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Palestinians Seek UN Observer Status; Dolphin Shootings Investigated; Are We in Another Recession?; Mohamed Morsi on the Cover of Time Magazine; Syrian Violence Continues

Aired November 29, 2012 - 15:30   ET




ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I'm Ali Velshi and this is "Your Money."

Today, are we in a recession? I mean, times are tough, but come on. Consumer confidence is up. Americans are spending more money in the holiday season and, if Congress doesn't push the country over a fiscal cliff, we're likely headed for more economic growth, right?

Well, one of the best economic forecasters around says not only is the U.S. economy headed for a recession, with or without the fiscal cliff, he says we're already in one.

Listen to what Lakshman Achutan of the Economic Cycle Research Institute -- ECRI, for short -- told me today.

LAKSHMAN ACHUTAN, CO-FOUNDER AND COO, ECONOMIC CYCLE RESEARCH INSTITUTE: The recession has started. We are a few months in to it and I think, if you wanted to argue against me, I would point to jobs. Jobs are still growing.

But when we look at the last seven recessions, in three of them, jobs continued to grow into the recession.

VELSHI: Achutan's group, ECRI, bases this on four economic indicators. Let me show you.

Industrial production, that's all the stuff -- that's top left -- that's all the stuff that's made in the U.S.; personal income, you know what that is; sales and, of course, employment.

Look at those lines. Based on official government data this year, they show a drop off in three of the four indicators starting in July. Only employment stays steady. That's the vertical red line, by the way, July.

According the Lakshman, that means we're in a recession right now. Now, this may sound obvious to some of you. It may sound ridiculous to others, but when it comes to determining recessions, few have a better track record than ECRI. Back in 2001, the group predicted a recession when the vast majority of economists said it couldn't be true. They were wrong. ECRI was right.

In 2006, ECRI predicted the housing boom had ended while others were still touting it. We all know what happened then.

Fast forward two years, ECRI forecasts the worst global recession in years. That was in August, a month before the collapse of Lehman Brothers set off the global financial crisis. ECRI also correctly predicted when the U.S. would come out of that recession.

Here's the weird part. Just today, we got a revised number for GDP, gross domestic product, for the third quarter of this year. It showed the U.S. economy grew at an annual rate of 2.7 percent in the third quarter. That is much higher than the 2 percent the government originally estimated.

Now, gross domestic product isn't perfect, but for now the broadest measure that we've got. The government says the economy actually grew more in the summer months right when Achutan and ECRI says things began to fall off.

So, what gives? Take a look at growth since the last recession. It has been a rollercoaster for this economy, but if you go by what the government is telling us, things should be looking up.

But everyone including Achutan and ECRI agree that going over the fiscal cliff would make things worse, which brings me to the next topic, sequestration. That's a stupid name for a stupid thing.

More then a year ago, both the president and Congress made a deal with the devil after both parties felt no shame in taking America to the brink over raising the debt ceiling. Their so-called compromise back then was that, if they could not negotiate a debt reduction deal, cuts would happen across the board.

Now, this isn't the whole fiscal cliff. This is just the sequester, $1.2 trillion of mandatory spending cuts over 10 years which are scheduled to start on January 2nd. Half of that money will be cut in defense. Half in everything else.

Next year alone, the sequester alone could carelessly take $65 billion out of federal spending, reduce economic by two-thirds and take out as many as a million jobs versus growing 2 million which is what the U.S. is on track to do now.

I fully understand that the government needs to spend less and spend more efficiently, but how you achieve it is as important as how much you cut and the sledgehammer approach of the sequester is not economically sound.

Now, there are targeted and measured ways to do this without driving the country in to another recession. Some debate today as to whether we're in one or not, but the sequester will only make things worse.

So, Congress, solve it. Solve it now. We're all watching.

Listen, I've been talking to you about housing lately. It's hot. And if you've got good credit and you've got money for a down payment, it is the perfect time to buy. Nationally, housing affordability is the best it's been in a long time.

But not where I am. According to a new survey, New York City is the least affordable place in America to purchase a home. No big surprise here. Home prices in New York are nearly two-and-a-half times the national median home price, which is $189,000.

Now, other expensive places on the list aren't that surprising either -- San Francisco, Los Angeles, Honolulu, but, hey, this one caught my eye. The West Texas town of El Paso. It's the tenth least affordable place in the U.S. because home prices are high there compared to median income which is how affordability is calculated.

A lot of El Paso resident depend on public jobs with the city, the local school district, nearby Fort Bliss, as well as the tourist industry and agriculture. So, many of these people don't earn much higher than the minimum wage and a third of the homes on the market there are unaffordable to them. Median income in El Paso lower than national average at $41,700.

That's what you need to know right now. I'll be back at this time tomorrow with the most important five minutes about business and the economy.

For a more in-depth discussion of these topics, watch "Your Money," Saturday 1:00 Eastern, Sunday 3:00 Eastern.

From the CNNMoney Newsroom in New York, I'm Ali Velshi with "Your Money."


DON LEMON, ANCHOR, "CNN NEWSROOM": Developing right now in Syria, Damascus international airport is shut down. Flights in and out canceled. Fierce fighting closing off the main road to the airport.

These clashes happening as the country's Internet goes dark and cell phone communication drops out.

The blackout means it's harder to post videos like this one reportedly showing shelling in Aleppo, uploaded earlier today.

In the past, the Syrian government cut off access in major operations, but a nationwide blackout is unprecedented.

All this as a Syrian military jet and two helicopters were shot down by rebels. Takeovers at military bases have given them a new arsenal of heavy weaponry. In this attack they used rockets.

As CNN's Arwa Damon reports, the rebels are claiming this as a major victory.


ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Children on the back of a tractor make off with a sizable tangled lump of metal.

What was all too often the cause of nightmares, now a trophy of war, proudly shown off by Abu Darham (ph).

We want to take these pieces to show them to the other villages, he says. Let them see what happened to these planes.

Everyone we speak to here describes the fear they felt any time they heard a jet overhead. For them, this is the greatest victory.

One man who we spoke to said that he was picking olives, that he saw the plane being hit and that the two pilots ejecting. He says at that point everyone fanned out, looking for them. He and others tell us one pilot was found unconscious with a head injury.

Video posted to YouTube shows a man in military uniform, seemingly unconscious, being carried away. As a man off-camera states, here is the pilot who was shelling the houses of civilians.

Another clip is of him in a makeshift field clinic, head bandaged. A voice says, this is the fate of your pilots, oh, Bashar al Assad.

And this is not an isolated incident. In the same vicinity, close to the city of Darret Azze (ph) in the span of 24 hours, rebels claim they not only brought down this fighter jet, but also two helicopters.

Video posted to YouTube shows a trail of smoke and a helicopter bursting into flames, but there's no way for us to confirm when and where this happened.

These dramatic developments are a result of a pitched battle fought here at the 46th Regiment Base just over a week ago.

For nearly two weeks Hasain Nushuli (ph) tells us they laid siege to the base after clearing the villages around it of Assad's forces and positioning rebel snipers in the area.

The final battle to take this massive base lasted 24 hours. Rebel fighters used artillery they captured from another unit on the base, firing it in to the building and ending the battle.

For this rebel unit, there was a treasure trove of weaponry and, most important of all, anti-aircraft missiles, hundreds of them, though not all functioning, the fighters tell us.

Video posted to YouTube right after the assault took place shows stacks of metal boxes packed with Soviet-era anti-aircraft missiles.

The regime still has the military advantage, thanks to the sheer size of its arsenal, but the balance it seems may have ever so slightly shifted.

Arwa Damon, CNN, Aleppo Province. (END VIDEOTAPE)

LEMON: Thank you, Arwa.

Any minute history expected to be made at the United Nations. Palestinians on the verge of gaining a new status at the U.N., but the U.S. isn't so happy about this one.

We'll take you there live next.


LEMON: The U.N. is voting at this hour on whether to make Palestine a non-member, observer state. Just the latest chapter in the Palestinian effort to become a nation.

CNN's Frederik Pleitgen explains what the new status could mean for peace prospects in the long-troubled region.


FREDERIK PLEITGEN, CNN BERLIN CORRESPONDENT: The final rally before heading to New York, Palestinian President Mahmoud Abbas addressing supporters in Ramallah.

The final decision is to head to the United Nations tomorrow, he says, to enhance the position of Palestine to an observer state in the United Nations and it is the first step to achieve all our national Palestinian rights.

If the Palestinians win a majority in the U.N. General Assembly, the U.N. will recognize Palestine as a non-member observer state like the Vatican, its territory to include the West Bank, Gaza and East Jerusalem.

HANAN ASHRAWI, MEMBER, EXECUTIVE COMMITTEE OF THE PLO: For the world to begin to rectify a grave historical injustice that the Palestinians have undergone beginning with the creation of the state of Israel in 1948.

PLEITGEN: Some observers think Mahmoud Abbas needs the U.N. vote to regain authority among Palestinians.

While the West Bank remained quiet, the Islamist Hamas which controls Gaza exchanged fire with Israel this month, its armed wing shooting hundreds of missiles into Israeli territory during a week of conflict.

While many here believe that going to the U.N. could be a first step to Palestinian statehood, the United States has warned the Palestinian Authority that going to the United Nations could thwart any chances of negotiations for a two-state solution.

Last year, a bid for full statehood at the U.N. ran into U.S. opposition. Israel threatened a strong response should the Palestinians seek full statehood, everything from withholding tax revenues to annexation of land currently occupied by settlements on the table.

MARK REGEV, ISRAELI GOVERNMENT SPOKESMAN: We think this is a mistake. It's political theater.

I mean, the Palestinians can get a piece of paper of the United Nations, but they're not going to get a state. Palestinian statehood can only achieved through negotiations with Israel.

PLEITGEN: But the Palestinians might try to use their new status to bring Israeli leaders in front of the International Criminal Court for war crimes they believe Israel committed in past military operations.

The Palestinian bid for recognition might be a largely symbolic move, but it could all also define the relationship between Israel and the Palestinians.

Fred Pleitgen, CNN, Ramallah.


LEMON: Right straight to the U.N. now and Palestinian president of the national authority, Mahmoud Abbas speaking. Let's listen in.

MAHMOUD ABBAS, PALESTINIAN AUTHORITY PRESIDENT (via translator): .. to live an ordinary life and to live in freedom and peace.

Palestine comes today to the general assembly because it believes in peace and because its people as proven in past days are in desperate need of it.

Palestine comes today to this prestigious international forum representative and protector of international legitimacy, reaffirming our conviction that the international community now stands before the last chance to save the two-state solution.

Palestine comes to you today at a defining moment, regionally and internationally, in order to reaffirm its presence and to try to protect the possibilities and the foundations of a just peace that is deeply hoped for in our region.

Mr. President, ladies and gentlemen, the Israeli aggression against our people in the Gaza Strip has confirmed, once again, the urgent and pressing need to end Israeli occupation and for people to gain their freedom and independence.

This aggression also confirms the Israeli government's adherence to a policy of brute force and war which, in turn, obliges the international community to shoulder its responsibilities towards the Palestinian people and towards peace.

LEMON: OK. That is Mahmoud Abbas speaking now at the U.N.

I want to bring in Elise Labott and, also, Richard Roth, as well. Richard's our senior United Nations correspondent.

Hey, Richard, I would imagine that since Mahmoud Abbas is speaking now, the vote has not taken place.

RICHARD ROTH, CNN SENIOR UNITED NATIONS CORRESPONDENT: The vote's not taken place. There will be some more speeches -- this is the U.N. -- and then the vote will occur and it's widely expected the Palestinians will get this upgraded, enhanced title at the U.N. which brings them closer to full statehood.

It has the word "state" in it, but they don't have all the rights of being a state. It's a bit of a step down to what President Abbas who continues to speak now what he wanted last year, but U.S. opposition stopped that in the security council. So it's a big day, Don.

LEMON: Yeah, it is. You're right, Richard.

Elise, why is the United States against Palestine becoming a non- member observer state?

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: Don, because they feel that it's really not going to get the Palestinians what they want, which is an actual state.

This is, as Richard has been saying, a largely symbolic vote. It doesn't do anything for Palestinian borders, for Palestinian sovereignty.

All of the things that the U.S. says needs to be done at the peace table with Israel.

LEMON: All right. Elise Labott and Richard Roth, thanks to both of you. We'll be right back.


LEMON: Just a reminder of what's happening right now. Palestinians are celebrating what the United Nations is supposed to approve very soon, making Palestine a U.N.-non-member observer state. Live pictures of the U.N. on your screen there.

The upgrade in status would place Palestine at the same level as the Vatican and help Palestine's effort to join the International Criminal Court.

The United States does not approved fearing it would inhibit peace negotiations with Israel. Updates here on CNN as we get them.

In Egypt today, demonstrations in Cairo's Tahrir Square prompted the U.S. to shut down its embassy. It was not under fire, but clashes between protesters and riot police clogged streets around the complex.

This kind of chaos has been going on for days now as demonstrators threaten Egypt's new Islamic president, Mohamed Morsi, with a second revolution.

With all this going on President Morsi is on the cover of "Time" magazine. Last hour I talked with one of the reporters who talked with Morsi in this exclusive interview and I asked Karl Vick why "Time" is calling Morsi the most important man in the Middle East.


KARL VICK, JERUSALEM BUREAU CHIEF, "TIME": One, he's just sort of central to, you know, the sort of new -- what they call a new Sunni axis of influence, these sort of powerful countries that are a counterweight to Iran, emerging -- thinking of Qatar in the Gulf and Turkey, certainly.

And Egypt has just always been -- it's the largest, most populous country, Arab country. It's just always been sort of the anchor and, if you're the president of Egypt, by default you probably should be the most important person in the Middle East.

Right now, the circumstances also are favoring Morsi.

And the other reason is because he holds the sort of future of Egypt in his hands right now and of the revolution with what he does in the coming couple of months.


LEMON: And another new development to tell you about today. Egyptian lawmakers dominated by Islamists are now rushing to draft a new constitution.

This move is seen by some of Morsi's critics as an effort by the Muslim Brotherhood to hijack the constitution and Egypt's budding push for democracy.

There's a slaughter happening along the coast of the United States in the Gulf of Mexico, to be specific. Someone is brutally killing dolphins, those gentle mammals that don't fear man. The area is a major dolphin birthing area putting newborns at risk.

CNN's Ed Lavandera takes us to the Mississippi Gulf Coast. And a warning for you, you may find some of the pictures very disturbing.


ED LAVANDERA, CNN CORRESPONDENT: To reach the crime scenes, you need to catch a ride and take a guide.

This island that we see off to our left, this is Deer Island where you found two of them?


LAVANDERA: A Harrison County Mississippi sheriff's chopper and Moby Solangi, the lead biologist from the Institute for Marine Mammal Studies, they took us to the sites where most of the murdered dolphins have mysteriously emerged on the Mississippi Gulf Coast.

So, Moby, get us up-to-date. How many dolphins have turned up killed so far? SOLANGI: We've been dealing with about six or seven. We know that there's three or four of them that were found dead with bullets. And that the other ones have been mutilated. Some with their tails cut off, jaws cut off or a screwdriver in them.

LAVANDERA: Dr. Solangi performed the necropsies or the autopsies of all the murdered dolphins.

What do you take away from that? What does it tell you?

SOLANGI: I think it's kind of a sick ritual of some sort.

LAVANDERA: So someone kind of getting a thrill out of doing this?

SOLANGI: I can't see any reason other than kind of a horrific act to do something like that. I don't know.

LAVANDERA: The pictures of the mutilated dolphins are disturbing to look at, the bodies clearly show signs of attack, bullet wounds and parts of the dolphins cut off, some too gruesome to show here.

Do you think this is a situation where you have a serial killer of dolphins?

SOLANGI: It looks like we have a deranged person that is out there doing something cruel, repugnant and senseless.

LAVANDERA: Federal investigators say they don't know if the murders are the work of one dolphin-killer or all unrelated.

But even in the wild, it's easy for a killer to lure in dolphins.

Katherine Burton trains dolphins at the Institute for Marine Mammal Studies.

KATHERINE BURTON, MAMMAL TRAINER: They are very curious. And I think by getting fed ...

LAVANDERA: Even out in the wild?

BURTON: Yes, out in the wild. They will get fairly close.

LAVANDERA: So, they can get themselves in a bad situation just unsuspecting.

BURTON: Right. I think sometimes they get close without realizing they're going to be in any kind of danger.

LAVANDERA: That's why it's actually illegal to feed dolphins in the wild.

So this is Ship Island where one of the dolphins was found?

Rusty Pittman is an officer with Mississippi's Department of Marine Resources, one of the agencies patrolling these waters.

RUSTY PITTMAN, MISSISSIPPI DEPARTMENT OF MARINE RESOURCES: I've never seen -- come upon a dolphin that's been shot. That's in 22 years.

LAVANDERA: It seems so much more difficult to investigate something like this. You know, if you have a murder of humans, the crime -- you have evidence. There's a crime scene.

PITTMAN: This you don't have.

LAVANDERA: This crime scene is huge.

PITTMAN: They do -- on the first dolphin that was recovered, they do have the bullet. They did recover the bullet. How much that will help, I don't know.

But like you said, you've got so much area through here. This is totally different than a crime scene involving humans.

LAVANDERA: This part of the Gulf Coast is home to the largest population of dolphins anywhere in the United States, as many as 5,000.

In the next few months, females will move in to give birth and Moby Solangi fears baby calves could be the next victims.

SOLANGI: This is gruesome, really. If it's somebody who is deranged, he's not going to stop.

LAVANDERA: The race is on to catch a dolphin-killer before he strikes again.

Ed Lavandera, CNN, Gulfport, Mississippi.


LEMON: And, Ed Lavandera, let's hope they catch them. Who would want to hurt innocent dolphins? Again, let's hope they catch him.

I'm Don Lemon at CNN Headquarters. I should say at the Time-Warner Center in New York. That is it for me.

In the meantime, I'm going to send it over to "The Situation Room" in Washington, D.C., and my friend, Wolf Blitzer. Wolf, take it away.

WOLF BLITZER, HOST, "THE SITUATION ROOM": Don, thanks very much.