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Early Start with John Berman and Zoraida Sambolin

Diplomatic Discussions to Hold Off War; Russia Stands Firm; Obama's Budget Faces Criticism from Right; Poll: NJ Wants Christie to Stay

Aired March 05, 2014 - 05:30   ET

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

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CHRISTINE ROMANS, CNN ANCHOR: Breaking news this morning. Round-the- clock diplomatic discussions to hold off war in Ukraine. Secretary of State John Kerry working overtime to broker a deal. Will it work? Live team coverage on the very latest right now.

Welcome back to EARLY START. I'm Christine Romans.

JOHN BERMAN, CNN ANCHOR: And I'm John Berman. Good to see you this morning. Thirty-one minutes past the hour. And this morning, at this minute, we are no closer to a people resolution to the Ukraine crisis -- doesn't seem to be getting any worse yet today. However, armed men still surrounding military installations in Crimea are men that Russian president, Vladimir Putin, insists somehow are not Russian soldiers.

They're just local militia members that he claims that he can't control. He's saying this, of course, as he defends what he called his country's right to intervene. Right now, secretary of state, John Kerry, is in Paris meeting with his Ukrainian counterpart. He will speak later today with Russia's foreign minister. That may be the key event today and all this as many worry about what might come next.

Our Michael Holmes is live in Kiev this morning. Michael, what are you hearing on the ground there? What's the Ukrainian government saying right now, because over the last day we've had a lot of talk from the American president and the Russian president? Where do the Ukrainians fit into this right now?

MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Yes. There seems to be a lot of talking going on, John, and not a lot of resolution. Down here at Independence Square, the barricades as you can see, are still up. There are people in there, those protesters who are the center of everything days ago when all the violence took place. They say they're not going anywhere until elections which are planned for may take place.

They don't trust the system themselves. The parliament's about a kilometer, less than a mile away from here. And they were meeting today to try to discuss what they can do to help the soldiers, Ukrainian soldiers in the east of the country, Crimea in particular. No resolution on that at the moment. You've got European ministers talking with each other. There are going to be a couple of European foreign ministers here tomorrow in Kiev to talk to the local government, interim government here.

But you know, there's an awful lot of talking. There's talk of sanctions, there's talk of visa restrictions, freezing of assets. And then (INAUDIBLE) what the Russian is saying, well, if you want to do that, we can do that, too. At the moment militarily, nothing is happening, but the people who are here in Independence Square say they're not going anywhere. It's kind of an odd vibe here at the moment. There are prayers regularly.

The national anthem is sung almost every hour. And there's people just sort of wandering around, just sort of taking it all in, if you like. It's somber, but there's very little anger at the moment. Everybody seems to be just waiting for the next move. And there's no clarity at the moment on what that move might be, John.

BERMAN: No. Precarious calm as it were with troops facing off, staring each other in their face literally in Crimea. And in Paris, we have John Kerry meeting with the Russian foreign minister today. The action may be happening there as well. And meanwhile, where you're standing, the people caught in the middle. Michael Holmes for us in Kiev this morning. Thanks so much.

ROMANS: All right. Meanwhile, Vladimir Putin does not appear to be giving any ground, turning down an invitation to take part in international talks in Paris. Putin insisting he has every right to intervene in Ukraine. Phil Black is in Moscow with that part of the story. Phil, what are the Russians saying this morning?

PHIL BLACK, CNN INTERNATIONAL CORRESPONDENT: A lot of talk today, Christine, about how Russia will respond in the event that the west, United States and Europe carries through with their threat of economic sanctions. The upper house of Russian parliament, effectively the Russian Senate, is working on a legislation that would give the Russian government the right to seize, to confiscate assets, accounts, property from American and European companies based here in the event that sanctions are leveled against Russia.

It sounds extreme. There are a lot of big American companies based here that have invested a great deal of money over the last 22 years as the Russian economy has transitioned from communism to capitalism. But this is what Russia talks about when it talks about an asymmetrical response. It doesn't like it when it gets the feeling that other countries are trying to interfere with or attack its sovereignty.

The most recent example that we can liken it to was the end of 2012 when U.S. Congress passed the Magnitsky Act, a law designed to punish human rights abuses in Russia. The Russian response was to ban American families from adopting Russian children. A lot of American families had begun that process, met the children, were never allowed to take them home.

That's what Russian being -- asymmetrical response coming back even stronger or perhaps from a completely different angle. That's the sort of response it seems you can expect in the event that the west does follow through with this threat of economic sanctions.

ROMANS: But to go after company's investment, or multinational companies, or companies based in the U.S., or people and business leaders based in the U.S., that is a different kind of response and would certainly be very difficult for Russian markets and for world markets. Let me ask you this, Phil, the German chancellor, Angela Merkel. Last night, she spoke with President Obama, you know, proposing Russia pull back its troops.

These were off ramp (ph). We've been hearing this diplomatic phrase, how they can try to allow a path for Putin to sort of get off of this current trajectory. Is there any chance that Putin will take that deal?

BLACK: A couple of key difficulties in any negotiations, how do you negotiate with a leader who says his troops aren't even on the ground in Crimea which remains the Russian president's position. The key to the off-ramp suggestion is sending in international observers to determine if Putin's concerns about ethnic Russians being under threat under attack are genuine.

Today, the Russian foreign minister, Sergey Lavrov, said that's not a question for the Russian government or the Russian people because they're not in control of that territory. That -- Ukraine, the Ukrainian people need to decide. The relevant authorities, either in Kiev or in Crimea should determine if they want to invite international powers in to determine exactly what's going on.

So from that line, it seems pretty clear. The Russians are definitely setting up another legalistic obstacle to that potential off-ramp -- Christine.

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

Also, new this morning, North Korea's defending last week's missile test as the Pentagon is issuing a new warning calling the regime a significant threat to chase (ph) into the U.S., primarily because of its pursuit of long-range missiles and nuclear weapons. The strategic assessment insists the U.S. will continue to work with South Korea and our other allies to deter North Korea and defend against any provocations.

BERMAN: Some political news, President Obama's budget proposal not getting a lot of positive reviews from Republicans, not surprisingly, they say. Nearly $4 trillion budget, the nearly $4 trillion budget is dead-on-arrival. The budget calls for increasing spending on education and extending tax cuts to lower income Americans. House Speaker John Boehner calls it irresponsible. He says the budget does nothing (INAUDIBLE) of government spending and will actually lead to a tax hike.

ROMANS: Happening today, President Obama heads to Connecticut for a speech on raising the minimum wage. That is a key priority of his administration. The president is going to be joined at Central Connecticut State University by four New England governors, all of whom support raising the minimum wage. Then he heads to Boston for a private fundraiser.

BERMAN: All right. You know, we all know it's cold, but you want a reminder of just how cold it is that will knock your socks off? Take a look at this. That's Niagara Falls frozen almost solid for the second time this winter.

ROMANS: Wow!

BERMAN: Wow! It's beautiful, but freezing. Indra Petersons is here with the forecast. Hopefully, we won't see that again for a long, long time.

INDRA PETERSONS, AMS METEOROLOGIST: Right. On that note, let's talk about these temperatures, but we actually have good news today. The temperatures are actually going to be warming up. Indianapolis currently about 18, Chicago 19. These are the current temperatures. Boston about 25. So, things are improving.

And take a look. Here are your highs over the next several days, more importantly, as we go closer to the weekend, right? Midwest, temperatures are climbing right to about average, and they're not the only spot. Let's jump to the northeast, same thing. We're not talking about 30s in Boston going to, yes above that -- it's only one degree. We're going to take 43 over 42 in Boston.

New York City also seeing 40 by this weekend. So, looking pretty good. Just keep in mind, there's the jet stream kind of rising a little bit. Remember, it's cold above the jet stream and warmer to the south. So, a little bit of some showers today from Ohio into the northeast overnight tonight, and then towards the gulf, we're talking about some light rain, of course, with temperatures are a little bit warmer.

Even to see temperatures still pretty mild into the southeast. Just keep in mind, you'll start to see them kind of go down a little bit. The reason for that, there is a low out there. And this is the guy we're going to have to watch to see whether or not it climbs up the coastline and gives us a chance for snow maybe as we go towards the weekend here, but tiny, tiny little guy. Nothing to worry about, guys.

BERMAN: Keeping away. Let's make sure --

(LAUGHTER)

BERMAN: Indra Petersons, thank you so much.

ROMANS: All right. World markets this hour on pins and needles. At any moment, we are one headline away from violent swings in markets. You've been warned. Stocks in Europe backing off their biggest rally in eight months. Asian markets closing mixed. U.S. futures are flat right now. I'd say there's a little bit of a negative tone, though, overall.

All anyone is talking about, though, is that rally. One headline this morning, put it this way, Putin blinks, stocks surge. The Dow's 228- point gain, the best of the year, the best day of the year. The S&P 500, it made history yesterday. It has never been this high. Remember, just Monday, we saw world markets tank on the Ukraine/Russia crisis. This morning, we now have France threatening sanctions on Russia. The politics are volatile, so will be the markets.

BERMAN: But it's really interesting the market saw was Putin blinking.

ROMANS: Yes. That's what markets saw. Now, even as other headlines and the rest of us reading the diplomacy of it, which was Putin digging in, markets said, look, this is a tense standoff. This wasn't him rolling in with tanks in Crimea and escalating the crisis. That's the way the markets read it.

BERMAN: Interesting. All right. It is 41 minutes after the hour. New Jersey governor, Chris Christie, caught in the middle of a political scandal. Of course, so many questions. The FBI investigating, but are these accusations hurting his standing with New Jersey voters? We have new numbers just released this morning coming up next.

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BERMAN: All right.

New this morning, New Jersey voters saying loud and clear they want Governor Chris Christie to stay, despite the investigations into the shutdown of lanes on the George Washington Bridge. This is from a new Rutgers-Eagleton Poll that finds just one in five think that the governor should resign.

Even the majority of Democrats say that the governor should not leave his job. That despite just over half of those surveyed saying they suspect the governor did know something about what his advisers were up to.

ROMANS: All right. Hillary Clinton is getting high marks as she considers running for president again. A new "USA Today"/Pew survey finds many Americans think more highly of the former secretary of state and first lady now than they did when she ran for the White House in 2008.

Fifty-six percent now describe her as honest. That's up significantly since 2008 when she was running for president. And just 36 percent say she's hard to like, 36 percent say she's hard to like. Back in 2008, 53 percent of those called her unlikable.

BERMAN: -- to remember is the debate with Barack Obama saying you're likable enough, Hillary.

All right. George Bush is closer to becoming an elected official -- George P. Bush, the son of Jeb Bush, the grandson of former president, George H.W. Bush, the nephew of George W. Bush --

(CROSSTALK) BERMAN: -- goes on and on. "P," as he's called in the family, has won the Republican primary to run for Texas land commissioner. That is a stepping-stone to higher office in Texas. Senator John Cornyn also won his primary beating Steve Stockman, a congressman backed by some in the Tea Party.

Carson peeked (ph) Sessions is bashed with his Tea Party challenger as well. A lot of people watching the Texas election to see the strength in the Tea Party.

Let's take a look at what's coming up right now on "NEW DAY." Kate Bolduan joins us. Hey, Kate.

ROMANS: Good morning.

KATE BOLDUAN, CNN ANCHOR, "NEW DAY": Good morning, you guys. We're, of course, going to continue to cover all the breaking developments from the Ukraine, have been a lot of moving parts that continues again this morning. Secretary of state John Kerry is set to meet with his Russian counterpart just hours from now. What will happen in that meeting? What's that going to be like? That's going to be a critical moment that we're going to need to track.

And also, you remember Putin's news conference yesterday. Of course, you do. Well, we're going to really break it down, separating fact from fiction, and what he says and what he claims.

Plus, we're also going to be talking live with Anderson Cooper who continues to be on the ground for us in Kiev this morning. We're going to get his take what it looks like on the ground.

And then, we've got this really wild story. We're covering it yesterday and continue today. It's an unbelievable case, a teenager suing her parents for tuition and expenses after she says that they kicked her out. Well, a judge has weighed in ruling against the teenager for now. But they're back in court next month. So, this case is far from over. What does this mean for parents everywhere?

BERMAN: Yes. Precedence being set here. A lot of discussion to be had around that case. All right. Kate, thanks so much.

BOLDUAN: Thanks, guys.

ROMANS: All right. A dramatic water rescue. A mini-van driven into the ocean. The vehicle being -- look at this -- being carried out to sea. And inside, that mini-van in the water, three small children trapped. Intense new video for you this morning. That's next.

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ROMANS: Breaking overnight, a deadly shooting in New Orleans just as Mardi Gras festivities were coming to an end. Police say two men, a 25 and a 28-year-old were killed in a parking lot not far from Mardi Gras world. That's an event space where a rap concert had just taken place. No motive has yet been released. Police aren't disclosing if they have a suspect. Developing this morning, investigators in Florida trying to figure out what -- look at these pictures -- what caused a pregnant woman to drive into the ocean in her mini-van with three young children inside, the ages of those children, three, nine, and 10. This was all playing out on Daytona Beach. Witnesses say some good Samaritans, look at that, trying to help, but they couldn't because the van kept moving.

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UNIDENTIFIED FEMALE: The kids were hollering "help us." When they got up to the car and started to open the door, she immediately went farther, deeper into the ocean, and then when she got so that she was facing the ocean and the waves were coming stronger, I saw her bail right out the window. And the kids were still in the car.

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ROMANS: This morning, the woman is in the hospital. She is said to undergo a mental evaluation. We can report to you that her children are said to be OK.

All right. Take a look at this. Amazing video from Kentucky where a classic -- this hurts my heart to look at that car -- classic 1962 Corvette, it has been recovered from that sinkhole at the Corvette Museum. Cruise used cranes to lift this Corvette from the sinkhole that opened up last month. This is the third beauty to be taken out of the hole.

Five more are still in there, but they cannot be removed until engineers are able to reinforce the building. Now, this Corvette will go on display in its damaged condition until April, and then it will be sent off for repair. Wow.

Coming up, are you guilty of stuffing too much in your carry-on bag? You know who you are. And guess what, your airline does, too. Say no more. You're going to pay for it. The details in "Money Time" next.

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ROMANS: All right. It's "Money Time." Welcome back.

The most important factor to your money today, again, the Ukraine and Russia crisis. It is fluid and that means we are just one headline away from violent swings in global market. Monday was sell, sell, sell. The Ukraine/Russia crisis escalated. And then yesterday, the S&P 500 closed record highs. It just turned on a dime. Right now, futures are flat, suggesting a flat open for U.S. stocks this morning.

European markets are lower. Look at France's market on the threat of possible sanctions on Russia. Asian market closed mixed. That's a swing. Wow. Unbelievable.

Now, remember that RadioShack Super Bowl ad, the nostalgic self-satire on a company stuck in the 1980s? Remember you saw it? It was a pretty good spot, right? But kind of ominous, too. RadioShack is closing 1,100 lower performing stores. That's 20 percent of its stores. And it makes sense. The electronics retailer has about 5,200 locations. Compare that to Wal-Mart which has only 3,700 stores.

Another story today to tell you about, shares of gun maker, Smith & Wesson, soaring in afterhours trading up eight percent. Sales up seven percent recently fueled by a 30 percent jump in handgun sales. The school shooting in Newtown, Connecticut in 2012 had some concern. President Obama was successfully passed restrictive gun legislation. That never happened.

And recently, Smith & Wesson rival, Sturm Ruger, said sales will come down a bit. But you know, Smith & Wesson is expecting its strong sales growth to continue.

If you fly United, keep a very close eye on the size of your carry-on bags. United cracking down on oversized luggage brought on board. You know who you are, people. Even sending some passengers back to the counter to check their bag and pay the $25 fee. A lot of people trying to get around paying with luggage fees by trying to stuff everything into their carry-ons. Planes are stuffed, too, right?

So, there's not enough carry-on space for everyone. United says their goal is to free up space in overhead bins so everyone can get their one appropriately sized carry-on on board.

"NEW DAY" starts right now.