Return to Transcripts main page

Early Start with John Berman and Zoraida Sambolin

Prince Salman Ascends the Saudi Throne; Yemen's Government Resigns; Japan Awaits Word on Hostages' Fate; Obama Won't Meet With Israeli Leader; Crisis In Ukraine; Rebels Gain Ground

Aired January 23, 2015 - 04:30   ET

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

(COMMERCIAL BREAK)

CHRISTINE ROMANS, CNN ANCHOR: Chaos in the Middle East this morning that could create big problems for America's war on terror. Saudi Arabia's king dying last night, as the president of U.S.-backed Yemen steps down. That country now in chaos, with al Qaeda looking to increase its power.

Live team coverage ahead.

JOHN BERMAN, CNN ANCHOR: The deadline passes for two hostages held by ISIS. These terrorists threatening to kill the men unless Japan pays a $200 million ransom. We are live in Tokyo with the very latest this morning.

Welcome back to EARLY START, everyone. I'm John Berman.

ROMANS: I'm Christine Romans. It's 31 minutes past the hour on this Friday morning.

Breaking overnight: the leader of the most powerful American ally in the Middle East has died. Later today, the funeral for Saudi Arabia's King Abdullah bin Abdulaziz, he died at age 90 on Thursday after battling pneumonia. His half brother, Prince Salman bin Abdulaziz, has already been declared Saudi Arabia's new king.

Now, that country, of course, is key to the U.S. war against ISIS and al Qaeda in the Middle East. It is key to the stability of the region.

Let's bring in senior international correspondent Nima Elbagir for the latest.

Good morning.

NIMA ELBAGIR, CNN SENIOR INTERNATIONAL CORRESPONDENT: Good morning, Christine.

Well, King Salman has already addressed the nation on state television, promising that he will continue to walk the same path established by the country's founder and carried on by his deceased half brother. But these are, of course, these are generalities. The reality is going to be in how he balances his support from the Saudi clerical establishment whom King Salman is seen to be much, much closer to them than King Abdullah, with the realities, the real politics that is developing across the region. You have Yemen. You have, of course, Iraq and Syria.

You have the rapprochement between Iran and the United States, and Saudi's rivalry with Iran for the regional power base, how is that going to play out given that King Salman is much, much more hard-line in terms of relationships with the Shia state.

Moving beyond that, of course, there are reforms that King Abdullah put in place in terms of women's right to vote in the municipal elections this year. How interesting is that for the broader world? Well, it's interesting in terms of indicators of how much of the reformists bent King Salman will continue along the sense from those within the kingdom for now is that given his hard-line, much more conservative reputation that a lot of those hard one fight rights, some of them could look shakier that they have been, Christine.

ROMANS: All right. Nima Elbagir, thank you so much.

BERMAN: All right. Happening this morning, another key U.S. ally in the Middle East is really on the brink of chaos, beyond the brink. And this could open the door to al Qaeda. The government of Yemen is in shambles as the president, the prime minister, the cabinet -- they all resign in the space of a few hours. Officials say they want to wash their hands of destructive political chaos in the wake of a deal that gives rebel insurgents more power.

Until now, the government of Yemen has been a key ally in the fight against ISIS and also al Qaeda in the Arabian Peninsula. The terror group may now try to fill that political vacuum. That terror group is already filling that political vacuum there.

In response to this turmoil there, the U.S. embassy in Yemen now is reducing its staff.

CNN's Jomana Karadsheh joins us on the phone with the latest.

Good morning, Jomana.

JOMANA KARADSHEH, CNN CORRESPONDENT (via telephone): Good morning, John.

Real uncertainty in Yemen. What happens is not clear who takes over from the government, from President Hadi who had resigned now. Clearly, as you mentioned, a political vacuum that seems to be looming in the country, this chaos, the vacuum. The sectarian grip is really seems to be widening in the country. It is creating an ideal breeding ground, fertile ground really for al Qaeda's branch in Yemen, AQAP, to really thrive in that country and be able to gain more support to operate freely in the environment.

And, of course, the U.S. war on terror in Yemen and its fight against AQAP is in question. What happens next? The government of President Hadi has been a key U.S. ally fighting AQAP on the ground, allowing U.S. drone strikes to take place in the last couple years.

So, what happens next? We see the Houthi movement tightening its grip on the capital Sana'a and on the government there.

And while they have been fighting AQAP, the Houthi, Shia movement, is not really a U.S. ally at this point. The group historically backed by Iran. One of the main slogans is "death to America" and it has said it is opposed to U.S. drone strikes in the country.

So, really worrying developments with the political uncertainty and vacuum in the country at a time when we see AQAP really trying to reassert itself as a major terror group on the international scene after claiming those attacks in Paris on the "Charlie Hebdo" magazine -- John.

BERMAN: So much going on in that region, and the chaos makes things much more difficult for the U.S. to be sure.

Jomana Karadsheh, thanks so much.

ROMANS: All right. The deadline for Japan to pay a ransom has passed for two hostages. The Islamic terror group said it would kill those two men unless Japan pays them $200 million. The Japanese government has been scrambling over the last couple of days to contact ISIS while saying it will not yield to terrorist threats.

Let's get to Tokyo now. CNN's Will Ripley has been following the story for us for the past couple of days.

And, Will, bring us up to speed on the latest here. I mean, the government, have they been able to reach ISIS and how do you even go about negotiating down from $200 million?

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: That's the very difficult question, because there is no way that a $200 million sum could be paid to secure the release of hostages. That has never happened.

But, you know, smaller sums, you know, even as high as $18 million for a group of French hostages have been paid. And so, it's not unprecedented for countries and corporations, private corporations to shell out millions of dollars to rescue citizens. That is why terror groups do these kidnappings. In addition to the shock value of the videotaped executions, it's also a big revenue source at a time when ISIS appears from the outside to really be struggling. And, you know, we heard about the significant number of people who have been killed in the coalition air strikes.

But those two Japanese citizens, we don't know right now where they are. We don't know their condition. We haven't heard any direct messages from ISIS. But a spokesperson for the group has been e- mailing apparently with one of the public broadcasters here in Japan, NHK, reiterating the demand for $200 million and also refusing to comment if they are negotiating with the Japan government.

What does that tell us? We really don't know. The government officials -- the government officials here in Tokyo are not confirming what NHK, the broadcaster is reporting. They are not confirming any sort of discussions happening with ISIS.

But if there is still hope that there could be negotiations to bring these people home, you can imagine the agony for their families.

Very emotional press conference earlier today with Kenji Goto's mother fighting back tears, Christine, talking about her son, saying directly to ISIS that "my son is a friend to ISIS. He doesn't want to do harm to anybody." She also talked about the fact his wife is sitting at home caring for their newborn baby -- Christine.

ROMANS: It's heartbreaking. All right. Will Ripley, thank you for that this morning.

BERMAN: Iraq is calling for more weapons in its fight against ISIS. But as the oil prices plunge around the world, that nation is hoping that Western allies will provide arms they want badly on credit. Iraq's prime minister says the oil problem has been disastrous for the country's economy. Oil exports account for 85 percent of Iraq's budget and the drop in prices is posing a new challenge as if they need more in that country's battle against ISIS.

ROMANS: U.S. military bases in Europe stepping up security measures following the recent attacks in Paris and continuing intelligence that foreign fighters are returning to their home countries from Iraq and Syria. Officials from the U.S. and European command did not specify the steps being taken for obvious reasons. But, generally, these security measures include physical checks of people and vehicles coming in to bases.

BERMAN: The first round of bilateral talks with U.S. and Cuba ended without much concrete progress, but it did have an optimistic tone. The two sides have agreed to meet again. No date has been set. Some of the issues that still need further discussion, the reopening of embassies, the blockade on Cuba and Havana's place on the list of terror sponsors. The State Department official called the talks positive and productive.

ROMANS: All right. Time for an early start on your money this morning, stocks climbing. European and Asian shares are up, getting a boost from the European Central Bank to launch a stimulus program. So, are U.S. stock futures, they are higher.

Stocks yesterday up for the fourth day in a row. Really good day for the Dow yesterday. It was up 260 points.

Watch oil prices this morning. They have bumped up a bit after the death of Saudi Arabia's king. Saudi Arabia, of course, the leader of OPEC. Saudi officials have pushed to keep output high, which has caused prices to plummet. Reaction this morning is muted because, you know, it is unlikely the new king will change that stance. So, that supply glut is likely to continue.

Here in the U.S., the crude stockpiles reached the highest level, John, in 80 years this week. The U.S. is producing a whole lot of oil. Saudi Arabia, OPEC continues to pump oil, Russia pumping oil. Iraq has post-war highs for oil. They are just a lot of the black stuff around there.

BERMAN: Interesting. All right. Christine, thanks so much.

President Obama sat down with three pre-selected YouTube stars on Thursday. You can see it there. This is part of his post state of the union push to get his message out to a larger audience. One of the people he sat with was Glozell Green.

Look what happens when she hands over some of her signature green lipstick.

(BEGIN VIDEO CLIP)

GLOZELL GREEN, POPULAR YOUTUBER: OK, my mom said when you go to somebody's house, you have to give them something. Don't come empty handed.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: OK, all right.

GREEN: I have green lip stick. One for your first wife, I mean --

OBAMA: My first wife?

GREEN: I mean, I mean --

OBAMA: Do you know something I don't?

GREEN: Oh!

(END VIDEO CLIP)

BERMAN: Yes. Well, there you go. Giving green lipstick for his first wife.

They took a selfie, the president did with the YouTube stars. And, you know, a lot of people are wondering today, good move, presidential move?

Christine Romans, what say you?

ROMANS: Well, I said I thought it wasn't very presidential. I'm getting killed on Facebook. I'm getting killed, I'm out of touch. Young people, this is what they watch. They don't get their news the way we think. There are millions of people, 13 million people is the combined reach of those three people.

BERMAN: You need to reach an audience you would never reach otherwise.

ROMANS: A lot of firsts for the president. It was millennials and young people who elected him the first time and the second time. So --

BERMAN: Eisenhower did not have nearly as much of an opportunity to speak to YouTube stars.

ROMANS: But you pointed that Richard Nixon was on "Laugh In." And that time, it was controversial.

BERMAN: Sure. You know, this happens. I mean, people reach the audience where it is

ROMANS: All right.

BERMAN: Forty-three minutes after the hour.

ROMANS: He met with those YouTube stars, but he will not be meeting with Israel's leader when he comes to the U.S. Benjamin Netanyahu. Why? We're going to tell you. We're live in Jerusalem, next.

(COMMERCIAL BREAK)

BERMAN: New developments this morning in the Israeli prime minister's planned speech to the U.S. Congress. The White House announced President Obama will not meet with Benjamin Netanyahu when he comes to Washington in March. The official line is that the president does not want to influence the election in Israel which will happen in two weeks after the prime minister's visit. The development really marks a new moment in the often difficult relationship between President Obama and the Israeli prime minister.

I want to bring in global affairs correspondent Elise Labott live from Jerusalem.

You know, a little bit awkward here to say the least.

ELISE LABOTT, CNN GLOBAL AFFAIRS CORRESPONDENT: It's a little bit awkward, John. But we always think it can't get worse, and then it does.

This morning, in one of the Israeli papers, there's an anonymous quote from an American official saying that Prime Minister Netanyahu really spit in the face of the White House and the American administration. And there's going to be a price.

If you remember, we were right here just a few months ago with a lot of snubbing going on. The U.S. has really, particularly this White House, has had a real problem with the relationship with Prime Minister Netanyahu. Obviously, the Israelis don't think the U.S. is tough enough on Iran. And that's why Prime Minister Netanyahu wants to come and address the Congress, to kind of criticize U.S. policy.

So, that's why this administration is so really angry. And I've heard the same from U.S. officials. This is really a poke in the eye not just from House Speaker John Boehner who extended the invitation, but from Prime Minister Netanyahu who did not consult with the White House before accepting the invitation.

BERMAN: Political implications, electoral implications in the United States, but certainly in Israel as well. Elise has written a terrific op-ed on this, a column on this on CNN.com. Please go look at it because it is very interesting. Elise Labott, thanks so much for being with us.

ROMANS: All right. Good stuff.

Happening today, mayors from cities and towns across the country will be getting face time with President Barack Obama. The president will host a White House reception with the mayors after they spent the day with meeting with cabinet members and senior administration officials.

BERMAN: All right. Jeb Bush gives a big speech today in San Francisco. People hanging on his every word because he is clearly in the process of running for president right now. He said he is considering it, mostly or, you know, speculating.

The big thing was yesterday, he met with former Massachusetts Governor Mitt Romney in Utah. The two men sat down for a meeting that so many people want to know what happened inside that meeting. A Bush aide said it was planned before Mitt Romney once again expressed interest in running for president. Both sides said they had a great conversation. It was mostly about the issues.

ROMANS: Well, the issues -- the issues being who's gong to support whom?

BERMAN: Exactly.

ROMANS: Where is the money coming from? And, you know, if Mitt Romney is serious, will he able to assemble his whole infrastructure and what will that mean for Jeb and his machine?

BERMAN: Yes, it won't be exactly the same. It will never be exactly the same. But, you know, Romney has a lot of support from some different groups than Bush does. There's a lot of overlap there, but there's also some independent areas.

ROMANS: All right. It's starting to get real interesting for 2016.

All right. The federal trial of accused Boston marathon bomber Dzhokhar Tsarnaev, you know, it's not going to begin Monday as scheduled. Opening statements have been pushed back. It is taking longer than expected to seat a jury. The judge is expected to announce a new start date next week.

Meantime, defense lawyers are asking for a third now to move that trial out of Massachusetts. They claim that 68 percent of potential jurors already believe Tsarnaev is guilty. He is charged in the 2012 marathon bombing that killed three people and injured more than 260. Prosecutors plan to seek the death penalty.

BERMAN: Transit officials in the nation's capital say a breakdown of radio communications hampered emergency responders trying to reach passengers stuck on that smoke-filled metro subway train. One person died on that train from smoke inhalation. Federal safety officials say ventilation fans in the tunnel near the plaza station were not functions as intended when investigators tested them shortly after the accident. ROMANS: It maybe the happiest place on Earth, but California health

officials are telling people to stay away from Disneyland unless they are vaccinated against the measles. The outbreak that started at the theme park last month has now grown to at least 70 cases of measles. Considering that people visit Disneyland from all over the world, officials expect there to be more cases in more places.

Another concern, five of the people who contracted measles were fully vaccinated.

BERMAN: All right. Fighting intensifies this morning in Ukraine. Pro-Russian rebels seem to make new advances against Ukrainian's military. We are live in Moscow with the latest.

(COMMERCIAL BREAK)

BERMAN: Happening now: the violence in eastern Ukraine is escalating this morning. Russian-backed separatists claim a victory as the Ukrainian army has retreated from key strongholds at the airport in Donetsk. Officials in Kiev say the rebels captured 16 wounded Ukrainian soldiers in the battle for this airport. At least seven civilians were killed when shells slammed into a transit stop.

Ukraine's president claiming that more than 9,000 Russian troops have crossed into his country, a claim that Russia fiercely denies.

Our senior international correspondent Matthew Chance is standing by live now in Moscow.

Good morning, Matthew.

You know, the claims and counterclaims -- they have been going on for a while. What is the status on the ground there? Any idea?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, regardless of whether the Russian troops on the ground inside Eastern Ukraine and, of course, the Kremlin denies that there are, it certainly the case that the rebels, the pro-Russian rebels have been making some serious advances against the forces of the Ukrainian government within the past 36 hours or so. They appear to have taken control of the airport in Donetsk. That's something that's been a key symbolic asset in the region. There's been a lot of battles for the control of the airport over the past several months.

So, the announcement by the government side that their forces have retreated from the terminal is a big blow for the authorities in Kiev.

There's just been a statement as well which is being quoted on a Russian-state news agency, quoting the leader of the rebels in Donetsk, Alexander Zakharchenko is his name. He is saying that at the moment, we're in an offensive mode. We are on the push forward. We're not interested in peace talks.

So, that's sort of raised questions as to whether the initiative that was agreed in the German capital a few days ago between the foreign ministers of Ukraine and Germany to bring an end to the fighting and to forge a cease-fire, whether that's going to go anywhere. At the moment, it doesn't look like it is, John.

BERMAN: The situation on the ground clearly seems to be changing, Matthew. The question is, is it slipping out of control?

Matthew Chance in Moscow for us, thanks so much, Matthew.

ROMANS: All right. Fifty-five minutes past the hour.

Good news for homeowners. I got good news for you. An early start on your money is next.

(COMMERCIAL BREAK)

ROMANS: All right. Friday edition, let's get an early start on your money. Stocks climbing this morning, a big boost from the European Central Bank. European and Asian stocks are up. The central bank announcing this big stimulus, maybe of us had expected. It's going to injecting -- basically injecting money and oxygen into the financial system. And, boy, do they need it.

U.S. stock futures are following the lead this morning. Yesterday, stocks closed with gains for the fourth day in a row. Believe it or not, that's the longest winning streak so far this year. The Dow had a nice day. Look at that, 260 was the gain, about 1 1/2 percent.

I think you are saving a lot on fuel? Not at much as Southwest Airlines. Boy, they are really saving a lot when they fill up. The low-cost carrier said it will save half a billion dollars just in the first quarter, thanks to plunging jet fuel prices.

BERMAN: A lot of money.

ROMANS: Overall savings for this year should be up to a cool $1.7 billion, a story that's not translating into cheaper airfares. Instead, Southwest is reporting record profits. The stock was the best performer in the S&P 500 last year. Shares are up 7 percent before the bell.

Big news for the housing market: the country's cheapest homes saw a 6.8 percent bump in value last year. Those homes were hit the hardest by recession, are slow to recover. So, rising home values, huge for homeowners who are now in a better position to refinance or sell. That should boost inventory, especially as more millennials are getting ready to start buying homes.

There was a lot of excitement about those lowest priced homes showing some price appreciation.

BERMAN: Time to move out of mom's basement and look at buying a house.

ROMANS: There you.

BERMAN: All right. EARLY START continues right now.

(MUSIC)