katrina swirled around in the gulf of mexico and it passed over florida. was gaining strength on the way toward the coast. it thought louisiana was in its landfall. or everyone seemed to. mississippi, instead, took the hit. when days nearly 2,000 people would be dead, desperate survivors clinging to rooftops or looking for food and water. 80 percent of new orleans would be submerged. millions of people would lived and worked in katrina's path would find their world torn apart. in the first days after it hit there was in relief in the hardest hit areas but cameras, and writers and reporters to she the world what was happening documenting history. fox was broadcasting from new orleans and across the gulf south. tonight, the organizers here at the museum are opening a one year exhibit on hurricane katrina, a 250,000 foot museum of the news, and officials say on the web site it blends five centuries of news history with up to the second technology, and exhibits and office a unique environment that takes you behind the scenes to experience how and why the news is made. the new exhibit is called "covering katrina," exploring and explaining how journalists reported open the disaster and the aftermath. that is what we are doing here today for the several days with live reports from the gulf south seeing what has become of the area and its people. after five very difficult years. in the hour ahead the fox report chief's correspondent reports from mississippi and we explore the aftermath of extra contain. but, first, police have arrested three suspects in connection with what they call "a major homegrown terror plot," and one appeared on a canadian virtion of "american idol." this was in the capital of canada of ottawa 50 miles north of new york state. they seized training videos and instructions only building bombs but they say one of the suspects also appears to have been helping militants in afghanistan. >> parts of the decision to make the arrest at this time was to prevents of purchase of weapons, which would, in turn, be used against coalition forces and our troops. >>shepard: two suspects have appeared in court but more arrests could be coming. and now with more on the case. these guy had, well, serious hardware. >>reporter: we had a news conference a couple of hours ago and we learned three were arrested and in the process, there were, really, two components to this plot. one was to raise money to help extremists in afghanistan to buy weapons and to launch attacks. the second was to launch possible strikes inside of canada. and in the process of the investigation, they found that the individuals collected components for explosive devices. and now the news conference from early today. >> the individuals targeted were in possession of videos, drawings, instructions, books, and electrical components designed specifically for the construction of improvised devices. >>reporter: we had a sense of the news conference today that there was a fairly significant scale involved because there were 50 circuit boards recovered that were specifically designed to detonate i.e.d.'s with the use of cell phones. >>shepard: this was on the canadian version of "american idol." >>reporter: this case is very serious to say the least. he is identified as a man who appeared on the (p'adian version of "american idol," and offered to sing a couple of songs one which is an arab song and he sings this song and what he tells the judges is he is from pakistan and he came to canada when the last couple of years but what we learned in the news conference today he has been in canada for longer than that. >>shepard: any u.s. ties? >>reporter: the state department told us that they do not see any evidence of a u.s. tie. the u.s. has not been asked for help in the case. but it was significant at the news conference that iran, afghanistan, and pakistan were identified as countries with people involved in the case so there are international dimensions and the question is, are these the equivalent of people who lived leader and traveled overseas for training, to come back and launch attacks in their home country. >>shepard: a lot to learn so far. >>reporter: yes. shpd fox news confirms millions of eggs connected to the massive salmonella recall will make it to kitchens across country. two iowa egg producers have recalled more than half billion eggs because of bacteria, and government officials say the bacteria has made more than 1,000 people sick. so far. but the iowa farms say this is no reason to stop using eggs from the hens responsible. workers will pasturize millions of eggs to get rid of the bacteria and cell them as liquid eggs or add them to other foods. congress would like to talk to the owners of the farms who are at the center of the recall. steve brown with the news live from chicago newsroom. who are the owners? what does congress want to know? >>reporter: the owners own the wright county farm, and then this is another owner of another farm and congress want dozen know more about their egg-producing operations and whether or not their practices could have left them susceptible to the outbreak. this hearing before a house of representatives, the energy and commerce subcommittee will be taking place in september and both owners have been invited, not necessarily subpoenaed. >>shepard: what is the status of the investigation into how this got started? >>reporter: well, it looks like it started with feed there is a conference call with cdc and fdc and many reporters and indications are that the same signature, or same strain, if you will, of bacteria was found not only in eggs from these farms but also in their feed. so the suggestion was that the tainted feed led to the chickens being, rather, consuming it and the tainted eggs followed. that is the suggested perhaps, method as to how the eggs became tainted but the cdc and f.d.a. are investigating. >>shepard: we hear one congressman wants consumers to know which foods are being made the once tainted eggs but it is not clear why that matters pause they are not tainted anymore. >>reporter: there could be overly cautious people who would like to know if they are eating eggs part of the recall. and the house of representatives energy and commerce committee believes consumers should have access and they should be fully informed on what foods are made with contaminated eggs that have been pasturized. and he said the consume should be told that the foods made with the once contaminated and now pasturized believed safe eggs shut be tested and provennen safe so the consumers can better know about that. that is a huge suggestion. because we don't exactly know where the eggs went. >>shepard: that would be expensive process, too. steve brown, good to see you. we have a new warning from the taliban hinting they may launch attacks against foreign aide,"s who are there to help the victims of the devastating floods across pakistan. reaction from the pentagon ahead and a live look at mississippi, an area hard hit by katrina but there are so many stories of hope and our chief correspondent is live on the survival of a is live on the survival of a landmark. i got into one of the best schools in t country! [ both screaming ] i got into one of the most expensive schools in the country! [ male announcer ] when stress gives you heartburn with headache. alka-seltz gives you relief fast. [ low male ] plop, plop. [ high male ] fizz, fizz. thanks. i got the idearom general mills big g cereals. they put a white check on the top of every box to let people know that their cereals have healthy whole grain, and they're the right choice... (announcer) general mills make getting whole grain an easy choice. just look for the white check. >>shepard: as the newseum in theed with at the opening of a new exhibit on the media coverage of hurricane katrina five years after. the public school system in new orleans is ready to get the help promised from the federal government. and the louisiana senator landrieu announcing this week that the federal emergency management agency will soon hand over a lump sum payment of about $2 billion. officials say that money is to be used for repairing and rebuilding the schools. in other places, recovering from the damage has been a matter of determination. and maybe a bit of stubbornness. the fox report has our chief correspondent on the biloxi coast with an example. >>reporter: there is a restaurant here called mary mahoney's been here for decade part of the fabric of the city. like biloxi, the restaurant has come a very long way since the fateful day when the wind whipped waters of the gulf came crashing through the second-store window. >> it felt like five linebackers hitting me at once. >>reporter: he felt the full force of hurricane katrina. >> it knocked me back about 15' with cuts all over me. reporter roar the damage was all too obvious when he appeared on the o'reilly factor days after. >> it was devastating. it looked like atomic bomb hit. >>reporter: but the damage to the restaurant was even worse. >> came through the windows. and went through the bar and blew the bricks out. so it was like a blowout kind of thing. and we had 5' of water in the dining room and kitchen and destroyed the kitchen equipment and dining room. >>reporter: but he would note -- not give up on the restaurant that his mother opened in 1955. >> i knew we would get back. but i didn't know how quick. >>reporter: never any question? >> no, no question, no doubt about that. >>reporter: 55 days after the hurricane hit, the restaurant reopened, a symbol of defiance among the devastation, a message of home for all those struggling to pick themselves up post katrina. the chef is a reflection of what has happened to biloxi itself over the last file years a reflection of the determination to rebuild, to bring about rebirth. there is still a great deal of work to do. but this weekend, this city is very much looking toward the bright future rather than the dark past. >>shepard: i was with the family a couple of months ago and it looked as if they got a lot of bright and shiny new stuff along the coast tourism picked up. how is the money flow? >>reporter: the money flow is good right now. you can see behind me part of the casinos, which opened a year to the day, or reopened a year to the day after katrina hit. and most of the casinos and hotels here are telling us right now they are 80 percent full. when you take into account the effect and perception they had to suffer through this summer because of the oil spill in the gulf, that is a pretty good figure and, really, people here are very, very optimistic about the future. >>shepard: that's great to hear. thank you from the shoreline. that is interesáing the way that went forward. thank you very much. for perspective on katrina disaster, head over to foxnews.com in the spotlight "katrina, five years later." aide workers in pakistan could need to travel with security. the state department spokesman said today that, rather, this afternoon, there is a real threat that the tall patch will target the worker as they bring food and supplies to the millions of people struggling to survive across pakistan. it comes ambassador the taliban spokesman accused foreign aide workers of having certain "intentions," whatever that means. countries and the world have pledged $8 hundred million to help people across pakistan, after weeks of punishing rain triggered floods that killed foilly more than 1,500, and left eight million in need of help. but it affects such a wide area, a quarter of the massive country, and you can see it is extremely difficult to get victims what they need. violence would make that situation all the more dire. and now following develops from the pentagon. mike, this doesn't sound like an empty threat? >>reporter: officials made it clear it is not just talk. they have intelligence to back this up. for more on the threat, here is our state department spokesman. >> sit a real threat. we are working with the government of pakistan. but, obviously, to the extent that this is something that extremists in pakistan contemplate, it demonstrates their disregard for the we fair of the people of pakistan. >>shepard: the resources are focused on relief, but it was made clear that they are taking this threat seriously, and looking to address it properly. >> you mention the relief effort. it looks like it is a huge task. how are they beginning to get help to people? >>reporter: the u.s. military used helicopters, planes, and delivered 1.8 million pounds of supplies for relief to those devastated by this flooding. they also have evacuated 6,900 residented trapped in the flooding, so the military is trying to get in there and do what they do best, respond to an emergency situation, and so they brought in more than, close to two million pounds worth of supplies and rescued almost 7,000 people. they are trying to do their best. >>shepard: good luck. mike, thank you from the pentagon. there is a new report and as a result new concerns from democratic leaders about the november elections. and if the party could lose its grip on congress. today, watch democratic lawmakers may be preparing for the worst. plus, a mystery washes up on a florida shore. 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pennsylvania avenue, but first news from florida. a 50' value valued at more than $1 million ran ashore with the engine running and no one in it. detectives are trying to fine the owner, and all leads point to mexico where a mexican newspaper reported that the yacht was missing from a local marine that but the boat ran ashore on a beach in florida. near saint petersburg and a witness was eating crerl and he noticed something outside his window. >> came inside and i am getting said he has to turn but he did not. it came just straight into the beach. >>shepard: the name of the yacht is "making waves." the sheriff says the owner could be the owner of a mexican soccer team. fox news is america's election headquarters and today a new report indicates democrats are becoming increasingly nervous, if that is the right word, ahead of the elections so says the reporting of our cousins at the "wall street journal." and a lot of it has to do with the economy. so much so that at least one veteran neitherrable democrat is joining the republican chorus and calling for the treasury secretary geithner to step down and now the wall street journal reporter and the journal of course is opened by the parent company of this network. >>guest: a congressman from virginia, the most endangered members of the house. they came down like a ton of bricks on me when i suggested that he was responding to boehner, the house minority leader. and, the representative came out with it a few days before bay federal -- before boehner. the right identified geithner as an architect of obama's economic policies. and the left sees him as too close to wall street, coddling the big banks and they say he worked at goldman sachs which he did not but he has not been able to shake that. that is not new. >>shepard: much is looking for someone to blame even at the cbo saying the actions, the stimulus and all the rest of the economic change saved us from great depression part two. >>guest: you cannot convince someone he is better off than he feels and no matter what the cbo says and i am in the doubting the numbers, if people feel things are pad, they will be angry and people feel they are going to be bad. this summer has not been the summer of recovery that president obama and the democrats hoped. they hoped that come september when the campaigns were heating up people would feel better about the economy and their prospects but they feel worse and that is not a good way to enter campaign. >>shepard: the polls indicate that is how people are feeling and you wonder if it could turn after labor day. at the same time, in the republican, well, both side, but in the republic primaries, some of the candidates who are further to the right, in most cases, the tea party-backed candidate are winning the primaries in some cases. what does that do for republicans in the general. it is the moderate voter you court. >>guest: it looks like joe miller could hold on to the upset of alaska senator murk murkowski. no one thought she would lose to him. but, we do not know if the republican electorate who voted for them reflects the larger group or if they are giving an opening to democrat candidates. remember, rand paul in kentucky, and joe buck in colorado. the races, people thought these were there for the republicans to take. and nevada, harry reid looked dead and all these guys, they seem to be running very close. they could win. no question. this is the year that very conservative candidate could win. but, they seem to be making it more difficult for the republicans. >>shepard: we hear in this town that the tea party type folks, grabbing on to the movement, they have voted in high messages, enough to win some of the republican primaries but no matter what their percentage, it won't be enough to win if november and the more moderate republicans, the fear is, on the respects' part some will go to the democratic candidate who is more moderate. >>guest: that is the fear. but this is the year where maybe, everyone is just so angry. and, i'm talking not just moderate republicans but i am talking democrats, too, working class democrats who feel like, you know ... people are not paint. they say we gave the democrats a couple of years, and we feel worse than we did when they were elected. we want to try something new. they may not like the republican party but it is wild vacillation back back and forth back and forth until you reach a plateau and it stabilized. we miss peace and prosperity. >>shepard: everyone misses that. thank you. in many ways, cash changes hands for information, or simply to get stuff done but it appears now the c.i.a. has been paying off one of the afghanistan president's top aides. what does this mean for the big picture? host: could switching to geico really save you fifteen percent or more on car insurance? is having a snowball fight with pitching great randy johnson a bad idea? randy: sorry man, you all right? man: yeah, im good. yeah you just winged me. randy: think anybodys going to notice that? man: yeah, probably. maybe we should just go sledding... vo: geico. fifteen minutes could save you fifteen percent or more. >>shepard: live to the newseum in washington, dc at the bottom of the hour. the july 2011 indicate -- date to with draw from iraq is boosting the morale of the militants. and there is no way to rid the country of extremism according to president karzai unless the terrorist sanctuaries are taken down. the top aide of president car someday -- karzai is on the payroll of the c.i.a. the feds say this is not unusual. but it underscores what a mess we have on our happen. jennifer griffin live from afghanistan with the latest there. jennifer? >>reporter: it shows how messy it is doing business here. senator john kerry flew here because president karzai ordered relief for the aid after he was arrestd for corruption and he was under pressure, and senator kerry was mad at karzai for releasing him and now that aide it towns out is on the c.i.a. payroll and karzai's brother is on the payroll so this is common business here. it makes for a messy situation. early today we went out to a very interesting training facility because as you know, in order for troops to leave here they will have to train afghanistan security forces. so we watched as afghanistan commandos, a special forces units was carrying out live fire training and they had a month ago did a major drug bust, and brought in 297 tons of drugs and a member said instead of getting praised they were chastised because they were going after some of karzai's cronies. this is complicated. the general in charge says the biggest problem is illiteracy. >> most of the people, the young men have never driven a vehicle. so, day one of our five week driving course is here is how you open the door of the vehicle. they do not understand, that basic. that is how low of a level we have to start. >>reporter: general petraeus said he does support president karzai's efforts to crack down on private security contractors here. he said after the u.s. and others spent all the money to train afghanistan forces, they do not want private security forces, firms, taking them away with big salaries and they are working hand in hand on trying to get that security contractor situation under control here. >>shepard: jennifer, thank you, and president jimmy carter is in north korea attempting to free an american jailed in that isolated country. but the north korean dictator, kim chong-il, is not. he is reportedly in china with his third son. the trip raised questions, in doubt, why he would take a rare trip out of country during a more rare visit from a former united states president. sit no secret that relations between the united states and north korea have chilled recently, after investigators warship from south korea and killed a bunch of sailors. kim chong-il is suggested to be there to present his son to china's leaders before he names him as an meir. china is north korea's biggest source of financial support, and the main political ally. after hurricane katrina, a lot of people who lived in new orleans' lower 9th left and never came back. those who stayed had a huge project in an attempt on bring the neighborhood back to life. and now we are seeing how their work has in map cases paid off. and now live from new orleans coming up on the special coverage of hurricane katrina five years later. ask your doctor about onglyza, a once daily medicine used with diet and exercise to control high blood sugar in adults with type 2 diabetes. adding onglyza to your current oral medicine may help reduce after meal blood sugar spikes and may help reduce high morning blood sugar. 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[ male announcer ] ask your doctor about adding onglyza. extra help. extra control. you may be eligible to pay $10 a month with the onglyza value card program. delicious news for dessert lovers. introducing new activia dessert. rich yogurt with desserty flavors like strawberry cheesecake and peach cobbler. mmm. you've got to try this. new activia dessert. ♪ activia >>shepard: from the museum in washington, dc along pennsylvania avenue, opening a new exhibit to mark five years since hurricane katrina sit with a series of reports from the hardest hit areas. one not hit bit storm itself but by the flooding, and the aftermath, the lower 9th ward in new orleans. you may not have heard of it before katrina but in the aftermath you saw it as a place where the locals were rescued from their homes or in some cases throaft die inside. in the years since, the 9th had gotten a lot of attention. and we went there to find out if that attention has helped at all. you need only walk the streets of the lower 9th to see it is recovering, before you have, very lowly of the one side a house like this. rebuild. and repainted. but across the street, homes like this, that have not been touched in five years, almost falling down. it still has the facous paint marks that told authorities how many bodies were inside? you look up and down the streets and you see some homes, some crews but not enough of either. before katrina there were 5,300 homes in the 9th ward. every single one of them was flooded between 3' and 18' and since then 1,200 homes have been repaired or rebuild. and a man name roy, first people to rebuild in the 9th. here is his story from video taken then. and now. watch. i had a gate here. all the grass was gone. and they business. the gate was halfway zigzagged. just busted opened. a door on that side. it slipped around and came through the front of the house. and this light here, it is actually the only thing i saved from katrina from the house. this little lamp. we decided to leave it there because it is a reminder of it. it was a mess. a shell. you really cannot describe it. it was just, everything was lost. like climbing through stuff trying to get through. but it looks fantastic now. you know? five years year i am not all complete but just about. i am better than some. that keeps me going i could be worse. it feels good. come home. and sit on my porch. and see the neighborhood is trying to come back. >>reporter: if there is a symbol of survival, of pride: the familiar x. look at the date. august 10. august of 2010. the house has been rebuild and repained and they sprayed that x back on so they do not forget. when the 9th raises again, and it will rise, it is those who came back first that may provide the inspiration for those who will come back. >>shepard: trace, thank you, those who came back first were the bravest. a new report on the fox report on the gulf throughout the weekend. on sunday, special coverage of the fox report weekend from trace. with more at foxnews.com clicking on "hurricane katrina, five years later." weather alert. you can see what it is all about on the screen. not one but two big storms, danielle is first. and earl is working across the atlantic. and our chief meteorologist is live from new york. we heard danielle could be the first major storm but not really affect us. >>reporter: it will get there. it has been strengthening and looking good right now. but planes have not gotten out there it is too far away from land. likely tomorrow. this is what the expectation is. yesterday we had an indication it could move toward the west. i don't think that will happen. bermuda is out of the picture. a major hurricane. it will cause significant swells from florida all the way up the seaboard. so, a rough weekend and start of the next week at the beach. so keep that in mind. there is danielle. no concerns for land. ally is behind it. this is more interesting. moves more to the west instead of the northwest, and it makes a curve here, and likely to become a hurricane, maybe a significant hurricane, again, by early part of the week, but some indications from this storm bring some effects across the seaboard. a lot of time to watch it and we will do that. >>shepard: thank you, sir, from new york. the number of homes, or home owners at risk of foreclosure now at record highs. today, what is behind the brand new increase and what this could mean for the rest of our economy. that's great, but this is a can. ye it is. you can't have a box top on a can. yes we can. but a can isn't a box. we know. i don't think you do. [ male announcer ] progresso. you gotta taste this soup. can be unsettling. but what if therwere a different sry? of one financial company that grew stronger through the crisis. when me lost their way, this company led the way. by protecting clies and turning uncertainty into confidence. what if that story were true? it is. ♪ but my doctor told me that most calcium supplements... aren't absorbed properly unless taken with food. he recommended citracal. it's different -- it's calcium citrate, so it can be absorbed with or without food. citracal. >>shepard: and now like from washington, dc, at the newseum and this week we have seen record drops in the sales of existing homes and new homes but today we learn that the number of people filing for unemployment benefits for the first time went down last week. for the first time in a month. the labor department reports new claims fell by 31,000 to 473,000 new claims for unemployment benefits. that's better than what economists expected but we are told it is worse than what we see in a healthy economy by far. and more signs of instability in the housing market. one in ten american homes with a mortgage was at risk of foreclosure this summer the one in ten. a record high number. the mortgage bangers association found 9.9 percent of homeowners missed one mortgage payment in the past couple of months, down lightly from april. lenders have repossessed two million homes since the great recession began three years ago and economists expect that number to grow. and now, from new york, the host of the willis report, weekdays on fox business network at 5:00. the numbers come despite efforts to help struggles homeowners. >>reporter: these are shocking numbers. the president's program to make housing affordable for everyone who is having trouble paying the mortgage, it has not been successful. 75 percent of the people have gotten into the program have droppeddous -- dropped out because the payments are too high. the president's man is not successful, bush's plan is not successful. >>shepard: did we have a sense of what is behind the increase? >>reporter: this reflects the unemployment market. sit shocking. that is what pushed the dlin qeapses through the roof how they bump up in 2010 higher than ever before. >>shepard: any sign of recovery? we look for anything? >>reporter: we have to see better enemployment numbers that will turn this around. we saw the existing home sales this week, 15-year-old, disappointing, shocking to analysts who cover this market. we have a long way to go it could be a year or two years until we have a dramatic improvement in the market. >>shepard: we hope for something after the labor day weekend. great to see you. catch more of you weekday afternoons at 5:00 eastern time and 4:00 in oxford. that is just up the dial on the fox business network. and rod blagojevich will have a retrial, and someone close to him is off the hook. percent of muscle per decade? try... each serving provides twenty-six vitamins d minerals. plus it has fifteen grams of protei to help mainin muscle. compare it to the leading competitor. boost high protein also has calcilock blend, with calcium and vitamin d to help maintain strong bones. get complete, balaed nutrition so you can stay active. try boost high protein. also available in powder. this has been medifacts for boost. >> and now a special studio b from the newseum in washington, dc, with the retrial hitting sequels if january and at a hearing today, the retrail for blagojevich will be next year blaming thanksgiving and holidays for delays in deliberation. and selection of a new jury pool. so, we will have to wait longer for the former illinois governor to defend statements like these. >> i'm left with gridlock and potential impeachment and a president who is all take and no give. i have this thing. golden. and i'm just in the giving it up. >> i busted my ... your grandmother. andñwhat do i get? only 13 percent of you think i am doing a good job. what's ... wrong with you. i could be, could end up, still, maybe delivering pizza somewhere, maybe that is my destiny. >>shepard: maybe it is, the jury only convicted him of one of 24 counts he faces in the first trial. next time, we will see. and tobin live, first, mike, robert blagojevich, the brother, he is going home to tennessee, right? >>reporter: a lot of the jurors interviewed say they want add full acquittal for robert. all the testimony around him said he never wanted to get involved in chicago politics, he agreed only to raise funds for his brother out of a sense of family obligation for four months. his attorney got the news moments before the hearing and the charges would be dropped, and called his client. >> he knows. oh my god, oh my god. i told him, you are done, you are free. and his wife is hysterical, crying. >>reporter: looked looked at four charges and up to 65 years in prison and his attorney says he will drink some scotch. >>shepard: and blagojevich cannot have the same legal team the first go round? >>reporter: not the same size with the taxpayers paying for it, the judge said he can only have two but the government has to play fair with discovery. the government should now play fair with us and tell us what they are going to do on the second trial. are they going to call levine? who are they going do call? all those things they didn't do in the first trial, they ought to tell us. >>rporter: we will see blago again in january. >>shepard: can't wait. i bet we see him before that. good to see you live from chicago. tiger woods back on the course today and it looks like, i don't know, maybe divorce suits him. a whole new, well, old style tiger today, special coverage continues. they put a white check on the top of every box to let people know that their cereals have healthy whole grain, and they're the right choice... 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