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Record Storm Heads East; Markets Setting New Records; Royal Secret Slips; Stewart Defends J.C. Penney Deal; Interview with Jeb Bush
Aired March 06, 2013 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: CNN NEWSROOM with Don Lemon begins right now. We'll see everybody back here tomorrow morning.
DON LEMON, CNN ANCHOR: Inch by inch and mile by mile, a massive winter storm burying records and taking aim at Washington, government agencies shut down. Snow piling up. Power outages spreading.
Banned since September 11th, now the TSA changing the rules. Small knives, some sports equipment will now be allowed on airplanes. We'll talk about it.
The newest member of Britain's royal family could be, well, a princess. Why the British tabloids are betting it's a little girl.
Plus.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: See the sky, who created you. Lord.
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LEMON: "The Bible," who knew, better than a best seller, now a television hit, God is beating zombies in the TV ratings. I'm going to talk to the producer.
You're live right now in the CNN NEWSROOM.
Good morning, everyone. I'm Don Lemon. Carol is off today. Snowfalls and records are tumbling right now. The same powerful winter storm that buried much of the central U.S. now slogging east, up to 20 inches of snow blankets the region, and this morning nearly, get this, 100,000 homes and businesses are now without power. That same wet, heavy snow could bring down even more power lines in and around Washington.
Live look now from Washington, there's the nation's capitol. Federal offices closed today and the temperatures swinging just a few degrees. Could make all the difference today.
Joe Johns slogging it out for us. He is northwest of the capital in Winchester, Virginia.
Joe, it is going to get bad. Just how bad is it going to get? JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Well, pretty bad. I can tell you it's actually picked up since we started around 5:00 this morning Eastern Time.
And, Don, it's not just the volume of the snow, it's also the weight and the heft of it, and the fact that it's moist. I mean, if you look at this, you can see the way the snow just is prone to stick on the limbs, of course, so much weight can bring limbs down, can bring trees down, power lines, as you've already said.
It's been a long day across the country and this is going to go on for quite a while.
(BEGIN VIDEOTAPE)
JOHNS (voice-over): In Chicago the afternoon commute was an icy, snowy mess.
UNIDENTIFIED FEMALE: It doesn't make for good driving but at the same time, you know what? It's beautiful out. The snow, the quiet.
JOHNS: The 10 inches of snow at O'Hare Airport set a record for most snowfall on that date. More than 1,000 flights in and out of Chicago were canceled.
Overnight, the snow started piling up in Indiana.
UNIDENTIFIED FEMALE: It was scary. It just felt like I was on ice and it was just really slippery.
JOHNS: And Ohio. But amid the misery, there is a bright side.
UNIDENTIFIED FEMALE: It's pretty sweet.
UNIDENTIFIED MALE: It's just like being on a mattress or a cloud.
JOHNS: Now that big monstrous cloud is bearing down on Virginia, has Washington in its sights and it's still far from being over.
UNIDENTIFIED MALE: If you have to get on the road use extreme caution, drive slower than you normally would.
(END VIDEOTAPE)
JOHNS: So as you can see, it's very easy to make a snowman out in this kind of weather. Of course, that's great for the kids. I did that during the package insert, believe it or not, pretty impressive, right, Don?
LEMON: It is impressive. You know, you bring your thermometer to the heat stories. Did you bring your ruler to the snow story? How many inches, do you know?
JOHNS: Yes. I did not -- I did not bring the ruler but I can tell you just by looking at it we're probably somewhere between four and five inches right here in this part of the Shenandoah Valley, that's very unscientific survey if you will.
LEMON: Yes. And seriously a lot of our viewers are traveling, Joe, and watching us from the airport. How many flight cancellations? Do you know? We're seeing a lot of you checked on that?
JOHNS: I'm sorry, Don, would you ask me that again? You're kind of garbled.
LEMON: Flight cancellations in the region.
JOHNS: Yes. I do not know, I do not have a current number on the flight cancellations. I know the number was in -- more than 1,000 as of yesterday, and that certainly wasn't counting the East Coast.
LEMON: All right. You're out in that. We can check it back here. We have computers.
Joe Johns, thank you, stay warm, my friend. Appreciate it.
We want to turn now to your money. The Dow heads into uncharted territory this morning. It will open at an all-time high of 14253. What does that all mean? And now one Wall Street analyst is predicting the Dow will hit 20000.
Alison Kosik at the New York Stock Exchange.
Alison, 20,000. That's an incredible number. I mean, what does this mean? What -- what's behind this?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: OK, so that Dow 20,000 just remember that theory is coming from one lone bull. This is from a strategist from JPMorgan Chase who says yes, the Dow could hit 20,000 in about four years and here's his rationale. He says that he thinks that corporate America is going to come in with strong profits this year and that will then be reflected in earnings and he thinks that earnings power is going to catapult stocks up to that 20,000 level within four years.
He says, look how the market's been acting lately, that it's been able to kind of shrug off the pressure of what's been going on just in the economy and the world economy and it still continues moving forward and he says with help from these stronger earnings he believes -- he thinks the Dow could hit 20000 -- Don.
LEMON: All right. So that's what the bullish folks, as they say, that's a bull's argument. What about the more reserved bears? What are they saying?
KOSIK: Yes. And most -- and most everybody else is a bear and they say, you know, they are actually expecting a pullback because they say for one reason actually this time of year it's kind of slow for stocks, that you're not going to see the volume really push stocks that high.
Also the end of government funding. That's going to kick in at the end of the month, not to mention the big debt ceiling debate? Yes, that's going to be happening in a couple of weeks as well. It may seem that the market is kind of numb to that now but many believe that that could lead to a pullback.
Now of course the one savior could be the Fed. The Fed continues pumping money into this market, pushing -- basically pushing investors to the best investments in town, and that seems to be stocks at this moment. But then you also look at history as your guide and you look at what happened to the Dow after it hit these record highs. So yes, in 2000, you see that the Dow peaked then in just over two years it tumbled. That's after the dot-com bust.
Then in 2007 the Dow peaked yet again. But about a year and a half later it tumbled because of the recession. And in both cases the tumble was a biggie. Was 40 to 50 percent and yes, now, now, we are at a record high again, Don. The good news is most market watchers think that if it does pull back you won't see a huge pullback like that 40, 50 percent that we've seen in the past, if only we had a crystal ball -- Don.
LEMON: Yes. Absolutely. Just not so long ago people were pulling their money out of the stock market investing in other things.
KOSIK: Yes.
LEMON: It's going back up.
KOSIK: Now they can't wait to put it back in.
LEMON: Yes. We'll check back. Thank you, Alison. Appreciate it.
KOSIK: Sure.
LEMON: These are the stories to tell you about right now that we're following this morning. Crews are looking into why an enormous crane made a giant splash into a bay near Portland, Oregon. Look at that. The structure fell while lifting new support towers to carry high voltage power lines. The new towers also fell into the way. Luckily no one was hurt.
Attorney General Eric Holder is not ruling out a case where a drone strike could target Americans on U.S. soil. He made the comments in a letter to Senator Rand Paul. Holder says in a hypothetical and unlikely to occur case the president could authorize the military to use lethal force within our borders. Holder says the U.S. has not carried out such an order and has no plans to do so.
Starting April 25th, the TSA will allow -- listen up. Will allow to you bring small knives and certain sports equipment in your carry-on. The items have been banned from aircraft cabins since the 9/11 terror attacks. Passengers also will be able to carry on pool cues, lacrosse and hockey sticks, golf clubs and whiffle ball bats. Officials say the change will align the U.S. with international rules.
The duchess of Cambridge may have let a royal secret slip out. It happened as the former Kate Middleton was greeting well-wishers.
CNN's Zain Verjee is in London with the latest -- Zain.
ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Hey, Don. It was the mother of all hints and a major oops for the duchess. What did Kate almost say? Well, yesterday during a royal visit a well-wisher gave her a teddy bear. According to someone who was there, Kate said, "Thank you, I will take that for my," and then she broke off without finishing the word.
So what do you think that mean? As you can imagine, the papers are all buzzing this morning, she's on every single front page, almost, and the main message is this. It's a girl. Sources are saying that after the slip, Kate blushed and said, "We don't know," but now we have a clue, her baby could be the future queen -- Don.
JOHNS: All right, Zain, thank you very much.
Martha Stewart means big business to Macy's. The domestic diva's brand brings in millions of dollars. That's why Stewart finds herself in court right now defending a new deal with the department store rival.
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LEMON: Welcome back, everyone. Top stories we are following this morning.
President Barack Obama has invited several Republican senators to dinner tonight. The move appears to be part of beefed up efforts by the White House to strike a budget deal after forced spending cuts took effect on Friday. Mr. Obama reportedly has called several GOP senators to discuss a plan for cutting the deficit.
Police in Tennessee are searching for the person or persons who robbed the home of Senator Lamar Alexander. Thieves took jewelry and silverware but police don't think the -- that lawmaker was targeted.
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DON AARON, METRO NASHVILLE POLICE: There is no indication whatsoever at this point that this home was burglarized because of who lives here. We think this was a crime of opportunity.
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LEMON: Alexander and his wife were not home during the robbery.
A leading dancer with Russia's Bolshoi Ballet confesses to ordering an acid attack on the company's artistic director. Police say the dancer admits arranging the January assault. The attacker and a getaway driver also in custody right now. Police say the dancer had a, quote, "hostile relationship" with the artistic director who got his job two years ago after a fierce behind-the-scenes power struggle. The director suffered third-degree burns to his face and eyes.
A global oil crisis is looming, but it's not the kind you might think. We're talking about olive oil. A recent drought in Spain has cut the olive harvest by 60 percent and because Spain provides about half the world's supply of extra virgin olive oil, the shortage means higher prices are coming so you might want to consider going light on the salad dressing.
That is of course Aerosmith front Monday Steven Tyler. You might recognize him from the reality show that he's part of. A bill bearing his name has passed the Hawaii Senate. It could let celebrities sue paparazzi who take invasive, offensive photos of them on private property. But some say it is unnecessary.
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JEFF PORTNOY, ATTORNEY: It's a hero worshipping bill in a legislature that is dealing with or should be dealing with nearly significant problems. It's written so vaguely and it's so poorly defines what conduct is prohibited that it may very likely be unconstitutional.
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LEMON: Well, the bill now heads to Hawaii's House of Representatives.
I thought we were allowed to do such a thing, that's what Martha Stewart tells a New York court about her deal with JCPenney. The problem is, Stewart's company already has a deal with JCPenney's rival Macy's. Macy's, suing both of them, claiming exclusivity. Tuesday Stewart took the stand.
Christine Romans joins us with more on that.
Man, this is a soap opera.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It really is and it's so rare to be able to peek inside three CEOs, three household names, J.C. Penney, Macy's and Martha Stewart, and see how business is done at this very high level. It is at its core a contract dispute.
You're seeing there, the Macy's attorney really tenacious in his grilling of Martha Stewart on the stand yesterday, trying to show that she basically stabbed Macy's CEO in the back and went -- and got in bed with another company when she had an exclusive agreement to sell her branded products inside Macy's.
Martha Stewart saying, "No, I thought I was allowed to do this," and even giving a little bit of a dig at Macy's saying $300 million business at Macy's is not enough to sustain a company like ours.
And she might be right because here's the truth, Macy's -- sorry, Martha Stewart has been shuddering magazines, they've been laying people off, they had been pulling back, no more TV show. She needs to expand in retail.
This is what Michael Kupinski said why she has to tie with J.C. Penney for the good of her company.
(BEGIN VIDEO CLIP) MICHAEL KUPINSKI, DIR. OF RESEARCH, NOBLE FINANCIAL MARKETS: Certainly, Martha Stewart is a very savvy businesswoman and she's looking for opportunities to enhance the value of her company and for shareholders as well. So broadening out the distribution to other retailers is an important element of growing this company.
(END VIDEO CLIP)
ROMANS: But did she break her contract with Macy's by getting in bed with J.C. Penney? Is that I that is what this judge is going to decide. Martha Stewart was on the stand yesterday. She is done testifying now.
This case originally was going to wrap maybe March 8th, but many observers of the court think this thing could be adjourned because of scheduling conflicts and come back again in April.
This deal also is really critical for J.C. Penney. J.C. Penney is losing millions of dollars.
LEMON: Yes.
ROMANS: Putting Martha Stewart in their stores critical for its own turnaround. And on the stand, a J.C. Penney executive last week testified, look, if they don't get her stuff in by Mother's Day, they have to get her stuff in their stores by Mother's Day.
LEMON: We're going to be watching it. You're right. J.C. Penney losing tons of money and been in the news about it as well.
ROMANS: Yes.
LEMON: We'll follow up with you. Thank you very much, Christine Romans.
ROMANS: You're welcome.
LEMON: From immigration to politics and family, former Florida Governor Jeb Bush sits down with CNN's Jake Tapper. Hear why Jeb Bush now says he understands what his dad went through, watching him run for public office.
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LEMON: Since 1988, no Republican has become president without the last name Bush. Jeb Bush might find himself on that list.
But, right now, he says he is focused on education and immigration and he told CNN's chief Washington correspondent Jake Tapper that his brother, former President George W. Bush came close to getting an immigration reform package passed in Congress.
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JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: Your brother tried to push immigration reform. JEB BUSH (R), FORMER GOVERNOR OF FLORIDA: Yes.
TAPPER: Your brother had a lot of skin in the game, and I covered it on Capitol Hill.
BUSH: Yes.
TAPPER: What could he have done differently, if anything?
BUSH: Man, he got to the two-yard line before there was a fumble. It was -- it passed the House. It had 60 votes in the Senate, the magical number. And as I understand it, both -- the leadership in both parties kind of gave a pass to the freshman senators to say, "Look, if this is going to put you in a bad position in your election coming up," which would have been 2008, "don't do it."
TAPPER: This conversation has prompted a lot of speculation about what your plans might be in 2016. I know you haven't ruled anything out and you haven't announced anything either.
BUSH: Right.
TAPPER: What kind of factors will you be weighing in the next year as you make this decision?
BUSH: Well, I'm not going to factor anything in a year. That's the only thing I've decided, which I think I have enough self- restraint to be able to pull off, which is to continue to pursue this hectic life that I have.
I have an education reform foundation that is booming. I mean, it's -- we got all sorts of great things that we're working on. And I have my business, and I have my family. So I'm not going to think about this for at least a year.
TAPPER: But you'll make a decision sometime in 2014? Is that a fair assessment?
BUSH: I don't know. Just -- the only thing I've decided is that I'm not going to think about it for 2013. It's -- it's just too far out for me, personally.
TAPPER: You've been the son of a candidate. You've been the brother of a candidate. You've been a candidate yourself. Now, it looks as though you will be the father of at least one -- at least one candidate, with one son talking about maybe running for statewide office in Texas, the other contemplating --
BUSH: Yes.
TAPPER: -- a possible congressional run in Florida.
BUSH: It's amazing.
TAPPER: What's it like being the papa of a candidate? BUSH: It's -- now I know what my dad feels like, why he would get emotional every time he was, like, in a setting where George or I were, you know, in pursuit of some office of some kind.
TAPPER: He would want to punch in the face people that went after his boys.
BUSH: He'd cry first. So, in the case of my son, I saw him -- I was in Austin working on education reform issues in the capitol, and he spoke for five minutes prior, and wow, I mean, no "ums," no "ahs," totally, credibly handsome, articulate, thought it through, thoughtful, engaging --
TAPPER: Very proud?
BUSH: Oh, man.
TAPPER: And what about -- and what about your other son?
BUSH: Jeb is my partner in business and father of the most beautiful little girl in the world and --
TAPPER: You're welling up a little bit, talking about your sons.
BUSH: Yes. And my daughter. Family really matters. It's a big deal. I'm proud of both of them. I'm proud of my daughter, as well.
(END VIDEOTAPE)
LEMON: The former Florida governor supports a pathway for illegal immigrants to become citizens and a smaller measure giving them only legal status.
Still ahead in THE NEWSROOM --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: God warned me, he told me to build a boat. God has spoken to me.
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LEMON: Could you say that TV is finally getting some religion? You could say that as new mini-series "The Bible" gets monster ratings. And you'll never guess the big name who is behind it.
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UNIDENTIFIED MALE: God has sent me to set you free.
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LEMON: Good morning, everyone. I'm Don Lemon.
Stories we're watching now in THE NEWSROOM:
Live video from Venezuela, residents are waiting for President Hugo Chavez's funeral procession. The socialist leader's remains are being taken to a military academy where he will lie in state. The presidents of Uruguay, Argentina and Bolivia are expected to be on hand today.
The country has declared seven days of mourning. Chavez's funeral is set for Friday.
One million Syrians have fled their country's civil war. The United Nations says a 19-year-old mother of two registered today in Lebanon as the conflict's millionth refugee. About half of all refugees are children. An estimated 70,000 people have been killed in nearly two years of fighting.
Henry Kissinger is in the hospital after falling at his home. That is according to "Reuters." Officials at New York Presbyterian have not said if the 89-year-old former secretary of state was hurt.
The news comes as "The Wall Street Journal" publishes an op-ed co- written by Kissinger. It offers a stern warn being the global nuclear threat.
Opening bell happening soon, stocks expected to open higher on Wall Street and that includes a record opening for the Dow -- whether the momentum holds is anybody's guess. We want to check in with Alison Kosik at the New York Stock Exchange.
So, Alison, we are waiting. What are we expecting?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, we are waiting.
Up, up, up, the Dow expected, Don, to pop up another 50 points in about 45 seconds. And this, of course, follows the Dow's day for the record books, where it's basically blew through its old record and now has a new one.
What's giving investors the incentive to buy, an upbeat report on private sector jobs in February. They rose by 198,000 last week and that's a good sign because what this report is kind of the appetizer to the main course, and the main course comes out on Friday. The main course is the official government jobs report.
But as you said, the question is whether we can maintain these levels, many analysts we talked to say, you know what, this is a market that's ripe for correction.
LEMON: You're right. There it is. The bell ringing now.
But, yes, the question, will it hold, Alison? And we're hoping so. But as you said, you need a crystal ball to figure that out for sure.
KOSIK: Yes, and a lot of skeptics say, they say, you know what? This kind of momentum can't last forever and, you know what's one of the deciding factors could be just for this week is that jobs report that comes out on Friday.
