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Arctic Freeze Moves in for New Year's Eve; Big Jump in Home Prices; Final Hours Before Colorado Pot Sales

Aired December 31, 2013 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Here's what's happening right now in the NEWSROOM. Firefighters are battling flames after an explosive train crash in North Dakota. Thousands of people are urged to evacuate as smoke and fumes threaten that town right now.

And New Year's deep freeze.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: (INAUDIBLE) very cold. (INAUDIBLE) three or four layers (INAUDIBLE). (INAUDIBLE).

UNIDENTIFIED FEMALE: We've got lots of layers and we'll just keep together and we're going to have a good time.

PHILLIPS: Temps plunging into the teens tonight and tomorrow? Well, the snow comes then. That's not stopping the New Year's celebrations, though, as we ring in 2014.

Good morning, and thanks for joining me, everyone. I'm Kyra Phillips in for Carol Costello today.

Happy New Year's Eve, everybody. It's already 2014 in Sydney, Australia, as you just saw a short time ago. People there rang in the new year with a spectacular fireworks show.

Oh, yes. And here in the U.S., cities across the country preparing for their own celebrations. You're looking at live pictures now of Times Square where officials are ramping up security as thousands of people are getting ready to watch that famous ball drop.

And if you're planning to ring in the new year outside, well, brace yourselves. An arctic blast is pushing east. Ice cold temps already gripping parts of the Midwest. At least five states are under windchill warnings and advisories. By midnight places like Minneapolis will actually feel like 18 degrees below zero.

And the new year could mean a new snow storm in the northeast as well. A possible nor'easter could dump up to 15 inches of snow in Boston on New Year's Day.

Our meteorologist Jennifer Gray is going to be one busy woman.

I don't know if you're going to have time to party. You're going to be covering this winter weather, Jennifer, all through the night. JENNIFER GRAY, AMS METEOROLOGIST: Oh, yes. It is going to just get worse. And temperatures this morning. You know, in Time Square, it felt like the teens and that's the way it's going to be tonight.

People are already getting here. I can't even believe it. They're lining up around the barricades and pretty shortly they'll be letting people in. And it is going to be crazy down here in Times Square as we go through the next several hours. But bundle up. It's going to be cold. And, you know, Times Square is not the only cold spot across the country. There are places that are much colder, including up in the north.

The northern plains seeing temperatures feeling like 40 degrees below zero in some places in the northern plains. And that cold air is going to slowly work its way to the northeast as we go through the next couple of days. So the cold air will stay in place in the northern plains, and right around the Great Lakes. But as we head into the second half of the week, we've been talking about this winter storm that's going to impact the northeast.

And you bet those temperatures are going to get cold. Seventeen degrees, the high temperature here in New York City on Friday. So just get ready. There are two scenarios that we're watching. The forecast models are still disagreeing a little bit on what this is going to do. Bottom line, though, very cold air is already in place. And so regardless of where the low goes, if it pushes well offshore, if it stays closer to the northeast, we'll still have very cold air.

The big question is how much snow will we see? If it heads offshore, we'll see less snow. This is the possible worst case scenario, if that low stays right over the northeast, then we're looking at possibilities of six to eight inches of snow in New York City, eight to 10 inches of snow in places like Boston.

So that would be the worst-case scenario. If the low does make a track offshore a little sooner, then we're looking at less snow and a better scenario. So something to watch as we go through the next 24 to 36 hours. Of course, if you are going to be outside at the stroke of midnight, there are your temperatures. And it is going to be cold across much of the country.

Layer up, layer up here in Times Square. It is going to be a long day for folks. But everyone we talked to, the weather is not stopping them, Kyra. They are out. They are strong and they're going to bundle up and just wait for that ball to drop at midnight. Long day.

PHILLIPS: As true New Yorkers do.

Jennifer, thanks so much.

Well, they're going to be celebrating all new year across the globe, actually. And one of the biggest parties around is always in Sydney, Australia.

Take a look at some of the best parts so far of the New Year's fireworks show that wrapped up just a short time ago. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Three, two, one.

(END VIDEO CLIP)

PHILLIPS: People near Castleton, North Dakota, are being urged to leave their homes after a train collision caused a massive explosion. Two trains collided yesterday afternoon and one of them was carrying crude oil. The collision sparked a huge fire that sent plumes of black smoke hundreds of feet into the air. You can see the smoke actually as far away as Fargo, which is about 25 miles away.

Now earlier, the Cass County sheriff spoke to CNN about the evacuation order and where this fire stands right now.

(BEGIN VIDEO CLIP)

SHERIFF PAUL LANEY, CASS COUNTY, NORTH DAKOTA: The test crews are here. We just met with them a very short time ago. They have two or three crews in Casselton taking (INAUDIBLE) from different areas up here as close as they can to the area and the additional housing that's nearby the scene and are trying to -- they're starting to spread their way out into the community and getting those (INAUDIBLE).

So the next few hours will tell us a lot as far as the current situation, when we can start bringing people back. Right now, you know, we're just going to hold the line. We -- the area is safe. People are out. Everybody is accounted for. And at this point we're going to just let the experts tell us what kind of readings they're getting.

The railroad crews are responding and getting set up throughout the night here. Ready to attack the fire at daylight. So things are definitely happening and everybody is safe right now. No fatalities. No injuries. And we're just very thankful for that.

(END VIDEO CLIP)

PHILLIPS: Most experts the NTSB is leading the investigation along with the Federal Railroad Administration.

And this just in. Huge news on the economy. Just minutes ago a research group released new numbers on a key element of the recovery. The value of your home and the rebound from those gut-wrenching losses a few years ago.

Alison Kosik at the New York Stock Exchange.

A lot of us are very happy this morning, Alison. Some pretty big numbers.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes. There are -- this is a big number, Kyra. Good morning to you. The S&P Case-Shiller Home Price Index says home prices in October across 20 U.S. cities rose 13.6 percent. That's if you compare it to the number a year ago. Las Vegas and Los Angeles both continue to show strength.

But when you compare the numbers to the earlier month in September, the growth in prices in 18 of the cities on the index, it's slowing down just a little bit with San Francisco showing prices ticking a little lower. However, Phoenix held on, posting the 25th consecutive increase in prices.

Prices overall have really enjoyed a strong rebound over the past year. Home sales have improved and number of foreclosures on the market have dropped. And those two factors have really given a boost to prices. Even though mortgage rates have kind of been creeping back up, it's still pretty low by historical standards.

So, you look at the health of the housing market. It's very critical to the overall health of the overall economy and improvement in household wealth really can free up a lot of money for homeowners to spend elsewhere. With more houses being built, it adds construction jobs. You see this domino effect.

Of course, the big question is, is this momentum going to continue into 2014? At least some experts say yes, even if it is not with quite the same gusto we've seen lately -- Kyra.

PHILLIPS: Yes, gusto, indeed.

All right. Alison, thanks so much.

Well, still to come, the final countdown to legal pot sales in Colorado. CNN's Casey Wian is live in Denver where shops are preparing for the big day -- Casey.

CASEY WIAN, CNN CORRESPONDENT: That's right, Kyra. It's less than 24 hours until anyone over the age of 21 would be able to legally buy one of these buds. But marijuana retailers are scrambling to get ready. We'll tell you what's going on, coming up.

(COMMERCIAL BREAK)

PHILLIPS: It's a first for our nation.

Come tomorrow, you can legally buy weed in Colorado. Anyone over the age of 21 will be free to puff with ease and so-called when ganjaprenuers across the state are expecting huge crowds at their pot shops when they open for business at 8:00 a.m. mountain time.

And for those who don't smoke, some shops are even selling the drug in edible varieties like brownies, cookies and, yes, even soda.

But there are still rules you need to obey, like don't toke in public, bring cash for the pot, and, of course, don't bring your drugs to the airport. Get slapped with a big fine.

CNN's Casey Wian is live in Denver, where pot shops are working down to the wire before the big day.

Casey, I think this is a first, seeing you live, surrounded by marijuana.

WIAN: Well, the only other time I've done it, Kyra, is when law enforcement was actually busting a marijuana grove in the California National Forest.

You know, this is a little bit different. See all these plants in front of me? There are 1,200 plants at the 3d Cannabis Center in Denver that need to have RF radio frequency identification tags put on them by 8:00 tomorrow morning before these retail sales can begin. It's part of the new regulations that Colorado has enacted to sort of manage this business.

The problem is this store and many others have not received their tags yet. You remember the problems that UPS had over Christmas, delivering presents? Those same problems impacting the marijuana business here in Denver. Authorities assure this business owner that they're going to have her tags here by noon today, so she can get 1,200 plants tagged in time for the business to start opening tomorrow morning.

They're saying, if they don't get them in time, they are allowing businesses a little bit of a grace period.

I want to show you a shot of the actual shelves where the retail sales will happen. You can see they're empty, these shelves. The marijuana that will be available for sale tomorrow is still locked up in a safe.

So, as you can see, there is still a lot of work to do in the next 24 hours before people can actually come in and start buying pot at these stores, Kyra.

PHILLIPS: All right. Casey Wian, we'll be talking to you a lot over the next 24 hours. Happy New Year, by the way.

WIAN: Same to you.

PHILLIPS: Remember that I mentioned you can only use cash to buy the pot in Colorado? Well, it's not because the shops are choosing to go all cash, despite the millions and millions of dollars legal pot sales will generate. But banks and credit card companies are actually staying away from marijuana businesses.

Joining me for more now, Dan Riffle, the director of federal policies at the Marijuana Policy Project.

So, Dan, let's talk about this. Although weed is going to be legal for everyone to purchase in the state, you know, banks could actually be accused of money laundering if they do business with the pot shop, right?

DAN RIFFLE, DIRECTOR OF FEDERAL POLICIES, MARIJUANA POLICY PROJECT: Yes, that's correct. And this is because of federal law. Federal law says you can't actually accept and process the proceeds of a marijuana transaction or that could be interpreted as money laundering.

And so, credit card companies have been unwilling to do business with dispensaries. That makes them cash only. Banks are unwilling to do business with the dispensaries so they have no place to put that cash. So, in some cases, some extreme examples, you know, there's a dispensary in the Bay Area in California that's been paying their taxes by sending a Brink's truck with a couple of hundred thousand dollars over to the city's office to pay their tax bill.

PHILLIPS: OK. Now, that the DEA has denied that it has been involved with threatening those armored cars. So, let's get to just what we're focused on here about the cash only and what could be some concerns in Colorado.

And that could be, you know, shady business, right? When you're dealing with cash only, there's no record of who is getting paid and who is -- the buying and selling. That's going to be a real challenge.

RIFFLE: Yes. I mean, the issue is -- there's two issues. Number one, for the dispensary and for their employees, this puts a target on their backs. You know, they're carrying around tens of thousands, sometimes hundreds of thousands of dollars in cash and so, that presents some real safety risks.

Number two, from the state, you know, we talked about the extensive regulations that are in place in Colorado. You know, part of the reason those regulations are in place is so that the state can collect enough revenue to pay for the enforcement of those regulations. And when the dispensaries are doing business in cash only, it makes it very difficult for the state to track sales and track proceeds and make sure taxes are being paid accordingly.

PHILLIPS: So how do we know that businesses are going to be legit, ethical?

RIFFLE: Well, fortunately, we've seen some signs out of Washington. We know that the Department of Justice and the Department of Treasury are moving on this issue. They recognize that it's a problem. Even for the states themselves. You know, the state of Colorado as well as the state of Washington, they have accounts where proceeds from marijuana transactions and the tax revenue they will create will go into those accounts.

There was some concern that even the states wouldn't be able to have banking accounts to keep the proceeds from these transactions. The Department of Justice and Treasury are moving forward and we hope some time in January that they will be able to do business with the banks safely and legally.

PHILLIPS: Well, it's going to be interesting to follow this and all the other concerns. I mean, even cash only, a threat of robberies, too, big-time robberies. Well, Dan, we'll stay with us. We'll be talking about this, no doubt, a lot more in 2014.

Dan Riffle from the Marijuana Policy Project, thanks, Dan.

RIFFLE: Thank you, Kyra.

PHILLIPS: You bet.

Still to come, President Obama's approval rating way down. However, his admiration ratings, through the roof. Our political panel explains, next.

(COMMERICAL BREAK)

PHILLIPS: Good morning, everyone. Happy New Year's Eve. Thanks for joining us. I'm Kyra Phillips, in for Carol Costello today.

You know, it's the last trading day of 2013 and the opening bell is ringing on Wall Street. Investors weighing a report on home prices and also minutes from now, the latest measure of consumer confidence.

Alison Kosik at the New York Stock Exchange with all the latest this morning, as we get ready to head into 2014.

Actually, the bell hasn't rung yet, right? We're waiting.

KOSIK: About a minute to go.

PHILLIPS: There we go.

KOSIK: To ring out 2013, and you know what? I'll have another. Another record, that is.

The Dow hit its 51st record high yesterday. Let's see when the bell rings, if the Dow is able to pull it off again and make it to 52 record highs just this year.

What a year it's been. You know, if you're one of the 52 percent of Americans who is actually invested in the market, I'd say you probably made a decent amount of money because the Dow is up 26 percent for the year, the NASDAQ is up 38 percent. It's been a really banner year for tech stocks.

The S&P 500, which is actually what most of our retirement and mutual funds track, that's up 29 percent. That's the biggest jump since 1997. Think of this way, in a typical year, you're looking at a gain closer to 8 percent for S&P 500. So, that's what's (INAUDIBLE) in the market. The Fed stimulus. The Fed has been pumping billions of dollars per month into the economy all year.

Now, we learn a couple of weeks, it will start pulling back on that. But contrary to what we may have expected it hasn't spooked the market at all. The Feds planned to pull back on stimulus, it shows it has confidence that the economy looks like it could start to stand on its own and that gives investors confidence, too.

As we begin the day, the Dow is up 16 points. We will see how the Dow does. Even any minute gain for the Dow, Kyra, means yet another record high -- Kyra.

PHILLIPS: Always cheering more confidence in 2014.

KOSIK: I hear you.

PHILLIPS: Yes, thanks so much.

Well, for the 74 people on the stranded research ship -- well, they've got a lot of confidence in Antarctica, that's for sure. The New Year has already arrived. What hasn't arrived is a rescue crew to get them off that ice bound vessel. That's about to change if Mother Nature cooperates. The passengers and crew, though, they're doing their part to kind of lay the ground work, literally.

Senior international correspondent Matthew Chance has their story of optimism.