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ANDERSON COOPER 360 DEGREES

Market Meltdown; Another Investigation on TrooperGate; Targeting Sharks for their Fins; Ten Most Wanted Culprits of the Collapse

Aired October 22, 2008 - 23:00   ET

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


ANDERSON COOPER, CNN ANCHOR: Tonight "Breaking News" on financial and political with just 13 days until the Election. A heart-breaking news on the financial front another $700 billion in value gone; a brutal day on Wall Street.
Right now, breaking now, global markets getting hammered; Japan's Nikkei Index down another six percent. Japanese traders right now, reacting to this. Chaotic day on Wall Street; investor driven by weak corporate profits and the possibility they'll sag even more during the holiday shopping season.

That, plus the worst jobs report since the 9/11 attacks driving the DOW industrials nearly 700 points down at one point today, the index closing finally at 514. We're going to have on the financial crisis later and if your job is safe.

But first the breaking political news that we learned tonight Sarah Palin and her husband Todd will both be deposed, questioned under oath this Friday. It's part of the second investigation to the firing of Alaska's top cop. Now the first investigation concluded, Palin had violated the state ethics rule although the firing of the employee was legal.

The second investigation is being conducted by an independent council on behalf of Alaska's personnel board. The results will likely be announced before Election Day.

Candy Crowley joins us for the "Raw Politics" of this "Breaking News" -- Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, this is probably not what John McCain would like to have seen in the last two weeks of this campaign. Nonetheless, as you said, this is the ongoing investigation by yet another board, a non-legislative board if you will, into whether Sarah Palin abused her power when she fired her top public safety official.

He alleges that he was fired because, in fact, she had wanted him to fire a trooper who happened to be her ex-brother-in-law who she said was abusive. So this is an ongoing case, a couple of things to remember.

First of all Palin herself asked for this investigation. When she looked at the legislative investigation which is now wrapped up she said it was all political and she went to the Personnel Board and said I want an investigation of this. Now, the flip side of that is the Personnel Board can recommend punishment. That punishment could be sanctions, it could be a reprimand, it could be a fine.

So there is a risk to that. And as you said, Anderson, the conclusions of this independent investigator will come likely before the election. So yet another distraction of a campaign that really doesn't need one because as we say all of this is happening in the face of one real fact and that is 13 days to go before voting.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Ladies and gentlemen, let's give a big buckeye welcome to the McCain/Palin ticket.

CROWLEY: The Republican ticket campaigned outside Akron, Ohio, blasting Barack Obama's plan to increase taxes on people making over $250,000 and cutting them for everyone else.

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: We finally learned what Senator Obama's economic goal is. As he told Joe the Plumber right here in Ohio, he wants to "spread the wealth around."

Sarah Palin and I will not raise your taxes, my friends. We want you to get wealthy.

CROWLEY: Campaigning in Virginia hoping to break the Republican's 44- year hold on the state, Obama gave as good as he got.

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: Well, let's be clear about who John McCain's fighting for. He's not fighting for Joe the Plumber. He's fighting for Joe the hedge fund manager.

CROWLEY: The economy consumes this race but the two have returned to the dangers beyond U.S. borders, long seen as McCain's strong suit and in these closing days he is playing it.

MCCAIN: And I will not be a President that needs to be tested. I have been tested. I have been tested. Senator Obama hasn't.

CROWLEY: Obama tried to counter McCain's credentials with a muscle flexing photo-op of his national security advisers. To McCain's argument that Obama is untested in a dangerous world the Democratic nominee suggests McCain is outdated in a changed world.

OBAMA: We're not going to defeat terrorist networks that operates in 80 countries through an occupation of Iraq. We're not going to deny the nuclear ambitions of Iran by refusing to pursue direct diplomacy alongside our allies. We're not going secure American people and promote American values with empty bluster.

CROWLEY: The polls nationwide and in the battlegrounds suggest if the election were held today Barack Obama would win. They feel it in the crowds and he feels it, too.

OBAMA: I feel like we've got a righteous wind at our backs. CROWLEY: Still nobody knows better than John McCain that politics can surprise. He returned to New Hampshire this morning, the state that resurrected his primary campaign.

MCCAIN: My friends, I'm asking you to come out one more time, get out to vote; get them out and we'll win.

CROWLEY: Less than two weeks to go and there's always these two men see things differently, for Obama the days are too long, for McCain, they are too short.

(END VIDEOTAPE)

COOPER: Candy, with just 13 days to go at this point I mean, where does McCain see signs of hope?

CROWLEY: Well, listen, because there has been fluctuating in the polls there are those undecided. In some cases it doesn't look as though there are enough undecideds to change in some states because the margin Obama has is that big.

Nonetheless we have seen all along at least up until the time the economy started to implode, you've seen all along that these polls have gone back and forth.

They believe in the McCain campaign that they have gotten traction off Joe the Plumber. They believe in the McCain campaign that his debate performance caused some people to take a second look. So they are watching the polls as closely as anyone. They certainly understand the odds here.

But they do believe and as you know now Pennsylvania a big part, winning Pennsylvania a big part of their strategy and that is a really, really tough go for McCain. Nonetheless they're looking at it. They see reasons to be hopeful. And honestly, that's what politicians do.

They really -- it's not over for them until those polls close across the country.

COOPER: Thirteen days to go anything can happen. Candy thanks very much.

We've just learned on our "Breaking News" that the depositions that Governor Palin and her husband Todd will be giving under oath on Friday are going to take place in St. Louis -- we didn't that just a few moments ago.

More now on the new numbers; the race tightening somewhat in national polls but widening in states that President Bush won four years ago and John McCain needs to survive.

The new CNN poll of polls, showing a seven-point Obama lead nationally; two points closer than just yesterday. It was nine points last night if you remember. But it is those red states as Candy was talking about that really tell the story tonight. So let's look across the board with CNN's John King with the magic map -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Anderson, must win is the term the McCain campaign uses for all five of the states where we have with new battleground polls and yet it is Obama the Democrat leading in the four of the five.

Let's take a closer look, moving from east to west.

We start here in North Carolina. And here are the numbers 51 percent to 47 percent, advantage Obama in North Carolina, which has not gone Democratic for president since Jimmy Carter in 1976.

We'll get rid of this.

Look at the blue areas from four years ago. This is where you have a significant African-American population. It is a boost for Obama in the early voting underway so far, critical if he can keep that state in his column come Election Day. That would be enough to deny McCain the presidency.

So would an Obama win here in Virginia and look at those numbers, not since 1964 has Virginia gone Democrat for president. A ten-point Obama advantage in that state at the moment, Obama is beating McCain two to one up here in the Northern Virginia suburbs. That's where most of the population is in the state. And also nine percent of Virginia Republicans tell us they will vote Democrat for president.

Pollsters say that is an impact among moderate Republicans who in part don't like McCain's choice of Sarah Palin to be vice president. The bright spot for McCain in our new polling here in West Virginia, a nine-point advantage in a blue collar state critical for George W. Bush twice, it looks like that one is looking safe for the Republicans at the moment.

But it won't make a difference if McCain wins West Virginia if he can't win here in Ohio; 50 percent to 46 percent, advantage Obama at the moment. What you find significant when you look inside the Ohio numbers, again, 10 percent of Republicans in the Buckeye State say they plan to vote for the Democrat for president.

One other big significant thing here, Republicans need a cushion in the Cincinnati/Dayton area to offset these blue areas elsewhere in the state. At the moment it is a dead heat between Obama and McCain in Cincinnati/Dayton. If McCain doesn't turn that around it's hard to see him winning in the state of Ohio.

And lastly out in Nevada, a stunning evidence here of the influx of Latino voters; advantage Obama 51 percent to 46 percent statewide. But if you break down the numbers a little bit more closely, and you remember a huge influx of Latinos into the Las Vegas area, 67 percent to 30 percent. 67 percent to 30 percent -- Obama is leading among non-white voters.

An influx of Latinos into Nevada could make the difference in this campaign, Anderson, and you add it all up and you get a map that at the moment is significantly in Obama's favor.

COOPER: All right, John King thanks.

We're talking politics online at AC360.com. I'm about to join the conversation myself. Check out Erica Hill's live web cast during the break as well.

Up next, the latest developments involving Sarah Palin's medical records. Sounded like she agreed to release them today but is that really what she said to NBC's Brian Williams? We'll play you the clip. Try to figure it out together.

Our political panel joins us on that and a whole lot more.

Also, John McCain talking to Wolf Blitzer about Colin Powell endorsement and Powell's critique of Sarah Palin.

And we add another name to our "Ten Most Wanted List: The Culprits of the Financial Collapse." This guy made millions and just cost you even more. Find out who he is and what he did, tonight.

(COMMERCIAL BREAK)

COOPER: McCain/Palin ticket today, Akron, Ohio still getting mileage from Ohio's unlicensed Plumber in Chief, Samuel Joe Wurzelbacher; otherwise known as Joe the Plumber.

"Digging Deeper" now is "Time" magazines Joe Klein, who's got an exclusive and eye-opening interview with Barack Obama in the next week's edition -- it is on the newsstands this Friday; also CNN senior political analyst, David Gergen and CNN political contributor Tara Wall of the "Washington Times." She supports John McCain.

David, what do you make of this news that Sarah and Todd Palin are going to be giving depositions in this trooper investigation on Friday, in St. Louis? It's certainly the last thing I guess the campaign wants to be talking about today.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Absolutely. It's one more diversion of a campaign that desperately needs to have a consistent message about the economy day after day.

And Sarah Palin now has gone from being a strong plus to a growing liability for John McCain as he seeks Independents and Democrats to come over. She's still very strong with the base but not beyond that.

That new NBC/"Wall Street Journal" poll we talked about last night Anderson, back in September they had Sarah Palin 47 percent positive by the public, 27 percent negative. Today it's 47 percent negative, 38 percent positive.

She's had a real reversal here over the last several weeks. And I have this kind -- I don't think this deposition -- I think the deposition may help to clear her but you just don't want this kind of distractions toward the end of the campaign. COOPER: Yes, Tara, that poll that David was talking about it says and I quote, that "Palin appears to be a continuing if not an increasing drag on the GOP ticket." And as David said, 49 percent of voters have an unfavorable opinion about her.

At this point, does the McCain campaign do something to kind of counteract that? Or the time is nearly up.

TARA WALL, CNN POLITICAL CONTRIBUTOR: Yes, well, one correction Anderson. I have not come out to support any candidate.

COOPER: I'm sorry about that.

WALL: Yes, but I will say that -- listen, they need to keep doing what they're doing in a sense it is. She has been a drag in many ways. I think actually, the parodies that Tina Fey has done on her probably have hurt more than helped. In some ways it's given folks a different kind of perception of her and questioned her abilities. And of course, the Katie Couric interviews.

But I think what she's doing now, going out, doing interviews with McCain on the trail, on the stump can probably help a little bit but in the long run I think most Americans are paying attention to what matters. And that is the economy. That is the issues. National security, foreign policy, things of those natures issues like that as opposed to how likable or unlikable Sarah Palin is. The candidates are what matter at the top of the ticket.

COOPER: Joe, has she -- especially toward undecided and Independent voters has she been a drag?

JOE KLEIN, TIME COLUMNIST: Yes. I think so. And it's kind of an embarrassment today. I mean, today's embarrassment was the fact that she's spent $150,000 on clothes in the month of September.

COOPER: Luckily she didn't spend the money.

KLEIN: The Republicans did.

COOPER: Right.

KLEIN: But also today in the NBC interview she was asked what a precondition was in a negotiation and she couldn't really answer. A precondition is a demand that you make of the other party going in just as we're demanding of Iran that they stop, you know, making nuclear fuel.

She didn't know that and every time she's asked a question she doesn't know it I think that more and more votes drift away.

COOPER: Tara if it -- I'm sorry go ahead.

WALL: I just wish they would also ask these same questions about the inexperience particularly of foreign policy when it comes to Barack Obama. She's not being held, number one, to the same standard and she is again the number two on the ticket. I mean let's get real here. I don't think that we've heard the same type of aggressive questions about the lack of experience from Barack Obama who essentially was in the senate 143 days before he launched his campaign.

So in all fairness, actually, to be fair, the Pew Center just issued a report out today that actually showed how much coverage these candidates were getting. The good news is they're both getting coverage equally. The bad news for the McCain campaign is that it seems that he's getting the brunt of the negative coverage.

So I think that if the scales were balanced a little bit more here and we're asking those same tough questions of the top candidate, of the other candidate who also is lacking in experience if you will in many minds I think that we would have a real conversation here.

KLEIN: I just completed an interview with Obama and most of it was about foreign policy. And he's been pretty strong on that, I mean the status of forces agreement in Iraq now, pretty much conforms to the withdrawal plan that he wanted to see.

He and I talked about Afghanistan and he is really keeping up, in fact, he and General Petraeus have come to the same conclusion that we should be negotiating with the Taliban, that we should be trying to do what some of the Southern Pashtun tribes in Afghanistan, what we did with the Sunnis in Iraq, which is an awakening program to pry some of the tribes away from the bad guys. He keeps up with this stuff. He's been on top of it; I was kind of surprised by how much he knew.

COOPER: You don't think he has been let off the hook.

KLEIN: No, I don't think he was if --

WALL: Well, maybe Joe didn't let him off the hook. But I would love to hear more of that, see more of that you know across --

KLEIN: It is in "Time" magazine this week Tara and you can read it.

WALL: No, in addition to your magazine. Though I mean, I would love to see Katie Courics and the Charles Gibsons and all the others that are doing these interviews and scrutinizing her every word do the same with Barack Obama.

Because, again, when he was in Israel on his European tour there were some moments there that I saw that he really did come up short. And it's still there, again, there are many questions in Americans' minds about just where he is on foreign policy.

COOPER: OK, I got it. We're going to have more from Tara and David Gergen and Joe Klein coming up.

Up next, John McCain in "The Situation Room" reacting to Colin Powell's Obama endorsement and statement that Sarah Palin is not ready for the job.

Later, a lot of attention given today to Governor Palin's swanky wardrobe, Joe Klein just mentioned it -- $150,000 in clothing and makeup at Saks and Neiman Marcus. Unusual and no doubt; anything about that inappropriate? We're "Keeping them Honest" ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: It's great to be here in Pennsylvania. We need to win in Pennsylvania on November 4th. And with your help, with your help we're going to win and we're going to bring real change to Washington, D.C.

(END VIDEO CLIP)

COOPER: John McCain in Pennsylvania; his campaign now pinning big hopes on turning it red, though the polling numbers show it turning blue. The latest CNN poll of polls of Pennsylvania showing Obama ahead with a 13-point lead.

Senator McCain spoke today at length in the "Situation Room" with CNN's Wolf Blitzer. They talked in particular about Colin Powell's endorsement of Obama and his critique of Sarah Palin and McCain's temperament. Let's take a look.

(BEGIN VIDEO CLIP)

WOLF BLITZER, CNN "SITUATION ROOM" ANCHOR: His criticism was that you were going back and forth on some of the specific issues. And he didn't like that. He thought that Senator Obama had a consistency in his approach.

MCCAIN: All I can do is laugh. We've been very consistent about cutting spending and cutting taxes and the fundamentals of our economic message. Senator Obama's been all over the place including wanting to "raise taxes on only the rich." 95 percent tax cut for 95 percent of Americans when 40 percent of them pay no federal income taxes as it is.

Whatever it is he's changed, look at the positions that he held on tax increases when he was first running in the primary and look at them now. They're vastly different. And the fundamental difference and maybe Secretary Powell agrees with him, I don't know, but to spread the wealth around is certainly not something I would ever do.

BLITZER: Do you think -- if you are elected President of the United States do you believe America's enemies whether terrorists or hostile governments would test you during the first six months of your presidency?

MCCAIN: I've already been tested. And I'm astonished and amazed to hear Senator Obama -- Senator Biden predict that the untried, untested President Obama will be tested by our enemies and we may not agree or his own backers may not agree.

Look, I've been tested. Senator Biden referred to the Cuban missile crisis. I was there. We came that close, as historians say, to a nuclear exchange. And Senator Biden expects his own running mate, expects Senator Obama to be tested in that way? And that's a remarkable statement.

That should concern all Americans.

BLITZER: In earlier administrations, they are tested early on by hostile powers out there.

MCCAIN: They know I've been tested. They know I've been tested. I've been tested many times.

BLITZER: I was reminded walking and then coming here in Manchester, June of 2007, I moderated one of the early Republican debates. You were up on the stage.

MCCAIN: You did a great job.

BLITZER: I don't know about that. And there were eight or ten of you Republican candidates. And at that point it didn't look very good if you remember for John McCain. Your poll numbers were not very good. There were some formidable challengers.

MCCAIN: They were in the tank.

BLITZER: But you came back.

We only have a few days left to go right now. Can you come back from what the polls are saying and be elected on November 4th?

MCCAIN: Sure, Wolf. And we will. And we are moving up rather significantly. But I think we'll be up late. It's going to a tough race. But we're working hard and I'm confident of victory.

(END VIDEO CLIP)

COOPER: Well, more politics ahead.

The price tag for Governor Palin's wardrobe has raised a lot of eyebrows, $150,000, a lot of money for clothes but were any campaign or party rules actually violated? We're "Keeping them Honest."

And new worries tonight after today's market meltdown; why it happened and what may happen tomorrow.

And we're going to add another name to our "Ten Most Wanted List: The Culprits of the Collapse." You need to know who these folks are and how much they have cost you. Find out who joins the list tonight.

(COMMERCIAL BREAK)

COOPER: Back to the "Breaking News" on the economy, today the DOW plunging 514 points, $700 billion in stock value lost on Wall Street. And right now, the Asia Pacific Markets are taking a beating. Japan's Nikkei is down more than five percents, China's Hang Seng down about the same.

There's more new report here in the United States, that shows massive layoffs last month soaring to their highest level since 9/11.

"Your Money, Your Vote." So is your job safe? Well, CNN senior business correspondent, Ali Velshi has some new important information for us all tonight and he joins us now.

Ali the DOW closed more than 500 points down. What happened?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: All right, there are a few things that play here. And I'm going to tell you about them. But first, let me take you for a tour of what happened on this market.

Take a look at that DOW, same thing that has been happening for weeks, in that last hour a major plunge, a little ray of hope by the way you see it tick up back around that 8,500 number. We're still trying to find a bottom on this market; more on that in a bit. There are really three basic reasons why this market went down today.

Now, one of them is that we're in earnings season. And that might sound boring but like your kids' report cards, four times a year America's companies give you a rundown of how they did and it doesn't look great.

The second thing that we're looking at is jobs. And let me show you what we're talking about in jobs. You just mentioned the layoffs in September, the highest number of mass layoffs since September of 2001. Mass layoffs mean more than 50 layoffs at a single company; we've seen lots of those.

This is what the year looks like; these are the monthly job losses that we've seen all year culminating in September, which is the last month that we have numbers for, down $159,000. You add all of this up, we have lost more that three quarters of a million jobs this year alone.

Our next jobs report won't come out until November 7th after the Election. Now what we should be doing according to economists is we should be having 100,000 to 150,000 jobs increase every month. Instead we're seeing these losses so we should be up 900 to 1.3 million; we're down 750,000.

Quite simply, Anderson. That means those are people who don't have an income, who are not paying taxes and giving the government revenue. They might even be taking money, because they are getting unemployment benefits. That does not help this economic recovery.

So, the market, you will get used to seeing this up and down for the next few months, but the jobs are really the main issue here -- Anderson.

COOPER: Any idea, I mean, what may happen tomorrow with the stock market? I mean, no one obviously knows, but, I mean, is this -- are we near a bottom? Do we know?

VELSHI: Well, when you -- when you have a bottom, sometimes, it takes a long time to formulate. And you can sometimes hang around in that bottom. I have been looking at charts of previous crashes in the markets and the recovery. They could take six to seven months, depending on how that goes. In that six to seven months, the bottom trades in a range. So, you could see big swings up and down. There are people who are buying stocks because they think they are good values and there are people who are trying to get out of this market.

So, every time there's a lot of buyers, and the market goes up, you then see a lot of sellers trying to get out of their positions. This is the kind of volatility you see when you're setting up a bottom.

But, typically, Anderson, in the months following a bottom, once you start establishing that, you can do very well in the market, if you stay invested.

COOPER: All right. Ali Velshi, we will be watching tomorrow. Thanks very much.

Coming up on 360: Sarah Palin's six-figure wardrobe and -- wardrobe and makeover, compliments of the RNC. Will the price tag hurt her image as a hockey mom? We're "Keeping Them Honest."

First, though, Erica Hill joins us with a 360 news and business bulletin -- Erica.

ERICA HILL, CNN CORRESPONDENT: Anderson, jury deliberations began today in the corruption trial of Senator Ted Stevens. The Alaska Republican is charged with seven felony counts of making false financial disclosures about home renovations worth a $250 million. Prosecutors say the renovations were gifts from oil industry executives and should have been reported.

We now know just how bad things were when Wells Fargo stepped in to buy Wachovia earlier this month. In its quarterly report released today, Wachovia posted a loss of nearly $24 billion. That is the largest ever for a bank.

And, Anderson, an update on a place I know you have reported on and from, Niger -- "Doctors without Borders" now urging authorities there to allow the group to immediately resume its feeding programs. The government, some authorities there, had suspended the work of "Doctors without Borders" three months ago.

But now the humanitarian organization is saying that the existing health care staff in the country cannot meet the demand and is worried that thousands of children are at risk of illness and death -- Anderson.

COOPER: It is unbelievable that the country of Niger would throw -- would stop "Doctors without Borders" from being able to operate. This is a Nobel Prize-winning group who have saved...

HILL: It blows your mind.

COOPER: ... tens of thousands of lives in that country over the last several years. I mean, we have been documenting this for the last two years. It's -- it's just -- it is unconscionable. It's incredible. Hard to believe. We'll continue to follow that.

On a lighter note, here's tonight's "Beat 360" photo, Governor Sarah Palin speaking at the University of Finley in Ohio today.

Here's the caption from our staff winner, Cate: "I just want to give a shout-out to Giorgio the Designer, who whipped up this little number for me."

Two victories in a row for Cate, we should point out. Think you can do better? Go to AC360.com. Click on the "Beat 360" link and send us your entry. We'll give the winner a "Beat 360" T-shirt.

Up next, targeting sharks for their fins. We take you along in our "Planet in Peril" investigation when "360" continues.

(COMMERCIAL BREAK)

COOPER: Seventy million; that is how many sharks conservationists think are being taken from oceans each year, mostly for fins that end up in soup. The fishing is mostly unregulated and scientists think completely unsustainable.

Ninety percent of some shark species have been lost. It has set up a battle between the highly lucrative shark fin trade and conservationists trying to save the animals.

For our "Planet in Peril: Battle Lines" investigation, Lisa Ling went 200 miles by boat off the coast of Costa Rica to investigate.

(BEGIN VIDEOTAPE)

LISA LING, "PLANET IN PERIL" SPECIAL CORRESPONDENT: I'm Lisa Ling and we're here at Coco's island which is about 330 miles off the Pacific Coast of Costa Rica. The only way to get here is by boat and it took about 30 hours. And despite the fact that I turned green and lost my lunch a couple of times we made it here safely.

But it was really surreal. As soon as we arrived it was dark and we spotted buoys out in the ocean. And some of the guys from Wild Aid which is the conservation group that's been helping started to pull in the fishing lines.

On that line were nine sharks, four of which were still alive, that they then released.

UNIDENTIFIED MALE: Let's save the shark.

UNIDENTIFIED MALE: I'm going to. Give me the keys please. There we go.

LING: The reason why we came here is because this area is totally under attack by fishermen who are looking for sharks. There is a huge demand for shark fin soup that it has been just really destroying the shark population here. And often they will saw off the fins and throw the bodies back into the ocean because they can't store the bodies on the boats.

And it has been a very eye opening experience for me because sometimes these fishermen they throw in lines that go miles and miles long and have hundreds of hooks. And imagine how many fish they are able to catch with those lines.

This is all going to be part of our "Planet in Peril" investigation that's going to be airing in December. So check it out.

(END VIDEOTAPE)

COOPER: "Planet in Peril: Battle Lines" airs December 11th to be exact. I hope you join us for that.

Up next, the big sharks linked to the market meltdown on Wall Street. We're naming another person to our "Ten Most Wanted List: The Culprits of the Collapse." Here's a hint. This guy we're adding tonight is linked to the mortgage mess.

This is "360." Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), VICE-PRESIDENTIAL NOMINEE: We believe that the best of America is not all gathered in Washington, D.C. It is here. It is in the kindness and the goodness and the courage of everyday, hard-working American people.

(END VIDEO CLIP)

COOPER: Governor Sarah Palin on the trail today in Finley, Ohio.

This weekend Colin Powell talked about Senator Palin -- Sarah Palin's earlier campaign comments when he told Tom Brokaw that McCain's choice of running mate called his judgment into question.

Today, in an interview with Wolf Blitzer, McCain responded. Take a look.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL NOMINEE: I respect General Powell, but I respectfully disagree. I especially disagree when he said the comments that he made about Governor Palin, the most popular Governor in America. Governor knows energy issues, $40 billion pipeline, reformer, took on the Governor of her own party.

And I hope at some time General Powell will take time out of his busy schedule to meet with her. I know she will be pleased to meet with him.

(END VIDEO CLIP) COOPER: All right.

Joining me for a "Strategy Session:" Joe Klein of "TIME" magazine; CNN senior political analyst and former presidential adviser, David Gergen; and Tara Wall of the "Washington Times."

David, in an interview with NBC tonight, Palin was asked if she would release her medical records. I just want to play her response for our viewers.

(BEGIN VIDEO CLIP)

PALIN: The medical records, so be it. If that -- if that will allow some curiosity seekers, perhaps, to have one more thing that they can either check the box off, that they can find something to criticize perhaps or find something to rest them assured over. Fine.

I'm healthy. I'm happy. Had five kids. That's going to be in the medical records. Never been seriously ill or hurt. And you'll see that in the medical records if they're released.

(END VIDEO CLIP)

COOPER: It seemed like in the beginning that she would release them, and at the end, she said, "if they're released." I'm not sure if there's really any significance in that. But it does just sort of invite, I guess, more scrutiny. But if she doesn't release them, then she's the only one who hasn't. Or release some form of medical records.

DAVID GERGEN, CNN POLITICAL ANALYST: You know, Anderson, on Friday when she takes the deposition or releases her records, get all this out of the way and get the campaign back to the economy and the focus back on John McCain.

I do not think it's helpful, at all, for the Republicans to have these continuing stories about Sarah Palin. She's energized the base, as Bay Buchanan has told us on several occasions. She needs now to get off television, basically, national television and keep the focus on her running mate, who is a leading running mate, and on the economy.

This is not over. I'm here in Pennsylvania, Anderson, and I can tell you that folks here have been telling me here in Philadelphia, the Democrats, that while Barack Obama has a ten- or 11-point lead in the polls, there is a widespread feeling that it's much closer than that. And it's going to be very close on Election Day.

And Governor Rendell very much wants Barack Obama to come back here to campaign. So this is not over, but if they get into all these continuing distractions, I don't see how the Republicans have, you know, much that they're fighting with.

COOPER: Joe, if the polls are so far apart how, then, are people saying on the ground that it's going to be closer?

JOE KLEIN, "TIME" MAGAZINE: There are reports that even Obama's private polls have Pennsylvania closer than the public polls. I don't know how that works.

But I do know that -- I think that David is absolutely right. I mean, remember, once again, the stock market went down another 500 points today. This is an absolutely crucial issue. That what Ali Velshi was just showing about the numbers of layoffs in this country, you know, in this year, as opposed to any other, we should be talking about that stuff, not about her medical. I don't care about her medical records.

COOPER: Tara, though, I mean, is -- can -- if McCain is only talking about the economy, I mean, is that enough? Or does he -- we've had other people on the program who say, look, he has to attack the character of Barack Obama to sow doubts in people's minds.

TARA WALLS, "WASHINGTON TIMES": Well, there's going to be a question about saying someone's character as opposed to someone's judgment. I think there's a distinct difference. You go after someone's judgment as opposed to character.

I think that's not the only thing. I mean, the negativity, I think, has probably turned off some independent voters. He has to widen the scope, though. I mean, of course, the economy matters to most American. But we're also seeing in some of these polling -- these polls are back and forth all over the place. Even today the AP poll out showed Barack Obama with just a one percentage point lead over McCain.

So I think you're going to see a tightening up in some spots. I think that, when you look at the issues, when you poll individuals about what they're concerned about, you know, they are still -- they still believe that McCain, the majority that McCain leads on national security issues, that he is more presidential.

So I think issues like that, issues that matter beyond just the scope of the economy, are those things that he's got to continue to hit home on. When he showed -- when he talked about inexperience and readiness to lead and those kinds of things, I think those resonate not just with the base but even some of those independents and undecided that are still on the fence.

GERGEN: Anderson, I do think you have to say for Barack Obama today, two things. One is a lot of these polls do show that he has erased most of John McCain's lead on national security. I think the debates have -- he helped himself a great deal with that and with the Colin Powell endorsement.

But the other thing I thought he did today, which was smart, was to call in those national security advisers. The last two days he has surrounded himself with some really strong, reliable people that the country would say, you know, if he gets elected, those kind of people are going to be around him. He's going to be a much -- the government is going to be in good hands; always a pivotal question for a president.

So you know, while McCain is struggling, I have to say Obama is managing to look increasingly presidential. I don't know what Joe Klein thinks about that. KLEIN: Two points from the interview I did with him. No. 1, he endorses David Petraeus at CentCom. He wants Petraeus to continue on there and says he's been doing a good job.

On the economy he said something really, really interesting and kind of candid. He said that we've been living on easy credit for the last 20 years. That's been the turbo charger of this economy, but it's not going to be the turbo charger in the future.

We're going to have to find something else to drive us. And he said to me, "My No. 1 priority would be to create an alternative energy economy, a green economy." He's never been so clear on that before.

COOPER: And that interview is going to be in "TIME" magazine this Friday.

KLEIN: It's in "TIME" magazine on Friday. Yes.

COOPER: All right. That's what we call a plug. Joe Klein, thanks very much.

David Gergen, thanks. Tara Walls, as well.

KLEIN: Appreciate your support.

COOPER: Up next, we're adding another name to our "Ten Most Wanted List, the Culprits of the Collapse." Every time we hear these, you can't believe what these guys have done; an executive with ties to the mortgage meltdown.

And at the top of the hour, the battle -- the battleground showdown, Obama gaining some momentum in some key states. But as we've just been talking about, the race may be a lot tighter than some people think. "Raw Politics" when 360 continues.

(COMMERCIAL BREAK)

COOPER: That's our "Ten Most Wanted List, The Culprits of the Collapse," big shots who helped create the crisis that knocked thousands of points off the Dow and put everyone's finances in jeopardy.

As you know, the Dow lost 500 today, and Asian markets continue to fall as we speak. That's the breaking news.

You'll probably notice not too many of the culprits are stepping up to shoulder their share of the blame. They're kind of pointing fingers at other people, usually in different parties. We think that's wrong.

So tonight we're adding a ninth name to our list. It's Franklin Raines, the former CEO of Fannie Mae, the government-backed corporation that bought up mortgages, including subprime mortgages, and sold them to investors.

Here is 360's Tom Foreman.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: In the glory days of the housing boom, Fannie Mae and Freddie Mac were dream weavers: government- backed businesses that helped get loans to people with low or moderate income. Political leaders from both parties were pushing Fannie and Freddie to expand their efforts and hailing success.

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: The lowest unemployment rate in 30 years and the highest home ownership ever.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Home ownership is the highest rate ever.

FOREMAN: Then, in 2003 and '04, worrisome reports. At Freddie Mac, massive accounting problems and, soon after, government regulators said Fannie Mae had been cooking the books, too.

Fannie's CEO was Franklin Raines, a respected and accomplished former budget director for Bill Clinton.

FRANKLIN RAINES, FORMER CEO, FANNIE MAE: This is a very serious allegation, and I deny that that occurred.

FOREMAN: Oh, but it had, regulators said. As the mortgage business had flooded with high-risk loans, many handled by Fannie and Freddie, Fannie's accountants had failed to appreciate the danger of market instability to their bottom line.

Worse, the report said they hid problems, because Fannie's executives did not want to lose huge personal pay bonuses. Raines' compensation was worth about $20 million a year, with taxpayers potentially on the hook if it all went bad. Libertarian activist Fred Smith had warned Congress years earlier, but when everyone was making money, he says, no one wanted to listen including Frank Raines.

FRED SMITH, COMPETITIVE ENTERPRISE INSTITUTE: If everyone around you says, "It would be stupid to blow the whistle now. Everything's going well," I could be wrong. How am I to say that this is really stupid?

FOREMAN: Then you're not going to blow the whistle?

SMITH: I'm not going to blow the whistle.

We saw that with Enron. We saw that in the S&L crisis in the '80s. Honorable people acting in ways that just don't appear honorable, because around them the whole context was are you out of your mind? How could this be wrong?

FOREMAN: At the time, Raines said he did not believe the regulators.

RAINES: We found no facts that would support the allegation that's included in the report.

FOREMAN: But once the Securities and Exchange Commission backed up the regulator's report, Franklin Raines resigned. Raines sent us a statement today, saying, "I left Fannie Mae in 2004, and both Fannie Mae and its regulator have stated that the company's current financial problems are the result of mortgages purchased years after my departure."

But because Fannie was already getting into trouble under his watch, Franklin Raines now has a place among our "Ten Most Wanted Culprits of the Collapse" -- Anderson.

(END VIDEOTAPE)

COOPER: All right. Tom, thanks.

Let's make it official. Franklin Raines, the former CEO of Fannie Mae, joins our "Ten Most Wanted List." We began with Joe Cassano from AIG; then Richard Fuld from Lehman Brothers; Chris Cox from the SEC; Phil Gramm of Texas; Alan Greenspan; Ian McCarthy, CEO and president of Beazer Homes USA; Angelo Mozilo, the guy -- the founder of Countrywide Financial; and James Cayne, former CEO of Bear Stearns. There they are, the "Culprits of the Collapse." We'll add another name tomorrow.

(COMMERCIAL BREAK)

COOPER: Time now for our "Beat 360" winners, our daily challenge to viewers. I'm still laughing from Erica Hill's Web cast during the break.

HILL: I'm glad you enjoyed it. I'm dancing because it is cold.

COOPER: It is cold. I like it icy.

So we know what "Beat 360" is. It's a challenge to viewers to come up with a caption better than the one our staff can come up with.

HILL: Yada, yada.

COOPER: Here's the photo of Governor Palin, speaking at the University of Finley in Ohio today. Cate, our staff winner: "I just want to give a shout-out to Giorgio the Designer who whipped up this little number for me."

Our viewer winner is Sean from Charleston, South Carolina. His caption: "When it comes to my wardrobe the other candidates 'Palin' comparison."

Thank you.

HILL: Oh, I like it. Try the veal.

COOPER: Exactly. Stop the punishment.

Sean, your "Beat 360" T-shirt is on the way. You can check out all the entries on AC360.com. Congratulations.

Time for "The Shot." Barack Obama took a time-out from his campaign, not a time-out, but took time out from his campaign trail.

HILL: He's on a time-out.

COOPER: That's right. To boogie for Ellen DeGeneres today; the talk show host and her audience watched as Obama -- well, take a look what he did.

(BEGIN VIDEO CLIP)

ELLEN DEGENERES, TALK SHOW HOST: Let's talk about dancing. Michelle was on the show, and she was talking some smack about your moves. You have 20...

SEN. BARACK OBAMA (D), PRESIDENTIAL NOMINEE: I noticed that.

DEGENERES: Yes. You have 20 seconds to respond to this clip.

(END VIDEO CLIP)

HILL: A little better. I don't really know.

COOPER: I give him props for doing that. I've had people try to get me to dance on television. Let's listen in.

(BEGIN VIDEO CLIP)

OBAMA: Let me tell you that Michelle may be a better dancer than me, but I'm convinced I'm a better dancer than John McCain.

(END VIDEO CLIP)

COOPER: There you go.

HILL: I have a quick question for you.

COOPER: Yes.

HILL: You've been on Ellen's show. Haven't you?

COOPER: I have. Yes.

HILL: And so you didn't dance?

COOPER: I didn't dance. Yes. I...

HILL: Did she give you a hard time about it?

COOPER: She didn't say anything about it, but I've never been back. So maybe there you go.

HILL: Well, there may be a reason for that, Anderson.

COOPER: I just can't bring myself to do it. I don't know. No.

Sure. Do we have the video of the crew? The crew dances.

HILL: Sure.

(VIDEO CLIP OF "360" CREW DANCING)

HILL: Yes. There we go.

Whoa.

COOPER: Yes. He recovered.

HILL: This doesn't ever get old, I love it.

COOPER: I know. I can watch this over and over again. It's always good. What I like about it is I always notice -- I always notice new little things in it, you know. Like little things I didn't notice before. It's the gift that keeps giving.

HILL: It really is.

COOPER: There we go. Oh.

All right. Now a special programming note; we are teaming up with MTV, saluting veterans home from Iraq and Afghanistan and those still serving. Friday night at 8 p.m. Eastern; "A Night for Vets," an MTV concert for the Brave, that's on MTV.

Then this Saturday and Sunday at 8 p.m. Eastern, don't miss a 360 special, "Back from the Battle." We're going to bring you the stories of the brave men and women who are back on the home front, sharing what their lives are like now. I hope you join us for that.

That does it for this edition of "360." Thanks for watching.

"LARRY KING" starts right now.