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U.S. Flies Through Disputed Airspace; Polls Show We're Losing Faith in Economy; Markets Wrap Up Record Setting Month; Fight for Bargains on Black Friday; Tomorrow is Deadline for Web Site Fix; Obama Visits Immigration Protesters; White House Christmas Tree; Obamas Sit Down for Joint Interview; Christie Expands Lead Among GOP

Aired November 29, 2013 - 13:00   ET

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

JIM SCIUTTO, CNN ANCHOR: Hello, I'm Jim Sciutto in Washington. Wolf Blitzer is off today.

We begin today with the markets. The Dow continuing its record run, trading wrapping up just moments ago. There you see the Dow finishing today's holiday shortened session, just about 16,084. It also finishes out what has been a record-breaking month. The Dow topping to the 16,000 milestone for the first time ever, while the NASDAQ is now back over 4,000.

So, we've got records on the Dow and the NASDAQ and big companies are raking in billions in profits. Things seem to be great on Wall Street, so why aren't folks on main street feeling as confident about the economy and their own financial situation?

We have our own Zain Asher in our New York bureau with some new polling numbers. Now, Zain, you look at polls. They show that our faith in the economy is shaky at best. So, what's the disconnect? We're seeing the markets jump on Wall Street. Doesn't feel like Americans think that's the right thing.

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hi, Jim. Yes, it's interesting poll numbers we're getting, 59 percent of Americans do not believe that things in the U.S. are going well. They think things in the U.S. are going badly; 39 percent believe we are still in an economic downturn, this has to do with the economy specifically; 24 percent believe that we are in a recovery.

So, here's where the disconnect is coming from. On the one hand, we have seen numerous record highs. You mentioned the Dow passing 16,000 for the first time this month, the NASDAQ also passing 4,000. We have not seen levels like that from the NASDAQ since 13 years so during the height of the dotcom bubble.

I do want to talk about housing. Housing is clearly in recovery. Even though mortgage rates are climbing steadily, housing is still in recovery. But on the other hand, the disconnect is coming from jobs. So, even though jobs are being added, a lot of low wage jobs specifically from (INAUDIBLE) and hospitality and retail. So, jobs are being added but a lot of it is low-wage jobs and 11 million Americans still remain unemployed -- Jim. SCIUTTO: All right, a lot of the gains concentrated among the wealthiest. Now, when I look at these numbers, I remember in 1999, 2000, memories right before the last bubble burst. Do we will have similar fears from the people you talk to that it will happen again?

ASHER: Well, feelings are certainly mixed but a lot of people do agree that a lot of the record highs we're seeing -- remember, the Dow started at 13,000 this year. Right now we're around about 16,000. A lot of these record highs we're seeing is largely because of fed stimulus. A stimulus is exactly what is pushing the market higher and higher.

And so, when you talk to people, you know, people are asking what's going to happen in December? Remember, December is traditionally a good month for stocks, but with the Dow and S&P both at 23 percent and 27 percent higher respectively, it might be a good time for money managers to take some profits off the table. So, it's going to be interesting to see how the year ends -- Jim.

SCIUTTO: Yes, a lot of cheap money helping the market go up. Now, I know a lot of people will hold -- in their 401Ks, they'll hold some of the big retailers. The retailers opened up on Thanksgiving Day, in part to get sales up. Are they doing well in the markets today because of that?

ASHER: Well, it's interesting when you look how Wal-Mart, JCPenney and Macy's are doing, Wal-Mart closing higher by .1 percent, JCPenney up also by .5 percent, Macy's though down slightly by .4 percent. You know, Black Friday really is the moment of truth for a lot of retailers. So, their goal is really just to lure as many -- as many shoppers at possible into the stores on Thanksgiving. That is why you're seeing a lot of retailers open earlier and earlier.

And when you look at corporate earnings, third quarter corporate earnings, the interesting thing is that 70 percent of companies actually beat on profits, but it's largely due to cost-cutting strategies. So, it really is crucial for all these retailers to lure people back into the stores for the holiday season -- Jim.

SCIUTTO: All right. So, it's certainly not a Black Friday on Wall Street today. Thanks very much to Zain Asher --

ASHER: Of course.

SCIUTTO: -- in New York.

So, how about that Black Friday on the ground in all those stores. In some places they took the term door busters a little too literally. People pushed and shoved to get the good prices. Although in this case, they weren't even in the store yet. Now, you've got to watch and listen to this one.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh, my god. Oh, my god.

(END VIDEO CLIP)

SCIUTTO: Now, this was the scene at a Wal-Mart in Elkin, North Carolina. A pretty ugly scene playing out around a few low priced T.V.s. People just really out of control there. It's not the first time we've seen it. We've seen it in previous holiday shopping seasons. But thankfully, we found, in general, it seemed to be the exception most of the time. The official start to the Christmas shopping season looks more like this mall in Newark, New Jersey. A lot of people, some long lines but thankfully no violence.

We're going to check to see what it looks like at the Macy's in Manhattan. Another one of those stores that opened up early this year. Our own Margaret Conley is watching the traffic there. Margaret, did you see any of those crazy scenes or was it pretty under control?

MARGARET CONLEY, CNN CORRESPONDENT: Jim, you know, there was fighting at Wal-Mart. There was a stabbing. And there were actually two people arrested for fighting for a parking spot at Wal-Mart in Virginia. But compared to that, things here have been pretty calm. And that's what we've been hearing from mall managers across the country.

Outside, you can see the mood here is festive. We're outside the Macy's windows right here. You can hear the music. But inside it is crowded. It takes a long time to walk through that mall, one of the biggest malls in the country for Macy's. And when you go into the restrooms here, by the way, there are people sleeping in the chairs. I talked to one employee, she's on her second shift. She was here when those doors opened. She said, when they opened at 8:00 last night, people were running inside just to get the best deal.

SCIUTTO: Now, Margaret, you talked to the CEOs of these stores. They say they're doing it because there's demand for it. People want to shop on the day. Of course, they're also doing it to increase sales. How much are stores like Macy's banking on these two extra days of shopping to beef up their bottom line?

CONLEY: Yes, Jim, Macy's opened early. They opened at 8:00 yesterday. Toys R Us, Target, Best Buy, they all opened up earlier too. We asked the CEO what he thought about this. He said the decision to do this, to open earlier, has been really, really popular.

(BEGIN VIDEO CLIP)

TERRY LUNDGREN, CEO, MACY'S: In our case, you know, we just want to do what our customers want and what our associates want and so we're being responsive in that way. I think the fact that 15,000 people versus 11,000 who were here last year at midnight is an indication that people want to be here when we opened our doors.

(END VIDEO CLIP)

CONLEY: Now, we're hearing numbers so far. They're not record- breaking but they are up. And we did ask a couple CEOs about next year and they say that this is the new normal. SCIUTTO: Wow. So, a successful experiment. I guess we'll have less time to eat at the Thanksgiving table next year. We'll be shopping. Thanks very much from Margaret Conley at Macy's in New York.

Another deadline tomorrow, the clock ticking for HealthCare.gov. Tomorrow, the deadline the Obama administration set to get the Web site working for, as the White House has said, the vast majority of users. But as that deadline approaches, the administration is dealing with more questions and more problems.

Jill Dougherty joins us live now from the White House. Jill, this is a self-imposed deadline. What are officials' biggest concerns as we get to those last 24 hours?

JILL DOUGHERTY, CNN CORRESPONDENT: I think you'd have to say numbers. They know or they believe that they can handle 50,000 at a time, will be able to by tomorrow. But one of the problems would be, what if there are more, let's say 200,000? And one of the problems is, you know, the different times of the day in the afternoon, you get a lot, a surge, and the other times, maybe it's quieter. And the -- also, the error rate. They've brought that down they say to under one percent. It used to be six percent. But there are some other problems and here are some of them.

(BEGIN VIDEOTAPE)

(voice-over): Withering criticism of the initial rollout of HealthCare.gov has intensified the pressure on the administration to get this fix right for Saturday. The White House hopes it can doing that at least for the vast majority of users.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And this Web site is going to get fixed.

DOUGHERTY: Healthcare.gov opened for business October 1st and it's been a disastrous two months. The site crashed, unable to cope with people trying to sign up. Small businesses still won't be able to use the site for another year. Insurance industry insiders tell CNN some customers' personal data is getting mangled or even lost. The White House says the site will be able to handle 50,000 users at one time. But they admit, there will be times after Saturday when HealthCare.gov does not function properly. And they're bracing for another possible huge surge in volume that could force some people into virtual waiting lines for callbacks.

Officials say, consumers who pick a plan by December 23rd and pay their premiums by December 31st will have coverage effective the 1st of January.

(END VIDEOTAPE)

(on camera) (live): And in effect, they're kind of tinkering with the system. I mean, obviously, they would like to completely fix it, but they're not pretending that they can do that. They say, for example, they've upped the speed when you log on. You load a page in one second. It used to be six seconds. So, these are the kind of incremental improvements, Jim, that they seem to be saying they can handle.

SCIUTTO: Well, another of the president's legislative priorities in the final three years of his term is immigration reform. We just got word that the president went to visit protesters calling that reform. What did he do? What can you tell us about that?

DOUGHERTY: He went very close by down to the national mall and sat down, he and Michele, his wife, with protesters. They're actually fasting. It's called fast for families. And these are people from faith groups, from labor groups and others who are protesting for immigration reform. And, of course, in that -- many of them are on the Democratic side. They've been criticizing Republicans for delaying the vote on that. And the president said -- praised them for nonviolent protests and also mentioned that he is very positive about in this. He said it's not a matter of if, it's a matter of when. And he thinks something can be accomplished.

SCIUTTO: Oh, now, that's commitment, fasting for immigration reform. Jill Dougherty at the White House. Thanks very much.

He is the leader of the pack. New Jersey Governor Chris Christie expands his lead among possible 2016 contenders. We'll have some new poll numbers on how the potential field is shaping up for the Republicans.

(COMMERCIAL BREAK)

SCIUTTO: It's now come time to trim the tree, a big one, at the White House. First lady, Michelle Obama, took delivery of the official White House Christmas tree just a couple of hours ago. That's it there. The 18 1/2 foot Douglas fir was grown in Layton, Pennsylvania. It will be on display in the Blue Room.

She's married to the leader of the free world. So, does Mrs. Obama try to influence her husband's decisions and would see do a better job than he does? ABC's Barbara Walters asked president and Mrs. Obama both of those questions in their first joint interview this year.

(BEGIN VIDEO CLIP)

BARBARA WALTERS, ANCHOR, ABC: Do you think that the first lady might have made a better president than you?

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: Oh.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Of course. Of course. That's an easy question. But she's smart enough to know that, you know, she might not want to go through the process.

M. OBAMA: I absolutely don't agree. I mean it takes -- you know, he has a level of patience and focus and tenacity and calm, you know, that you -- that just doesn't, you know, come by anyone.

WALTERS: You don't -- you don't have that patience?

M. OBAMA: I definitely don't. WALTERS: So do you, you know, when everything's quiet late in the evening, do you nag him and say, honey, why don't you this, that?

M. OBAMA: No, no, I try not to do that. I try -- we both try to make sure that home is a sanctuary. Particularly because when we're home, our girls are home. And they dominate the conversation when they're there. And they're not talking about issues of the day, they're talking about issues of their day, which has nothing to do with what's going on in the rest of the world. So, you know, everyone has to have their safe haven, a place of peace and calm and, you know, that's home for us. So I try to stay out of his ear. He's got enough people in his ear.

(END VIDEO CLIP)

JIM SCIUTTO, CNN ANCHOR: The Obamas there unscripted.

President Obama may have three years left in the White House, but the 2016 talk is well underway. New Jersey Governor Chris Christie has expanded his lead among possible GOP contenders in the 2016 presidential race. In a new CNN/ORC poll, 24 percent of Republicans and those who lean Republican say Christie is their likely choice. That's up 7 percentage points since early September. Senator Rand Paul is second, followed by Congressman Paul Ryan. Senators Ted Cruz and Marco Rubio round out the top five.

Well now political director for CNN, Mark Preston, here looking at these numbers.

What do they say about the race? Is Christie really a lock in 2016?

MARK PRESTON, CNN POLITICAL DIRECTOR: Look, he's the flavor of the month, Jim. He had an overwhelming victory earlier this month. He crushed his Democratic opposition. He won women. He won Latinos. Clearly his brand of Republicanism is playing well right now with Republicans across the country.

What's interesting about these numbers, though, is that you would think that Chris Christie would do really well with blue collar Republicans. And from what we learned from this poll, actually Rand Paul does better than he does. For Republicans making over $50,000 a year, Jim, Chris Christie's got a lock on that. Republicans making under $50,000, they go to Rand Paul. So it's interesting, he has that rock 'em, sock 'em blue collar attitude, but it's clearly not playing out right now.

SCIUTTO: Interesting. I'm going to make a guess here that Hillary Clinton leads among Democrats. What do the numbers look like on the Democratic side?

PRESTON: Just overwhelmingly. And we shouldn't be surprised. Let's take a quick look at these numbers right now, Jim. I mean Hillary Clinton is clearly the front-runner right now for the Democratic nomination. And she's going to be the front-runner for the Democratic nomination at this point. It's just -- she's unmatched. She's up 51 points over her closest rival, and that's Joe Biden. But let's remove Hillary Clinton from the race and then all of a sudden Joe Biden becomes the front-runner certainly at this point in time.

SCIUTTO: That makes sense, eight years as vice president, been in the Congress, what, since the early 1970s.

It's early. We're three years out at this point. I mean do these numbers matter? Are they just a general indicator?

PRESTON: You know, they do matter, but they are a general indicator and they are going to change. And for the folks out there, Jim, who say that it's too early to talk about this, certainly from our perspective, well, we're not the ones going to Iowa, New Hampshire, South Carolina, Florida, raising money for Democrats, clearly laying the groundwork. We've seen that from Rand Paul, Ted Cruz. We're going to see a lot of that from Chris Christie in the coming months. And Joe Biden himself is already making telephone calls to Iowa, New Hampshire and South Carolina. So the game is on, but if Hillary Clinton doesn't run, it's a whole new race.

SCIUTTO: Got to start so early now. We're already handicapping 2016. Thanks very much to Mark Preston, CNN's political director.

Later this hour we'll talk more about Joe Biden's hopes for 2016. He may be second in some of the polls, but that's not stopping him from acting like the leading candidate.

But first, U.S. and Japanese planes fly into contested air space and China scrambles fighter jets in response. We'll have the latest live from the Pentagon.

(COMMERCIAL BREAK)

SCIUTTO: Today, China scrambled fighter jets in contested air space above the East China Sea. It's all part of a growing dispute over islands claimed by both China and Japan. And now we understand the U.S. has made another flight right through that contested air space. Our Pentagon correspondent Barbara Starr joins us live now from the Pentagon.

Barbara, it doesn't look like the U.S. is backing down. What's the latest you're hearing?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Jim, sources here at the Pentagon are telling us that this flight was part of what the U.S. military plans to continue to do all the time, fly through international air space. China can claim it's theirs, but the U.S. military will not obey the Chinese rules that they have to file flight plans and state their flight data to Beijing when they fly through these areas. So, again, another flight.

I think what's happening here is the U.S. is trying to hold firm to the notion that it has the right to fly through there, but it is also trying to make sure that this situation doesn't escalate any further. Officials are characterizing this as just the normal part of business that the U.S. military does. And these aircraft, while they were not identified to us, Chinese news reports say the Chinese scrambled the jets after seeing the aircraft and they say that they are P-3 navy aircraft, which are surveillance aircraft. Kind of big, slow, surveillance aircraft. No mistake for some kind of fighter jet.

Nobody wants to see any kind of confrontation here. Still, plenty of worries that this could escalate into some sort of incident.

Jim.

SCIUTTO: Now, U.S. officials say that these flights are routine, they're scheduled. Is that true or are they trying to send a message here?

STARR: Well, maybe just a bit of both. Hey, you know, they are routine. They are scheduled. This is one of those areas that the U.S. military, the Japanese, the South Koreans, all the nations out in the Asia-Pacific fly through this region, we're told, on a fairly regular basis. And the U.S. Navy does. The U.S. Air Force does.

But, in the meantime, with this escalation of tension, they certainly are sending a message to China, if you thought we were going to back off, well, no, we're not.

SCIUTTO: Yes, it's a very strong message. Now, Vice President Biden will be in China next week with another message to deliver presumably. What happens when he's there? What kind of things is he going to be saying to the Chinese?

STARR: Right. He is going to sit down with Chinese officials. The visit was supposed to focus a good deal on trade and economic issues. Well, no more. Topping the agenda likely is to be this situation. We are told by senior administration officials the vice president will bluntly say to the Chinese, what are your intentions? What is it that you intend to do here? Because the concern is, again, if all the countries in the region continue to fly through this air space and the Chinese continue to scramble their jets, how long before there is some sort of inadvertent incident, planes coming too close to each other, possibly colliding. An incident, an escalation, that's what nobody wants to see.

Jim.

SCIUTTO: Yes, a lot of assets in the area increases the chance for a mistake. Thanks very much to Barbara Starr at the Pentagon.

Now, the lure of low prices, it motivated many consumers to start shopping on Thanksgiving Day. But many store employees felt shortchanged by having to work on the holiday. The latest on that controversy, next.

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