge amount of confidence in the investigation by the metropolitan police. So what is it you now want?

GRANT: Well, the old police investigation is now widely regarded as having been a farce. You know, they dragged their feet. They were in the pocket of Murdoch. There is a new police investigation, which I have to say looks a little more vigorous. They have been to see me. There is a criminal-a number of criminal cases going on against people at "News Of The World". It may center on senior executives. But it won't be enough. What we need is a big public inquiry into all the methods, and the whole culture tabloid press in this country. That is one thing.

And people can vote, very much, with their wallets. You know, they just don't have to buy these papers.


CROWLEY: Acquitted of murder but convicted of lying to police. What's next for Casey Anthony?

Plus Al Qaeda making a come back in Afghanistan. Details of bold new attacks on U.S. Forces.


CROWLEY: It was the climax of one of the most closely watched murder trials in recent memory. And many observers were stunned when Casey Anthony was found not guilty of murdering her two-year-old daughter Caylee. Casey Anthony was convicted of four counts of lying to police. But with time served she's due to be released from prison a week from tomorrow. CNN's Martin Savidge has more on a very dramatic day in court.


MARTIN SAVIDGE, CNN CORRESPONDENT (voice over): It was a very different looking Casey Anthony who faced Judge Belvin Perry for sentencing, letting her hair down for the first time since the trial began, talking and smiling. And there was a rare bit of humor as Judge Perry asked her attorneys if they still wanted to pursue that mistrial issue, something made pointless by Tuesday's dramatic verdict clearing Anthony's of the charges that she abused and killed her two- year-old daughter, Caylee.

JUDGE BELVIN PERRY, NINTH JUDICIAL CIRCUIT COURT, FLORIDA: You had asked me to reserve ruling on your motion for mistrial.

UNIDENTIFIED MALE: We withdraw that your honor.

PERRY: That takes care of that.

SAVIDGE: Then it was down to the business of sentencing Anthony for her four misdemeanor convictions of lying to police. Her attorneys argued they should be reduced to just one, citing double jeopardy.

UNIDENTIFIED FEMALE: Your Honor, before sentencing we respectfully request the court address the violation of double jeopardy at issue, with respects to counts V, VI and VII. Because all four statements in the indictment arose during the July 16 interview, between Detective Mellich (ph) and Miss Anthony. All four counts of providing false information to a law enforcement were on continuous criminal act with a single intent. As such each false statement separately charged violates double jeopardy and must be reduced to one conviction based on one occurrence in course of conduct.

SAVIDGE: But Judge Perry disagreed. Saying Anthony's lies sent authorities on four different wild goose chases.

PERRY: As a result of those four separate and distinct lies, law enforcement expended a great deal of time, energy and manpower looking for young Caylee Marie Anthony.

SAVIDGE: And then came the judgment.

PERRY: I will sentence you to one year in the Orange County Jail, imposing a $1,000 fine on each count. All four counts to run consecutive to each other, giving you credit for the time that you have previously served.

SAVIDGE: Realizing she wasn't going free today the smile was gone from Casey's face. It would take the court the rest of the morning to do the complicated math of time served and good behavior to come up with a release date.

Outside the courthouse, police were prepared for any possible reaction beefing up security with deputies on horseback and a helicopter overhead. The crowds may have been smaller than expected but reflected the huge debate that raged on air and online since Tuesday's verdict.

Anthony's legal troubles are far from over. The State of Florida has filed a motion to bill her for what it calls special investigation and prosecution costs, a woman who says Anthony falsely identified her as the nanny who kidnapped Caylee has filed a lawsuit.

And the rescue group Texas Equisearch said it's considering suing Anthony for the more than $100,000 the group said it spent looking for Caylee.

All seem to be eyeing the money many expect Anthony could make from her new found fame once she's free, which by the way will be almost exactly three years since Caylee was reported missing, July 15, 2008, by her frantic grandmother.


UNIDENTIFIED OPERATOR: 911, what's your emergency?

CINDY ANTHONY: I found my granddaughter has been taken. She has been missing for a month. Her mother finally admitted that she's been missing.


SAVIDGE: The call that started it all. Martin Savidge, Orlando.


CANDY CROWLEY, CNN ANCHOR: For more on the sentencing I talked with our CNN's senior legal advisor, Jeffrey Toobin.


CROWLEY: Jeff, thanks for joining us on this. Casey Anthony is going to get out of jail next week and go free after her not guilty verdict. Can you explain to us how the judge came to -- all right she has to spend another week in jail?

JEFFREY TOOBIN, CNN SENIOR LEGAL ADVISOR: Well, what happened was she was acquitted of all the serious charges, but she was convicted of four misdemeanors, which were involving lying to the police.

The judge gave her the maximum, but misdemeanors only come with a maximum of one year each. So he sentenced her to four years in prison, four one year misdemeanors to be served consecutively.

But she's already been in prison for almost three years and Florida like most states gives prisoners credit if they behave well in prison as Casey Anthony apparently did.

With those credits, she essentially has already served the equivalent of four years so by next year, she will have completed her sentence with the time she served. CROWLEY: By next week.

TOOBING: I'm sorry by next week, yes.

CROWLEY: So, he didn't really have any discretion. This was a mathematical equation.

TOOBIN: Certainly, he had discretion to give her less, but he gave her the max that he possibly could. But once he gave the max those calculations about time served, good time that's outside of his control, he couldn't sentence her to longer than next week.

CROWLEY: So, there was some sort of talk earlier in the day that this was his way of trying to protect her, that maybe the hue and cry will die down by then, but you think this was the way of him giving her the max that he could give her.

TOOBIN: Absolutely, I thought it was very moving the way the judge summarized the false statements that Casey Anthony made, which were so appalling.

Imagine, you know, most people are frantic when they lose sight of their kid in the mall for a minute. Casey Anthony went month after month deceiving the authorities about the fate of her daughter and the judge went through that.

You could tell in his low key way how appalled he was. He did everything he could but this is what happens when the defense wins a case. Misdemeanors are minor crimes.

And so he didn't have any more discretion than he exercised to give her any more than he could.

CROWLEY: Casey Anthony wakes up in jail. It's her day to be set free. What happens?

TOOBIN: Well, there will undoubtedly be arrangements made between authorities in Florida and her lawyers to try to make it as uncircus like as possible.

Presumably her lawyers will have arranged some sort of hotel room, some sort of friends place so that she can go somewhere where she will at least be protected from the surge of attention.

I mean, the ways of the media being the way they are, there's going a huge surge when she gets released. It will die down after a couple of days.

I think then she will have to start figuring out what she will do with the rest of her life, which I hope is no contact with children and somewhere outside of the state of Florida.

CROWLEY: Quickly, if I could, Jeffrey, the state now wants Casey Anthony to pay for the police investigation that resulted in her saying that her daughter was missing even though we now know she knew her daughter of dead. Is that actually going to happen? TOOBIN: Well, you know, these civil cases are very different from criminal cases. The criminal cases really have to be resolved. The civil cases kick around the courts for a long time.

At the moment, Casey Anthony doesn't have any money at all. There's an IRS audit against her, a judgment against her. The IRS is always first in line for money.

So frankly I don't think anything will come of these civil lawsuits except the one from Uncle Sam because Uncle Sam always gets his money.

CROWLEY: That much we know for sure. Jeffrey Toobin, thanks so much for your time. Appreciate it.

TOOBIN: OK, Candy.


CROWLEY: How did Casey Anthony's lawyers react to her acquittal? We'll hear from one of them in his first post-trial interview. Plus a chilling new terror tactic, surgically implanted bombs.


CROWLEY: Casey Anthony's attorneys are speaking out about the verdicts. Earlier defense lawyer Cheney Mason talked to Jean Casarez of "In Session" on TruTV.


JEAN CASAREZ, HOST, "IN SESSION" ON TRUTV: When you sat in the courtroom and you heard that not guilty for count one, do you remember the first thing that came into your mind?

CHENEY MASON, ANTHONY DEFENSE ATTORNEY: Yes. I took a breath and I said well now, you know, now I can relax a little bit because we know that there's no penalty phase, there's no death penalty. I mean, instant, like that and kind of waited to hear not a couple more times. Greatest word in the courtroom, not.

CASAREZ: Were you shocked?

MASON: I wouldn't say shocked. Certainly a great deal of anxiety, waiting for the verdict as there always is. I mean, I'm not even sure how many jury trials I've done at this point in the last 40 years.

But I'm told it's nearly 400, whatever the number is, I don't remember ever whether it's a very minor case or other homicide cases that I didn't have a breath deal of anxiety waiting on that jury. I've had juries out a long time.

One, I remember, was out for 12 days. You talk about building some anxiety or pressure with that. Surprised, strongly surprised. Skeptical not because of the jury. We thought we had a good jury.

But because of the relentless news media conviction of Casey for the past three years. You know, no matter, same thing, should have been vilified by the news media and talking head lawyers who don't have experience or qualifications to say the things that came out of their mouth. We were up against it so, surprised, yes. Pleasantly surprised, obviously.

CASAREZ: What did you learn about Casey during the course of this trial that you didn't know before the trial?

MASON: Tough. She's got guts. She's as tough as they come and she's very smart. She's very alert, quick and, you know, you get to like her. She's a likeable person.

She wants to reach over and clean the scraps of paper or cups off the counsel table, like she's, you know, that's her job or something. And of course I remember hearing some of the witnesses talk about, when she was with her friends in different apartments she was the one doing the cooking and cleaning and shopping and helping everybody and that's the way she is.

CASAREZ: She seemed to have a lot of anger inside of her, though. We saw various emotions, but I probably think the most predominant emotion I saw was anger in that courtroom.

MASON: Frequently and I can't imagine anybody not being angry with some of the testimony from people that were friends or some of her family throwing her under the bus, you know.

She's the one that knows it's unjustified. And, yeah, that would make me pretty angry too. Of course, the news media, every day, having a compulsion to have a story even if all they could do is make it up and skew the facts far from the truth makes you angry so, yes.

CASAREZ: How did Caylee Anthony die?

MASON: I know nothing different than what has been presented. She drowned in the pool and there's never been anything different than that.

CASAREZ: Do you believe that?

MASON: Yes, I believe it. I have no reason to think otherwise.


CROWLEY: Terrorists may have a frightening new strategy for attacking airliners. A new warning is issued on surgically implanted bombs.

And after nearly a decade of war in Afghanistan, al Qaeda is making a comeback even as the U.S. prepares to draw down its troops.


CROWLEY: Word this week of a potential new threat to air travel. First there was the shoe bomber, then the underwear bomber, their plots to blow up airliners failed at the last moment. But now, an even more frightening tactic that terrorists are trying to adopt turning their own bodies into bombs. Our Brian Todd is looking into this, scary.

BRIAN TODD, CNN CORRESPONDENT: It is, Candy and U.S. officials say terrorist groups might do this by surgically implanting bombs inside attackers' bodies. It's a chilling tactic designed to circumvent full body scanners and other sophisticated technology.


TODD (voice-over): U.S. security officials tell CNN of chilling tactic terrorists might try next, targeting commercial aircraft by surgically implanting explosives or bomb components inside the bodies of attackers.

JOHN PISTOLE, TSA ADMINISTRATOR: We see this as the latest generation or the evolution of what terrorist groups are trying to do to circumvent our security layers and to perhaps defeat our societal norms.

TODD: Officials say there's fresh intelligence showing terrorists have a renewed interest in planting bombs in bodies, but there's no specific or imminent threat.

One U.S. official said a man suspected in this involvement in this effort is Ibrahim Asiri (ph), a bomb making mastermind for al Qaeda in the Arabian Peninsula.

Asiri is believed to have planned the 2009 plot to kill Saudi Arabia's interior minister by placing a bomb in the rectal cavity or underwear of his own brother.

Asiri's brother was killed, but the minister escaped. I asked Israel's Rafi Ron former top aviation security official about surgically implanted bombs.

(on camera): What does this tell you about where the terrorists are versus where security officials are right now?

RAFI RON, NEW AGE SECURITY SOLUTIONS: Well, it tells me that we have exhausted the capabilities of the technology available to us. Because there's no way we can take the next step after the body scanners to figure out when a person carries a device inside his body.

TODD (voice-over): Ron and other experts say those full body scanners, which we once tested out can see through clothing, can find prosthesis, breast implants, contours, but can't detect bombs inside the body.

I spoke with Dr. Jack Sava, chief trauma surgeon at Washington Hospital Center about how terrorists might try to pull this off.

(on camera): Do you need a hospital or can you do it in a terrorist field camp? What kind of training do you need?

DR. JACK SAVA, WASHINGTON HOSPITAL CENTER: Well, I think the fundamental question will be how well do you want to do it? If you want to do it to 20 people and have 19 of them die and one success you can send on your mission that would be easier.

You could do that sloppy, but if you wanted to do it well, and expect them all to remain sterile, not cause infection, I think you're largely going to be talking about a hospital or at least a clinic setting.


TODD: Dr. Sava says explosives could be implanted in the abdomen or elsewhere, it could be placed in a prosthetic device like a fake hip or breast implant.

He says a non-sophisticated bomb might last three to four days inside the body before complications set in. but if it's a sophisticated surgery and implant, it could last weeks, months or even longer, Candy --

CROWLEY: So two questions come to mind, the first is, how do you detonate a bomb inside one's body? The second is if it's inside the body, doesn't that somewhat blunt the impact of the bomb itself?

TODD: There's debate among experts over both those questions. Some experts say you would need an external detonator for this maybe a chemical injected by syringe.

Others say it could be done on a timer, now on the blunting of the impact, there are some say the body itself would blunt the impact and that such an explosion couldn't bring down an airliner.

But others say it only takes a few grams of that explosive PETM to puncture the fuselage of an aircraft, and if a terrorist had more than a few grams of that inside his body, which is a possibility then it could maybe bring down an aircraft. So they're trying to figure out a lot of this as we go.

CROWLEY: Right, you don't really want to get to the point where you say, it won't bring down an airline, if you didn't want it there in the first place. Thanks so much, Brian Todd. Appreciate it.

Now to Afghanistan and the hunt for al Qaeda forces on the move and regrouping after the death of Osama Bin Laden. CNN's Nick Paton Walsh is with U.S. troops and local forces along Afghanistan's border.


NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT (voice-over): Almost a decade in, the hunt for al Qaeda in one part of eastern Afghanistan looks like this.

Americans pushing the Afghans to the front, taking the high ground and hails impossible to police. The pressure for less Americans here is extreme, but the Afghans only mustered five men for this patrol.

UNIDENTIFIED MALE: We shoot, it's got to be five to seven rounds first. Go! WALSH: And despite this training, they're barely policing the local villagers, let alone taking on the very terrorist network America came here to eradicate.

(on camera): It's here that Afghanistan's future looks a lot like its past. American control does not extend up on this valley. They found safe havens for al Qaeda.

(voice-over): U.S. and Afghan officials have revealed to CNN they located here al Qaeda fighters using this secluded alpine villages for training and planning.

In June, hundreds of Americans were airlifted in, 9,000 feet up. They faced a longer flight than planned. U.S. officials say they killed 120 insurgents. Many Taliban, but several of them Arabs linked to al Qaeda damaging their network.

Yet the clashes reveal that al Qaeda for years, said to be mostly across the border in Pakistan is again a concern back where they started in Afghanistan's hills.

We pushed down into the valley, still an insurgent strong hold. High- tech American attack helicopters buzzed overhead until militants shot at them from the valley.

2ND LT. TREY VAN WYHE, 2-35 INFANTRY BATTALION: It's uncharacteristic from the Taliban I know. They're getting gutsy. Right past there. If you go past that you're going to take enemy contact, it's pretty certain.

WALSH: The Afghans are clear about who lay in wait for them ahead.

UNIDENTIFIED MALE (through translator): It's very dangerous, there are Taliban, Arabs, Pakistanis there.

WALSHI: At the foot of the valley, the American base is often hit by pot shots, sometimes from lone gunmen up high who they then mortar.

Al Qaeda's return to these remote hills could tie America's hands, making harder to justify pulling back from here. The terrorist network that made America's case for invading seeping back in just when America makes its case to leave. Nick Payton Walsh, CNN, Afghanistan.


CROWLEY: We'll be back in a moment.


CROWLEY: It seems everyone had a reaction to the Casey Anthony verdict. Here's CNN's Jeanne Moos.


JEANNE MOOS, CNN CORRESPONDENT (voice-over): It only took two words to finally get a smile out of Casey Anthony. But not guilty was not music to everyone's ears. From Nancy Grace --

NANCY GRACE, HOST, HLN'S "NANCY GRACE": The devil is dancing tonight.

MOOS: To the cartoonist who portrayed Casey Anthony putting duct tape around the eyes of lady justice.

UNIDENTIFIED FEMALE: What is your reaction, Geraldo?


MOOS: The judgment even had the Fox News family at each other's throats momentarily.

UNIDENTIFIED MALE: This is a good mother.


MOOS: And this --


MOOS: -- took many people back to this.

UNIDENTIFIED FEMALE: We've been O.J.ed. This is the worst thing that happened to Florida since the hanging --

MOOS (on camera): Now you might expect the defendant to cry when a verdict came down -


MOOS: But you probably wouldn't expect the talk show hostess to choke up.

UNIDENTIFIED FEMALE: The verdict in the Casey Anthony --



MOOS (voice-over): If you think human hosts were shocked.

GRACE: Stunning blows.

MOOS: Imagine how the animal kingdom reacted to the Casey Anthony verdict from dogs to alpacas. And though Jay Leno tried a couple of Casey Anthony jokes, Jay learned that a murder trial joke can bomb like a closing argument.


JAY LENO: Not guilty. You know what this means? This means, President Obama's economic team is only the second most clueless people in America. That's what it means. Did the mike go off?

UNIDENTIFIED MALE: No, you're good. LENO: I don't think they heard the joke.

MOOS (on camera): Some folks even shot themselves reacting to the verdict as it was handed down.


MOOS (voice-over): Parking themselves in front of their TV's and posting their reactions on Youtube. So tense they chewed on remotes, took breaths as if it's a Lamasse class.


MOOS: Critiquing the defendant's look --

UNIDENTIFIED MALE: First degree eye shadow --

MOOS: There was something creepy about watching the verdict with a toddler. These viewers made Nancy Grace seem zen.


MOOS: Leave it to your toddler to lay down the law. Jeanne Moos, CNN, New York.


CROWLEY: I'll be here tomorrow morning for "STATE OF THE UNION" at 9:00 and noon, with congressional leaders Kevin McCarthy and Chris Van Hollen. We'll see if they have any solution to the dismal unemployment numbers in America.

I'm Candy Crowley. Wolf returns to THE SITUATION ROOM Monday, but right now the news continues on CNN.