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Where is Kim Jong-Un?; Dow Opens after Worst Day OF 2014; Police Seize Cab Driven by Jesse Matthew; Alleged ISIS Wannabe Remains in Custody

Aired October 10, 2014 - 09:00   ET

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

DON LEMON, CNN ANCHOR: The North Korean leader not seen for more than a month. He fails to show up for a major event this morning. Who is running the country?

Also, markets tanked. Biggest drop all year. European markets sliding south as well. Ahead, find out what's behind the loss and what you should be doing with your money.

The man stands up on a flight and says, "I've got Ebola, you're screwed." Hazmat team to the rescue and a flight attendant's message to the cabin that's going viral this morning.

Let's talk live right now in the CNN NEWSROOM.

Good morning, everyone. I'm Don Lemon in for Carol on this Friday. Thank you so much for joining me on a day very important to North Korea and on the same day North and South Korea start shooting at each other.

The big question remains, where in the world is Kim Jong-Un?

Well, today marks the 69th anniversary of the ruling Workers' Party and the controversial leader was not there today at a ceremony to honor his father and grandfather.

CNN's Paula Hancocks in Seoul, South Korea for us.

What's being said about Kim there?

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Don, we have an assumption now from the South Korea Defense minister. He said just a few hours ago that he believes Kim Jong-Un may be near the Bongwha hospital in Pyongyang. He may be staying in one of his residents with the -- his sister and also with his wife.

Now this hospital is the same hospital where his father, the late Kim Jong-Il, and his grandfather, Kim Il-Sung, were treated as well. Both had many illnesses during their lifetime. So this is just the latest guess, really, from the South Korean Defense minister. Of course no one knows for sure where he is. It is widely assumed here in Korea that he had health issues. There have been rumor and speculation that there may have been a coup, he may have been deposed from power by the military. But most experts say that that's simply not likely. They do believe

that Kim Jong-Un might well still be in control and still be calling the shots, but of course they don't know exactly what's wrong with him or how ill he is. But the fact is, it has been five weeks now since we've seen him -- Don.

LEMON: Let's talk now about this exchange of gunfire between North and South Korea. How serious was this exchange -- Paula.

HANCOCKS: Well, to be honest, this is the most serious incidence that I've seen in about four years. It was serious. The -- there were certain activists who were sending balloons over the border to North Korea. They were filled with 200,000 leaflets, anti-Pyongyang leaflets, which they wanted the North Korean residents to read to find out exactly what their regime is like. There was also dollar bills and DVDs in those balloons.

And North Korea fired at them. They have sworn in the past that they would react angrily if they carried on with these balloons and obviously today that is what happened. Some of those shells landed in the South. The South Koreans then fired 40 rounds of machine gunfire in response. There were no casualties on this side of the border in South Korea. Of course it's impossible to know whether there were in North Korea -- Don.

LEMON: Thank you, Paula Hancocks in Seoul for us this morning.

I want to bring in now Charles Armstrong. He's a professor of Korean studies at the Columbia University and a fellow at the Wilson Center.

Do you believe that Kim Jong-Un has some kind of illness?

CHARLES ARMSTRONG, PROFESSOR OF KOREAN STUDIES, COLUMBIA UNIVERSITY: I think that's the most likely scenario. It's very unlikely that he's been deposed, that there's been a coup. He's too important as a figure head for those who are around him in the country to get rid of him. But the North Korean media can never show their leader in anything but the most robust of health, he's got to be seen as strong, he's got to be seen as in charge. So if he's not well, if he's injured, he's going to be hidden away until he recovers.

LEMON: So you believe this is some sort of illness? Is this any sign that he is not fully in charge, that there's not some shuffling going on with the North Korean government?

ARMSTRONG: Well, if he's seriously ill, he's obviously not running the day-to-day politics of the country. There's some speculation that his sister, Kim Yo Jong, is the one really running it and other people in the leadership as well. So he doesn't run the whole country by himself. There are people around him and there are shuffling for power as well.

LEMON: This cross border firing that's going on, does this happen without his permission -- a permission from the leader?

ARMSTRONG: It doesn't happen without very high level approval, of course. And most likely from Kim Jong-Un himself. Yes.

LEMON: There was an initiative to have some sort of diplomacy between the North and the South. Does this change anything?

ARMSTRONG: Well, as far as we've seen, it's been business as usual. They sent three very high-ranking officials down to South Korea at the close of the Asian Games last week. So it looks like things are going forward but we'll have to see when Kim Jong-Un makes his appearance.

LEMON: All right. We'll be watching. Thank you very much, Charles Armstrong, from Columbia University, professor of Korean Studies. Appreciate that.

This hour on Wall Street, the Dow will try to rebound from its most dismal day of 2014 that closed down 335 points but that's only part of the story. It's also knee buckling plunge from a near 24 hours earlier when the Dow saw its best day of 2014.

CNN's chief business correspondent is Christine Romans, and she's here, Alison Kosik is at the New York Stock Exchange for us this morning.

First to you, Christine, what's driving this roller coaster?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: What is going on? That's what everyone's asking. Look, there are four simple reasons here, and they are not really big surprises. In Europe, the German economy is stalling here. In China, you've got growth slowing. In the U.S., the Fed is going to end its stimulus this month.

And guess what? Don, we have not had a 10 percent correction in the stock market in more than two years. That's almost unheard of. There has not been a pullback in so long.

Look at this chart. Let me explain it to you. Those red spots are where you've seen a pullback. Usually you see them -- very frequently, every year, every 18 months. For two years we have not seen a technical 10 percent correction. And so a lot of people are looking at these other factors and saying, maybe this is time to take some money off the table.

Now a note of caution, before you freak out, remember this, the Dow is still just 4 percent below all-time highs. Really close still to all- time highs. So you'd have to see a lot more damage in the market to get that technical correction.

What I tell people to do, if you're very close to retirement, you should not be all in stocks. You need to take a very good, hard look at how much of your money is in the stock market for the long term. If you're very young, this matters nothing to you. Keep investing, keep investing, keep investing.

LEMON: Don't freak out as Christine --

ROMANS: Don't freak out.

LEMON: Just said. OK. But, Alison, are we seeing warning signs already this morning?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Unfortunately, those bears, Don, they are still hanging around. So yes, get ready for stocks to continue sliding when the opening bell rings in a little over 20 minutes.

I talked to a few traders today and they tell me this is about a correction because everybody is asking, is this a correction? Right now we are not in a correction per se. A correction is a temper -- is basically you're falling 10 percent from a recent high. And the traders that I'm talking to say yes, a correction of 10 percent or more is always possible.

The Dow is just 3.6 percent below its all-time high which ironically that all-time high, Don, was hit just a few weeks ago. Now a real correction would get the Dow down to 15550. That's another 1100 points. That's a long way. So, although a correction is possible, many don't see that happening.

I just want to mention as well, it's not just stocks we're seeing sell off. Oil has been getting whacked. Oil prices down 6 percent just this week. If you look at oil, oil is below $90 a barrel, it's at a level we haven't seen in two years and that's happening because of concerns that a global economic slowdown could cause less demand.

Hey, you want to look at the glass half-full in this? Oil prices falling could mean lower gas prices -- Don.

LEMON: You guys have so much energy this early in the morning.

(LAUGHTER)

ROMANS: The market is exciting again finally. It's been complacent for months, just going up and never moving back down. There's actually excitement in the stock market.

You know what I like to tell people, Don, is that if you're trying to find out what your log in for your 401(k) is only on the day after there's been a 300-point decline, you're not doing your job.

(LAUGHTER)

So, please, everyone, you should know and rebalance your portfolio for your own risks for your retirement -- Don.

LEMON: Your passion about this is jumping through the screen. That's why you're our chief business correspondent.

Thank you very much, Christine Romans and Alison Kosik, this morning.

ROMANS: Sure.

LEMON: All right. Let's check our top stories, a little pause there. We need to check our top stories.

The Supreme Court stopped Wisconsin from requiring voters to provide photo identification before casting their ballots in the coming election. And in Texas a federal court struck down that state ID law saying minority voters were disproportionately burdened. Texas says they'll appeal.

Scientists at Harvard University have discovered a diabetes breakthrough using stem cells. For the first time they have been able to create insulin-producing cells that could be transplanted in the body.

Microsoft CEO apologizing after putting his foot in his mouth about equal pay. He said not really about women asking for a raise but knowing and having faith that the system will give you the raise, the right raise. What's worse, he said it to a roomful of women at the Grace Hopper Celebration of Women in Computing. The women that I can see in my purview right now, all shaking their heads and just screaming.

Charlotte, North Carolina, Wells Fargo employee, Tyrel Oates, e-mailed his CEO asking for a raise and then copied 200,000 of his co-workers on the e-mail. He wasn't just asking for him. He wanted the CEO to give everyone a $10,000 bonus. Wells Fargo says their compensation exceeds federal and state minimums.

And Katy Perry's got a new gig. Yes, she does. She's performing at Super Bowl halftime show. No word if she had to pay to play like the NFL had wanted. We shall see if we're going to see Katy Perry halftime at the Super Bowl.

NEWSROOM back after a quick break.

(COMMERCIAL BREAK)

LEMON: It has been nearly one month since UVA student Hannah Graham vanished from the close-knit community of Charlottesville, Virginia. Now police are hoping new clues about suspect Jesse Matthew could help solve the case. DNA evidence has already linked Matthew to the disappearance of another student Morgan Harrington. Her remains were found back in 2009. But it's what Matthew was doing the night of Harrington -- the night Harrington vanished that could help bring Graham home.

Let's bring in now CNN's Erin McPike.

Good morning, Erin.

ERIN MCPIKE, CNN CORRESPONDENT: Don, good morning. Well, Jesse Matthew was driving a cab the night Harrington disappeared and she was last seen getting into a cab. Police have recently seized the cab that Jesse Matthew was driving that night and now the connections between these two cases are becoming impossible to ignore.

(BEGIN VIDEOTAPE)

MCPIKE (voice-over): Jesse Matthew has been in police custody for two weeks, the last person known to have seen Hannah Graham the night she disappeared four weeks ago. Police have linked him to another missing girl, Virginia Tech student, Morgan Harrington, who vanished in October 2009. Now police have found a second possible link connecting Matthew to Harrington's death.

A source with knowledge of the investigation says police have seized a taxicab owned by Matthew. Law enforcement sources say they have already linked Matthew to Harrington's disappearance with DNA evidence but no charges have been filed.

Last month Harrington's parents told CNN's Anderson Cooper they just want to prevent another tragedy.

GIL HARRINGTON, MORGAN HARRINGTON'S MOM: We're not joyful. There's no celebration here. We're kind of stunned, but we also are, you know, devastated that it has come through Hannah Graham being missing.

MCPIKE: In 2005, Matthew got a business license to drive a cab in the city of Charlottesville. State and federal investigators believe Matthew was driving for a now defunct company called Access the night Morgan went missing.

Fellow drivers remember Matthew.

MARK BROWN, YELLOW CAB OWNER: Our understanding he was driving a cab that the night Morgan Harrington was abducted.

MCPIKE: Her body was found months later in 2010, 10 miles where she was last seen getting into a taxi. 2010 was also the last year Matthew renewed his license to drive a cab in the city of Charlottesville.

Investigators say they interviewed several cab drivers at time.

MELVIN CARTER, CAREER DRIVER: They asked what dark colored cars, cabs around. I went down a list and asked them, I've seen him again, what cab company was it? And he told me. And when he told me, I'm like, oh, OK, great, it wasn't us.

MCPIKE: Matthews' attorney is not commenting on the case.

(END VIDEOTAPE)

MCPIKE (on camera): Now, Matthew's co-workers at the time also recently told CBS 6 News here in Charlottesville at the time, they suggested he looked like the man in the sketch linked to Harrington's death, that he became visibly upset and sometimes disappeared for hours, Don.

LEMON: Erin McPike in Charlottesville, thank you very much, Erin.

Still to come in THE NEWSROOM, the latest on the strange case of a Chicago teenager arrested for allegedly trying to join up with ISIS. His attorney says the young man is not a threat to the U.S.

(COMMERCIAL BREAK)

LEMON: Welcome back, everyone. A suburban Chicago teenager who allegedly wanted to join ISIS will

stay behind bars for at least another two weeks. A bail hearing yesterday for 19-year-old Mohammed Hamzah Khan was postponed when prosecutors sought to keep part of his proceeding secret. His defense lawyer argued it should remain open afterward he said no danger to the U.S.

(BEGIN VIDEO CLIP)

THOMAS DURKIN, KHAN'S ATTORNEY: In my opinion, ISIS is night threat to the United States and a lot of people share that view. So, if ISIS isn't a threat to the United States, I don't know how he could be. A matter of weeks, ISIS has become the most dangerous group on the face of the Earth because they made -- they beheaded a few people in very cleverly with public media.

(END VIDEO CLIP)

LEMON: Ted Rowlands covering the story for us in Chicago. Also with us is HLN legal analyst Joey Jackson.

Ted, let's start with you. You were in the courtroom. Did government attorneys say why they want secrecy during what should be a fairly routine hearing?

TED ROWLANDS, CNN CORRESPONDENT: No, it's kind of a mystery, Don. In a filing they said it was a third party privacy concern and then during, the hearing the judge actually said that the concern had to do with minors.

But that was it. That's all we heard about. And as you mentioned, Khan's defense team adamantly objected for that part of the hearing to be done in secret. They wanted the media and the public to be able to see what happened. So, basically, the judge ordered the prosecution to file a rebuttal and we'll find out in 11 days whether in this be will in the open or out doors.

LEMON: So, Joey, the government says that Khan was attempting to provide material support to terrorists. His attorney says that the teenager may hold radical view but hasn't broken any laws and he also says, you know, ISIS doesn't pose a threat, just beheaded a few people.

What's your take?

JOEY JACKSON, HLN LEGAL ANALYST: My take is as follows: I know Thomas Durkin. I tried a federal case with him. He's a very good lawyer.

Having said that, there's a lot, Don, that we don't know. The reality is, the suggestion that he made, I have to part ways with Tom Durkin on that the attorney, of course, for the teen.

But here's what it amounts to, was he providing material support to terrorists? That's the issue. If he was providing that and the government has evidence to establish that, he has a problem and a major problem, which amounts to 15-year sentence. The issue then becomes, Don, what is material support? How do they go

about proving that?

Well, material support is, was he providing any type of service? Was he going there to serve? Was he providing anything type of assistance? Was he intending to do and carry out that assistance when he got there? Did he take a substantial step towards that?

If the government has that, and generally, Don, what the feds do, they've got surveillance on you, they've got audio, they've got video, they've got you know e-mails -- there's a lot of surveillance that they do before they arrest you. We'll see.

LEMON: Joey, why the secrecy? Why does the government want to keep these, some information may get out, provoke others? What's the reason behind keeping part of the proceedings part of them at least secret?

JACKSON: Well, Don, there's two things here really. The first is, if you look at the criminal complaint, it's just bare bones. In other words, the government, Don, doesn't have an obligation to provide the defense with all of its evidence or us with all of the evidence, they do just bare bones.

As to the closed proceeding, there could be multiple reasons. Remember, we're dealing with -- excuse me -- a terrorist organization. So, there are major security concerns.

The other thing, as Ted mentioned, dealing with potential minors who may be testifying based upon the defendant's age himself. So, all of that would a basis to close the courtroom. As to whether the judge will do that, it remains to be seen.

LEMON: Ted, give us a timeline here. When might we see some movement on this?

ROWLANDS: Well, the next hearing is the 21st of this month. So coming up. That will be the detention hearing. We'll find out whether or not Khan will be in jail during this proceeding or the trial as it plays out.

But as you know and Joey knows, the actual process could take months, even years, for it to completely play out. The question, we'll find out very soon, whether this teenager will be back in suburban Chicago with his family while this plays out or remain behind bars.

LEMON: Ted Rowlands will be following for us in Chicago, Joey Jackson in Atlanta. Thank you very much, gentlemen.

Still to come on CNN, bell rings and nerves rattle. Will the Dow rebound from its worst day of the year? Buckle up for the October rollercoaster. Fasten your seat belts. Bumpy ride.

Live from the New York Stock Exchange, next.

(COMMERCIAL BREAK) ANNOUNCER: This is CNN breaking news.

LEMON: Breaking news right now, getting close to the opening bell on Wall Street, as the Dow tries to bounce back from its worst day of 2014. Yesterday's loss of 335 points was made all the more dramatic because it came hours after the best day of 2014.

Let's check in now with CNN's Alison Kosik at New York Stock Exchange.

Alison, how it's looking?

KOSIK: It's looking like -- first the bell hasn't rung yet, we have 45 seconds before it rings. But it looks like you're going to see stock open in the red.

And, you know, seeing this roller coaster, we're using that analogy, and it is happening. You're seeing that roller coaster and the reason the rough patch feels so rough is because up until now, it's been easy breezy with the markets. Look at major averages last year, they clocked in with double-digit percentage gains.

When you see drops like this and huge swings that we've seen all week, it's a lot to take. But there's a lot changing, Don. The landscape is changing.

Worries are setting in these days about how economies around the world are doing. The fact is, they're slowing down, specifically the eurozone where there are worries, recession is being thrown around. And the thinking is, that that could hurt demands for products from the U.S.