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QUEST MEANS BUSINESS

Colorado Shooting Reignites Debate on Gun Control in US; Current US Gun Laws; Police Believe Colorado Gunman Acted Alone; Spanish Stocks Tumble as Valencia Asks for Help; IMF Economist "Ashamed," Quits; Euro at New Low; Colorado Governor: "Words Can't Express Sorrow"; US Gun Law Debate; Shooting Suspect Called Himself "Joker"

Aired July 20, 2012 - 14:08   ET

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


MAX FOSTER, HOST: Hello. Aurora, Colorado, like Columbine High School and Virginia Tech, now, a name synonymous with the mass killing of innocent people by a gun. We've been here before. Tonight is one of those other nights. Their deaths have reignited the debate on gun control, each side raises its voice to affirm its opinion and politicians stay largely silent on the issue.

The question is, in this election year, will things be any different? The mayor of New York City, Michael Bloomberg, says it is now time for those running for president to stand up and act on gun laws.

(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG, MAYOR, NEW YORK CITY: Soothing words are nice, but maybe it's time that the two people who want to be president of the United States stand up and tell us what they're going to do about it. Because this is obviously a problem across the country.

(END VIDEO CLIP)

FOSTER: Four weapons were recovered from the scene of the shooting. They were an assault rifle, a shotgun, and two handguns. Jim joins me now to explain the laws on guns in the United States.

JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: Well, let's start with the Brady Campaign. It's a get -- sorry, grassroots group devoted to ridding America of gun violence. Now, it's developed a scorecard for each state.

The more effective their gun laws, the more points they get. The deep red on this map shows those with less than 10 points out 100. Dark green represents 75 points or more.

Now, let's start with Colorado. It gets just 15 points on the Brady system. You don't need a permit there to buy or own rifles, shotguns, or unconcealed handguns. You don't need to register firearms. Assault rifles are legal, and there is no limit on the number of guns you can buy or the amount of ammunition.

Now, let's switch over to California, a green state. It gets the best Brady score, 81 out of 100. The assault rifles in that state are illegal, and gun owners must have a license. There must be background checks conducted, and handgun purchases are limited to one per month.

Let's switch to another map. This is the National Rifle Association. Now, it's devoted to defending the second amendment right to keep and bear arms. On this map here, it shows you which US states are the ones where you have a right to carry a gun in a restaurant. That's most of these states. Only six, the red ones, ban completely the ability to carry a gun inside a restaurant.

Now, let's look at this map. This is the entire United States, and this shows the mass shootings over the last ten years. There is, of course, no pattern. You can see here that many have occurred in big cities and smaller country towns, in states with strict gun laws and in states without. We are going to bring you -- Max, back to you.

FOSTER: OK, Jim, thank you very much, indeed. Well, we are going to bring you much more on the situation in Colorado throughout the rest of the hour. First, let's bring you up to date with some other headlines from the world of business, and it has been an extremely significant day for Spain. Some major losses on European markets. We'll bring you the details of that next.

(COMMERCIAL BREAK)

FOSTER: Welcome back to you. Police in Aurora, Colorado say they believe the gunman in a mass shooting at a movie theater acted alone. An investigation is underway after 12 people were killed at a screening of "The Dark Knight Rises." We'll bring you new details as soon as we get them, but for now, let's move into the day's top business stories.

Eurozone finance ministers have given the green light to Spain's banking bailout, but as one problem is resolved, others are emerging, and the fear is, the markets are being affected in a very real sense.

Stocks in Spain took an absolute hammering today. They closed down almost six percent as ministers signed off on the bailout deal. One of the country's biggest regions, Valencia, said it would need financial help from Madrid. That puts an even greater burden on the government's finances, and Spain's finance minister now says it will be two years before the Spanish economy grows again.

That's had a big effect on borrowing costs as well. As stocks fall, they are soaring ever higher. The yield on ten-year Spanish bonds is now at 7.27 percent, a record euro-era high, and comfortably above the 7 percent mark that's seen as so unsustainable.

Our Madrid Bureau Chief Al Goodman joins us from the Spanish capital. Of course it's bad news, Al, and we keep talking about the reaction on the markets, but today it was particularly bad, wasn't it?

AL MADRID, CNN MADRID BUREAU CHIEF: It was, Max. And what's happening here is that despite the efforts of the conservative government, which has only been in power since last December, what they say are their best efforts is nothing they have done really has calmed down the markets.

And the yield on the ten-year bond and the basis points, the spread between what Spain pays and what Germany pays, nothing they have done has calmed the markets down for other than a very short period.

And so now, after they've just passed an $80 billion package in Parliament yesterday, including spending cuts and tax hikes, which brought out those massive protests in Madrid and across the nation last night.

And then they get this -- the eurozone approval and the German parliament, and the Finnish parliament signing off on this bank bailout deal, all of that is supposed to calm things down, and it's quite the opposite. Max?

FOSTER: In terms of that yield, it's been hovering around 7 percent, but 7.27 percent starts to feel like it's going to do what Ireland and Greece did and start flying upwards. Is there any sense from any of the analysts there about at what point it loses control?

GOODMAN: Well, some of the Spanish media are already saying that Spain, according to the numbers, if you just look at the numbers, looks like Greece.

Now, we had the -- I've just been at the economy minister -- economy ministry a few hours ago with three senior officials who briefed reporters. They can't be named, but one was asked, "What do you think about this, the stock market and the yield?"

And he said, "Well, you know, the market reacts slowly. It does these things and you have to give it time and you shouldn't pay too much attention to the short term." Everybody else is saying, how can you not pay attention to the short term? So there is a lot of nervousness out there, Max.

FOSTER: And in terms of the stock market, was it partly to do with the fact they're on a Friday, it's in the summer, and there's a lot of volatility, thinner trading? Or was that a very real fall of 6 percent?

GOODMAN: No, that's the biggest fall -- the biggest one-day fall in two years. And of course, things were already heading south. And then, as you mentioned, this large region, Valencia's the third-largest city and it's got a region three provinces around it. It's been in financial trouble.

Some of its savings banks have been in financial trouble, and now, this announcement that they're going to need help from the central government to pay their books and pay their debts. That further sent everything south on the stock market, and the yield going up.

So, just a whole wave of bad news, and the bank bailout hasn't even happened yet. The first tranche of about 36 billion euros is supposed to happen by the end of this month.

Then, in the autumn, they still have to figure out a bad bank and put all these toxic real estate assets from the banks that get this intervention help into one bank, a bad bank, and that's going to sit around for years. That's what we were told at the Economy Ministry. So, this problem is not about to go away. Max?

FOSTER: Al Goodman, thank you very much, indeed.

Well, high-ranking officials inside the very groups arranging these bailouts are furious about how the situation is being handled, and they're letting their bosses know about it, too. One of the IMF's top economists is leaving after 20 years. He says he's ashamed to have been involved with the fund at all.

Peter Doyle wrote an open letter to its executive board, which was exclusively obtained by CNN's Nina Dos Santos. I asked her if Peter Doyle's words summed up the feeling inside the IMF.

(BEGIN VIDEOTAPE)

NINA DOS SANTOS, CNN INTERNATIONAL CORRESPONDENT: It's not clear at this stage, but I can tell you that I've spoken to more than one person who's expressed concerns about a number of the IMF's projects, particularly the issue of Greece.

Because if you speak to a couple of people inside the IMF, what they'll tell you is there's a lot of concerns that this project may well end up being a failed project, and then the IMF will be blamed for that.

Let's bring in a little bit of detail, Max, about exactly who we're talking about here, who penned this letter. This is a leaving letter written by a fellow called Peter Doyle. He's a 20 year veteran of the International Monetary Fund.

He was until recently an advisor to the European department, this is the very department inside the International Monetary Fund that's been responsible for bringing us the bailouts of Greece, Ireland, and Portugal.

I must point out, he was a division head, which means he's relatively senior, for non-eurozone countries. But that in itself just goes to show that people even outside of the realm of those sections that are working on these bailouts don't agree with certain aspects of what the Fund is doing.

Let me bring you some quotes, here, Max. What he said is that the failure of the International Monetary Fund to try and get politicians on an international scale to focus and face up to some of these challenges had ended up bringing the single currency, which he calls "the second global reserve currency," to the edge of the brink of disaster.

He says, "the Fund for the past two years has been playing catch-up and reactive roles in the last-ditch efforts to try and save it." So, pretty damning.

FOSTER: It's like he's blaming the IMF for -- in part for the crisis, isn't he?

DOS SANTOS: He's saying that there have been successive failures. And also -- this is an interesting note -- he said is that he's pointed out -- he said that various people inside the IMF have been pointing out this lack of direction, if you like, and that they were, quote, "suppressed."

Now, I must point out that I've been speaking to the International Monetary Fund. The spokesman for the International Monetary Fund, William Murray, has told me repeatedly, they haven't found evidence of this suppression, nor has he actually provided them with evidence of this kind of suppression, but it does go to show that the upper echelons of the IMF are particularly divided.

FOSTER: And in terms of Christine -- Ms. Lagarde, the managing director, not criticizing here, but criticizing her appointment.

DOS SANTOS: Yes, that's right. And that's not something that's new, but this is particularly sharp, the language that he's used. Let me bring the exact quote. He said the incumbent is, quote, "tainted, as neither her gender, integrity, or elan -- " so, spring,"can actually make up for the fundamental illegitimacy of the selection process."

You'll remember all of this goes back to when Dominique Strauss-Kahn resigned after the scandal and he was replaced by Christine Lagarde. She was elected, but she faced some strong oppositions from some of the world's emerging markets, who want a bigger say at the table.

Of course, the irony we have here, Max, is that she is the first woman to head up the International Monetary Fund, but being French, she's from Europe, and Europe has traditionally dominated the top positions here at the Fund, whereas America has dominated the top positions at the World Bank.

Now, the irony we have here is that Europe is the very place where the International Monetary Fund is having to bail people out. It's looking awfully weak these days.

(END VIDEOTAPE)

FOSTER: We are still watching events unfold in Colorado. Just had a police press conference after that 24-year-old was put into custody, the student, after 12 people died, dozens were wounded. We are following those events for you. We're going to keep you updated. In a moment, we're going to look at how the gun laws may now play into the presidential election towards the end of the year.

Meanwhile, the euro is at a fresh two-year low against the dollar, dragged down by soaring Spanish borrowing costs. Japan's yen is strengthening, the pound is back below $1.57.

(COMMERCIAL BREAK)

FOSTER: Colorado police say a total of 71 people were shot at a theater in Aurora, 12 were killed in the attack and 59 injured. Aurora police chief Dan Oates says officers arrived on the scene within around a minute, and Colorado governor John Hickenlooper earlier said words can't express the sorrow that's been felt.

(BEGIN VIDEO CLIP)

GOV. JOHN HICKENLOOPER (D), COLORADO: There's not one of us that doesn't -- read or hear this story, certainly anyone who has children, and think about it being your child in that movie theater. Your cousin's child or your neighbor's child. And that reality makes the pain and the grief too intense for words. But we can't let it keep us from our lives.

(END VIDEO CLIP)

FOSTER: A spokesman for the National Rifle Association of America has given the following statement to CNN: "Our thoughts and prayers are with the victims, their families, and the community. NRA will not have any further comment until all the facts are known."

Susan Candiotti is standing by for more on the investigation, but first we're going to speak to Dana Bash. She joins us now from Washington. Dana, just explain for us the role that gun laws are having in the US presidential election, whether or not they will have a bigger role now looking ahead because of this.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: First of all, the role that they have, not much. Not much at all. And the answer to your second question, will they have a bigger role? Probably not. In fact, most likely not.

In talking to people in both parties, particularly Democrats who have really been historically the ones who have pushed for greater or tighter gun laws -- gun control laws, I should say -- they're not likely to do that in the near future.

Why is that? I'll tell you, it's probably about 10 years ago -- I guess 12 years ago at this point. After Al Gore lost his bid for the presidency in 2000, Democrats started to reevaluate and look at the map and look at where he lost votes and started to think he lost a vote of votes in rural America, and so did other Democrats. The parts of America were people actually tend to vote a lot on the gun issue.

So, Democrats started to back away from pushing gun control laws and start to recruit candidates who were more for gun rights. And they have been doing that ever since. Even Democrats who control the United States Senate have been reluctant to put anything on the floor of the US Senate that has to deal with gun control, and that is because they believe just bottom line that it's bad politics.

FOSTER: Dana, thank you very much, indeed. Well, the suspect has been named as James Holmes, he's a 24-year-old PhD student from the University of Colorado. Susan Candiotti joins us from New York for more on what we're learning about this incident. It's unfolding all the time, but bring us up-to-date on what you've found out, Susan.

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Well, Max, here's some really disturbing information we just got from, of all people, the New York Police Department commissioner, who has revealed to us just moments ago that this suspect's hair was painted red and that he said that he was the Joker, the Joker from one of the Batman movies.

Now, it's unclear right now whether he said that to police, whether he yelled that out in the theater. Many witnesses have said that they didn't hear him say anything as he was firing shots into that dark movie theater.

But here's what else we were finding out about him. Apparently, he has no criminal record except for just a speeding ticket that was issued last year there in Colorado. And that, evidently, he had at least four weapons -- he had four weapons with him, according to police.

One is described as an AR-15 assault weapon. He also had a 12-gauge shotgun with him. He had two Glock handguns described as being 40 caliber.

Now, some of these weapons were in the car. Three of the weapons, I believe, were in the car, and one was left behind in the theater. Authorities have no idea how many rounds were fired.

They said that his care was found behind the theater. They're not exactly sure how he got in except to say it was parked in the back, implying or indicating that he might very well have gone into a door in the back of the theater, but that part is not known.

We had heard from sources that he had the exit door in the front of the theater where the screen would have been propped open and then got geared up, had his helmet on, had a gas mask on, and then started firing his weapon.

We don't know how many of those guns that we indicated to you were actually used. Police say they have no idea at this time how many rounds were fired. But suffice it to say, many, many, many, certainly.

So, they have a lot of investigating to do, but as importantly, they are also on the scene of the apartment where he is believed to have lived. There are four or five apartment buildings in this complex. The area has been evacuated, all the people inside those buildings moved out, as police are making their way inside.

Now, we understand that there are at least two police officers inside that building in full protective gear because, police say, they believe it is booby-trapped inside. They said that there are a number of wires inside, another kind of possibly explosive devices.

And they are not sure whether it will take them a matter of hours or possibly even days to make sure that it is OK for them to completely go through that apartment building, so they obviously have a lot of work ahead of them. No word yet on where those -- or how those weapons were acquired. Max?

FOSTER: Susan, thank you very much, indeed. And as the story unfolds there, do stay with CNN as we continue to follow this story for you. We have just heard that President Obama has ordered all US flags to fly at half mast.

(SILENCE)

(COMMERCIAL BREAK)

MAX FOSTER, CNN HOST: Welcome back. I'm Max Foster. These are the headlines. A 24-year-old Ph.D. student is in custody after 12 people died and dozens were wounded at a theater in the U.S. state of Colorado . The suspect has been named as James Holmes.

Police say he entered a midnight screening of the new Batman film in a gas mask, where he threw tear gas and opened fire on moviegoers. Police searching his house say it contained a, quote, "very sophisticated booby trap."

U.S. President Barack Obama has cut short a campaign trip to the state of Florida to return to the White House. But first he spoke to a somber crowd there about the Colorado shootings. Mr. Obama called for a moment of silence for the victims and asked people to set aside politics and embrace their families.

New video from the Damascus suburb of Midan shows burned-out buildings and cars. Syrian forces say they've cleansed the area of terrorists. Battles between Syrian troops and rebels have been raging in the Damascus suburbs for days now. And violence across the country has killed more than 400 people in the last 24 hours.

In Israel, funerals today for the five Israelis killed in a bus bombing in Bulgaria. The bodies of the victims arrived by plane this morning in Tel Aviv. Israel blames Iran and Hezbollah for the suicide attack, although Iran says it wasn't involved. Bulgarian investigators say they aren't certain who was behind the bombing.

(MUSIC PLAYING)

FOSTER: U.S. President Barack Obama and his rival, Mitt Romney, say politics must take a back seat after the deadly shootings in Colorado. The two presidential candidates each released statements expressing their sadness at the events in Aurora, and both men urged Americans to come together in the wake of the massacre.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We will take every step possible to ensure the safety of all of our people. We're going to stand by our neighbors in Colorado during this extraordinarily difficult time. And I had a chance to speak with the mayor of Aurora as well as the governor of Colorado to express not just on behalf of Michelle and myself, but the entire American family, how heartbroken we are.

FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: I stand before you today, not as a man running for office, but as a father and grandfather, a husband and American. This is a time for each of us to look into our hearts and remember how much we love one another and how much we love and how much we care for our great country. There's so much love and goodness in the heart of America.

(END VIDEO CLIP)

FOSTER: Mr. Obama has called for a day of prayer and reflection. Our Brianna Keilar is at the White House for us now. And he's been talking about hanging flags at half-mast as well, Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: That's right, Max.

And as soon as President Obama -- remember, he was in Florida -- as soon as he landed in Marine One on the South Lawn of the White House, he headed straight to the Oval Office for a meeting to talk about the shootings in Colorado, to talk with some of his top aides and some of the top officials in his administration, including the vice president, his top homeland security and counterterrorism adviser as well as the head of the FBI.

That meeting may actually still be underway. We're waiting to see if we can get a readout of what was discussed. But it's really interesting. And you can tell just by what you heard the president and Governor Romney talking about.

What you normally would have seen from them today, both of them in very key battleground states, the president in Florida, Romney in New Hampshire, what you would have seen was them essentially slamming each other.

And instead of that, the really heated politicking, it's kind of given way obviously to this somber mood as both of them turn their days, which would have been campaigning, into these addresses and then really put obviously the rallies aside, President Obama calling this "evil." He said it was senseless, and, Max, he talked about his daughters, Sasha and Malia.

He said that he thought about what if they had been in that theater. And we should also say that it just appears the campaigns on both sides at a standstill. You've got Vice President Biden and Michelle Obama, who canceled campaign events as well, Max.

FOSTER: Yes, and the ads have been canceled as well, I gather.

KEILAR: That's right. That's another very interesting thing. Millions and millions of dollars in ads on the airwaves here in the U.S. right now. In Colorado specifically is where the ads have been canceled. Both campaigns have asked television affiliates to pull those off the air.

Why? Well, because a lot of them, the vast majority of them, if not all of them, are very negative. And the other thing you're seeing, a lot of the money that is putting ads on the air is coming from these super PACs that are not affiliated with the campaigns. And we're seeing the leading conservative one and the leading liberal one also pulling down ads during this time in Colorado as well.

FOSTER: This is a debate. We've been talking about it a bit, gun laws is a debate within America. It's not a huge political debate, and we don't expect it to become one. But it is interesting to see how the two teams are coming together, at least on one issue.

They have to get the tone of this right. It's not just about sort of responding to the events of today. It has a really big long-term impact on how they're seen, their personalities, right?

KEILAR: That's right. And even to the littlest thing, you'll see, will be dissected. President Obama, as he walked into the Oval Office, we even take note of the fact that normally he waves to people who may be waiting for him. He didn't. He walked very somberly in.

And there's also this visual, sort of the optics of it, we call it, his going into the Oval Office and having a meeting, showing that he is focused on this, that he's making sure that his administration does everything they can, and the same for Mitt Romney.

Obviously, this is sort of a brutal campaign between these two. But they're really trying to show that certainly right now they put politics aside, or it would look very bad for them politically.

FOSTER: OK, Brianna, thank you very much indeed for joining us with that.

We're taking a look at Wall Street in just a moment, keep you on top of events in Colorado, too, the big movers and the big corporate earnings next on QUEST MEANS BUSINESS.

(MUSIC PLAYING)

(COMMERCIAL BREAK)

FOSTER: Twelve people have been killed and 59 others wounded in a shooting at a midnight screening of the new Batman movie in the U.S. state of Colorado. Twenty-four-year-old James Holmes has been names as a suspect by police.

They believe he entered the theater wearing ballistic armor and a gas mask. Our Susan Candiotti reported earlier that the suspect had dyed his hair red and was claiming to be the Joker, the villain from the Batman series. Police who tried to enter the suspect's home say there are incendiary and chemical booby traps inside the building, and that it might take days to clear.

We're following that for you, but meanwhile, U.S. stocks look set to end Friday's session in the red, down by more than 1 percent, as you can see. Wall Street's other main indices are showing gains for the week as a whole.

Financial shares are some of the worst performers. Bank of America is down around 2 percent currently. GE is one bright spot. It's the Dow's top performer, up around 2 percent today after stronger than expected earnings. GE says one-off charges were the main reason for the profit drop. It reaffirmed its forecasts for double-digit earnings growth this year.

Microsoft shares are down around 1 percent after the company posted its first-ever loss at the publicly traded company. They lost $492 million in the second quarter. That's mainly due to an already announced $6.2 billion write-down related to its advertising acquisition, aQuantive.

Now revenue from Windows software fell $58 million in the quarter, as customers wait for the new Windows 8 software due in October. And Microsoft's Office software remains its biggest money spinner by fives (ph).

Now installed on a billion PCs, would you believe, around the world, this week Microsoft unveiled new versions of Office with touchscreen features for tablets and a subscription option so you pay for the software as you would with Netflix or newspaper deliveries. Now Kurt Delbene is president of Microsoft's Office division, and he told me it's a way of making sure your software is always up to date.

KURT DELBENE, PRESIDENT, MICROSOFT OFFICE DIVISION: Well, it is, I think, an important change for us. It's an opportunity for customers in terms of always having the freshest version of Office available to them and also having a set of add-on services available. And it's also an opportunity for us to always deliver that best experience as users subscribe.

FOSTER: Google has obviously won some strong customers recently, and they're big on the cloud, also subscription as well. So is this in response to much smaller competitors like Google?

DELBENE: It's a much broader field than just thinking of the more narrow Web-based applications and fairly lightweight experiences that are available elsewhere. And so I think if your users take a look at what's embodied in this release, they'll really kind of understand our view of what a full solution looks like.

FOSTER: And in terms of some of the small changes, what do you think is particularly attractive? What sort of stood out for you and something that you like?

DELBENE: The first, I would say, is we took a look at the user experience and the kinds of devices that people are using in the modern workplace, and we said this is an opportunity for us to really create a new user experience, one that's fast and fluid and really a pleasure to use.

And that's why I think if your users download the beta or the consumer preview, they will find it quite different in terms of user experience, and they'll be delighted in it. So I think some -- the user experience has changed. It's particularly adapted around the kinds of devices people have today.

One of the huge value propositions is it'll be a great Windows 8 device. It'll work as on a tablet device as well as a notebook as well as your desktop. It'll be great on touch; it'll be great with a stylus and pen. And so we really feel like that kind of modern user experience that they expect.

Three other things I think are key, it's connected to the cloud. That means you get cloud storage and your documents roam with you. It's social. That means your social feeds come into the Office experience. And also allow businesses to do so social-based collaboration and communications.

And the final thing is across the product, whichever product you find that you love the most, you'll find some new innovative scenarios, things like digital notetaking, unified communications using HD video, reading content.

We find that 60 percent of users open a Word document, for instance, only to read it. And so we've created a really great reading mode and enabled markups so that they can consume that in a more pleasurable and a more productive way.

(END VIDEO CLIP)

FOSTER: That's the story from Microsoft. Just to clarify for you our graphic a little earlier; I may not have been clear, was accurate, but the General Electric Q2 net profit is down 16 percent, shares down 3 (ph) percent today.

Now as the drought in the U.S. Midwest continues, soybean futures have surged to record highs. In Chicago, corn prices are spiking, too, up more than 50 percent over the last five weeks. The U.S. Secretary of Agriculture says nearly 80 percent of the country's soybean and corn crops are in drought-impacted areas. The level of America's largest river, the Mississippi, is falling close to record lows, an indicator of just how bad the drought it. Consumers won't be exposed to the financial effects of the drought just yet. Some of the first to feel the pinch will be livestock farmers who use corn as animal feed. Well, Terry Branstad is the governor of Iowa, America's largest corn and soybean producer. He told me there are way to deal with the drought, and that market traders are overreacting.

TERRY BRANSTAD, GOVERNOR OF IOWA: Well, I think people need to be careful about not overblowing the situation. We have always been resilient. We have tremendous agriculture production. They've done a tremendous job of developing more drought-resistant feeds.

And so although we have seen a significant drought, hotter and drier weather than we've had for a long time, I feel confident we are going to get through this situation.

FOSTER: Clearly the market's traders are very concerned about this. You've got corn and soybean prices at record highs right now; wheat prices are actually above those levels we had after that 2010 Russia export ban which was seen as a crisis. So it just seems though it is a crisis.

BRANSTAD: Well, oftentimes traders exaggerate the situation and I have seen this happen before. And then we see markets go back down dramatically. And what happens is when the price gets so high, then (inaudible) feeders look for alternative things that they can feed their animals.

And that will also reduce the demand. So this thing has a way of correcting itself. And I think it's important for not -- people not to panic, not to overreact to the situation.

FOSTER: Yes, I just want to ask you, what sort of support do local farmers need in order to avert a full-on crisis if this drought does continue for a month as opposed to just a couple of weeks?

BRANSTAD: Right. We have a farm program that says some of the land that might be more rotable, we've been taking out of production. It's called the CRP land. This has been seeded to grass. And that can't be used for production, but in a emergency situation like this, the USDA can open it for grazing.

FOSTER: Do you think that will be enough to avert a crisis, which you don't actually think has transpired quite yet anyway?

BRANSTAD: Right. Yes. We think this idea of calling it a crisis is overblown. We recognize it's a critical situation and obviously we're praying for rain every day, hoping that that can help alleviate the situation.

But we also recognize that there's other things that we can do, such as opening the CRP acres for grazing and haying and then also some of the other programs that are available to provide short-term assistance and I'm confident we're going to be able to get through this. We've gone through challenges like this before.

And because of the quality of the seeds that we have today, we're even more effective in being able to produce in stressful circumstances.

(END VIDEO CLIP)

FOSTER: The governor there, pretty confident they can keep on top of this. But Jenny's at the Weather Center. It all depends on how long it goes on for. It can't go on for weeks and weeks, maybe just a couple of weeks before they can't (inaudible) actually.

JENNY HARRISON, CNN METEOROLOGIST: Yes, well, and there's another concern or a consideration here as well, Max, which is of course the Mississippi River. It's such an important river for transportation throughout these central regions across the United States.

Now this is just a reminder what it looked like back in April 2011, if you remembered, it was at record levels because we had all of this flooding, a lot of snow melt and a lot of rain. And so it all combined to produce a scene like that.

And then, of course this year, well, this is a very different scenario, because now we have got this drought. So as well as the drought across much of the region, of course, all of the region, we're also now seeing some really disturbing signs of that drought across the Mississippi. These areas in the sort of taupe color, that, of course, is just the dry river bed.

We've got some video to show you as well, which gives you a really good idea as to just really the severity of the situation. As this video goes on, you will see a few seconds in, unfortunately, that -- here we go.

You begin to really get an idea as to just how much the river has been eroded by the lack of rain. And what you have to bear in mind is that what the levels are like last year, they were well above average. And look at that now. So what you can see is some areas barely passable.

So the U.S. Army Corps of Engineers, they're spending about $7 million. They're going to be dredging the river in an effort to keep it open to traffic the (inaudible) separation as well and also all that river barge traffic already some of the shipping companies, they are lightening their loads so that the ships of course are not so low down in the water, but it means they're not as cost-effective.

So this is another big concern as this drought continues. Now there have been a few showers and thunderstorms in the last few hours, most of it now across eastern areas. And of course there is some more rain in the forecast.

But as we know for many of the crops it is coming far too late. This is the outlook as we go through the rest of the month, unfortunately, because of the time of year, because of the type of systems we see, which is not so much rain, and this drought is very much looking to worsen and then on top of that it is also likely we're going to have some above- average temperatures across this entire region.

So the sort of short-term outlook through the rest of this month is not particularly encouraging. But there is some rain, as you can see in the forecast, but really across much of the Midwest, across all those Plains states, there is not much there in the forecast at all. And temperatures will be high, 34 in Chicago, very warm across the South at the moment, 41 the high there in Dallas on Saturday.

Then we head across to Europe, and in particular, across towards the U.K. Now there's been some fairly heavy showers and thunderstorms in the last few hours. But in between, some nice sunshine. More about rain of course with some strong thunderstorms pushing across into Germany. There will be some warnings in place because of that.

There's that high pressure I was talking about yesterday. It should be a good weekend but there's another system coming in across the north. There are the warnings across central regions for those severe thunderstorms and again as we go through the week, the week and the lead up to what will be, of course, this particular day, just a week away, the opening ceremony of the Olympic Games.

It should be drier than normal. However, it may also be a little bit cooler than normal. But it's not quite as bad as it seems. We have, of course, had a lot of rain at Lyman St. Thames (ph) for the golf, which is currently underway. Conditions are actually pretty improved as we have gone through Friday into Saturday as well. It should be a nice, sunny day if a little on the cool side, Max.

FOSTER: OK, Jenny, thank you very much indeed.

Now after the break, an update on the situation in Colorado. Stay with us.

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FOSTER: We are continuing to follow the situation in Colorado where 12 people have been killed and 59 others wounded by a gunman who entered a midnight screening of a new Batman film. The suspect has been named as 24- year-old James Holmes.

They believe he was heavily armed, wearing ballistic armor and a gas mask. The gunman opened fire with a shotgun, a handgun and an automatic rifle; according to the Aurora police chief, the suspect was acting alone.

(BEGIN VIDEO CLIP)

CHIEF DANIEL OATES, AURORA POLICE DEPARTMENT: We are not looking for any other suspects. We are confident that he acted alone. However, we will do a thorough investigation to be absolutely sure that that is the case. But at this time, we are confident that he acted alone.

(END VIDEO CLIP)

FOSTER: Well, Warner Brothers has canceled tonight's Paris premiere of "The Dark Knight Rises," as well as interviews with the cast. It's also pulled promotional trailers for its upcoming film, "Gangster Squad." The film features a scene where people are shot in a cinema. Warner Brothers put out this statement earlier today.

"Warner Bros. and the filmmakers are deeply saddened to learn about this shocking incident. We extend our sincere sympathies to the families and loved ones of the victims at this tragic time."

Warner Brothers is owned by the parent company of CNN.

It was a dark theater, playing a movie that included gunshots in the middle of the night. Many in the Aurora cinema had no idea what was happening until people started screaming. Here's what some of them witnessed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: He came in and he started lighting a gas can, and he threw it into the crowd. At that point, he shot his first fire into the ceiling to scare everybody, and they just started scattering. And mass chaos just happened.

UNIDENTIFIED FEMALE: He pointed the gun at you.

UNIDENTIFIED FEMALE: Yes.

UNIDENTIFIED FEMALE: Did you see him looking at you or --

UNIDENTIFIED FEMALE: He just pointed the gun directly at my face. I was just terrified and I just jumped into the aisle and just started crying, you know.

UNIDENTIFIED FEMALE: How far was he standing from you?

UNIDENTIFIED FEMALE: About four or five feet.

DONOVAN TATE, WITNESS: There was this one guy who was on all fours crawling. There was this girl spitting up blood. There were bullet holes in some people's backs, some people's arms. There was this one guy who was stripped down to like just his boxers. It looked like he had been like shot like in the back or something. It was -- it was crazy.

QUENTIN CALDWELL, WITNESS: I think we were about 15 minutes in, and there was a chase scene, where there were gunfire on screen. And right then, out of nowhere on the right side of us, we just hear a very distinct pop-pop-pop-pop. And you know, my wife jumped and I kind of sat there, I was like, oh, it was probably just really good special effects, you know, sound effects. And my wife said, no, that's (inaudible).

ALEX MILANO, WITNESS: She said that a man about 6 feet tall, taller than her, kicked through the door and he was in, she said, a riot helmet . She said he was -- had a bulletproof vest on, you know. She said that he was completely covered in all black with goggles.

And he -- she said that after that point, when she saw that he was holding a shotgun, they -- her and her boyfriend dropped to the floor and just kind of started to crawl to see if they could get away. They got up and they started to run through the emergency exit. She said that when she turned around, all she saw was the guy slowly making his way up the stairs and just firing at people, just picking random people.

BRITTNEY JACKSON, WITNESS: As they were leaving, he witnessed a baby, an infant get shot. But, yes, they said gas bombs, they were leaving and then just gunshots all over the place.

FRANK FANIA, AURORA POLICE DEPARTMENT: He did not resist. He did not put up a fight. I don't know the exact details, if the officer surprised him or how it actually happened, but I know some of the first officers that arrived within, I don't know it was seconds, maximum a couple minutes, found him behind the theater at his car and took him into custody there.

(END VIDEO CLIP)

FOSTER: Well, Becky will be back at the top of the hour with the latest news headlines followed by "AMANPOUR." For now, I'm Max Foster. Thank you for watching. That was QUEST MEANS BUSINESS.

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