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Brinksmanship, the New Normal?; Should Some Government Activities be Kept Secret?; The First Lady Makes Oscar Appearance; Glamour Night at the Oscars; Barnes & Noble Considers Nook's Future; Danica Makes History at Daytona

Aired February 25, 2013 - 09:30   ET

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


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CAROL COSTELLO, CNN ANCHOR: Good morning. I'm Carol Costello. Stories we're watching in the NEWSROOM, at 31 minutes past the hour, a new trading week beginning on Wall Street. U.S. stocks opening higher following bangs (ph) in the Asian and European markets. Ringing the bell, this morning executives with Alon USA partners, which operates a crude oil refinery.

Hewlett Packard is opposing its new Android tablet, is hoping rather its new Android tablet catches on after the failure of the touch pad. The Slate 7 offers a seven-inch screen and costs $169. It's targeted at the entry-level consumer market. It will be released in April.

Here's something you don't see every day. Police say a driver near Houston lost control on a curve, hit a house, went airborne, and then landed upside down on the roof of another home. Wacky. Fuel leaked into the house. A crane operator was called in to remove the car. Amazingly, no one in the car or the home was seriously hurt.

A blizzard is crippling the plains right now. These are new pictures near Amarillo, Texas of near whiteout conditions. Conditions are so poor here roads are impassable, and emergency crews having a tough time getting to the scene of several crashes. Flights in or out of Amarillo airport, canceled.

"Political Buzz" is your rapid fire look at the best political topics of the day. Three topics, 30 seconds on the clock. Playing today, CNN contributor and ESPN senior writer L.Z. Granderson, and CNN contributor and analyst for "The Blaze," Will Cain.

Welcome, gentlemen.

WILL CAIN, CNN CONTRIBUTOR: Good morning, Carol.

L.Z. GRANDERSON, CNN CONTRIBUTOR: Good morning,

COSTELLO: First up, by now, you're all too familiar with how the story goes. A financial disaster looms. Congress and the White House play the blame game. And then at the very last minute a deal miraculously gets done. And with just four days until those forced spending cuts, you know sequestration, President Obama and the returning Congress find themselves right back in that same spot in that old story. The White House is telling states how those forced spending cuts will affect them, reducing money for everything from cop salaries to funding for HIV tests and early childhood education. Here's how Delaware's governor summed up the impact.

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GOV. JACK MARKELL, (D) DELAWARE: The most frustrating conversation any governor can have these days is when we talk to a business who says, I'd love to hire, but I can't find people with the right skills. So we have resources available for job truing, and if those resources get cut, it really puts -- it stops the recovery in its tracks. That's not what we should be doing.

(END VIDEO CLIP)

COSTELLO: Despite the pressure, people in the nation's capitol continue to drag their feet. Governor, they say, don't worry. Our question, though, is brinksmanship standard operating procedure in Washington now? L.Z.?

GRANDERSON: Yes, for any sort of emergency that's created by them. I think they're still smart enough to know there's an outside force that's creating the emergency that they'll operate. But if they're using this kind of drama for political tactics, then, yes, this is part of the normal day to day life of Washington now. You've got to remember. They've had 18, 19 months. This didn't sneak up on them. They knew this day was coming. They kicked it down the road by a couple more months, but this was all created by them. This is the way they want to operate. Yes, right now, for non-outside emergencies, this is the way it is.

COSTELLO: Will?

CAIN: They may have known this was coming for 18, 19 months, but here's why it hadn't mattered: because they do this so often. About a month ago on "The Blaze," I charted how many times over the last two years we've had these do or die brinksmanship politics. I think I sent you an image that you can put up. This shows you since December of 2010, eight times. That's four times a year, almost once a quarter on average. Look at these greatest hits. Remember the fiscal cliff? How about the government shutdown in 2011? We do this over and over. We focus on the symptoms, but we have to look at the root cause. Congress has not passed a budget in four years, Carol. Four years, no budget. We'll keep doing this.

COSTELLO: That's so mind boggling.

Okay, onto the second topic. The most transparent administration in American history? Not so fast, President Obama. Your former press secretary says, when it comes to the issue of drones, some things were better left unsaid.

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ROBERT GIBBS, FORMER WHITE HOUSE PRESS SECRETARY: One of the first things they told me was you're not even to acknowledge the drone program. You're not even to discuss that it exists. I think in many ways the president has seen -- I haven't talked to him about this, but I want to be careful, this is my opinion. I think what the president has seen is our denial of the existence of the program, when it's obviously happening, undermines people's confidence overall in the decisions that their government makes.

(END VIDEO CLIP)

COSTELLO: Oh, you're kidding. Here's our question. Why all the secrecy about drones? Will?

CAIN: Accountability. Pure and simple, it's about accountability. Both domestic, democratically and internationally. We're having conversations now about when Americans can use drones to execute other Americans. Here's another one. Accountability on the international stage. This technology will proliferate and proliferate quickly. There are questions about geographic boundaries. What happens when someone else sends drones in areas we don't want them, China, whatever it may be. We don't want to have the conversations because we don't want to be accountable for the rules we're setting right now.

COSTELLO: L.Z.?

GRANDERSON: Will is spot on. The fact of the matter is that, if we were to have that much transparency about this particular program, we have to have a lot more discussion. And if you're discussing something and you think someone's at the works (ph) actually creating something that's going to harm Americans, time becomes a factor. Expediency becomes a factor. We just talked about the last question. I'm not really sure Washington is the place we're going to have a long conversation if someone's plotting to kill Americans. So they're doing it on the low. They're doing it secretly because they feel like it has to be done, and they don't want to have a discussion, which is not the way democracy is supposed to work.

COSTELLO: Final question. Michelle Obama, our first lady, champion of children's health and Oscar presenter?

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MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: And now for the moment we've all been waiting for. And the Oscar goes to - "Argo." Congratulations.

(APPLAUSE)

(END VIDEO CLIP)

COSTELLO: I love that dress. A surprise appearance that's drawing cheers and some jeers from people who think the nation's first lady could be doing something more important with her time. In fact, some say the first lady's turn in the Hollywood spotlight is eerily reminiscent of a stunt featuring a beloved character from the 1970's hit show happy days, and that would be the Fonz for those who do not know. Michelle Obama has been everywhere. She's doing the mom dance. Did Michelle Obama jump the shark at the Oscars? Is it too much? L.Z.?

GRANDERSON: No. I don't know who's so upset about this. It's 12:00 at night. What else do you think she's going to be doing at 12:00 at night?

COSTELLO: Sleeping?

GRANDERSON: I think this conversation is absolutely ridiculous. We've got to remember Laura Bush also was present at the Oscars back in 2002. That was the year Halle Berry and Denzel Washington both won lead actor and actresses. First time African-Americans have done that in Oscar history. That's the reason why I remember it. So, no, it hasn't -- she hasn't jumped the shark. It's a silly conversation.

COSTELLO: Will?

CAIN: Let me -- okay, let me just offer you this. It's not worth a red card, that's for sure. It's worth a little warning, a yellow card. It's not about Michelle Obama's time, whether or not it's better spent somewhere else. Isn't it a little uncomfortable when we mix up politics and entertainment in Hollywood so blatantly? We accept the fact that it's essentially a voluntary propaganda wing, that it's left leaning, but when it's officially tied together, it's a little bothersome. By the way, the state department funded one of the nominees this year, a short film, "Buzkashi Boys." I think we need to keep these two worlds separate.

COSTELLO: Will Cain, L.Z. Granderson, many thanks for playing today.

Some of the best and worst dressed stars captured the spotlight on the red carpet. We'll show you some Oscar fashion hits and misses.

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COSTELLO: Most of those gorgeous Oscar gowns are likely heading back to the designers today after many were verbally ripped apart by critics. Topping the fashionistas of best in show though, were Jessica Chastain. Of course that's not Jessica. There she is. That was Jennifer Lawrence you saw first in that beautiful gown and Jennifer Hudson also got kudos for her gown. Let's talk about Helen Hunt. She wore simple Navy dress from H&M along with $700,000 worth of jewelry. "Village Voice" entertainment writer, Michael Musto is live in New York to talk about more than just fashion, but that's where we want to start because honestly it's my favorite part of the Oscars, the fashions. Good morning.

MICHAEL MUSTO, ENTERTAINMENT WRITER, "VILLAGE VOICE": Can I just start by saying I thought there was all too much silver glitter. It's like there was a sale on tin foil. Tan mom could have run through the audience like this.

COSTELLO: You should know glitter is in this year, Michael.

MUSTO: I know, but less is more.

COSTELLO: Less is more, true. You had fourfaves. Let's go over them. The first is what?

MUSTO: Jennifer Lawrence looked absolutely beautiful. Of course, she tripped on her flowing, billowy white gown on the way to the stage. That's the price of fashion. Being pretty is not pretty. You have to suffer to look beautiful. Jessica Chastain also looked gorgeous. She went for an old school, Hollywood glamour look. Minimal is in. No silver glitter there. Not a lot of bling, in fact I don't see any bling. She looked ravishing. Charlize Theron is a glamazon. She looked amazing. She has a pixie haircut because she's doing like a Mad Max film. She is very tall, like three Kristin Chenoweth's. But she managed to pull off this superhero outfit. And I also loved Catherine Zeta Jones, who was also a little glamazony, a little Xena warrior queen, with a hint of Star Trek, but in a good way.

COSTELLO: I know, she did. She looked great. So let's go on to some of the worst, which is always kind of mean to me. Usually, they're the most interesting. It's easy to look beautiful, right?

MUSTO: Exactly. It takes a lot of courage to look bad. It costs a lot of money to look cheap. I would say Naomi watts was a mistake. She was nominated for "The Impossible." That outfit was the impossible. It was very 70's glam rock meets -- again "Star Trek". And she looked like she'd been hit by a tsunami. I'm sorry and the hair was a little --

COSTELLO: I loved that.

MUSTO: You know I almost loved it. But the almost is the key word there. It was bad. Amy Adams, I thought, looked like she was molting. She looked -- she looked like a rag picker. Jennifer Garner looked like "Barney the Dinosaur" in that purple outfit with the ruffles in the back.

(CROSSTALK)

COSTELLO: You don't like the ruffles?

MUSTO: Caring means sharing, but -- no don't -- caring means sharing but don't ever share that one again, Jennifer.

Meryl Streep can do no wrong except for that outfit. It was like a glittery gunnysack. It was like granny goes disco. Granny went grocery shopping, and now she's going to studio 54. She kept hiking it in the back. And what was she doing back there? I don't even want to know.

COSTELLO: She was trying not to trip like Jennifer Lawrence.

MUSTO: Exactly and I think actually the worst was Kristen Stewart. Of course nothing goes with crutches and I feel bad that she stepped in glass and was hobbling but that dress looked like -- it looks like it had elephantitis. It was lumpy. It looked like a cross between cauliflower casserole and a furniture showroom. Otherwise it was gorgeous, otherwise it was absolutely gorgeous.

COSTELLO: Otherwise it looked great. Before you go I'd like to touch a little bit on Seth MacFarlane because I want to get your take on how he did. I didn't love him honestly.

MUSTO: I thought it was funny. Let's not forget Carol two years ago was the legendary Anne Hathaway, James Franco year. Not just the worst Oscars, the worst anything in history. He -- I thought he was funny. He made me laugh a little at his own jokes a little too much. But he went through some edgy stuff, like the boobs material. It wasn't just a total cruise ship to the catskills (ph). And he made Tommy Lee Jones laugh. That's an achievement unto itself.

COSTELLO: He didn't make him laugh with a joke, though. He only said was my goal is to make Tommy Lee Jones laugh and Tommy Lee Jones laughed.

MUSTO: Whatever it takes. You try it Carol.

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COSTELLO: I know I would never want --

(CROSSTALK)

MUSTO: That's one pickle pus. He makes Renee Zellweger look happy.

COSTELLO: Oh Jesus.

MUSTO: But next I would love to see Michelle Obama. She did a great appearance. She seems to be auditioning for a host next year. I think she would be great with Melissa McCarthy but not in that dress, that was like a larger version of Meryl's dress minus the glitter.

COSTELLO: Oh my God I think that's -- this is a good time to wrap up the conversation. Thank you Michael we appreciate it.

MUSTO: Thank you Carol.

COSTELLO: We'll be right back.

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COSTELLO: "The Wall Street Journal" reporting Barnes and Noble may soon part ways with its e-Reader, the Nook. Alison Kosik is at the New York Stock Exchange with a possible buyout. Hi Alison.

ALISON KOSIK, CNN CORRESPONDENT: Hi Carol. Well this deal would involve actually splitting Barnes & Noble into two businesses. Essentially the idea is to really just find a way to keep the bookstore open.

So the chairman and the founder of Barnes & Noble his name is Leonard Riggio (ph). He currently owns 30 percent of Barnes & Noble. Well now he wants to buy back the Brick and Mortar Bookstore. So what would happen would be that he would spin off the Nook -- the Nook e- Book and e-Reader business as one and the other would be the physical bookstores and BarnesAndNoble.com.

Now, talks of all this began last year. Right now the physical bookstores, they still actually, believe it or not, make more money and do much more in annual sales than the Nook. You look in fiscal 2012 the stores actually took in almost $5 billion in sales. The Nook took in less than $1 billion. We will see if this in fact happens. And if it does happen, if it's enough to save Barnes & Noble.

COSTELLO: All right. Alison Kosik reporting live for us this morning.

"Talk Back" question, "Did Seth MacFarlane hit or miss at the Oscars?" Facebook.com/CarolCNN or tweet me @CarolCNN.

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COSTELLO: "Talk Back" question today, "Did Seth MacFarlane hit or miss at the Oscars?"

This from Mitch, "He did great. He put new life into the Oscars. I watch them every year and it was getting dry and boring. I loved it."

This from Joyce, "Anything that's demeaning to a race, gender or otherwise is bad enough, but to do so in a public forum is extremely distasteful."

This from Ken, "He did a fine job, just too many stuffy uptight people who need to loosen up more."

And this from Nancy, "Captain Kirk did get it right. Seth was the worst Oscar host ever."

Keep the conversation going Facebook.com/CarolCNN or tweet me @CarolCNN.

How much would you pay for a professional athlete's socks? Curt Schilling's famous bloody sock from the 2004 World Series, oh, did it fetch a pretty penny.

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COSTELLO: All eyes were on one driver at the Daytona 500, and you guessed who that driver was. It would be Danica Patrick. She went toe to toe with the men at the Nascar's biggest race. Joe Carter's here with more in today's "Bleacher Report".

JOE CARTER, BLEACHER REPORT: Hi, good morning from Daytona. Yes, Danica's memorable day started right from the beginning when she walked out for driver introductions, and this crowd gave her a giant roar. And then the grand marshal, actor James Franco, gave her a really flattering nod when he made a special announcement to officially start the race.

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JAMES FRANCO, ACTOR: Drivers and Danica, start your engines.

(END VIDEO CLIP) CARTER: All right. That really set the tone for the day. Danica made history from start to finish. She's the first woman to start front row in the Daytona 500, the first woman to lead a lap in this race. She actually led five in all. And she's the first woman to finish in the top ten -- she finished eighth.

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DANICA PATRICK, RACE CAR DRIVER: -- that I didn't think that I --

UNIDENTIFIED MALE: Great job, great job. Who says girls can't do this crap?

PATRICK: It's a little bit maybe more calm driving around here than Indy in an Indy car. I guess maybe at least on your own anyway, especially in the lead. I guess I had a little more time to look around and see the people.

(END VIDEO CLIP)

CARTER: Well, what she saw was Jimmie Johnson making a late-race charge to the front row. Johnson took home the checkered flag to win his second Daytona 500. The five-time sprint cup champion adds another piece to an already legendary racing career.

Mixed martial arts fighter Ronda Rousey rocked the house and made history Saturday night by winning the first women's match in UFC history. Rousey defeated fellow American and Marine Liz Carmouche late in the first round. The fight is said to be the highest women's pay-per-view in history beating out a boxing match in 2001 between Muhammad Ali and Joe Frazier's daughters.

One of the most famous bloody sock worn by Curt Schilling in the 2004 World Series was sold Saturday during a live auction in New York. The bloody sock went for more than $92,000. Schilling put the iconic sock up for sale after his video game company that he started went bankruptcy last year. He lost millions of dollars, and his baseball earnings in the video game company investment.

Manti Te'o had some explaining to do over the weekend at the NFL combine. Te'o has been going through meetings with officials from teams where he was asked, of course, about that now infamous fake girlfriend hoax. He also had to face the media and field questions mainly focusing on the Internet hoax itself.

A big part of the NFL combine is testing players' mental aptitude and character, not just their physical abilities. Manti Te'o met with 20 teams over the weekend. He's going to meet with those same 20 teams today when he'll work out on the field.

Of course, check out bleacherreport.com to find out more information about that.

Carol, what a historic weekend here at Daytona 500. We saw history in the making for Danica Patrick and of course, Jimmie Johnson being crowned quite the champion -- Carol. COSTELLO: You're not kidding. It was a great race. Thanks so much.

Next hour of CNN NEWSROOM begins right now.

Happening now in the NEWSROOM, Congress returns after a week off and facing a Friday deadline. Their mission -- compromise.