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Early Start with John Berman and Zoraida Sambolin

Michael Slams Into Florida as Category Four; Saudi Arabia Under Pressure; Dow in Tailspin. Aired 5-5:30a ET

Aired October 11, 2018 - 05:00   ET

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


[05:00:00] CHRISTINE ROMANS, CNN ANCHOR: USPS says this will provide much needed revenue. President Trump has criticized the Postal Service for losing a fortune by not charging higher shipping rates for online retailers like Amazon.

But the Post Office actually makes money on shipping. It's losing money everywhere else. People are sending less mail, and it faces high costs for health care and pension obligations. So, 55 cents for a stamp.

DAVE BRIGGS, CNN ANCHOR: All right.

EARLY START continues right now with the devastation left by Hurricane Michael.

(MUSIC)

ROMANS: A deadly storm dropping devastating rain on Georgia after tearing through the Florida panhandle. Two people killed, including one child. Where the storm is headed next.

BRIGGS: And growing pressure on Saudi Arabia to explain the disappearance of "The Washington Post" journalist. One senator warning significant wrath from the United States. We are live in Istanbul.

ROMANS: And the Dow down 800 points. The third worst point selloff in history. Who the president blames for the drop?

Good morning and welcome to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. Good morning to you. Good morning, everyone. Thursday, October 11th. It is 5:00 a.m. in the East.

We begin with breaking news this morning, Michael now tearing its way across Georgia, headed for South Carolina, as it's still very dangerous tropical storm. At this hour, officials in three states say more than half a million people are without power, nearly 6,700 people still in shelters. Two people died in separate incidents.

A Florida man and 11-year-old boy in Georgia killed when trees fell on their homes. No telling what first responders will find this morning. Sunrise in about an hour and a half. They are beginning to search through homes as conditions improve. ROMANS: Michael made landfall near Mexico Beach, Florida, with winds

excess of 140 miles an hour. The stunning video just in to CNN. Look at that, the sudden calm in the eye of the hurricane and that spectacularly defined eyewall.

The storm hit just shy of category five, enough to launch rooftops across the street. It was the strongest hurricane to hit the Continental U.S. since Andrew in 1992, the strongest to hit the panhandle in recorded history. Michael leaving devastation in its wake.

Look at the drone footage of the gym in Panama City, the room peeled back. Same with the nearby shopping mall which locals say was recently remodeled.

This boat warehouse in Niceville, Florida, a total loss.

BRIGGS: Power lines and transformers downed across the region. It may be weeks before the power is restored everywhere. But for proof of this power, look at this, a train blown completely off the rails in Panama City.

CNN's Derek Van Dam was in the thick of it. He joins us live from Apalachicola with the latest.

Derek, good morning. What are you seeing?

DEREK VAN DAM, AMS METEOROLOGIST: Yes, good morning, Dave.

We're about 30 miles east from where hurricane Michael made landfall and the full fury of the powerful storm surge is on display behind me. I want to put it in reference for you. What you are looking at is the high water level behind me. You can see that debris on this pile of oyster shells. It's actually part of the fishing industry that's in the area that I'm located.

It comes up to just passed my waist, but, of course, the land slopes gradually all the way into the Apalachicola River which is about 200 yards to my left. But the power of storm surge is so incredible. It only takes one foot of moving water to pick up a vehicle and rush it down the street.

But look what seven feet of recorded storm surge can do in a matter of no time. That semi truck turned on its side. Obviously influenced and impacted by the storm surge. I've also got -- this is incredible, a golf cart, who knows where this particular vehicle came from. That probably floated down from several houses and blocks away from me where I'm standing.

Franklin County without power. Franklin County without communications making it difficult for the few people who decided to ride out the storm to reach out to emergency services personnel. It is a difficult night here. It is still dark.

But in the morning when we get the first glimpse of light, Dave and Christine, we will see the scope of what hurricane Michael brought to this area.

BRIGGS: All right. Great reporting from Derek Van Dam. Stay safe there.

ROMANS: All right. Michael leaving utter devastation in its wake in Panama City, after making a direct hit on the resort town, packing 155 -- look at that, 155-mile-an-hour winds.

CNN's Dianne Gallagher is in Panama City with the latest.

I mean, just devastation there. What are you seeing there this morning?

DIANNE GALLAGHER, CNN CORRESPONDENT: Yes, Christine, I'm going to go ahead and step aside so you can see here. This is one example of essentially what we saw almost every other lot driving streets here from Panama City Beach to Panama City across the bridge early this morning.

[05:05:03] Now, to be honest, I've never been through a hurricane this strong before in my lifetime. And the damage itself, Christine, even looking at these buildings here in Panama City look almost like tornadoes have come through here instead of just these hurricane winds. That is how strong they were and how they just ripped this metal. They twisted it around and collapsing entire buildings.

What's so -- I can see through the building here. There are tires on the wall of the Firestone. And then right next to it, the wall is completely missing.

The difference between this and, of course, tornadoes is this is so widespread. We're on 15th Street. This street and another one over, 18th Street, it is just house after business after structure that is just destroyed. They are broken down, Christine.

Now, we have seen police officers out here sort of going through -- trying to figure things out. They were going through yesterday when the storm ended, trying to break through buildings and structures to see if people were okay to do rescues. Things like this, homes that were completely collapsed. Schools that were collapsed.

And again, the sun hasn't come up yet. So, when the sun comes up today, we'll probably get a better look at just how extensive this damage is. But what we have seen so far, Christine, this is devastating.

ROMANS: Yes. All right. In another hour and a half, hour and 45 minutes until the sun comes up, and we really get a clear picture then.

Thank you so much, Dianne. Be safe.

BRIGGS: Overnight, Michael punished Georgia with torrential rain and destructive winds that arrived as a category three hurricane and weakened to a cat one as it moved northeast across the state, making it the most powerful storm to hit the area in 120 years. Meteorologist Pedram Javaheri tracking Michael live from the CNN

weather center.

Good morning.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, Dave.

Yes, the 5:00 a.m. advisory from the National Hurricane Center has downgraded the storm just a little bit more, down to 50 miles per hour, which was at 60 in the last when we spoke here. And this storm system is still a tropical storm, now beginning to move into South Carolina. The southern trajectory allows clearer air to move in as the sun comes up across the panhandle and the system going to be entirely in South Carolina. With it, of course, expecting tropical storm force winds and heavy rainfall and still watching the tornado watches in place there from Columbia, down towards Charleston, could see that expand into Charlotte as the sun begins to rise across North Carolina.

So, certainly, far from over for folks in its path when it comes to the gusty winds, the wet weather. But one piece of good news, this was a quick moving system, up to 21 miles per hour right now and we think it will kind of lose its tropical characteristics over the next 12 or so hours, become an extra tropical system and then quickly move offshore by this time tomorrow. So, then, we're just talking about recovery for just about everyone in its path, after really leaving significant devastation across the coastal side, the panhandle here.

The heavy rainfall, we are expecting about four to six inches across the Carolinas. River levels across Cape Fear in North Carolina where it expected to finally begin to drop below flood stage on Monday afternoon. This is not going to help. I don't think it's going to exceed significantly because of how quick it's moving, but still see the water level rise just a little bit here over the next couple days, which is not what they want to see.

ROMANS: All right. Pedram, thank you so much for that.

BRIGGS: OK. As of last night, 508,000 residents and businesses were without power in Florida, Georgia and Alabama. And according to some experts, that number could climb as high as 2 million.

Ana Gibbs joins us by the phone from Florida. She is the spokeswoman for Duke Energy.

Good morning, Ana.

When do crews get out there? We know you have more than 5,000 linemen set to help restore power. When can they get out there and what's the biggest challenge in restoring power in the region?

ANA GIBBS, SPOKESWOMAN, DUKE ENERGY (via telephone): Right now, we have dozens of crews hitting the road. We have crews that have stretched from the Perry area and in Tallahassee and Jacksonville. And some of the challenges are really just getting through the roadways. We know that Tallahassee reported more than 200 roads that are blocked

right now. So, literally, just getting to the actual outages may be a challenge as there are trees downed and different debris that are blocking roadways. And we do cover Mexico Beach, which is I know that is an area you have been showing, how devastated that area is.

ROMANS: Wow. So, if you live essentially in the panhandle, if you live west of Tallahassee, chances are you don't have power right now?

GIBBS: That's correct. So, Duke Energy covers an area stretches basically from Pinellas County, all the way up to the coast through Mexico Beach. And so, if you are west of Tallahassee and you are a Duke Energy customer, it is likely you do not have power right now.

BRIGGS: How long do you expect those counties? Namely Franklin and Gulf and Jefferson County to be without power? Are we talking hours? Days? Is there potential for weeks?

[05:10:01] GIBBS: So, we have asked customers to prepare to be without power for days and in some cases, over a week. However, we will have crews out today and we're hoping that many of the customers, of course, will have power restored at that time. But we asked customers to prepare to be without power for a week.

BRIGGS: What is your advice this morning? Is there a word of warning before people head out to assess the damage?

GIBBS: Absolutely. We are confident there are lines down with the category four hurricane. We ask people to be extra careful. We know there are many customers who want to clear debris and clear the vegetation that may have come down with the storm. And often times that vegetation may hide a downed power line.

We would just ask them to have patience and before you do that allow us time to get out there. One of the things that we do attack is the lines that come down. Just because a line is down does not mean it's energized. So, please be careful. You know, safety is our first concern for our customers.

ROMANS: Yes, that's very good advice.

Ana Gibbs, Duke Energy's spokesperson, for us this morning -- thank you. And there are crews which are staged and ready to get to work, but everyone needs to be patient here. Thanks, Ana.

BRIGGS: Best of luck to those folks heading out to help.

All right. Coming up, President Trump vowing to get to the bottom of what happened to that Saudi journalist who vanished in Istanbul more than a week ago. We're piecing together the timeline leading up to this disappearance, next.

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[05:15:39] ROMANS: Just a brutal day on Wall Street. Stocks with the biggest drop in months. All three indices lost at least 3 percent. Dow down more than 800 points. The third worst point decline ever. Not in the top 20 of percentage.

But the selling spread around the world. Shanghai down more than 5 percent. European stocks open lower. The U.S. futures now suggest more selling when the market opens in a little over four hours.

Just to give you an update here, Dow futures are down about 290 points. So, this thing has spread around the world and now back here and it is still weak.

It started with tech stocks. Netflix, Amazon and Apple. Throw those three alone lost $120 billion in market value.

It's been a rough October. Investors are worried about the U.S./China trade war. They're worried that's going to slow economic growth next years and they are worried about higher interest rates. It eats into corporate properties. Higher interest rates increased that's eat into corporate propertie.s

Rate are rising because the U.S. economy is so strong. The yields on the 10-year treasury is near a 7-year high. Mortgage rates topped 5 percent. The Federal Reserve is raising benchmark interest rates to keep the economy from overheating.

Now, the president uses the stock market as his personal scorecard. What is he doing now it is falling? He is blaming the fed for the plunge. First after arriving in Pennsylvania.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think the Fed is making a mistake. They're so tight. I think the Fed has gone crazy.

(END VIDEO CLIP)

ROMANS: The Fed has gone crazy. Then on Fox News.

(BEGIN VIDEO CLIP)

TRUMP: The Fed is going wild. I mean, I don't know what they're problem is. They're raising interest rates. It is ridiculous.

(END VIDEO CLIP)

ROMANS: All right. But Treasury Secretary Steve Mnuchin is not blaming the Fed. He told CNN Wednesday's drop is a normal correction. A correction is a 10 percent drop, that is normal. The bull market is nine years old. And even now, the Dow and S&P are still only about 5 percent away from record highs.

BRIGGS: OK. President Trump insists he will get to the bottom of Jamal Khashoggi's disappearance. The Saudi journalist who writes for "The Washington Post" vanishing after entering the Saudi consulate in Istanbul. He's been missing for more than a week. Khashoggi, a resident of Virginia, who wrote regularly for "The Post".

Donald Trump claiming he contacted the highest levels of the Saudi government to get some answers.

(BEGIN VIDEO CLIP)

TRUMP: I hope --

REPORTER: Do you hold the Saudi government responsible?

TRUMP: Well, I have to find out who did it, but people saw him go in but they didn't see him come out as they understand it. And we're going to take a very serious look at it. It's a terrible thing.

(END VIDEO CLIP)

BRIGGS: A bipartisan group of more than 20 senators sent a letter to President Trump Wednesday, triggering an investigation into his disappearance.

Nic Robertson wrote a piece on CNN.com about this. We encourage you all to read it. He joins us live from Istanbul.

Nic, what is Turkey saying about the disappearance of Khashoggi? What are the theories?

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Their lead theory at the moment is when Khashoggi walked in there, four fatal steps we saw in taking on the security camera video as he walked in -- that he walked into a trap, that there was a preplanned operation to abduct him. And the theory among Turkish officials now is that he was killed within the first couple hours of getting inside the consulate.

What they don't know is what happened next. They leaked video from CCTV footage from other cameras in this neighborhood, around counsel general's house. They leaked video footage of what they believe is a hit team coming from Saudi Arabia at the airport in the early hours of the day. They leaked footage of operatives there going through passport control.

So, the pressure is building for the Turkish side to get answers from the Saudis. But the Saudis seem to be pushing back. They had agreed to let Turkish officials go in for the investigation into the consulate building. But Saudis are now saying that's not going to happen. They are pushing back on this.

So, that is raising the temperature between Saudi Arabia and Turkey. And then you have the United States and President Trump's position with Saudi Arabia entering this as well. Turkish leader Erdogan, the president here, really wants President Trump to get tough on Saudi on this.

[05:20:04] He doesn't want to stand out there alone leading what could be a dust-up between Turkey and Saudi Arabia.

BRIGGS: The world needs strong words from President Trump. Nic Robertson, great reporting, live from Istanbul -- thank you.

ROMANS: All right. Melania Trump weighing in on sexual misconduct allegations during the #metoo moment.

(BEGIN VIDEO CLIP)

MELANIA TRUMP, FIRST LADY: We need a really hard evidence that, you know, if you are accused of something, show the evidence.

(END VIDEO CLIP)

ROMANS: How President Trump poked at the movement again during his rally last night.

(COMMERCIAL BREAK)

[05:25:04] ROMANS: All right. 24 minutes past the hour.

We're getting information about the mishap here. A Soyuz capsule launched in Kazakhstan, carrying an American astronaut and a Russian cosmonaut, that had some kind of a problem with a problem with the booster. The rocket launch aborted. The capsule coming back to earth, according to NASA, landed, carrying two crew members.

Search and rescue teams are in contact with the crew and are in route to the landing location. You can see, they are showing a live picture of mission control there in NASA. But again, this was a trip that was meant to go to the International Space Station, and these two astronauts -- an astronaut and cosmonaut. Something happened with the booster. It aborted the launch.

BRIGGS: If you want to follow this, if you're online NASA.gov. They say the capsule returned in ballistic dissent. If you want the name of the American astronaut it is Nick Hague. One Russian and one American. Nick Hague is the American.

We are watching NASA.gov, and we will update you with the latest. But they are en route and believe those two are alive.

ROMANS: Do we have video of the launch? We don't have the video? The launch was moments ago. You know, so, this is all unfolding right now. We'll continue to follow this for you and give you more information.

BRIGGS: And bring you video of that launch as we get it.

Meanwhile, President Trump taking a swing at the #metoo movement at the rally last night in Pennsylvania. He wanted to say the state was like the woman who got away for most Republicans until he won it in 2016. Listen.

(BEGIN VIDEO CLIP)

TRUMP: I used an expression, you know an expression, but under the rules of #metoo, I'm not allowed to use that expression anymore. I can't do it. It's the person that got away. See, it is a little different. Pennsylvania -- he says do it anyway.

(END VIDEO CLIP) ROMANS: The one that got away is the expression I always heard. It wasn't gender based.

OK. Just a few hours earlier, ABC released an interview with the First Lady Melania Trump. She offered this lukewarm endorsement of the #metoo movement.

(BEGIN VIDEO CLIP)

MELANIA TRUMP: I do stand with women, but we need to show the evidence. You cannot just say to somebody I was sexual assaulted or you did that to me or -- because sometimes the media goes too far.

(END VIDEO CLIP)

ROMANS: During the 2016 presidential campaign, at least 13 women accused Donald Trump of sexual misconduct.

BRIGGS: A trail of destruction left in the southwest after Hurricane Michael tore through Florida. A live report on the aftermath and where the storm is heading now, next on EARLY START.

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