D damon harris died a couple of weeks ago. Im brooke baldwin. Lets take you to washington now. The situation room with wolf blitzer starts right now. Happening now, they are just about to ring a bell on a roller coaster day, almost history making day on wall street. Stay right there. Were going to see how close the dow industrials come to their alltime high. Also, whats wrong with this picture up on capitol hill, lawmakers are getting out of town instead of working to help the forced spending cuts that hit tomorrow. Plus, look at this. Dennis rodman, yes, believe it or not. Dennis rodman scoring a diplomatic triumph. There he is. He is sitting right next to the leader of north korea, kim jongun, courtside at a basketball game in pyongyang. Im wolf blitzer. Youre in the situation room. All eyes are on wall street. The New York Stock Exchange closing on a day that saw the Dow Jones Industrial average making a run at breaking its alltime high. Our chief Business Correspondent ali velshi is here in the situation room with us today. Ali what a day. The numbers are going up. Just flat, basically. We came within 16 points of the record that was set on october the 9th in 2007. So if we got there, you would have just made your money back after more than five years. Let me just remind you, in a market that is volatile, which means a lot of computers influence trade trading, you will go down. This will take a few days. For Everything Else going on in the economy and in washington, this dow is near an alltime high. We got to a fireyear high again today. It doesnt look like on wall street at least, this concern about forced spending cuts. Theres a couple of reasons for that. As you know, lets say the forced spending cuts go into effect on saturday morning. Up wont see any of the furloughs or layoffs for another month and thats when we have to discuss the budget. So the market thinks you have the end of march, not february. The stock is overvalued. You pay a multiple of that. In a lowInterest Rate environment, you tend to take a risk. You get nothing by putting your money into a bank account, inflation would eat away at it, so you are pushed into the stock market. So theres more money in the stock market than there would be if Interest Rates were 5, 6 as opposed to 3 or 4 on mortgages. So thats part of the reason why youre seeing this kind of pressure, upward pressure in the stock market. There are still some people who warn, be careful of a market like this. What goes up, goes down. Remember, if youre invested in bonds with Interest Rates where they are starting to go up, bonds are coming down. So if youre an older investor, you dont have choices but to start getting into the stock market and thats why youre seeing so much bubbling and activity. 14,054, almost 55. It was 6500. Unbelievable. Even though it was at 14,000 in 2007, the next year it was down to 6700. Just because its doing well right now, my advice and your advice to investors out there is stay calm. This is a traders market. Remember, its a traders market. Your investment behavior should not be governed by trading volatility. Right now what were looking at is trading volatility. Why didnt it go over the top . A couple things. Theres no real catalyst to it going over the top. Economic growth at the end of 2012 was onetenth of 1 positive. They need 3, 4 to create jobs. Yeah. This isnt a victory dance. This has taken five years to get here. Last quarter it was negative growth. It was negative and it went from negative onetenth to positive onetenth. Again,. 02 difference. Not that big of a deal. Its not a celebratory market. Alley, youll be back. Thanks very much. Were now just a day away from those forced spending cuts that will cut across u. S. Defense and domestic programs. You might think its finally time for congress to get serious about doing something to avoid the potential pain out there. But guess what . You would be wrong. Our chief Congressional Correspondent dana bash is up on capitol hill to explain what is going on. Go ahead, dana. Explain. Reporter we can now report that those 85 billion in forced spending cuts will kick in by the end of the day tomorrow. Why . Because congress is the only place that has the power to stop them and they are gone. Lawmakers racing down the capitol steps, bolting out of town for a long weekend. This was before noon, a full day before the hammer comes down on forced budget cuts they voted for. Is there a concern that you all are going to leave town while these cuts kick in and you wont even be here . Well, speaker and the leadership will be here and im a quick flight away. I go home every weekend to see my family. Reporter youre on your way out . Are you on your way home . Yes, maam. Reporter so youre not going to be here in town when these cuts kick in . If they call me back, ill be back. Reporter what do you think of the idea that you all and Congress Wont be here when these cuts kick in . Weve got to go to the airport. Reporter okay. Bye. Some republicans whose party run the house were unapologetic about leaving washington until monday. I think its better when were at homeworking because the work we do there is more important than the work we do here. This was the president s idea. Reporter as you all know, most republicans voted for it. I voted for it, too, because i think we have to get our spending in line. 2 , most families, most businesses have had to do the same thing. Reporter yet some lawmakers in both parties sounded as fed up as their constituents. We could stay here and not pass a bill, thats not even better. Reporter youre heading to your car. I assume youre going home to new york . Yes. Listen, i think the sequester is crazy. The president should show more leadership. But to sit here makes no difference. Its an absolute disgrace that were going home. We should stay here until this sequester has ended. This is a stupid way to do it. Reporter but democrats do run the senate and their last votes this week were only a few hours later. The motion is not agreed to. Reporter two proposals to relieve the forced cuts. Partisan show votes. Neither passed and neither was expected to. Will the senate not be here just like the house wont be here the day that these cuts take place. Were in session. Were ready to work. But at this stage we dont have a partner. Reporter now, the senate is technically still in session but senators as we speak, wolf, are headed for the airports, most of them getting out of town. Leaders in both parties made the point that they will be here tomorrow, of course, for the meeting that they will have with the president at the white house tomorrow morning. But i have not found a source in either party that expects them to do anything to change what is going to happen, at least starting tomorrow night. And that is, those cuts will begin to go into effect. But we really, dana, at least everything im hearing, saturday, sunday, monday, in the immediate days after these forced budget cuts go into effect, most of americans, all of americans really wont feel any direct pain . Reporter thats exactly right. You heard jay carney at the white house talk to members of congress. What is going to happen is its going to be a slow roll. Its going to take some time for the effects of this to trickle down and get to the american public. What were obviously going to be watching for first is those most obvious to most of us, like airport delays and things like that. It could take a few weeks, even more for people to feel the pain from these cuts. Yeah, were going to have more on the president shifting tone on the pain. Thats coming up in the next hour as well. Dana, thank you. New developments today in what many are seeing as an important side show to this important spending cuts fight. Were talking about the veteran journalist book woodward and his assertions made here in the situation room yesterday, his exchange with a Senior Obama Administration official who didnt like what he was reporting. Today we learned that that official is Gene Sperling and were getting some new insight into that exchange as white house officials are going out of their way to say its all part of a big misunderstanding. Lets bring in our chief White House CorrespondentJessica Yellin. Shes been doing some digging, reporting on whats going on. Whats the latest, jessica . Reporter book woodward and Gene Sperling had a phone call first and then an email exchange. Bob woodward said he felt it was threatening and the white house is saying that is ridiculous and a seener adviser, david pluf, is sort of mocking bob wood ward sending out a tweet comparing him to an aging sports star. Watching woodward the last few days is like watching mike schmidt facing live pitching again. Perfection gained once is repeated. Ouch. Heres what the drama is all about. An intimidating threat or a Friendly Exchange between a reporter and a white house official . They are not happy at all. Reporter at issue, a spat over Bob Woodwards reporting on the president s plan to avoid the looming forced spending cuts. It was said very can clearly, you will regret doing this. Who sent that email to you . Well, im not going to say. Was it a senior person . A very senior person. Reporter that official was Gene Sperling, director of the Economic Council and according to the white house, his email was no threat at all. In a statement, a press official said, the note suggested that mr. Woodward would regret the observation he made regarding the sequester because that observation was inaccurate, nothing more. Gene sperling, in keeping with a demeanor i have been familiar with for more than 20 years was incredibly respectful. Can you not read those emails and come away with the impression that gene was threatening anybody. Reporter the key here, all important context. In the email exchange obtained by politico, sperling writes, i apologize for raising my voice in our conversation today. My bad. But i do truly believe you should rethink your comment about saying that the president asking for revenue is moving the goal post. I know you may not believe this, but as a friend, i think you will regret staking out that claim. Woodward replies, you do not ever have to apologize to me. This is all part of a serious discussion. I, for one, welcome a little heat. Now woodward says it was too hot. It makes me very uncomfortable to have the white house telling reporters, youre going to regret doing something that you believe in. Reporter the president says he values a free press that is not afraid to ask questions, to examine and to criticize. Uhhuh. Reporter as he ever spoken to his aides about the tone he would like you to take when talking to reporters . We are enormously respectful of the work that you do and that i used to do and we also believe its important for us to make clear when we think somebody is out there getting the facts wrong. Reporter wolf, sources sometimes get animated as they try to share their perspective and its up to each reporter and each interaction to decide whats taking place in that individual instance, wolf. Well, certainly and i think you will agree, jessica, based on that email exchange at least, i dont know what happened in the extensive and fairly angry phone conversation that Gene Sperling and bob woodward had on the email exchange, it doesnt look like on the surface that its all that awful. Certainly there was no direct threat or anything like that. You will be punished or whatever. It was relatively tame and maybe this whole sidebar is being overblown. Reporter right. It does not seem to be any theres no explicit threat in that email. So if something happened in the conversation, we just cant know about it. We wont know. But i agree with you, and i know from working with Gene Sperling, i personally have never been bullied by him. He gets very excited and very, very talkative. Sometimes more talkative than anybody really expects when youre on the phone with him. But i do not myself see the threat in the emails. Again, though, you cant speak for another reporter and what they might feel in their own interactions. No. All of us know Gene Sperling very well and bob woodward very well at the same time. Obviously both very honorable guys. Ive worked with Gene Sperling going back to the Clinton White house when he worked there at that time and hes not the type he likes to talk, as you point out, but he doesnt make any brutal threats, anything along those lines or anything like that. Bob wood dlds ward, one of the premier, if not the premier washington journal reporters. We invited them, by the way, to come in here to the situation room and have a little peacemaking session and they declined. Good news coming out of all of this, Gene Sperling will be candy crowleys guest on the state of the union address. Well tie up all of the loose ends at the same time. Both very, very good guys, Gene Sperling and bob woodward and im sure before too long the two of them will be having dinner at a fansing washington here in washington making nice to each other. Reporter over an expensive bottle of wine, yes. Thanks Jessica Yellin for that. Now we turn to the history making events at the vatican. Where Pope Benedict xvi no longer is the leader of the 1. 2 billion roman catholics. His resignation the first of any pope in nearly 600 years took effect a couple hours ago. Christiane amanpour is joining us. Benedict ended his reign a couple of hours ago. Whats it like now . Whats the mood there . Reporter well, listen, i think people are taking it in stock and moving forward but i must say a couple of hours ago when 2 00 p. M. Eastern, 8 00 p. M. Local, the swiss guard, the traditional guard that protects the pope walked inside, closed the doors when he was at castel go gandolfo and you got that sense of finality t, its been very dramatic when he flew in his helicopter, landed there, came out on the balcony of the summer residence and told people, i am no longer pope today. I am just a pilgrim. All of a sudden the emotion and enormity of what happened, because its a precedentsetting event, all of that set in and you saw the pope look almost i dont know. Almost relieved when he gave his last blessing. Having looked very tired in morning in his meeting with the cardinals and yesterday during his papal address, i thought he looked rather tired and frail but unburdened, i think he is now feeling relieved. I spoke to Timothy Dolan of new york who is considered amentioned by many to be a front run arer. He, of course, played that down but said what would be looked for in the next pope. One of the natural characteristics that were looking for . Well, you need a good pastor, somebody who is good with people, like jesus was. You need somebody thoroughly versed in the catholic wisdom. Number three, you need somebody savvy about the Church Universal who is aware and conscious of the diverse needs of the catholic family. Number four, you need somebody who can get by in italian and preferably other languages, too. And number where am i . Five, six. You need somebody with some governing capacity, some managerial skills. I would presume those are the qualities we would look for. Right. Reporter now, many people say that its unlikely that there will be an american pope at this time but on the other hand, some say you just never know and the field is wide open and the whole situation right now is so uncertain. So you dont know. But of course the other thing i spoke to Cardinal Dolan about and like i did with cardinal mccarrick, the pope has to get through all these scandals that have rocked this church and turned off so many catholics. Most particularly the priest Sexual Abuse Scandal has to finally come to a conclusion whereby theres full accountability and transparency and i think Everybody Knows going into the conclave that is going to have to be front and center of all their calculations for the future. Wolf . When you spoke to Cardinal Dolan about that, what did he say . How does he think the church needs to deal with all of these problems . Reporter well, i think he feels that the church has done a lot. Obviously since it first exploded this terrible scandal and these crimes, really, wolf, against these young people that date back decades, that this explosion in the u. S. In 2002 and swept europe in 2010 and Pope Benedict is the first pope to have apologized and met with abuse victims, who instituted a zero tolerance policy. That needs to be fully implemented. There has to be a zero toll trans policy, not just for those who abuse but also for those who shielded the abusers for so long and prevented those abusers from being held accountable and farm them out to different parishes. So lots and lots of different catholics are looking for that to happen and many people who are not catholic want to see that happen in the Catholic Church because as you well know, the pope is not just pope of 1. 2 billion catholics around the world. What he does and says and what he represents really matters even outside the catholic faith. Wolf . It certainly does. Christiane amanpour joining us from rome. Coming up in the situation room, im going to speak live with a a sheriff who is furious with the Obama Administration. He says they have no problems releasing criminals on to the streets of his county. Also coming up, Dennis Rodman. Hes become a diplomatic mvp in north korea. Whats going on . [ nyquil bottle ] hey tylenol, you know were kinda like twins. [ tylenol bottle ] we are . Yeah we both relieve coughs, sneezing, aches, fevers. And i relieve nasal congestion. Overachiever. [ female announcer ] tylenol® cold multisymptom nighttime relieves nasal