First family reflects on eight years in office

(CNN) -- As President George W. Bush prepares for his last week in office, he and First Lady Laura Bush spent time Tuesday talking with CNN's Larry King.

In a wide-ranging interview, the First Family reflects on the past eight years of the presidency, including 9/11 and the war on terror.

They also discussed what awaits President-elect Barack Obama and his family when he takes office on January 20. The following is an edited version of the interview.

Larry King: Are you going to miss it, Laura?

Laura Bush: I am going to miss it. I'm going to miss this beautiful house and all the people that work here. We're going to miss the people especially.

King: Are you anxious to go, Mr. President?

George Bush: I don't know if it's the right word. I'm not sure exactly what I'm going to feel like on January 21. I've been, you know, I've had security briefings -- intelligence briefings nearly every morning for the last eight years. I'll wake up and not have a briefing and realize the responsibility is not on my shoulders anymore.

King: Are there ambivalent feelings?

George Bush: No. I don't think you can be ambivalent. I've been looking forward to the inauguration of Barack Obama. I'll have a front row seat in what is an historic moment for the country.

King: Do you like him?

George Bush: Yes, I do like him, and you'd like him, too.

King: But he was so critical of you. Do you take that personally or you don't?

Laura Bush: I did.

King: Were you angry at it?

Laura Bush: Yes, sort of. George didn't even really know about it because he didn't watch it that much, I don't think.

George Bush: When you make big decisions and tough calls, you're going to get criticized. During the course of this presidency, of course, I've been disappointed at times by the silly name-calling that goes on in Washington.

It's really not necessary that it happened. But I've done my best, though, to make sure I didn't bring the presidency down to that level.

King: How do you feel personally when you see the ratings and the polls that have you at 25, 30 percent?

George Bush: I don't give a darn. I feel the same way as when they had me at 90-plus.

King: Do you ever get the feeling -- and everyone has some doubts about some things -- that, you know, if I was wrong, if Iraq was wrong, then (the troops) died in vain and I sent them?

George Bush: I don't think Iraq was wrong.

King: No, but do you ever have a moment of feeling where it was wrong?

George Bush: I was worried Iraq was going to fail, not Iraq was wrong. That's why I put 30,000 troops in when a lot of people were saying, "Get out." The surges worked. A young democracy in the heart of the Middle East has taken hold, and, obviously, there's more work to be done.

King: Reagan once asked this, so we'll ask it, are we better off today than we were eight years ago?

George Bush: One thing is for certain today, we understand the real dangers that we face. Eight years ago, it looked like the world was peaceful and everything was just fine in the economy. Then, we had a recession, then we had an attack and now we've had this financial meltdown.

Everything looked like, on the international front that, you know, radicalism might be, you know, a problem over there, but not here. So one thing is for certain, there's a lot of clarity now on the threats we face.

King: Do you worry?

Laura Bush: Sure, I worry. I worried most right after September 11th. I mean for a long time, I worried a lot. I worried about another attack. I worried about the safety and the security of Americans. I mean everyone did. I think there isn't anybody that lives in the United States that didn't worry for a long time.

I think we've forgotten what it was like when we all worried and when a lot of people had anxiety, most people, probably that had watched television that day or had seen what happened.

I mean I think that's because we are more secure today, people are not as worried and they've sort of forgotten what it was like when -- when everyone woke up worried.

King: 9/11, what did it do to you?

George Bush: It made me realize my most important responsibility is to protect the country from attack.

King: It changed you?

George Bush: Yes, it changed me. It changed the country, too. I still have images of those days vivid in my mind. I told the American people I wouldn't tire and I wouldn't falter and I haven't.

King: Are we ever, ever going to find (Osama) bin Laden?

George Bush: Yes, of course. Absolutely. We have a lot of people looking for him, a lot of assets out there. He can't run forever. Just like the people who allegedly were involved in the East African bombings, a couple of them were brought to justice recently.

King: Did we ever come close?

George Bush: I don't know. I can't answer that.

King: You don't know.

George Bush: I really don't know. I'm not trying to hide anything.

King: You had two girls in the White House. What advice would you give Mrs. Obama on having two girls in the White House?

Laura Bush: Well, I would tell her this is a wonderful and grand home. It is a very nice home for a family, and we know that both from having been the children of a president ourselves, and then of course from having Barbara and Jenna here.

Barbara and Jenna took Sasha and Malia on a tour of the White House, showed them all the fun, you know, great things to do. This is a terrific house for hide-and-seek. They showed them how to slide down the ramp from the Solarium. I think those little girls will have a wonderful time living here.

King: Upon reflection, two more things: was Katrina the lowest point beyond foreign entanglements and 9/11.

George Bush: I think being called a racist because of Katrina was a low point. I can remember people saying George Bush is a racist because of the response, when, in fact, the truth of the matter is the response was pretty darn quick, if you think about the fact that the Coast Guard and a lot of brave kids were pulling 30,000 people off of roofs as soon as the storm passed, as soon as they found people on those roofs.

King: But a lot of mistakes happened too.

George Bush: Well, yes, at all levels of government, absolutely.

King: Do you think those mistakes, that we learned from them?

George Bush: No question. That's a good thing about government. By the way, we have had eight hurricanes, major hurricanes, and seven and a half were dealt with the way everybody expected them to be dealt with. The Mississippi part of Katrina was dealt with well, even though it was a really horrible hurricane.

King: I know you will be talking Thursday. Anything you want to say?

Laura Bush: Well, I wanted to say I am very grateful for the opportunities I have had because George is president. I have met wonderful people all over our country. I appreciate all of their prayers and all of their support and all of the millions of people who have thanked me. I appreciate that a lot.

George Bush: I want to say it has been a huge honor to be president. I have enjoyed it. I've been amazed at the character of the American people.

Julius Genachowski to Be Nominee for F.C.C. Chairman

WASHINGTON—President-elect Barack Obama intends to nominate Julius Genachowski, an adviser on technology issues and a longtime friend, to become the next chairman of the Federal Communications Commission, advisers to Mr. Obama said.

Mr. Genachowski, 46, played a leading role in the Obama campaign’s highly successful online strategy and was a major fundraiser for the campaign. He and Mr. Obama both attended Columbia, though they were in different classes. They became friendly at Harvard Law School, where they both served in top positions at the Harvard Law Review . They have also been basketball buddies.

During the campaign Mr. Genachowski shaped many of Mr. Obama’s telecommunications and technology policies. He advocated an open Internet in the debate over so-called net neutrality, and media ownership rules that promoted a diversity of voices on the airwaves.

While it is difficult to predict what direction Mr. Genachowski will take the commission, an analysis by Stifel Nicolaus, an investment firm, said that it expected that “the regulatory initiative is likely to shift” away from some from incumbent — like the large telephone companies — to new entrants and other “nontraditional telecom and media players” including such companies as Google, Yahoo and eBay.

It speculated that Mr. Genachowski would seek to spur competition among the wireless carriers as a counterbalance to the dominance of the telephone and cable companies. And it said that Mr. Genachowski is unlikely to be as aggressive in his approach to regulating the cable industry as the current chairman, Kevin J. Martin, has been.

Mr. Martin has not set a departure date, although he is widely expected to step down soon. If he leaves before Mr. Genachowski’s confirmation, then Mr. Obama is expected to name one of the two remaining Democratic commissioners — Michael J. Copps or Jonathan S. Adelstein — as interim chairman.

People involved in the transition said that Mr. Genachowski was a top candidate for both F.C.C. chairman and a new White House position overseeing technology issues that has not yet been fully defined.

If confirmed, one of his first challenges at the commission would be the conversion to digital television. The Obama transition team has asked Congress to delay the conversion, set for Feb. 17, because millions of viewers have been unable to obtain coupons to pay for converter boxes that would enable their sets to receive signals once broadcasters drop their analog signal. (The conversion would not effect viewers who subscribed to cable or satellite services.)

Over the last decade, the chairman of the F.C.C. has played a more expansive role in regulating the economy, particularly with the rise of the Internet and wireless communications. Now, as the new administration plans to make the expansion of broadband and Internet services a significant part of its stimulus package, Mr. Genachowski, with his close ties to Mr. Obama, could have a larger role in shaping economic policy than many of his predecessors.

Mr. Genachowski, the son of Eastern European Jews who fled during the Holocaust, is married to the documentary filmmaker Rachel Goslins, whose latest film, “Bama Girl,” documents the 2005 homecoming queen contest at the University of Alabama.

Upon graduating from law school, he clerked for Judge Abner J. Mikva of the United States Court of Appeals. Mr. Obama had turned down a clerkship with Judge Mikva. Mr. Genachowski later clerked for Supreme Court Justices William J. Brennan Jr. and David H. Souter.

He was chief counsel to Reed Hundt, an F.C.C. chairman during the Clinton administration. He then worked for eight years as a senior executive at the IAC/Interactive Corporation, run by Barry Diller. He also founded an investment and advisory firm for digital media companies and co-founded the country’s first commercial “green” bank.

New Yahoo CEO lacks Web and deal-making chops

SAN FRANCISCO (Reuters) - Yahoo's (YHOO.O) new CEO is a straight-shooting, tough-talking technology veteran but she is seen lacking two qualifications investors hoped for most: deal-making savvy and Web business know-how.

Carol Bartz was appointed to the top job at Yahoo on Tuesday after a two-month search, and brings with her a strong track record of revenue growth at software company Autodesk Inc (ADSK.O), where she was chief executive from 1992 to 2006 and still remains executive chairman.

Bartz, however, does not have an established reputation as a deal-maker and Yahoo investors regarded her appointment sceptically, with shares of the Internet search and advertising company dropping more than 3 percent during the trading day.

"People respect her. She is direct and focussed, but not mean-spirited like a 'Chainsaw Al' type of person," said Needham & Co analyst Richard Davis, who covered Autodesk when Bartz was at its helm.

She is credited with increasing Autodesk's revenue from $285 million (£195.5 million) to $1.5 billion during her 14-year tenure, as well as diversifying its business. Bartz, 60, built the company by buying small and medium-sized businesses, including a $444 million buyout of Discreet Logic in 1999.

"She seems to me to be more of a builder than a buyer-and-flipper," Davis said. "I'm sure that plenty of people wanted to buy Autodesk over the years."

Analysts lauded her for being a dextrous, capable and committed executive, but said that without any experience in the Internet sector, she would likely find it daunting to turn around Yahoo, which is a distant second to Google Inc (GOOG.O) in the search advertising market.

Bartz will be under immediate pressure from investors, who have seen the value of their shares nosedive in the past year, to re-open talks with Microsoft Corp (MSFT.O) and secure a sale of the company at a healthy premium. The software maker has shown no interest in reviving its $47.5 billion takeover bid.

Bartz herself welcomed the challenge during her first conference call as Yahoo CEO, saying she wouldn't have accepted the offer if she didn't think a turnaround was possible.

"I just see this company as a company with enormous assets that frankly could use a little management, and I love leading, love managing, love making decisions," she said.

She added that she would address questions of whether Yahoo should look for a search partnership, divest assets and find new ways to cut costs later, after she had spent some time understanding the company.

DEAL OR NO DEAL

Collins Stewart analyst Sandeep Aggrawal said Microsoft could see Bartz's appointment as an opportunity to make a fresh proposal for Yahoo.

"Yahoo probably needed a CEO who was going to favour this deal," Aggrawal said. "We were never really sure whether Jerry Yang wanted to do this (Microsoft search) deal or not."

Yahoo co-founder Jerry Yang agreed to step down from his CEO post in November after drawing investor ire for failing to strike a deal with Microsoft.

Although Bartz was mum on Microsoft on her first day, some analysts wondered if her appointment itself was a message to the market that Yahoo wants a CEO who can focus on the company's growth strategy rather than sale.

"The selection of Bartz is a declarative statement for Yahoo, that 'we are not for sale'," said Neil Sims, a managing director at executive search firm Boyden's technology practice group. "She doesn't have the M&A dealmaker profile you'd expect Yahoo to select if (selling) was their overt intention."

Analysts also wondered whether Bartz's lack of media industry experience would be a stumbling block when it comes to transforming Yahoo.

"The Yahoo brand is very muddled and complicated and confusing," said Sims, who has done executive search work for Yahoo. "The company is a cobbled-together association of fiefdoms, and within those business units and predecessor companies are strong personalities with agendas."

Bartz's lack of industry insight could make managing the company that much tougher, he added.

But Bartz refuted the notion that it would be tough for her to run Yahoo's online media properties because most of her experience is in the technology industry.

"I didn't know CAD (computer-aided design) when I joined Autodesk, I didn't know hardware when I joined Sun," she said. "I am a technology person, I am a market-driven person, I love customers. So I suspect I have a little brainpower to learn what it takes to understand media."

UPDATE: KB Home 3Q Loss Widens As Orders, Deliveries Slump

KB Home (KBH) reported a larger-than-expected quarterly loss early Friday, as it held firm on pricing, fueling a stunning order decline and rise in cancellations as potential buyers walked away.

The third-quarter results are the latest in a recent string of grim statistics that show the sector's worst downward spiral in decades - one that has forced dozens of builders out of business - drags on.

Chief Executive Jeffrey Mezger was bleak: "Market fundamentals appear unlikely to improve significantly in the near-term" amid competition from increased foreclosures, bloated inventory and tighter requirements for mortgage rates, even for potential buyers with good credit.

"It's pretty clear that the home building market has undergone another leg down," said Morningstar analyst Eric Landry.

Shares of Los Angeles-based KB Home slipped about 3%, slightly below the Dow Jones US Home Construction Index's 3.13% fall.

For the quarter ended Aug. 31, the company, one of the nation's largest builders, reported a net loss of $144.7 million, or $1.87 a share, compared with a prior-year net loss of $35.6 million, or 46 cents. Analysts polled by Thomson Reuters expected a loss of $1.22 a share on $734.7 million in revenue.

Revenue actually dropped 55% to $681.6 million, while orders plummeted 66% - well above the 40% JP Morgan expected. New home deliveries slid 51%. "The contraction in KBH's operating metrics are staggering in our view," noted Wachovia's Carl Reichardt. "Q3 unit backlog is 79% lower than in Q305 while orders this quarter were 85% lower than those generated in Q305."

The cancellation rate - typically unit cancellations divided by gross orders - jumped to 51%, up from 27% in the second quarter. Until recently, some builders have seen cancellation rates improve slightly.

Mezger said the dramatic order decline "reflects the broader dynamics of the housing market" and its strategic response: cutting the amount of developments underway - its active community count was sliced by 38% - and changing offerings. It is at work on "new, value-engineered product with smaller, more affordable standard features" and a lower base price.

In California's Inland Empire, one of the nation's worst housing markets, KB Home has cut the size and prices of houses - by more than half - to make them competitive with resales and foreclosures, often bargain-priced to sell quickly. The change is working, Mezger said during the earnings conference call.

The company also reduced its use of sales incentives and price discounts as it reviews pricing strategies. Since the downturn began, builders have tried everything - free gourmet kitchens, paid closing costs and even six-figure discounts - to move inventory. KB Home has even offered price protection guarantees to reassure buyers afraid of buying a house only to see it fall in value.

Analysts were divided over the decision to hold prices.

"KB Home is in an enviable position where they can afford to do that," Landry said. "The liquidity is such, where they can say 'We don't need to fire sale homes anymore.'"

KB Home executives echoed that sentiment during the earnings conference call.

But there isn't a lot of differentiation in what public builders construct - with the exception of Toll Brothers Inc.' (TOL) luxury product - so buyers could easily score price discounts from nearby competitors.

Holding firm on prices kept charges down this quarter, but JP Morgan's Michael Rehaut thinks there's more pain to come.

"While we believe this was enough to prevent material impairment charges this quarter, given the highly negative commentary, we believe that KBH will be forced to reduce its prices over the next 2-3 quarters, which should trigger further material impairments," he noted.

Builders also face the loss of seller-funded down payment assistance, or DPA, which has been a key driver of recent sales. As part of this summer's housing bill, DPA ends at the end of the month. After that, as much as 15% of the buying base could be erased.

Some investors and analysts have pinned their hopes that the effects of a proposed $700 billion government bailout of the financial industry can stem home builders' pain. But industry watchers, including the National Association of Home Builders, point out it doesn't immediately address some of the builders' biggest problems: The difficulty for first-time buyers to come up with a down payment and the downward pressure foreclosure sales are putting on house and land values.

Friday, KB Home's Mezger said "difficult conditions have now been exacerbated by the recent, unprecedented turmoil in financial and credit markets," while noting "it is too early to assess" whether conditions will improve following government intervention.

KB Home is the second builder to report a loss this week. Lennar Corp. (LEN), the nation's second-largest builder, reported a narrower loss of 56 cents a share, compared with a prior-year net loss of $3.25 a share. Orders dropped 42%, while deliveries fell 49%.

Chief Executive Stuart Miller's comments mirrored the same issues KB Home reported: "While we expected the housing market to remain constrained throughout the third quarter, the weakness in the market actually accelerated as a result of increased foreclosures, weakened consumer confidence and tightened mortgage lending standards."

Meanwhile, August's new-home sales fell 11.5%, sliding to their lowest level in 17 years, the government said Thursday. The rate tumbled 35% in a year. And existing sales, a much bigger slice of the market, also slipped in August.

Fire in illegal Chinese dance hall kills 43

A fire at an illegal dance club in southern China, just across the border from Hong Kong, left 43 mostly young people dead and another 88 injured, another grim reminder of the country's broken regulatory system.

The fire broke out just before midnight at the packed King of the Dancers club, sparked by a pyrotechnics display on the third floor, said Xinhua, quoting local police as saying.

The owner of the club, located in a blue collar area about an hour's taxi ride from downtown Shenzhen, was being questioned by police, but no charges had yet be filed, said Xinhua.

The main hall quickly filled with deadly smoke after the roman candle-type display touched ceiling tiles, and the lights went off soon after -- plunging panicking revellers into darkness, said witnesses.

"The fire wasn't that big, but there was a lot of smoke," said a man surnamed Zhang, who said he worked at the club.

"Everyone was crowding towards the front entrance, because they didn't know about the one in the back," said Zhang.

"We tried to tell them, but nobody would listen," he said.

Local media and witnesses said the club operated without a proper licence, but local officials could not confirm that.

Just hours later a coal mine gas accident in central Henan Province claimed 37 lives, said Xinhua.

Rescue efforts are underway at the privately-owned mine, which had 108 miners underground at the time of the accident, 64 of which were able to escape, it said.

China is trying close smaller unsafe mines, but with soaring coal prices mine operators working in concert with local officials have strong financial incentives to keep their mines open.

The accidents come as China is scrambling to contain a spreading scandal over tainted dairy products that has killed four children, made thousands more ill, triggered a regionwide recall and sparked an outcry from China's trading partners.

Premier Wen Jiabao presided over a cabinet meeting last week, after which the government said the incident reflected chaotic industry conditions, loopholes in the supervision and management of the dairy industry.

Many of the deaths and injuries occurred in a stampede to escape through a narrow hallway, said Xinhua.

The Party chief of the province, Wang Yang, has ordered an immediate investigation into the cause of the accident, said Xinhua, without giving any other details.