we'll begin with the breaking news, all of us with money in the stock market, we're just catching our breath and now this, another big selloff on wall street. all three major indices way down at the closing bell. the dow losing a hefty 419 points. it's the fourth biggest slide for the dow in a month of big losses. the dow has plunged 1152 points so far this august. that's a drop 9.5%. and the month isn't even over yet. let's turn to cnn's richard quest. he's following what's going on. a lot of traders on wall street, richard, they're blaming what's happening where you are in europe for a lot of the problems here in the united states. do they have a point? >> way too simplistic to put it like that, wolf. there are problems on both sides of the atlantic. what prefaced today's fall was the morgan stanley's report that warned of a dangerous risk of recession in the united states and in the euro zone because of what it called policy errors and sluggish growth. it's not -- you cannot say one side or the other is to blame. the danger part about today is that it's now becoming a self-fulfilling prophecy. investors get worried and fall out and markets fall even further. the session was off its lows and, yes, the buyers, there were some buyer, they came in late in the day. but it certainly was not the sort of day you wanted to be holding stocks. >> how much trouble are some of the major banks in europe in right now that could promote further disruption not only in europe, but here in the united states? >> there are rumors that one small regional bank went to the event cb for some credit support. that's not been confirmed. most of the big major banks in europe are no different in many ways to the u.s. they've improved their base capital, their tier one capital, but even so, the fears are there. what you and i need to watch out for in the next few days and weeks is to make sure that those fears do not translate into the money markets so banks stop lending to each other. that's what happened after lee mann. the dig bif, two weeks ago, it was fear driven. now we're getting gdp, jobless, morgan stanley, retail sales. we're starting to get evidence that things are not good and that's what's moving the market. >> richard, thanks very much from london. let's move on to more breaking news. after months of brutal ifity an blood shed, u.s. leaders are finally saying what people have been waiting for. president obama declaring in a written statement that it's time for assad to step aside. he also ordered new and tougher economic sanctions against syria. hillary clinton says the goal is to further isolate the assad regime. >> the people of syria deserve a government that respects their dignity, protects their rights and lives up to their aspirat n aspirations. assad is standing in their way. for the sake of the syrian people, the time has come for him to step aside and leave this transition to the syrians themselves. and that is what we will continue to work to achieve. >> and joining us from beirut, arwa damon. any reaction from damascus yet? >> reporter: no, no official government reaction just jet. we've been keeping a close eye on syrian state television to see if anything would come out of there. and they quite simply seem to be ignoring it. there is no mention of this whatsoever. this fact they is been repeatedly running this clip that they say is a weapons cache that they found in one of the cities where the military crackdown is still ongoing. as for the activists theps, this is something that they've been calling for for five months and they've been increasingly frustrated at the amount of time it has taken especially the united states to come to this stage. that being said, they do say that at least they feel they are not in this completely on their own. >> is it your sense as you study this closely, you've been to syria, that today's announcement from the u.s., britain, can that today, france, germany,s others, and the increased sanctions being imposed on the syrian regime will really make much of a difference when all is sudden and done? >> reporter: if we look at the way that syria has reacted to other actions, one would have to assume that, no, it's not. when secretary of state hillary clinton said that it lost its legitimacy, syria simply scoffed at that. when the sanctions were implemented, the foreign minister said fine, we'll live in a world where europe does that exist to us. we'll look to our friends in the east. the sanctions, although yes they target the vital energy and oil sectors that won't have such a big impact. what activists say that europe needs to follow with similar sanctions because there are major european countries that are still purchasing syrian crude, two significant company, shell and total operating inside sear yarks and then there's russia. russia still selling weapons to the syrian government. turkey we still have not sure what sort of steps it is into to go take. saudi arabia, for example, critical countries when it comes to the security council. so it will take a large, much larger, coalition standing up, calling for the president to go down before it will really begin to shake this government. >> i wrote about this on my blog. the prime minister of iraq al maliki who spent years in iraq as well as all of our viewers know, he seems to be siding with a al assad and the iranians. are you surprised that this u.s. ally is with assad? >> reporter: this is not surprising at all. i think the current iraqi government led by al maliki, it would be a bit of a stretch to assume that it is even a u.s. ally at this stage begin how indebted and tied to iran it is. in fact many will tell you that the outcome of the u.s.-led invasion has been to hand iraq over to iran on a silver platter. so there is absolutely no surprises there that the al mali maliki-led government would be siding with iran. it just goes to show you that iran has not only political influence over the iraqi government, but it also wields a lot of influence and in fact funds a number of the sheiite milit militias. so it could be that iran is pushing pressure on iraq to on side with syria to try to create a new axis of control and to do whatever it can to really continue to prop up the syrian regime. >> arwa damon, thanks very much. >> assad with his son went to medical school and later studied ophthalmology. he was called back to be groomed for the presidency after his older brother died in a car accident. assad became the syrian president in 2000. he ran unopposed after his father died of a heart attack. there was no challenger in the race. he was reelected once again without any opposition to a second seven year term in 2007. that is bashar al assad. mb meanwhile left washington on his way to what the white house call as working vacation on mar ththa's vineyard. a lot of people are asking is this a good time for the president to get away? dan loathian is up in martha's vineyard cover wlag's going on. so what are they saying up there, what's going on? >> reporter: well, a lot of people here excited to see the president come here to martha's vineyard, but the point that you were talking about there, the criticism of the white house, the white house brushing as side that criticism of the president's vacation saying that, look, even though the president is physically away from the white house, he has not left his job. for the third summer in a row, president obama and his family are returning to mar shatha vineyard's for a pricey vacation. the welcome signs on the island are out. the tourists are hoping to catch a glimpse. >> i can't wait for him to come over. >> we're happy he's coming. we both voted f ed fod ed fod f. >> reporter: but this setting is not the presidential picture some americans want to see. as the stock market stumbles, as the president forms his new jobs plan, and as the administration turns up the pressure on syria. >> the people of syria deserve a government that respects their dignity. >> reporter: republican presidential hopeful mitt romney took a swipe at the president and his ten day getaway. >> i wish the president were in washington calling back congress and dealing with the challenges we have. >> reporter: the republican national committee is circumstance lating a harsh tongue in cheek rebuke on the internet. 18 postcards with doctored photos of the president and captioned like, quote, finding a way in martha's vineyard is almost as hard as finding a job. while not responding directly to take attack, jay carney recently defended the president's decision to stick with vacation plans on the islands. >> there is no such thing as a presidential vacation. the presidency travels with you. >> there is no such thing as a presidential vacation. the presidency travels with you. >> there is no such thing as a presidential vacation. the presidency travels with you. he will get regular briefings and he will of course be fully capable if necessary of traveling back if that were required. >> reporter: carney says he doesn't think that the american people be grudge the president for spending time with his family. wolf, as you know, this is not anything new. presidents have long been criticized for taking vacation. look back to president bush when he took a month long vacation not on an island, but on his ranch. >> every president in my memory, they always get criticized for going on vacation. ron paul is a severe critic of the federal reserve. but does he agree with his rival, rick perry, that the fed chief may be on the brink of treason in stand by for my interview with ron paul. and we'll tell you why the justice department is now investigating the agency that downgraded america's credit rating. it's pro-cool technology releases armies of snowmen masseuse, who cuddle up with your soreness and give out polar bear hugs. technology. 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(sigh) whaa. tasty. that's, that's a complete dramatization of course, but you get my point. vo: geico 15 minutes could save you 15% or more on car insurance. jack cafferty is here with the cafferty file. >> the 2012 campaign is well under way now. the republican candidates out there every day tripping all over themselves and each other trying to win their party's nomination. as the in-consume went, president obama is expected to be the democratic nominee, but what if he's not? consider this. a new poll shows 70% of democrats want the president to be the nominee. it's actually 11 points below what it was in june. only 57% of the democrats wanted bill clinton to renominate him back in 1994. however withere are other bleak signs. his job approval rating continues to decline hitting a new low of 39% for would be three day period last week. americans are increasingly unhappy with mr. obama's handling of the economy, always the number one issue short of war in this country. according to gallup, he gets a lousy 26% approval rating on on the economy, 24% for handling the federal budget deficit, and 29% for job creation. in a word, these are terrible numbers. as if to confirm them, morgan stanley was out with a report this morning that says the united states is, quote, dangerously close to a recession in the next 6 to 12 months. so that happy note, the stock market headed right into the toilet. the dow closed down 419 points. president obama says he has a plan for job growth. but he's going to wait until after labor day to tell us. why is he wait something the unemployment rate is 9.1%. do you suppose there are millions of americans who would like to know how the government is going to create jobs, now, not after the president's vacation? we do know the president hopes to extend the payroll tax cut and unemployment benefits spending additional hundreds of billions of dollars that we don't have. here's get. should another democrat perhaps challenge president obama for the nomination, and if so, who? go to cnn.com/cafferty file to comment on my blog or as increasing numbers are doing, you can go to our post on the situation room's facebook page and talk this. >> people love that page. jack, thanks very much. new confirmation that the obama justice department is investigating standard & poor's, the same agency that recently downgraded america's credit rating. allan chernoff has been working the story for us. what are you finding out? >> the fact is that these investigations have been underway well before s&p's recent downgrade of the united states. sources confirmed to cnn that the department of justice and the secures and exchange commission have been digging in to the inner workings of the nation's largest credit agency standard & poor's and moody's, focusing on their failure to fail to assess the risk of mortgage securities. s&p and moody's are targets of federal investigations into more ganlg securities that went shower during the financial crisis. according to sources familiar with the inquiry, attorneys from the department of justice and the securities and exchange commission have been digging into the rating agency's method onle gi, in particular, did executives veto credit analyst efforts to downgrade ratings so as not to lose business on the issuers of securities who are paying to berated. >> the credit rating agencies fail spectacularly in the years leading up to the financial crisis. >> reporter: the rating companies have been getting slammed in congress and in depositions given on to federal investigators. one form of credit analysts told cnn he had had two interviews in the past six months with federal agents and had shared evidence that what he described as improper management influence in the ratings process. quote, they have plenty of ammunition, he said. there are plenty of people who will squeal on them. the sec has been on this issue for some time. a 2008 report quoted one e-mail from a credit analyst saying let's hope we are all wealthy and retired by the time this house of cards falters. just several days ago, a former top credit analyst from moody's filed a comment that charged the goal of management is to mold analysts into pliable corporate citizens who cast their committee votes in line with the unchanging corporate credo of maximizing earnings. the sec said it would neither confirm nor deny the existence of an investigation, but added cases arising from the financial crisis are among the highest priorities of the enforcement division. the department of justice had no comment. a spokesperson for s&p told cnn s&p has received several requests from different government agencies over the last few years regarding u.s. related mortgage securities. we have cooperated and will continue to cooperate with these requests. cnn also asked moody's for comment but did not receive one by dead line. >> thanks very much for that report. congressman ron paul is the immediate darling, or has his presidential candidacy been down applied by the national news media? i'll talk to him about his concerns. and we're look into the online terror threat against the late night host david letterman. e eny and economic growth. north america actually has one of the largest oil reserves in the world. a large part of that is oil sands. this resource has the ability to create hundreds of thousands of jobs. at our kearl project in canada, we'll be able to produce these oil sands with the same emissions as many other oils and that's a huge breakthrough. that's good for our country's energy security and our economy. the nascar nationwide series, that's good for our country's energy security i know pleasing fans is a top priority, 'cause without the fans, there'd be no nascar. just like if it weren't for customers, there'd be no nationwide. that's why they serve their customers' needs, not shareholder profits. because as a mutual, nationwide doesn't report to wall street, they report to their customers. and that's just one more reason why the earnhardt family has trusted nationwide for more than 30 years. nationwide is on your side. here are some of the stories we're working on for the next hour of "the situation room." michele bachmann promising $2 gas if she makes it to the white house. can she deliver?nikki, i'll ask her whether she's ready to make the plunge to a vice presidential candidate. and an urging appeal from somebody to some of those suffering economically the most. is the first african-american president doing enough for african-americans? stand by. you're in the situation room. the republican presidential candidates are focusing on new hampshire and south carolina. might be shael bachelle bachman are looking to build on their showings in the iowa straw poll last weekend. and joining us now from in an chester, new hampshire, ron paul. he's a candidates for president of the united states. thanks very much for coming in. >> good to be with you. >> you are really differentiated yourself from all the other republican candidates dare i say the democratic candidate, that would be the president of the united states, as well, when you made it clear that on national security and foreign policy, you want to bring american troops home immediately from iraq, afghanistan, germany, south korea. is that right? >> that is correct. and immediate of course can be qualified a little bit. it takes a few days to get over there and pick them up. no, as soon as possible. the american people are with me on that the majority respond in that manner. i don't think we can afford it anymore. i don't believe it's in our best interests to be there because i think it underlies our national security. >> so including germany and south core re, a bring those thousands of troops home? >> yeah, the immediate benefit before you reorganized and decide how big the army and navy should be, just think of all those troops spending money back at home. there are some bases in this country that probably should be open, but the ones overseas are more important to be closed down than the ones here. bring the troops home and have those spend all those salaries here at home because germany actually likes us to be over there for which i can reasons. it helps their economy as well as the other countries. so i would say the immediate effect would be the psychological benefit of knowing things are changing, this will help our economy. >> and your position on on iran. do you believe iran represents no real threat to the united states? >> no real threat. i think it's a threat just like there's lot of threats around the world. but compared to what? soviets had 30,000 in the