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Arson Spree in S. California; Earthquake Rattles Ohio; First Votes in 2012 Presidential Race; Financial Fresh Start; Bring on 2012

Aired December 31, 2011 - 19:00   ET

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

NATALIE ALLEN, CNN ANCHOR: (AUDIO GAP) investigators say they are dealing with one of the worst arson sprees in recent memory.

And whoever is behind it is setting more than Tinseltown on fire. These images are from Burbank overnight.

At least 21 fires in the last two days have cost more than $350,000 in damage. Mostly cars but some homes, including one where Doors front man Jim Morrison used to live. So far, just one firefighter with minor injuries, but the fear is, it is only a matter of time.

(BEGIN VIDEO CLIP)

ZEV YAROSLAVSKY, SUPERVISOR, LOS ANGELES COUNTY: We are dead serious about trying to apprehend the individual or individuals who are responsible for this. We want to get these SOBs before they hurt somebody.

(END VIDEO CLIP)

ALLEN: Investigators say it's possible not all the fires are arson. Multiple groups are now offering a total of $60,000 in reward money for information leading to an arrest.

Joining me now, the mayor of West Hollywood, John Duran. Four of the fires have been in his city.

Also with me, Los Angeles Fire Captain Jamie Moore.

First, captain, we've heard 21 fires over two days. "The L.A. Times" is saying 35 fires over three days. Can you clarity how many fires you are dealing with here? And do you think they are all linked?

CAPT. JAMIE MOORE, LOS ANGELES FIRE DEPARTMENT (via telephone): Well, the criteria we're looking at are automobile fires that (INAUDIBLE). The majority of these fires are underneath car ports where they are adjacent to apartments or parking structures, all are single-family dwellings.

We had 21 fires between the city of Los Angles and the county of Los Angeles yesterday morning. And this morning, we had a total of 14 fires between city of Los Angeles and the county of Los Angeles. Thirteen of those fires were in the city of Los Angeles' jurisdiction. Ten of those being in the north Hollywood, with three of those refer to as the Burbank area. Three of those in the Fairfax area of Los Angeles, which is the southwest area. This is southwest of Hollywood.

ALLEN: So, it is amazing because we see the video there on the screen of the intensity of these fires as well. Captain, there are no arrests, but do you have any suspects? Are you close to charging someone?

MOORE: Well, the Los Angeles Fire Department, the Los Angeles County Fire Department, the Los Angeles County sheriff's office as well as the Los Angeles Police Department are joining task forces, along with the federal Bureau of Tobacco, Firearms and Explosives in investigating these fires.

As you can imagine, this is -- we are talking about a lot of fires in a short amount of time. We are getting some manpower on the investigative side as well as our firefighting efforts. Unfortunately, the firefighters are working tirelessly to extinguish these fires, and in doing so, they've ensured a limited amount of damage. But most importantly, they've ensured the safety of the community both in Los Angeles and Los Angeles County, and insured nobody has been injured.

ALLEN: Captain Jamie Moore, we thank you so much and we wish you the best in trying to solve this.

Mayor, to you now, what do you want to say to the person or the people who are behind these arsons?

MAYOR JOHN J. DURAN, WEST HOLLYWOOD, CALIFORNIA: I think what these people have to understand, they are not just setting cars on fire, they are using cars as an incendiary device to set buildings on fire. And in those buildings, many of these buildings with open car ports are rent-controlled apartments, they are very dense. They are in parts of West Hollywood and Los Angeles where we have 20,000 people living per square mile. Each of these buildings contains several residents, many of them frail seniors, many of them families with children, that can't move as quickly as young people.

And so, it is a new form of urban terrorism that we are seeing in our community. This is going on every night for three nights.

You know, at first, it was sort of like, OK, they are burning cars. No, they are not burning cars. They are using cars as nap sticks to set buildings on fire. And that's the problem that we're having as a community where you're telling people all across west Hollywood and Hollywood, the greater Los Angeles area, be vigilant, watch out for one another, this guy or persons are going to continue until they are caught or apprehended.

We've got have a full force deployment out tonight as well.

ALLEN: And that's a shame here on New Year's Eve, that this is something that you have to contend with. I would imagine the people in this area, as you say, many of them are elderly, are quite scared about who is behind this and where they might hit next.

DURAN: You know, this is the type of architecture with car ports that are not behind security gates, architecture reminiscent of the '50s and the '60s, they're rent-controlled buildings where people have been living for decades and decades who are very frail and not very mobile. So, the target -- these targeted buildings, it's really a severe problem for all of our cities. Los Angeles County is home to 89 cities and it appears now it's becoming more widespread. So, I think that all of southern California is on alert.

You know, tall buildings are in New York as cars and automobiles are to Los Angeles. You know, when you have millions of people living with millions of cars in these very dense neighborhoods, this is becoming a new form of domestic terrorism that's really got our community in a very bad spot at the moment.

ALLEN: Well, we hope that people behind it are caught and caught quickly. We appreciate your time joining us on New Year's Eve. The mayor of West Hollywood, John Duran -- thank you very much.

DURAN: Thank you.

ALLEN: We move now from fires to earthquakes. A 4.2 magnitude quake hit Ohio today and there are rumblings that it was more than just Mother Nature at work here. The U.S. Geological Survey says the quake was centered near Youngstown.

CNN national correspondent Susan Candiotti joins me with more on the controversy about what could be behind it.

First of all, Susan, first, Ohio just had an earthquake recently, is that correct?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: They did. The last time they had one was on Christmas Eve, as a matter of fact. You know, they sound like science fiction to some, Natalie, but the scientists say this could signal a very serious problem.

Today's 4.0 earthquake near Youngstown, Ohio, comes one day after the state shut down operations at a fluid injection well. It treats waste water created by fracking. That's a way to extract natural gas and oil.

Now, here's the scary part for people who live there. Over the last eight months there have been 10 quakes within two miles of the well. Today's makes 11. All in an area where earthquakes have been rare.

Residents tell us they felt the ground rumbling and houses shaking. Protesters have been complaining about the well activities for some time. Scientists explain it this way, waste water from the fracking procedure is shot at high pressure more than a mile into the ground as part of the disposal procedure. The theory is that the waste could be lubricating existing faults prompting these minor earthquakes.

The company says it's going to run some tests to figure out what's going on.

(BEGIN VIDEO CLIP) BEN LUPO, CEO, D&L ENERGY GROUP: We have approximately 1,000 wells between Ohio and Pennsylvania. And we have never had a problem where we have protesters or we are shut down by the state of Ohio. We do have other disposal wells that we've had for 20 years. And never, ever had a problem with an earthquake or spill or any problems whatsoever.

(END VIDEO CLIP)

CANDIOTTI: Now tonight, I spoke with a scientist from New York's Columbia University whose heading out to Ohio to help the state decide whether to shut down the well permanently. The state says it's concerned about health and safety. However, we have no reports of damage or any injuries today.

But, Natalie, Christmas Eve, now New Year's Eve, unsettling news to say the least.

ALLEN: Absolutely. It has to be for the residents there as well. Has Ohio ever had and earthquake that caused serious damage?

CANDIOTTI: Well, strategically, we don't have that information from the U.S. Geological Survey, but these, certainly, they have had some earthquakes in Ohio. It's not out of the ordinary in the state of Ohio or in the Northeast, they are just infrequent. But this many happening around this well -- clearly, they are looking to see if there's a direct linkage. There certainly appears to be and that's what they want to find out, whether this is a well that should be shut down because of it.

ALLEN: Very interesting story out of Ohio. Susan Candiotti following for us, thank you, Susan, very much.

The big ball won't drop in New York for another five hours, but cities around the world are ringing in the New Year.

London began celebrating the New Year a few minutes ago. And it is still going on. We have live pictures right here from London. It's a big year in the British capital with the Summer Olympics coming up in July. This, perhaps, the kickoff. A quarter million people were expected to line the banks of the Thames River to watch the massive fireworks display.

Let's listen.

London's mayor says 2012 will be, quote, "The most extraordinary and exciting year we are likely to see in our lifetime."

Berlin took its turn about an hour ago. The city's Brandenburg Gate was the place to be for revelers. It's a bittersweet holiday in the eurozone. Sunday marks ten years ago since the euro was introduced as the common currency. The euro, as you know, hasn't fared well this year. But Europeans hope for a brighter year in 2012.

Russia kicked off the New Year with the fireworks display over the Kremlin, but anyone looking to toast it with an alcoholic beverage would be out of luck if they didn't plan ahead. Authorities banned sale of alcohol to prevent the parties from getting out of hand.

People in the Dubai and the United Arab Emirates were treated to a dazzling display from the world's tallest building, the Burj Khalifa. The skyscraper was illuminated in white, red and green lights, drawing on the colors from the UAE's national flag. The colors were also a nod to the 40th anniversary of the country's independence celebrated earlier this month.

Australia, of course, among the first countries to celebrate the arrival of 2012. Huge crowds gathered to watch the fireworks over Sydney Harbor. It's hard to compete with that. More than a million and a half people were expected to watch in person. Sydney's lord mayor says it is the city's goal to make each year's display bigger and better than the previous year.

Well, it's the contest that could set the tone in the race for president. Republicans vying for the Oval Office are crisscrossing Iowa just three days before the first in the nation caucuses, trying to set off fireworks of their own. We are there with them live in two minutes.

(COMMERCIAL BREAK)

ALLEN: All of the buildup, all of the debates, all the jockeying for position, is leading up to this moment. Iowans are about to cast the very first votes in the Republican race for president. The Iowa caucuses are just three days away.

And CNN political editor Paul Steinhauser is standing by for us live in Des Moines, Iowa, where he has pretty much pitched a tent for the past few weeks.

And, Paul, it is crunch time for these candidates. Who is there and who isn't?

PAUL STEINHAUSER, CNN POLITICAL EDITOR: Just about most -- just about all of them are here. I will tell you who is not here in a second, but, Natalie, it is December 31st. This is the middle of winter. I'm in Iowa. It should be cold.

It is not that cold out. Honestly, it has been very mild here. And that could be a factor on caucus night, which is on January 3rd, just three nights away.

But, yes, most of the candidates are here. We saw Newt Gingrich, Rick Perry, the Texas governor, Rick Santorum, the former Pennsylvania senator, Michele Bachmann, the congresswoman from neighboring Minnesota, they started crisscrossing the state this morning.

Mitt Romney, the former Massachusetts, guess where he started today? In New Hampshire. He was there for about 24 hours. He was here earlier in the week. Why New Hampshire? Of course, they go second. Their primary one week after the Iowa caucuses.

And you mentioned, yes, there is somebody who isn't here at all. That is Congressman Ron Paul. He was back home in Texas today and tomorrow going to spend the New Year's holiday with his wife. But his campaign tells us he's going to be right back here Monday morning campaigning in the state with his son, the senator, Rand Paul of Kentucky -- Natalie.

ALLEN: And we learned something new today about Rick Perry's plans after the Iowa caucuses. What can you tell us about that?

STEINHAUSER: Yes, this is fascinating. You would think that most of the candidates, the ones who survive here and go on, go right to New Hampshire, right? That state goes second. No.

Well, Perry's campaign tells us the Texas governor is going on to South Carolina. Remember, that state votes third, their primary comes 11 days after New Hampshire. So, what's going on here? Are some of these candidates are going to avoid New Hampshire? Maybe.

Listen, if you look at the polls, Mitt Romney, from neighboring Massachusetts, the overwhelming front-runner in New Hampshire. Maybe for Rick Perry and some of the other candidates that do move on, who are looking for that social conservative vote, you go to South Carolina instead because, well, South Carolina has got an electorate a lot closer to Iowa. New Hampshire much different, independents are a big factor in New Hampshire. Social conservatives are not.

And, you know, Natalie, one thing about Iowa -- listen, it may not crown the nominee, the GOP nominee, it normally doesn't do that. What it may do is it may now narrow the field a little bit -- Natalie.

ALLEN: That's what it will certainly do, probably, perhaps. Paul Steinhauser, we will be watching. We thank you so much. See you soon.

Well, it's time to talk last-minute strategy for these GOP hopefuls. Let's take a look at the latest CNN/"TIME"/ORC poll in Iowa. Mitt Romney on top with 25 percent, Ron Paul behind him, 22 percent, Rick Santorum, surging in recent weeks to the third spot with 16 percent. And Newt Gingrich with a stunning fall to 14 percent. That's down from 33 percent in the last poll.

And in less than an hour, all eyes will be on one final poll from the "Des Moines Register."

I want to bring in Republican analyst Lenny McAllister, and Republican consultant and CNN contributor Alex Castellanos.

Given the margin of error, Ron Paul has a serious shot of winning on Tuesday, guys. But while others are swarming Iowa this weekend, as we just heard, Paul is in the home state of Texas, spending time with his wife tonight. Lenny, is this a sign of confidence from Paul or is he avoiding the spotlight for a reason this weekend?

LENNY MCALLISTER, REPUBLICAN STRATEGIST: He's doing both. What's come out with these newsletters has been a little damning for him. This gives him an opportunity to move away, get out of the spotlight.

The thing about him is this: he has the grassroots already out there. He's had folks that's been running for him, running for president for the past four years. He has the advantage of the grassroots and the advantage of the caucus structure benefiting him and his supporters in a very good way.

So, he can get out, get away from the spotlight and let things cool down for just a second, come back to Iowa and still not lose that much momentum. I think it's a good move for him up and I think that he will not suffer on Tuesday as a result of it.

ALLEN: Alex, let's talk about Rick Santorum. What's behind his surge in the polls in recent weeks?

ALEX CASTELLANOS, CNN CONTRIBUTOR: Well, I think the failure of the other candidates, I'm not so sure it's so much of a Rick Santorum surge that he has surged forward as it is that all the other candidates have stepped back. There's nobody left to vote for in this contest. You know, with Newt Gingrich's collapse, really, over the past three weeks, votes got to go somewhere, and the only guy left is named Rick Santorum.

ALLEN: And, Lenny, after Tuesday, how many candidates are done? And who are they?

MCALLISTER: I think the person we really need to keep a focus on is going to be the person that pushed Tim Pawlenty out of the race, just in August. Michele Bachmann cannot afford to come in fifth or sixth place. It's very ironic because she pushed Pawlenty out of this race. She's had a major hand in pulling Rick Perry down in the polls.

And if she doesn't do well on Tuesday, the woman that claims to be the native of Waterloo, Iowa, may have her waterloo on Tuesday night.

ALLEN: Same question to you, Alex, what do you think?

CASTELLANOS: Well, I think it is a slightly more complicated. When Newt Gingrich failed to counter attack, when Ron Paul, Rick Perry and Mitt Romney started to launch the negative campaign to bring Gingrich down a few weeks ago, when Gingrich didn't respond, he opened Iowa to Mitt Romney. And now, we've seen Mitt Romney go up in the polls. Everyone else go down.

Romney has an opportunity to take this race. The other candidates now, there's really almost no one left who is a serious threat for the Republican nomination.

So, in that sense, they can all stay in. And they may well. These campaigns now can live off the land and the Internet. And that may be to Romney's advantage. If he can keep the right divided, he can walk away with the center right, go from Iowa, win New Hampshire and maybe end this contest early.

ALLEN: It's all been so interesting that the give and take, the back and forth and Iowans saying that they are still kind of undecided and they could change their minds. So with three days left, Alex, to you first, do see any Hail Marys from the bottom of the pack, say, Bachmann or Perry? CASTELLANOS: It's hard to launch a Hail Mary this late in the game. When voters, you know, when half the voters say they are undecided this late, it doesn't mean they are undecided. It means they are uninterested. That they really don't feel passion for any particular candidate.

What does that mean? They will stay home. We are going to see probably a record low turnout here.

Last time around, there were only 115,000 voters for Republicans in Iowa in 2008. This time, we may see less. Mitt Romney won with 29,000. If he can get half that as people voted for him before and half of what Giuliani and McCain got, another 15,000 votes, Romney could get 25,000 votes and maybe win in Iowa. That could be a real shocker.

ALLEN: And, Lenny, same question to you. Any possibility of a Hail Mary from, say, Bachmann?

MCALLISTER: Well, the Hail Mary pass, if you will, would come in if somebody could effectively use social media in these last 48 to 72 hours to get their message out there. You know, President Obama used social media extremely well in 2007 moving into 2008, which gave him the chance to catapult into the national imagination with the win in Iowa.

If somebody can take that blueprint and use social media, use Twitter, use Facebook, use some of those things to get their message out there in a cost-effective way to create the buzz, there may be a shot. Do I see it? Not necessarily, but if somebody has a shot they have to take it.

ALLEN: We thank you both.

CASTELLANOS: I wish it worked that way, Lenny. I wish they did. You got to have something new to say, not just a new way to say it.

ALLEN: On that note --

MCALLISTER: That's what happened with President Obama. We saw that four years ago. It can happen. I don't think it will happen, though, Alex.

ALLEN: We appreciate you guys staying on the political beat for us before you go celebrate New Year's. We can tell you to enjoy it.

Thanks so much, Lenny McAllister and Alex Castellanos.

MCALLISTER: Happy New Year. God bless you both.

ALLEN: Thank you. And to you.

Tuesday, the GOP candidates vying to run against President Obama will get their first real test of voter opinion. And tomorrow night, Wolf Blitzer takes a close look at what each of the candidates is doing to win last-minute support in "Countdown to Iowa: Final 48 Hours." Will anyone launch a Hail Mary? It's tomorrow night, 8:00 Eastern, right here on CNN.

Coming up in three minutes, a woman plays chicken with police in a shopping center parking lot. Even hitting a patrol car. Who won? The takedown, ahead.

(COMMERCIAL BREAK)

ALLEN: Federal authorities say there's no need for a recall of baby formula. That decision coming despite a fourth baby being infected by a rare and sometimes fatal bacteria that can come from formula. Health officials say parents can keep using any formula they have following directions and checking the expiration date. Cases have been reported in Missouri, Illinois, Oklahoma and Florida. The infected infants in Florida and Missouri died this month.

A woman is facing charges for allegedly trying to run over police in Alabama. And some of it is caught on tape. It's a weird sight in Huntsville. Police found a woman driving around a Target parking lot going up and down rows over and over again blasting her radio. When police tried to stop her they say she hit a patrol car twice and then she floored it toward an officer who fired a shot and missed her.

Police used spike strips on her tires and boxed her in and broke a window to pull her out. She was taken to a hospital for a mental evaluation. No one was hurt, but the woman faces an attempted murder charge.

Well, the search is on for Banana Sam. He is a squirrel monkey that someone stole from the San Francisco Zoo. Zoo staffers discovered the 17-year-old monkey missing Friday when they noticed two holes cut into a mesh fence of Banana Sam's exhibit. The monkey is only about a foot tall and weighs 2 pounds. Cute, but zoo keepers say he's got sharp teeth and will bite if provoked. However, they are more concerned how Banana Sam will fare, saying stress can kill a monkey that small.

Well, we are just hours away from a New Year. How about getting a start, a fresh start on organizing your finances?

Financial expert Terry Savage is joining me.

Terry, what's the first thing you would do.

Wait, we'll answer on the other side of the break.

(COMMERCIAL BREAK)

ALLEN, CNN ANCHOR: The New Year means a fresh start for getting your finances in order if you know where your money goes you'll better be able to meet the New Year's resolution that nearly all of us need to follow. Spend less, save more. Easier said than done. Joining me now is financial columnist for the "Chicago Sun Times" Teri Savage. We will let you talk now, Teri. And happy new year to you.

TERI SAVAGE, "CHICAGO SUN TIMES": Happy new year.

ALLEN: You got some online tools people can use for the great price of free. So what's the first thing people should do to get their financial house in order?

SAVAGE: All right. This is all about getting organized. I know you want to go out and party tonight, but tomorrow is the day you get to start over and fix all the mistakes you made last year with your money. So here are four free websites that can give you a lot of help getting organized.

The first is mint.com. This is a wonderful website that gives you control over all your spending and budgeting. It is sort of a sister company to quicken.com. Only mint goes on to your smartphone. It runs around the internet, scurrying around all the accounts that you have set up, your credit cards, your billers and so forth, and so it lets you keep track in real-time of what happened to your money. It lets you set up a budget and it will send you text messages. So if you are out to dinner tonight, for example, you stop at the bar and you pick up a check. You can get a text message, don't go out to dinner, you are about over your entertainment budget.

ALLEN: Or you cannot have that second drink.

SAVAGE: Exactly. No more drinks. Because mint is free because a lot of financial services companies get to send you messages saying you can have a less expensive credit card or a home loan and so forth. But Mint you cannot move money, you can just take a look at it and they can tell you where you stand. So the next one is really a fabulous site. It is brand new actually this year called manilla.com.

And if you keep all your bills in a Manila folder, the ones you pay and the ones you are going to pay, this does this online for you securely. You set up your own account at manilla.com. And you tell all your billers, your credit card company, your mortgage company, the insurance bills, your auto payment, to send the bill to your account at manilla.com. They will send you text messages. They keep a calendar right up there. And at Manilla you can click to securely pay your bill, you get to see the whole bill, front and back, all the charges, even better they keep all your bills securely.

So next year if you want to say, how much was our electric bill in December with those holiday lights? You can go back to see. Manilla.com is free because you tell your billers to send you your bills by e-mail and they save so much money that they pay for the service. They don't have to print and have postage. So that's a great new way to coordinate almost all of your bills, thousands of billers are now doing that. And it is really worthwhile checking out in the new year.

ALLEN: I feel more organized just listening to you. Just (INAUDIBLE).

So now that you know where your money is going, is there some place out there that can give you advice on how to invest it?

SAVAGE: You know everybody wants to give you advice about how to invest, especially your 401(k). This is a perfect time to start thinking about reallocating. It's the new year after all. Many of the Fortune 100 companies used a service called financialengines.com. It was started by a Nobel prize winning economist Dr. William Sharp give personalized individualized financial advice to 401(k) plan participants.

You can go to their website, but it will cost you. However, here's a free way to get one year of financialengines.com. If you go to my website, terrysavage.com, there's a link right up there right on the home page. And if you go through that way, and I don't keep track of it, but I have written about them so much they said we'll give you this link for your readers, you get a free one-year service. So just look at the top of terrysavage.com. It will help you decide how to invest. And it will also work on retirement and withdrawal scenarios, so this is a top level advice that corporations give their employees.

Now you can have it. And by the way, when you are at terrysavage.com, a little yellow box will pop up. Everything on my website is free. You will put in your name and e-mail address, it will get send up to my sometimes, when I feel like it economic newsletter. And by return e- mail, you'll get a link to my free personal financial organizer. You can print out as many as you want, give them to all your family and friends. List everything on there. Your bank accounts, your brokerage accounts, where your will is. It will help you get organized for the new year.

Four free ways to get control. You cannot get ahead financially until you get control of your money. Here's how to start.

ALLEN: Great, great advice. So many people were challenged in 2011 and are looking for a fresh start for 2012. Terry Savage, we can't thank you enough. And happy new year.

SAVAGE: Good to be with you. Happy new year, Natalie.

ALLEN: Thanks so much.

We are just about four and a half until the U.S. begins ringing in the new year. From the biggest celebration in the country, Times Square to a place that celebrates in style. We are checking in on the pre-new year's parties next.

(COMMERCIAL BREAK)

ALLEN: We got less than five hours left in 2011 on the East Coast and CNN is helping you ring in 2012 with our epic New Year's Eve countdown, hosted by Anderson Cooper and Kathy Griffin at 11:00 p.m. Eastern. We are getting all our players in place.

Isha Sesay is standing by live in Times Square where the ball drops at midnight, and John Zarrella in a very different setting, the beautiful Florida keys. Let's start with Isha. Isha, is it already getting crazy there? ISHA SESAY, CNN CORRESPONDENT: OK. Let me tell you Natalie, it is getting totally crazy here. Let me give you a taste. Guys, make some noise! A little louder. A little louder! Just a small taste here. You know, as you say, we are still some hours away from midnight, but Times Square is filling up rapidly for the ultimate street party, because that's what it is. It is 17 blocks here in Manhattan that had people crammed in behind these barriers here to sample the very unique atmosphere that you get here in Times Square. There's music, which you can probably hear a little bit behind me, and so there's a lot of dancing. There's a lot of singing. A lot of camaraderie.

People come from all over the United States to sample this. Let's talk to a couple of people, shall we? Just to find out why they're here, why do you want to come to Times Square on New Year's Eve? Hey, guys, we got some (INAUDIBLE) tell me, what's your name? Where are you from and why are you here?

JULIANA: My name is Juliana and I'm living in Virginia but I'm from Colombia. I come here, of course, to celebrate (INAUDIBLE) New Year in Times Square.

SESAY: Why Times Square?

JULIANA: Because it's famous all over the world. (INAUDIBLE).

SESAY: OK. You hear it from her. It's famous around the world. This is the place to be. We are here. We are going to bring you all the excitement, all the festivities right here in New York Times Square. Say good-bye, everybody. Back to you, Natalie.

ALLEN: Isha, fantastic. And imagine the crowds will continue to grow. It is 7:39 p.m. Eastern. Look at them already. OK. Over to John Zarrella now in a very different part of the country. John some reporters get all the tough assignments. What's it going to be like to ring in the New Year on the beaches of the Florida Keys? We do hate you, you know that.

JOHN ZARRELLA, CNN CORRESPONDENT: I know that. You know, that's just the way it is, Natalie. 72 degrees here today. Went fishing the last couple of days, spectacular place to ring in the New Year. These are all our friends invited here to party. This is Nathan. He was just on the phone with his dad telling his dad to turn on CNN. Right, Nathan?

NATHAN: Yes. And my family from Canada.

ZARRELLA: And the family from Canada. You folks down from Ohio?

UNIDENTIFIED MALE: Yes, Springfield, Ohio.

UNIDENTIFIED FEMALE: Go bucs! It's my birthday.

ZARRELLA: It's your birthday today?

UNIDENTIFIED FEMALE: No, tomorrow.

ZARRELLA: So why did you come here? UNIDENTIFIED FEMALE: To celebrate.

UNIDENTIFIED MALE: To celebrate, you got it.

ZARRELLA: Better than in the cold, right? You know that crowd in New York was kind of loud. I want to hear you guys even louder, say happy new year.

UNIDENTIFIED MALE: Happy new year!

ZARRELLA: So Natalie, we are on Duvall Street. You know they have many, many great celebrations here on New Year's Eve. Of course, the biggest one of all is the drag queen drop. Sushi, the drag queen, would drop out of that show at midnight. We have been doing this for 10 years and we are joined briefly by Mayor Craig Cates. Mayor, this is a big night for you. Do you expect a lot of people here tonight?

MAYOR CRAIG CATES, KEY WEST, FLORIDA: Yes, we are expecting 50,000 partiers here tonight.

ZARRELLA: And it grows every year. I know because CNN is here every year. And that's why it is growing.

CATES: Thanks for being here for 10 years in a row. We really appreciate it.

ZARRELLA: It's a great time. I want to ask you. It's not just this event, but you got other events all up and down Duvall Street, right?

CATES: Right. The whole length of Duvall we have events tonight. So we could It is not really crowded, but everybody has a great time.

ZARRELLA: You got a conch shell drop, sloppy Joe's, you got the pirate wrench appropriately at (INAUDIBLE). You got on a mast on a ship so it is a great party here tonight, Natalie. And it always is, but again, the highlight of the event is Sushi coming down in the red shoe.

And interestingly enough, before you let me go, this year she's going to be in a period costume reflecting the 1912, 1920 period because next year in 2012 is the 100th anniversary of the completion of Henry Flagler's railroad. And I got my conductor's hat. That linked the mainland to Key West. So a lot of big things coming up in Key West, but tonight we are going to have some fun ringing in the new year. Natalie?

ALLEN: I can already tell. The crowd doesn't compete with Times Square, but I like the shorts and the t-shirts look from the people there. Fantastic. We don't hate you, but have a great time. We know you will.

ZARRELLA: We will.

ALLEN: All right. Meteorologist Karen Maginnis is here with celebrations getting underway. I don't know, Key West, Times Square, I would take either one. KAREN MAGINNIS, AMS METEOROLOGIST: You know, I think one of the most exotic places I have ever spent New Year's Eve was in Yellowstone National Park. How about you, Natalie?

ALLEN: Oh, very nice. Gosh, I don't even know. I think I was in Florida once, but not Key West.

MAGINNIS: That's a pretty nice assignment. Happy new year's to everyone. And if you are or are headed to the Times Square venue, remember back in 1917? Well, maybe not, because the temperature there was below zero. Not going to be nearly that cold as we're going into the overnight hours. We will expect mostly clear skies for tonight with temperatures hovering right around 43 degrees. Boy, remember those temperatures could be a whole lot colder like they were in 2008 when temperatures were dropping down into the teens.

Washington, D.C., it looks like clear skies there, 37. And Key West is looking at the temperature at midnight to be around 72. Now, a different story across the midwest is going to be a little windy, so you'll have to factor in the wind chill effect here as well. Minneapolis hovering around that freezing mark. Maybe a little bit of snowfall expected there. But gusty winds, 20 to 25 miles an hour.

New Orleans, looking at 62 degrees and breezy in Nashville. And in Memphis you could expect some showers there, Shreveport, some showers also expected, across the Rockies today, some of the winds have gusted over 65 miles an hour. Now the front is moving through and we are looking at temperatures behind the system dropping down into the 20s and 30s. But if you're headed to Phoenix around 56 degrees at midnight. And in the pacific northwest, some showers are expected here. Mountain snowfall. And in Seattle, winds out of the east and the temperature at 39 degrees for Los Angeles. Not so bad. The temperature is expected around 54. And for San Francisco, 67. 67 in San Francisco this time of the year, Natalie, not so bad. I hope everyone has a great 2012.

ALLEN: We'll take any of those. Thank you. And happy new year to you, Karen. Thanks.

Yes, so farewell to 2011. 2012 is almost here. Tonight, ring in the new year with Anderson Cooper and Kathy Griffin live from Times Square and they'll be checking in with John down there in Key West. Our live coverage starts at 11:00 p.m. Eastern.

What is your New Year's? Ahead ways to make it happen and truly keep the resolve in your resolution.

But first, John Legend. Music isn't his only passion he also has some strong feelings about reforming education in America. We'll hear about it.

(COMMERCIAL BREAK)

ALLEN: Music isn't John Legend's only passion. The Grammy-award winning artist brings a unique voice to the debate over education reform. He was home schooled, but also attended private and public schools.

CNN education contributor Steve Perry sat down with the singer to get his perspective in tonight's "Perry's Principles."

(BEGIN VIDEOTAPE)

JOHN LEGEND, SINGER: Everyone believes that a kid should get a good education, but you have to put your money and your policy where your mouth is. But here's what that means. Quality principals, quality teachers, quality superintendents that are accountable for actually delivering on their promises. And when you talk about accountability, then that means everybody is not going to be protected in that situation.

STEVE PERRY, CNN EDUCATION CONTRIBUTOR (on camera): That's a loaded speech right there, man.

LEGEND: The priority is to make sure that the kids have the opportunity to get a great education.

PERRY: Now you have gotten some flak from that.

LEGEND: Of course, I have gotten flak for that.

PERRY: People are not interested in hearing a singer out there telling them how to educate people.

LEGEND: I get flak for that and I'm not an educator and I know that.

I see this every time I talk about teachers, I truly respect what they do and I don't envy the task they have. And like I said, we need to hold this job in high esteem, but when you hold it in high esteem that means you don't just put anybody in front of 25 kids. You make sure they are doing what they are supposed to be doing. If they are not doing it well, then they shouldn't be there.

You know the idea that rich kids get to go to good schools and poor kids don't is so entrenched in our national psyche that we haven't challenged that notion.

PERRY (voice-over): Steve Perry, New York.

(END VIDEOTAPE)

ALLEN: For many of us, New Year's resolutions often involve old goals, ones you've already failed to meet. Sorry to be so negative there but it gets to a point. The only thing you resolve is to not have a New Year's resolution as one of our I-reporters found out at a celebrity event.

(BEGIN VIDEO CLIP)

SIMON COWELL: My new resolution is never make one because I break them.

NICOLE SHERZINGER, SINGER & CELEBRITY JUDGE: The New Year is going to be amazing. I can't wait to get my music out there.

PAULA ABDUL, CELEBRITY JUDGE: I don't make New Year's resolutions. I'm grateful. I walk with gratitude every single day.

LEANN RIMES, SINGER: I don't have one. No New Year's resolution for me. Just a happy new year.

(END VIDEO CLIP)

ALLEN: Oh all those celebrities. So how do you make 2012 different if you want some changes? To help us, human behavior expert Dr. Wendy Walsh joins me. Wendy, thanks for being with us.

DR. WENDY WALSH, HUMAN BEHAVIOR EXPERT: Hey, Natalie, how are you? Those celebrities, you know, they're going to be publicly scrutinized. The rest of us can break our resolutions and no one knows.

ALLEN: Yes, absolutely. You're right about that.

(INAUDIBLE)

ALLEN: OK. What I want to know is people make them and by January 8th can't even remember what they are.

So help us out here. You've got four chips. The first, desire.

WALSH: The first year is desire. When you make any kind of resolution, it has to come from within yourself. You can't be doing it for anyone else. It's not because your husband or wife has nagged to you quit smoking or lose weight or get control of your finances. You have to have the internal desire yourself. That's the first one.

ALLEN: And desire is one thing, ability, skill at getting it done is another.

WALSH: Right. So you have to set realistic goals. You know you have to have the ability. You can't say this is the year that I'm going to climb Mount Kilimanjaro if you can't even climb on to a Stairmaster for 20 minutes. You have to pick realistic goals that you can achieve.

ALLEN: Right. Third support, you need support for your change. Can't do it alone.

WALSH: Well, certainly addiction specialists have proved this over and over and over, that we have a lot of enablers in our lives that enable our negative habits. So we need to find enablers who are going to support all our new resolutions. So if you are going to join a gym, join it with a friend or go to a regularly scheduled class so you make friends in that class who notice when you're not there. Actively create the support group around yourself.

ALLEN: And the fourth, this is a big one because there is not something I don't have going into my resolutions, it's confidence.

WALSH: That's the main thing. It's one thing to say, "Look, my New Year's resolution is and I mean I probably won't achieve it but that's not confidence, people." What you need to do is have no backup plan. When I hear people say "Well, my backup plan is this," it means they're planning on their backup, not the reality. So you really have to have that confidence like the little engine that could, I think I can, I think I can, I know I can, right?

ALLEN: Absolutely. OK. I'm going to try to change my attitude. There first thing is attitude.

OK, you've got the four tips. There's an article on cnn.com called "Fix Tips From Your Future Self" and this isn't just about the New Year (INAUDIBLE) to follow for life. What did you take away from it?

WALSH: I loved, loved, loved this article, Natalie, because it was a review of a book of where the author interviewed people over 70 and well into their 80s and 90s to get the wisdom that we all want, right? And yes, there was the old stuff, don't worry so much, don't make money your primary goal, make it about relationships but you know the takeaway for me as a sort of slightly younger person is that you should look at maybe these times that we're in, this recession times, where still one in six Americans are in default, where people are hurting financially and you should say this is a gift of time. This is a time in our lives where we can nurture our relationships and it doesn't cost money do that.

I mean I remember one summer, I'm a single mother, money was a little bit tight a couple summers ago so we explored our own city for free. I looked at everything free to do in our own city and we became tourists in our own city with the kids. So that's the kind of thing is look at it as time and how you can nurture these relationships because these old dudes say at the end of the day it's all about relationships.

ALLEN: Absolutely. It's not really quality time, it's just time as long as you're with them. Right? Well do you have a resolution real quick?

WALSH: I do. I have a very big birthday coming up this year answered and I plan to get in tip top shape by April 30th. I'm saying that publicly so here we go. I'm going to call my friend Jillian Michaels and see if she can help me out.

ALLEN: Happy 30th early.

WALSH: Thank you, Natalie. Good to see you on domestic. Happy new year.

ALLEN: Thanks so much. Wendy Walsh, happy new year to you as well. Thank you for the great advice. Confidence. Got it.

All right. The hour's top stories are next.

(COMMERCIAL BREAK)

ALLEN: Checking some of our top stories.

The mayor of West Hollywood calling an arson spree in Southern California "a new form of urban terrorism. Los Angeles fire officials say they've extinguished at least 21 fires in the last two days in Hollywood and West Hollywood. Many if not all were arson. There's now a total of $60,000 in reward money for information leading to an arrest.

I'm Natalie Allen at CNN World Headquarters in Atlanta. Don't forget to watch Anderson Cooper and Kathy Griffin ring in the new year live from Times Square. That's 11:00 Eastern. Meantime, "AC 360'S BEST AND WORST OF 2011" begins in two and a half minutes. Happy New Year.