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U.S. Showing Economic Growth; Winter Storm Tangles Holiday Travel; Tuberculosis Outbreak at a California High School?; Celeb Chef's Former Assistants Not Guilty; As Signups Surge, New Changes to Obamacare; Rising Concern Over Smartphone Thefts

Aired December 20, 2013 - 09:00   ET

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

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: The trend really important here when you see how the last year we have done better. You have seen the economy starting to gather momentum. It's exactly what the Fed is making the Fed more comfortable about taking its -- you know taking its foot off the gas in terms of helping the economy, the taper light as we've been talking about it. Again, this is an economic number that is again confirmation that the economy is healing -- Carol.

CAROL COSTELLO, CNN ANCHOR: All right. A bit of good news this morning, thanks, Christine Romans.

ROMANS: You're welcome.

COSTELLO: Millions of Target customers are waking up this morning to find an e-mail from the store, in their inbox. The nation's second largest retailer in full damage control mode after one of the largest breaches in retail history.

As many as 40 million credit and debit accounts may have been compromised in an attack that started just before thanksgiving and ended on Sunday. Now Target is reaching out to customers via e-mail.

The message which is also posted on the company's Web site reads in part, "We began investigating the incident as soon as we learned of it. We have determined that the information involved in this incident included customer name, credit or debit card number and the card's expiration date and CVV, that's shorthand for the short security code printed on the back of your card and designed to provide extra fraud protection.

Some Target customers are already spotting problems.

(BEGIN VIDEO CLIP)

CAROL, CREDIT THEFT VICTIM: $2319.51 that they tried to get out of the account. I toured the United States and a little bit of the country.

GINA SEKULA, SHOPPER: You think you have money in your account and then you have nothing. You have beyond nothing because I went shopping at Target.

(END VIDEO CLIP)

COSTELLO: Under federal laws, consumers who use credit cards have more protection than those who use debit cards because, as you know, you get cash out of those debit card accounts.

Check your statements.

Just hours from now the holiday travel season kicks into gear and for millions of Americans those plans may grind to a halt just in time for the start of winter a sprawling storm is plowing across much of the country, painting scenes that are both spectacular and a little scary.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Oh my gosh.

(END VIDEO CLIP)

(LAUGHTER)

COSTELLO: Yes. Wicked combination of high winds, freezing rain and heavy snow knocked out power across much of Salt Lake City and now closed the airports there. Now weekend flyers are bring warned of similar frustrations across the eastern half of the country.

Indra Petersons is in the CNN Severe Weather Center, OK, hit us.

(LAUGHTER)

INDRA PETERSONS, AMS METEOROLOGIST: Does this sound familiar, Carol, like anything maybe like Groundhog Day from Thanksgiving? Yes, I am not making friends here once again. We're going to a holiday travel weekend and we're seeing a series of storms and a lot of variety, too. Like you mentioned we're talking about freezing rain, ice and even the threat for tornadoes and why not leave out record-breaking heat?

We're going to talk about that all coming up and it feels like here we go again.

(BEGIN VIDEOTAPE)

PETERSONS (voice-over): As holiday travelers bombard the airports and roadways this weekend, a wicked weather system could derail travel plans with snow, freezing rain and severe thunderstorms across the country.

According to AAA, the wide-ranging storm potentially threatening the travel plans of 94 million Americans.

UNIDENTIFIED MALE: Do you want to go on the airplane?

UNIDENTIFIED MALE: No.

UNIDENTIFIED MALE: No.

PETERSONS: From the South to the Midwest, the risk of severe thunderstorms include damaging winds and even isolated tornadoes. Up north, freezing rain will be the problem from Chicago to Wichita. Holiday commuters will have to watch for icing on bridges and overpasses.

Snow has already caused issues for air travelers this holiday season. In Wisconsin this week, a plane slid off the snow slicked runways.

UNIDENTIFIED FEMALE: Well, you know what's happening and then they said that airport were shutdown.

PETERSONS: Further east up to 10 inches of rain could dampen the holiday travel plans and once millions finally arrived to a destination, who will have a white Christmas? Right now it's looking like Colorado and parts of the Great Lakes.

(END VIDEOTAPE)

PETERSONS: All right. So here we go. Let's take a look at several of these storms. Here is the first one, today still producing icy conditions moving from Michigan back down through Missouri but not really the big system that's dissipating. The rain still going to be affecting the northeast but again it is the system behind it. We keep really talking about it.

And notice the low now moves into the southeast, where it's very warm, there's tons of moisture, and fuels all this moisture into the Ohio Valley back down to the Mississippi Valley. And on the back side you're talking about more icing conditions.

Talk about getting farther north where it is colder, now the back side fueling in heavy snow around the Great Lakes. It doesn't end there. Then we have the icing great into through upstate New York. We're talking about places like New Hampshire, Vermont, even Maine, over half an inch. That can take down power lines.

So definitely huge ice storm possibly for Sunday morning. We'll be monitoring that and no, it does not end there, into the southeast. That same system, remember, showed you all the moisture in the southeast, the record-breaking temperatures, tonight already it looks like anywhere from Little Rock back down through Waco, a threat for severe weather, thunderstorms, even isolated tornadoes.

Even a moderate risk in through tomorrow. This is some dangerous stuff here from Memphis back down through Monroe. We're talking about again the threat for severe weather and in the east, yes, record- breaking heat. But that's not even the big story. Just wanted to point it out. There's a lot going on but for many of you just be warm if you're a little bit showery.

COSTELLO: So hopefully people will leave early today. That's the safest time for most of the country, right?

PETERSONS: It really depends on where you are. But to be honest, we're already talking about icing conditions in many places, so when you're already talking about ice out there, plus places like Madison you already have problems right as we speak. COSTELLO: All right, Indra Petersons, thanks so much.

Also this morning fears of a tuberculosis outbreak in California. 1800 high school students and staff will be tested today for TB. This after 45 students at Indio High School in Palm Desert tested positive for possible exposure. Only one student has been confirmed with an active case of tuberculosis.

The school says it's requiring the tests out of an abundance of caution. The risk of transmission appears to be moderately low but some parents are upset this wasn't handled sooner.

(BEGIN VIDEO CLIP)

NOEMI MUNOZ, PARENT: I'm very shocked that it wasn't addressed earlier and I felt like -- I feel like if it was addressed earlier it wouldn't be this big of a problem.

(END VIDEO CLIP)

COSTELLO: Pretty scary, right?

CNN's Casey Wian is live outside Indio High School this morning with more.

Good morning.

CASEY WIAN, CNN CORRESPONDENT: Yes, it is scary for a lot of parents and students and staff members here at Indio High School, Carol. Let's talk up and talk about how this all started because parents are raising concerns about the timetable.

A few weeks back one student came down with tuberculosis. School officials decided to test everyone that that student was in class with and everyone that that student was known to have come in contact with. That was 131 other students. Of that 131, 45 students were tested positive for exposure to TB.

Doesn't mean they have the disease, it means what health officials say is they have possible or likely latent TB which means they could develop it -- about a 10 percent chance they could develop it at some point in their lifetime.

All of those students will be treated with antibiotics.

Five students have been sent for further tests, because chest x-rays showed that there was some abnormalities that may or may not be related to TB. They still don't know. So out of an abundance of caution, school officials say they're testing all 1800 people at this school. Students and staff alike.

We spoke with the principal of the school and the county health director. Here's what they had to say.

(BEGIN VIDEO CLIP) RUDY RAMIREZ, PRINCIPAL, INDIO HIGH SCHOOL: I also am a parent. I have a senior here, senior girl and a freshman boy. And as a parent I too am concerned.

DR. CAMERON KAISER, RIVERSIDE COUNTY PUBLIC HEALTH OFFICER: Tuberculosis can an unpredictably contagious disease. It can spread to people in unpredictable fashion and even though tuberculosis is not nearly as serious as it used to be it is still a very serious disease and it can still have significant health consequences.

(END VIDEO CLIP)

WIAN: If the tuberculosis scare is not bad enough today is the last day of school before winter break. Everyone who has tested today has to come back on Monday to get the results of their tests, so they won't be allowed back to school after the winter break until they're cleared -- Carol.

COSTELLO: Casey Wian reporting live from Indio, California, this morning.

Also new for you this morning a jury has found two former personal assistants to celebrity chef Nigella Lawson not guilty. Their defense team argued that Lawson's admission during the trial that she used cocaine tarnished her credibility as a witness.

The assistants who are sisters are accused of defrauding the TV chef and her ex-husband out of more than $1 million.

CNN's Erin McLaughlin live in London to tell us more.

Good morning, Erin.

ERIN MCLAUGHLIN, CNN CORRESPONDENT: Good morning, Carol. Well, it took the jury nine hours of deliberations to reach this verdict. Neither Grillo sister in court today to be able to hear it due to Elisabetta Grillo's poor health.

Following the hearing their defense attorney reading out a statement on their behalf saying, "This has been a long, hard fight played out in the gaze of the world's media. Elisabetta and Francesca Grillo would like to thank friends and relatives for their love and support and members of the public who expressed their best wishes."

Now the prosecution had alleged that the sisters fraudulently funded a lavish million-dollar lifestyle using Saatchi company credit cards. But they had to prove not only that what the sisters did was dishonest but that they knew it was dishonest.

And the defense argued that these transactions took place over a time period of four years and that Nigella Lawson either implicitly or explicitly authorized the transactions in order, in part, to hide her drug abuse, something that Lawson vehemently denied in court.

They also argued that at no point did the sisters try to hide these transactions and they argued that they were the casualty of the very public breakdown of the marriage of the celebrity chef and her former husband, Charles Saatchi.

Clearly the jury citing -- clearly the jury is listening to the defense and it was enough to create reasonable doubt in this case -- Carol.

COSTELLO: Erin McLaughlin, surprising verdict, I must say.

Erin McLaughlin reporting live from London this morning.

Still to come in the NEWSROOM, saying no to SeaWorld. Young students now joining the outcry sparked by the CNN documentary "BLACKFISH" and the theme park now taking a new approach to this mounting controversy.

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COSTELLO: Checking our top stories at 15 minutes past the hour.

Protests over the arrest and treatment of an Indian diplomat in New York are hitting close to home. Following angry rallies in India, an afternoon protest is planned today outside the Indian consulate in New York City. The National Domestic Workers Alliance wants to call attention to the diplomat's housekeeper who was supposedly overworked and underpaid.

A peaceful vigil turns ugly in Durham, North Carolina. The crowd gathered to remember a teenager who died last month in police custody. Police say the 17-year-old shot himself while in the back of a squad car. Well, last night, riot police say they fired tear gas only after protesters started pelting them with rocks and bottles.

The cigarettes are fake but the health concerns are real. So New York is moving to add e-cigarettes to its list of banned vices. The city council voted to ban them from bars and restaurants just like, you know, tobacco-filled cigarettes. Mayor Bloomberg is expected to sign the measure which would go into effect early next year.

The handshake that grabbed everyone's attention at Nelson Mandela's memorial has a new supporter. Earlier this month President Obama -- President Obama and Cuban President Raul Castro shook hands in South Africa. Now in his first comment since Mandela's death longtime Cuban president Fidel Castro is congratulating his brother for his, quote, "brilliant performance" in greeting Obama with firmness and dignity. Those are his words. The White House downplayed the impromptu handshake.

Just three days left for Americans to sign up for Obamacare and be guaranteed coverage by January 1st.

But for those Americans who have seen their insurance canceled because of the new law, there may be more time -- thanks to a new 11th hour option.

Chief national correspondent John King is in Washington.

Good morning.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Good morning, Carol.

And some Democrats love this, some Republicans don't, which is why I'm growing fond of saying Obamacare is in the eye of the beholder.

(LAUGHTER)

KING: Let's go through this one. The administration, remember, this is a big controversy because the president had to acknowledge he had broken a pledge, where he said, if you like your doctor you can keep that doctor, if you like your plan, you can keep that plan. And, you know, millions of Americans were affected by that.

The administration says the real number is about 500,000 people who had their plans canceled, who have not yet signed up for new plans and what the administration is saying as an option, if you can't find something out there in your state exchange or the federal exchange, you can sign up for the catastrophic health care option under Obamacare. It's a more bare bones stripped down plan, but it gives you an option to get in there.

And a lot of Democrats, including senators up for re-election next year, Carol, who -- let's be honest -- have been feeling the heat onto the White House are saying this is great. It gives those people an option to get their coverage.

But Republican critics and the insurance industry are saying the president is again changing the plan, again lowering his standards, again moving the goal post. They make the argument it will disrupt the marketplace and the Republicans say it proves Obamacare is a failure.

So, more changes to the plan and more debate whether they'll work.

COSTELLO: Well, it does seem unfair. Say I lost my insurance and I signed up under the exchange and I pay a certain premium, right? And this new rule goes into effect I can apply for this ultra cheap catastrophic coverage. Do I get to switch?

KING: That's a good question. If you sign up now and find something else later can you switch? This is mainly for people who are worried about the January 1st deadline, or worry about a lapse in their coverage. That is part of the continued pressure on the administration to make sure these people have more options. The House passed a plan but the president won't accept it that would have given them the option to keep their exact plan.

So, we'll see as this goes forward. And again, it's one of the -- you know, you have some new state numbers out that have shown some progress in enrollment, so there's encouraging news at the state level. You have a little bit of confusion here and this change that again some people say is great, other people say is proof that the program is flawed.

This debate we're going to carry into the New Year, without a doubt, both from a policy perspective and the politics.

COSTELLO: Without a doubt. John King, many thanks so you.

Still to come in the NEWSROOM, politicians putting smartphone makers and carriers on notice, demanding a kill switch to make sure something like this doesn't happen again. Yes, apple picking. They want to stop it all together. We'll tell you how they're going to do that, next.

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COSTELLO: All right. A bit of news just in to CNN. The Senate Majority Leader Harry Reid was taken to the hospital this morning, we believe it's nothing serious, in fact his office sent us a statement he wasn't feeling well and just as precaution they took him to the hospital.

The doctors did some tests. Apparently, Senator Reid is feel better but he's remaining in the hospital just for now, he's under observation. If there are any more developments on the story we'll pass it along to you.

In other news this morning, lawmakers in California have an idea that could wipe out cell phones fast, it's a big problem. As you might know, I was a victim myself. Some punk kid ran up behind me while I was talking on my cell phone and ripped it out of my hand with a chunk of my hair. I was lucky because he didn't have a gun, like this guy did on a Seattle bus.

This guy used a gun to steal people's smartphones until the crowd turned on him and beat him up.

Now, officials in California are proposing a new law that could end this kind of crime. They want to require smartphone manufacturers to install a kill switch that would make it impossible to use stolen or lost devices. Now, the idea is if thieves can't use your phone, there's no point in stealing it. Simple, and it's simple and beautiful, right?

Joining me now from New York is Brett Larson, host of "Tech Bytes."

Brett, welcome.

BRETT LARSON, TECH BYTES: Hey, Carol. Thanks for having me.

COSTELLO: This sounds like a fantastic idea. So, I would assume that cell phone manufacturers are jumping on board with joy.

LARSON: Wouldn't you think they would all be on the band wagon for stopping cell phone theft?

But surprisingly, they're not. What happened to you is a horrible example of what is happening in a lot of major cities. It's called apple picking, they literally run up behind you or come up from in front of you with a gun or a weapon and steal your phone and it's terrible.

And the cell phone companies, there's been talk about let's do something about this, let's make these phones. They have a serial number unique to every individual phone, make them so they don't work anymore once they're stolen. And they haven't gotten on board with this. So, now, we're seeing this legislation out of California which may push this process along of instilling this kill switch.

COSTELLO: What is the kill switch, is it like an app? Could I install it on my phone?

LARSON: Right. It would be something that the device manufacturer would actually put into the phone, it would be a software, not a physical switch but a software that runs that would effectively listen for or take in a signal from either the cell phone carrier or from law enforcement officials, once you say my phone is stolen, they send out the signal to the smartphone, the signal tells the phone to shut down and then your phone is inoperable.

So, now, the downside to that is if that kill switch is accidentally flipped, that you have a phone that no longer works. One of the reasons that the cellular telephone industry, the CTIA doesn't want to get behind a kill switch is what they're afraid of is hackers could gain access to these things and send that signal to your phone for no reason and then you have what's known as a brick -- your phone is, doesn't do anything, it doesn't even turn on.

COSTELLO: That is a new term that I think everyone should learn, a brick, and we have a definition to put up.

So, tell us what a brick is.

LARSON: A brick is when your really expensive smartphone becomes a really expensive brick because it doesn't work.

COSTELLO: OK.

LARSON: You basically, you have a $500 paperweight, and there you go. You can throw it at the wall in frustration. You can let it sit on your desk. It's not doing anything.

COSTELLO: I just thought people had to know. Doesn't the new version of the iPhone have something like a kill switch installed?

LARSON: It does. With the iCloud services that Apple offers, you can go online and you can see where your phone is, you can send instructions to your phone, you can send messages to say, hey, if you found this phone please call this number. You can lock your phone. You can also erase all of your personal data on your cell phone.

But the one this in one thing you can't do is tell it, don't ever turn on again. The problem here is if somebody steals this phone, I can erase all my data, I can make it not work unless you punch in my code, but if you stole my phone, there's a pretty good chance you're going to be able to take that to a computer, plug it in and wipe out the data, including the data that says don't open it until you put a password in, and turn around it and sell it.

COSTELLO: Yes. Well, I'm sure that's exactly what happened to my iPhone, someone's enjoying it to this day, although I don't know who that person is.

Thank you, Brett Larson, for joining me this morning, much appreciate it.

LARSON: Thanks for having me.

COSTELLO: Still to come in the NEWSROOM: a night out in a London theater turns terrifying when the roof collapses during the performance.

Max Foster is in London this morning.

MAX FOSTER, CNN INTERNATIONAL CORRESPONDENT: Carol, imagine I've been speaking to people that were in there, they either felt rubble fall on top of them in the middle of this performance or they saw a cloud of smoke and were rushed out. Details after this.

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