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Paris Authorities Thwart Attacks at Police Station; Saudi-Led Warplanes Hit Iranian Embassy in Yemen?; U.S. Allies, U.N. Vow to Punish North Korea for H-Bomb Test; China Halts Trading for Second Day on Stock Drop; Trump Fuels Fire on "Birther" Battle. Aired 9-9:30a ET

Aired January 07, 2016 - 09:00   ET

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

ANNOUNCER: This is CNN breaking news.

[09:00:28] CAROL COSTELLO, CNN ANCHOR: Good morning. I'm Carol Costello. Thank you so much for joining me.

We do begin with breaking news this morning out of Paris, where authorities have shot and killed a man carrying a knife outside of a police station. That man was reportedly shouting "Allahu Akbar" and wearing fake explosives.

The shooting coming on the first anniversary of those deadly terror attacks on "Charlie Hebdo."

Atika Shubert, Chris Cuomo and our terror analyst Paul Cruickshank are in Paris this morning.

But, Atika, I want to start with you. You were at the scene. What are you learning right now?

ATIKA SHUBERT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, police are still keeping residents pretty far from the scene. Actually if you look down there, maybe less than 100 meters or so, you can see that's where the incident took place. Still a lot of police out here quite heavily armed. Some of them also wearing riot gear as well as -- as residents try and crowd the area. Tensions are sort of simmering here.

But it doesn't seem that anyone is in any imminent danger. They are just trying to clear and secure the area. There is a school nearby and all the students have been kept inside as a precaution.

What we know of the specific attack is that the man attempted to enter the police station with a butcher's knife. A meat cleaver. Possibly to attack an officer who was there. He was shot four times according to eyewitnesses who saw what happened and then because they feared he may have explosives, a robot controlled -- remote controlled robot was brought in to check. He did not have any explosives on him.

But it just goes to show how very tense the city is one year after those attacks on the "Charlie Hebdo" magazine offices -- Carol.

COSTELLO: Atika, let's go back to -- the man was wearing fake explosives? Can you get into more detail for us on that?

SHUBERT: Yes, we're not sure exactly. Police were actually waiting here for a police press conference. They said they feared he may have explosives but that he did not. However he was wearing a kind of a belt or a vest which made them suspect he may have explosives. That's what we know at this point.

But the other interesting point we know is that he allegedly shouted "Allahu Akbar" as he was entering the police station. That of course means "God is Great" in Arabic. But we don't know anything more than that. We don't know if he was connected with anyone, if he had any accomplices or if he was linked to any particular organization. So this could be many different things.

Keep in mind, police have not even yet identified this as a terrorist attack. They are still being very cautious on this.

COSTELLO: All right. Atika Shubert, many thanks to you. Now to Chris Cuomo and Paul Cruickshank.

Chris, police must have been ready for this sort of thing since it is the one-year anniversary of the "Charlie Hebdo" shootings.

CHRIS CUOMO, CNN ANCHOR, "NEW DAY": Well, you know, it cuts two ways, Carol. I agree with that assumption that you would think today's the day to be ready but very often they believe this is the least likely time because of the enhanced presence. But context is everything. This isn't just the one-year anniversary of the day of "Charlie Hebdo." This happened with this man at the police station at almost the exact same time that the "Charlie Hebdo" attack happened. So it really set people on edge.

And from the police perspective, you know, yes. All Muslims during prayer say "Allahu Akbar," God is great. But it's also become an opera phrase for terrorist incidents. So that is going to be a threat indicator for police. He's got a cleaver in his hand and he had a pouch that some kind of wires or something coming out of it. That's what we're hearing from authorities. So you put that all together and you have a real threat profile.

The really good news is obviously, other than this man losing his life, nobody else got hurt here. They wound up taking his car form the scene, they had shut down schools, and there was concern for a while that maybe he was bait, that he was trying to draw people to a scene and there'd be a secondary attack. None of that came to fruition.

But again, Carol, you have to remember, with terrorism, you know, that effect of just fear has meant so much here in Parisian society. The streets, this is the big sale day here on the day of the anniversary. All the stores say 50 percent off but there are very few people on the streets.

COSTELLO: So, Paul, a man tries to get into a police station armed with a butcher knife and wearing fake explosives. Fake -- that just doesn't make sense to me. PAUL CRUICKSHANK, CNN TERRORISM ANALYST: Well, they are still

investigating this whole thing. They are still trying to figure it out. The fact that he went in with a butcher's knife, the police obviously could take no chances. They clearly thought that he might have something under his jacket. At the same time they could make -- take no chances with that.

[09:05:03] I can tell you, Carol, that the people here in Europe, counterterrorism officials I think who are on edge, the concern is about copycat attacks. They're monitoring a lot of radicalized individuals in Europe right now and they have all been electrified by the November attacks here in Paris. They want to follow in that footsteps so real concern about copycats but also concerned that ISIS increasingly pivoting towards international terrorism, that they may be sending more recruits, European extremists back to Europe to launch more attacks.

COSTELLO: And, Chris, at the "Charlie Hebdo" offices, what is the mood like there? What are they doing there?

CUOMO: Well, they did come out with a new magazine as you know. They put out a million copies for this anniversary. On it there is a depiction of a god-like character. And the headline is "The Assassin Still Runs on the Loose." And, you know, obviously they're playing with religion again. This is what they do. They see this as an expression of their liberty here.

Remember, these terrorists didn't just take lives, they attacked a way of life. Today there are many who are visiting the offices of "Charlie Hebdo." There is a little bit of a -- a kind of a makeshift memorial outside of it. But there is also this intentionality especially being projected by the staff at "Charlie Hebdo" to not remember this just as the worst. Live your lives. Let us put out our magazine.

But that's something that was compromised a little bit after "Charlie Hebdo." So that was seen as targeted, specific. After the November attacks, Carol, that really changed the disposition here. Parisians became awakened to the reality that we have to live with in the United States which is it could be anyone, anywhere, any time and it's definitely had an effect outside and inside Paris.

COSTELLO: All right. I have to leave it there. Chris Cuomo, Paul Cruickshank, thanks to both of you.

We're also following breaking news out of the Middle East. An alarming spike in tensions between Saudi Arabia and Iran. It's unfolding right now in Yemen. Tehran says its embassy there has been struck by warplanes in the Saudi-led coalition. There are unconfirmed reports that guards and civilians were injured, and Iran says the attack was deliberate.

CNN's Nick Paton Walsh is following the latest developments. He joins us now from Beirut, Lebanon.

Hi, Nick. NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Carol, it's

unclear really what did happen late last night in the Yemeni capital Sana'a. Now the Iranian Foreign Ministry is saying that their embassy was hit and that guards were injured late last night. The Saudi coalition, their spokesman, Ahmed Asiri, for their turn is saying that they don't have any credible evidence at this stage but they are investigating what did occur.

And this just feeds in -- whatever it was that actually happened just feeds into this broader, frankly terrifying increased in fiery rhetoric and actions between Iran and Saudi Arabia.

Now Yemen is relevant because the group holding the Yemeni capital Sana'a, the Houthis, are backed by Iran. They are currently in a war with a coalition led by Saudi Arabia whose jets are repeatedly in the skies more frequently now for a long time in the past few days. Ceasefire collapsing just recently. At the same time Iran and Saudi Arabia have been at each other's throats publicly, canceling diplomatic relations along with Saudi's allies and Iran.

Just today in fact banning the import of Saudi goods at cabinet level and stopping Iranian citizens going on pilgrimages to Saudi Arabia where most key holy sites in Islamic faith actually are The fact now that potentially and we don't really still know what happened in the Yemeni capital of Sana'a. We might actually be seeing some sort of exchange of blows. No reported deaths or injuries confirmed at this stage. It's a deeply troubling escalation in a region already wracked by sectarian -- sectarian tension. The rivalry between Saudi Arabia and Iran being absolutely key, the foundations to all of that -- Carol.

COSTELLO: All right. Nick Paton Walsh, reporting live from Beirut this morning. Thank you.

The U.S. and much of the world community is scrambling to slap some sort of punishment on North Korea. Even as the so-called hermit nation faces an even greater insult. There are growing doubts over its claim of successfully detonating that first hydrogen bomb.

Our senior international correspondent Ivan Watson is in Seoul, South Korea this morning.

Hi, Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Carol. We're still trying -- we're still waiting to find out was this truly a hydrogen bomb or as North Korea put it, an H-bomb of justice. So far you have intelligence agencies trying to put together analysis to figure that out. In the meantime neighboring countries, China, South Korea and Japan, they have all said that they have not seen an increase of any -- radiation in the air as a result of this nuclear test.

[09:10:03] But that doesn't give us conclusive information about whether or not North Korea did make a technological leap and did successfully test a hydrogen bomb unlike the previous three nuclear exercises, explosions that it has carried out since 2006.

Now the Chinese government has shown its disapproval for this nuclear test by summoning North Korea's ambassador to the Foreign Ministry. We don't yet know whether or not China will take further measures. It has said it was not told ahead of time about this nuclear test.

In the meantime, the South Korean government, and there have been late-night phone calls with President Obama over this issue, the South Korean government has vowed that there should be some kind of corresponding price as -- some corresponding price as a result of this nuclear test. So far they have announced one measure and that is that on Friday South Korea will resume broadcasting propaganda across the Demilitarized Zone into North Korea with these giant banks of loud speakers that will be broadcasting news bulletins and also K-Pop, that's the name for this incredibly popular Korean pop music that South Korea churns out.

That believe it or not is something that has very much angered North Korea in the past and they had to have -- both sides had to have three days of talks last September and August when tensions spiked. And in the end South Korea agreed to turn the loud speakers off. But so far that is the only concrete measure we know of anybody is going to take to punish North Korea after this nuclear test -- Carol.

COSTELLO: All right. Ivan Watson reporting live from Seoul, South Carolina this morning.

Investors bracing for the Opening Bell, as markets face the worst start to a trading year since 2008. Right now futures are pointing lower as markets around the world are seeing red.

The freefall started in China early this morning as trading was stopped after just 30 minutes. Stocks there plunging more than 7 percent.

Christine Romans is following this for us this morning. Good morning. .

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Good morning. And it spread around the world. Once you saw Chinese stocks plunge and then stop, stop trading after just 30 minutes, then Europe opened up. Big losses there. Take a look at Paris, Frankfurt down 3 percent.

That's a big move the for one day, Carol. When you look at the United States, the Dow Jones Industrial Average, the Dow 30, as you know, likely going to open down about 300 points. That is what it's indicating right now. The Dow has already lost 518 points this week. You do the math at the beginning of the year with more than 800 points wiped away very quickly.

China is the problem. Growth story in China. How quickly that economy is cooling. When China sneezes the rest of the world gets the cold. Second largest economy in the world, that is what's driving all of this -- Carol.

COSTELLO: All right, Christine Romans. Thanks to you.

ROMANS: Welcome.

COSTELLO: Still to come in the NEWSROOM, Donald Trump doubles down on questions over Ted Cruz's Canadian birthplace. Is Cruz eligible to be president? Experts say yes but Donald Trump is casting doubt.

(COMMERCIAL BREAK)

[09:16:35] COSTELLO: Republican presidential hopefuls Donald Trump and Ted Cruz go head to head as try to muscle their way to the top in Iowa. Donald Trump now fueling the fire when it comes to questions about Ted Cruz's birthplace as the birther battle heats up.

During two separate interviews with CNN, Trump and Cruz addressed the controversies. Trump telling CNN's Wolf Blitzer the senator's birth in Canada could pose, quote, "a big problem." Cruz saying it's nothing but a silly sideshow.

(BEGIN VIDEO CLIPS)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: There is this doubt. People have doubt.

Again, this is not my suggestion. I didn't wring this up. A reporter asked me the question.

But the Democrats are brought it up. And you have somebody a congressman saying no matter what happens, we're going to be suing on this matter.

That is a tough matter for Ted. Again, I didn't bring it up, Wolf. This was brought up and this was asked to me as a question. It is not the first time it is being asked but it is being asked by a lot of different people to a lot of different people that are running.

BLITZER: Because, as you know, your critics are saying you're just doing to Ted Cruz what you tried to do to President Obama --

TRUMP: No, no, no, no, no --

BLITZER: -- because he was born and his birth certificate --

TRUMP: Who knows about Obama?

BLITZER: His mother was a U.S. citizen, born in Kansas --

(CROSSTALK)

BLITZER: -- so was he a natural-born citizen?

TRUMP: Who knows? Who knows? But who cares right now?

We're talking about something else, OK?

I mean I have my own theory on Obama. Some day I'll -- I'll get -- I'll write a book. I'll do another book, and it will be do very successfully.

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: The legal issue is straightforward. The son of a U.S. citizen born abroad is a natural citizen.

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: But it's never been tested. You know full well because you've done it on other issues.

CRUZ: Listen, the Constitution and laws of the United States are straightforward. The very first Congress defined the child of a U.S. citizen born abroad is a natural born citizen. And by the way, many of those members of the first congress were framers at the constitutional convention.

At the end of the day, this is a non-issue. But, you know, my response as you and I were talking about just a minute ago, I tweeted a link to a video of Fonzie jumping a shark. You know, I'm not going to engage in this. And the reason is simple. There are far too many serious issues facing this country.

(END VIDEO CLIPS)

COSTELLO: Today, Senator Cruz carries his campaign to the Hawkeye State, to Iowa, while Trump heads to the hometown of the Democratic challenger Bernie Sanders, Burlington, Vermont.

Local media reporting some 20,000 tickets have been given out. The only problem is the venue itself only holds about 1,400 seats. So, it should be interesting very fast.

Let's bring in CNN chief political correspondent Dana Bash. She interviewed -- ooh, it looks nasty out there.

BASH: It's pretty actually. Just a little cold.

COSTELO: Tell us more about your interview with Ted Cruz.

BASH: Well, look, let's take a step back to where we are right now and the reason we're really heating up. We're just a few weeks from the Iowa caucuses.

Ted Cruz is doing well. He is the front runner here in Iowa. And I've been with him on his bus tour which all told is six days and he's just trying at this point to secure his position at the top, make sure that people get out in caucus. He has a pretty impressive ground operation here in Iowa.

But as they get there, he and Donald Trump are battling on issues that really appeal to conservative voters.

[09:20:04] First and foremost is the issue of immigration. And they are trying to outdo each other when it comes to how they would handle illegal immigration.

Listen to part of Donald Trump's interview with Wolf Blitzer, and what Ted Cruz told me. (BEGIN VIDEO CLIP)

TRUMP: Now he's taking my idea for the wall. I'm glad he's taking it. I think it is the right thing to do.

The problem is I'll build the wall. It will be the right wall. These people -- politicians don't know how to build walls. They don't know how to build anything.

But I'll build wall and I have Mexico pay for the wall. All of a sudden, they are trying to come over into my territory.

No. We will get people out and the people who come back will come legally. They will come back legally. We'll have a country again. We're going to have strong borders. Border patrol people are fantastic. I got to know them very well. But we're going to have a wall.

Now, I heard just the other day Ted said, he never said about wall before. All of a sudden, he's talking about a wall.

CRUZ: My principles are, number one, we should secure the border and stop illegal immigration. And number two, we should welcome and celebrate legal immigrants.

Now, as it concerns the H-1B visa program, I used to support an expansion of that program and I support the original goals of that program, which is bringing in high skilled workers that produce jobs and economic growth.

But any rational person responds to changed circumstances. What's changed? We've seen a whole number of employers abusing the program.

(END VIDEO CLIP)

BASH: So, there Carol you were hearing Ted Cruz talk about the issue of legal immigration. The fact that just a couple of years ago, he supported increasing visas for high-tech, highly skilled workers and now he wants to suspend the program.

Some of his opponents are accusing him of flip-flopping for politically crass motivations. He insists that is not it. That the issue has changed, that the program needs to be reformed.

And I want to add, a little plug for our colleague Manu Raju, he did a very interesting and important story on this, really explaining it. And it's on CNN.com.

COSTELLO: OK.

The candidates also tackled gun safety, right?

BASH: They did. And again, this is would have been those issues where they are tripping over one another to be the most critical of President Obama and his new plan to take executive action.

Listen to both Donald Trump and Ted Cruz on that.

(BEGIN VIDEO CLIPS)

TRUMP: The first thing I do is protect the Second Amendment. The second thing I do is I wouldn't use executive orders to do this. You got to get people.

You know, our country is founded on the basis that you are supposed to negotiate back and forth with different members of different parties. And you come to a conclusion through negotiation and compromise.

You don't go and just keep signing orders. And all he's doing is taking chunks out of the Second Amendment. That won't happen.

WOLF BLITZER, CNN ANCHOR: You don't want convicted felons or mentally ill people to be able to go to a gun -- any place online or whatever and get access to a gun.

TRUMP: When you say anyplace, we have strong laws right now on the books, but the federal government --

(CROSSTALK)

BLITZER: Gun shows for example. You don't want the bad people to get access to guns.

TRUMP: I know, but when you get into the gun show, it's a slippery slope. That stops a father from giving his child --

BLITZER: What about online purchase?

CRUZ: Following the tragic shooting in Sandy Hook, President Obama could have brought Democrats and Republicans together and said let's focus on violent criminals. Let's focus on the criminally insane. Let's come down on them like a ton of bricks. Instead, what he did is say, let's go after law abiding citizens.

(END VIDEO CLIPS)

BASH: So, you hear Ted Cruz arguing that it's important to prosecute people who commit crimes visa via getting guns that they shouldn't and so forth.

And I should just note, Carol, that when it comes to Cruz, he is criticizing the president but there is no question the Cruz campaigns welcome this being an issue because this is in many ways where he cut his teeth as a national conservative figure as solicitor general of Texas. He organized a bunch of states to help with the arguments in the Supreme Court, a landmark decision that did away with guns in the District of Columbia but also made clear that the law of the land is individual right to bear arms that is something that conservatives who are in the know on this understand and this is a chance for Ted Cruz to talk about it which can only help as we're just weeks away from the Iowa caucuses.

COSTELLO: All right. Dana Bash, reporting live from Iowa this morning.

Donald Trump isn't the only one who says questions about Cruz's eligibility for president are valid. Senator John McCain who faced a similar issue during his 2008 bid, one quickly quashed, thanks to a resolution sponsored by his Senate colleagues, is also weighing in.

(BEGIN AUDIO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I do not know the answer to that.

[09:25:01] I know it came up in my race because I was born in Panama. But I was born in the Canal Zone, which is a territory. Barry Goldwater was born in Arizona when it was a territory when he ran in 1964.

REPORTER: But you were born on a base too, weren't you?

MCCAIN: Yes, it's a U.S. military base. That's different from being born on foreign soil. So I think there is a question.

I'm not a constitutional scholar on that but I think it is worth looking into. I don't think it is illegitimate to look into it.

(END AUDIO CLIP)

COSTELLO: Now, we should note McCain and Cruz have not been on the friend lest terms in Washington.

Arizona's senior senator once referred to the Texas lawmaker and his allies as, quote, "whacko" birds for filibustering CIA director John Brennan. McCain later apologized.

So, let's talk about all of this.

Ron Brownstein is the editorial director for "The National Journal" and CNN senior political analyst, and John Brabender is a Republican political consultant. He was also a senior strategist for Rick Santorum's 2012 campaign.

Welcome to both of you.

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: Good morning.

JOHN BRABENDER, REPUBLICAN STRATEGIST: Good morning.

COSTELLO: Good morning.

Ron, I want to start with you. Donald Trump addressed this topic once again, especially what John McCain said via Twitter this morning. He says, quote, "It was a wise move that Ted Cruz renounced his Canadian citizenship 18 months ago. Senator John McCain is certainly no friend of Ted."

So, where is that coming from Ron?

BROWNSTEIN: Yes, it's striking. I mean, it really is kind of an indication of the extent to which the emergence of Trump and Cruz as kind of co-frontrunners in this race leaves more centrist Republicans in this kind of King Kong versus Godzilla situation.

I mean, Ted Cruz is no favorite but neither is Trump of McCain. They have gone at it even more pointedly in recent years and recent months than McCain and Cruz. And yet here is McCain very consciously I think stirring the waters.

In the end, there does not appear to be a legal issue here, the question why Ted Cruz going to run for president, although it has not been definitely nailed down by the Supreme Court.

What Donald Trump in this characteristic way is raising a political issue and it is very similar to what he's doing by raising questions about whether Cruz's evangelical faith is legitimate. In essence, he is reminding a Republican primary electorate that was 93 percent white of the voters in 2012 that Ted Cruz is not someone who looks like them, and I think he is very consciously drawing a line around Ted Cruz and raising questions about whether he is in effect an other that you can't entirely trust.

COSTELLO: And, John, "The Washington Post" wrote an article about this and called Trump brilliant because he's sort of saying it without really embracing it. He's just bringing up the question.

BRABENDER: Well, how he did it I think was smart. He's saying, hey, I'm not making accusations but he said stay he was concerned if he was to become our nominee, the Democrats are going to go after him. It could be in the courts for years and it could hurt a lot of other candidates on the Republican ticket for governor and Senate if this is a major issue in the fall.

Look, everybody in Republican circles knew this was a potential issue. And frankly, I do wish that Senator Cruz would spend more time addressing it so we can get it out of the way.

COSTELLO: Well, he did renounce his Canadian citizenship, Ron. So, wasn't -- doesn't that indicate he was worried about it at one time?

BROWNSTEIN: It is an interesting question. I mean, look, he is a constitutional scholar. He is saying he doesn't have a problem.

Most constitutional analysts believe there is not a real issue. But the fact is we are talking about this issue. Again, you know, the success of the Trump campaign has been to take this campaign and move it into a series of almost ad hominem personal attacks.

We were talking about Trump's attacks on Bill Clinton a few days ago. We're not -- you know, one and there will be something else in all likelihood if the pattern holds in a few days aimed at someone else.

I mean, this is the ability to drive the narrative of the campaign by raising this issue. And, look, a lot more people today know that Ted Cruz was born in Canada than knew it a week ago. And that is the reality he has to face.

As I say, in a Republican primary in which as the Cuban American he's dealing with an electorate that looks very different than him.

COSTELLO: So, John, you handled strategy for Rick Santorum in 2012. Rick Santorum did very well in Iowa. So, what is you prediction in light of all of this?

BRABENDER: Well, here's the challenge I think Donald Trump has. Donald Trump support who I believe are people who have never gone to a caucus before. And so, the real challenge he has is, can I actually get them to cross the barrier and show up? And I think that's the challenge.

From a messaging standpoint, I think in Iowa they get very sensitive to all of this criticism. I think Donald Trump is missing an opportunity with what is going on in China with their stock market, what's going in with Korea, with the hydrogen bomb, what's going on with Iran and Saudi Arabia, to not look more presidential and I think that's where Donald Trump would be smart to move.

COSTELLO: All right. I have to leave it there. John Brabender, Ron Brownstein, thanks to both of you.

Still to come in the NEWSROOM: investors bracing more another wild day on Wall Street. What you need to know, next.