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Early Start with John Berman and Zoraida Sambolin

North Korea Announces H-Bomb Test; Trump Raises Issue of Cruz's Canadian Birth; Gun Control: Obama's Emotional Appeal. Aired 4:30-5a ET

Aired January 06, 2016 - 04:30   ET

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

(COMMERCIAL BREAK)

[04:32:26] JOHN BERMAN, CNN ANCHOR: Breaking overnight, North Korea claims it explodes a hydrogen bomb him, a major escalation of nuclear tension. Global reaction pouring in. We'll have more moments away.

CHRISTINE ROMANS, CNN ANCHOR: Donald Trump using a claim of a birth claim, Ted Cruz. He says the Republican's birth place could be an issue for the race in the White House. We have what Cruz is saying this morning.

BERMAN: An extraordinary show of emotion from President Obama as he unveils his new gun control measures. But already this morning, new pushback from some Republicans in opposition.

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

ROMANS: I'm Christine Romans. It is 32 minutes past the hour.

ANNOUNCER: This is CNN breaking news.

BERMAN: Breaking overnight, North Korea says it exploded a hydrogen bomb. This is the very first time North Korea has made such a claim. Yes. It has done nuclear tests before. But those are for the more crude fusion devices. A hydrogen bomb, which is a fusion device, it would be a huge escalation in their capabilities, presenting new challenges for global security and certainly for the United States.

This apparent underground test set off political tremors around the world all night. There has been an emergency session of the U.N. Security Council set for just a few hours from now.

Joining us now with the latest, CNN's Will Ripley live from Beijing.

Good morning, Will.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Good morning, John.

This is truly alarming here in China. We're on the border, right now. We know that government investigators are testing for radiation. Japan sent planes into the air to monitor for radiation as well as a result of this nuclear test. The fourth nuclear test North Korea has conducted in the last 15

years. The first one back in 2006, it was 2009, 2013 and confirmed today.

Now, whether or not it was an H-bomb, experts say it could take several days to determine that. But we do know that it created a invisible earthquake. A 5.1 magnitude event that was felt in China. There were schools that were evacuated.

And this really is a strong message on the part of the North Korean regime that in spite of international sanctions has continued to invest heavily in its nuclear program, aggressively developing warheads, miniaturizing nuclear warheads and also investing in its missile delivery systems. Essentially what you see is this isolated regime now with an arsenal and the ability to potentially cause significant amount of damage in this region.

The United States for most of President Barack Obama's term has engaged in a policy known as strategic patience, basically ignoring Pyongyang for the most part, hoping they will denuclearize on their own.

[04:35:09] That clearly hasn't happened.

Let's listen what the former U.S. ambassador to South Korea has to say.

(BEGIN VIDEO CLIP)

CHRISTOPHER HILL, FORMER U.S. AMBASSADOR TO SOUTH KOREA: I'm not sure saying we're going to respond with strategic patience is really going to get us so far. I think what we're going to have to do is there will be a discussion in the U.N., there'll be an effort to tighten sanctions. There will be I think effort with regional countries including China.

And I hope there will be some understanding that we have so to somehow retire this program in the way that we did with the Iranian program. So, I think we're going to have to really think very hard about what to do. We can just leave this one alone.

(END VIDEO CLIP)

RIPLEY: So, I want to read for you the translation of a document signed by North Korea' supreme leader Kim Jong-un, saying, quote, "For the victorious and glorious year of 2016, when the 7th convention of the Workers Party will be held, make the world look up to our strong nuclear country and labor party by opening the year with exciting noise of the first hydrogen bomb."

Incident ally, Kim Jong-un turns 33-years-old on Friday. He considers the sound of a hydrogen bomb exploding exciting. The rest of the world, though, very troubling.

The U.N. Security Council holding an emergency closed door session less than seven hours from now -- John. ROMANS: Watching markets, I got to tell you, Will, I'm watching

markets, to see if any of this will factor into world trading today? This is It's another reason why markets have been nervous overall.

But China, a big, big reason to be concerned here. What do we think about the Chinese reaction to this? And what this says, specifically, about Kim Jong-un and maybe an adversarial relationship he has with the new Chinese leader?

RIPLEY: As you point out, Christine, the Chinese government in a very, very precarious position right now, because ever since the October 10th Workers Party celebration, the military parade in Pyongyang that I attended, where China sent a very high level delegate from the communist party to meet personally with Kim Jong-un, it appeared that relations between China and North Korea were doing quite well.

But Xi Jinping, the Chinese president, has condemned any nuclear testing. Of course, China is North Korea's most powerful friend and champion in the global community. It's also the largest by far trading partner with North Korean. The North Korean economy could not survive without trade with China and clearly, the international sanctions, the United States and its allies and the United Nations have placed on the regime, they haven't deterred this nuclear program. Chinese companies play a crucial role here.

And the next step, a lot of people are going to watch closely, because would there be sanctions on Chinese companies doing business with Pyongyang? That would be a very, very dramatic move. We just don't know what's going to happen yet.

BERMAN: All right. Will Ripley for us Beijing, watching this situation. We are getting new reaction, new information by the minute. We will update you more when it comes in.

Thanks, Will.

ROMANS: All right. Thirty-eight minutes past the hour.

A potentially divisive new line of attack this morning in the race for president in this country between two candidates who's so far have been mostly chummy. Donald Trump now raising questions whether Ted Cruz is even eligible to be president.

The Texas senator, Ted Cruz, was born in Canada. But because his mother was a U.S. citizen, most legal scholars agree, Cruz meets the constitutional requirement that he is a natural born citizen. Nevertheless, Trump says nominating Cruz will put Republicans in, quote, "a very precarious position".

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: A lot of people are talking about it. I hope it's not so. I hope it doesn't come about. But people are worried that if he weren't born in this country, which he wasn't, he was born in Canada. If the Democrats bring a lawsuit, the lawsuit could take years to resolve. And how do you have a candidate where there is something, you know, over the head of the party and that individual?

(END VIDEO CLIP)

ROMANS: Cruz responded tweeting this, a clip from Fonzie from "Happy Days" jumping a shark.

Instead of going after Trump, Cruz went after the media for covering possible division among the Republican candidates.

(BEGIN VIDEO CLIP)

SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: With all respect, our good friends here in the media are playing into the Democrat's playbook. How about we talk about the real challenges facing this country? One of the things the media loves to do is gaze at their navels for hours on end, by a tweet from Donald Trump or from me or from anybody else, who cares? Let's focus on the issues, let's focus on the issues on hand.

(END VIDEO CLIP)

ROMANS: Cruz spent the day in Iowa. Trump is off the campaign trail for the day. He sat down with Wolf Blitzer for an interview that will air on "THE SITUATION ROOM".

New reaction this morning to President Obama's announcement on proposed gun control measures. In a few hours, House Speaker Paul Ryan and other leaders will make their case against the president's proposal at a news conference. The outline of the president's plan unveiled Tuesday, in a rare show of deep emotion from the president surrounded by victims of mass shootings and their families.

(BEGIN VIDEO CLIP)

[04:40:02] BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For every family who never imagined their loved one would be taken from our lives by a bullet from a gun, every time I be taken from our lives by a bullet from a gun -- every time I think about those kids, it gets me mad.

(END VIDEO CLIP)

ROMANS: He has a reputation for being so cool and professorial, but White House insiders have said this has moved him to tears before privately. Now it has publicly.

For the latest, I want to bring in senior White House correspondent Jim Acosta.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: John, Christine, this was one of the most emotional moments of the Obama presidency. The president embraced the crowd of mass shooting victims and their families, and then cried openly at the White House as he made the case for new executive actions on gun control.

Under the president's new executive actions, a warning to nearly all gun sellers to conduct background checks or risk prosecution. Plus, new FBI and ATF agents, $500 million for mental health care and a new push to develop smart gun technology. The new executive actions are not a gun grab. In fact, they fall short of a law mandating universal background checks across the country.

Here's more of what the president had to say.

OBAMA: Second Amendment rights are important. But there are other rights we care about as well. We have to be able balance them, because our right to worship freely and safely, that right was denied to Christians in Charleston, South Carolina, and that was denied Jews in Kansas City, and that was denied Muslims in Chapel Hill and Sheiks in Old Creek. They had rights, too.

(APPLAUSE)

ACOSTA: The NRA responded saying, quote, "The proposed executive actions are ripe for abuse by the Obama administration, which has made no secret of its contempt for the Second Amendment."

Much of the president's ability to enforce these new actions depends on Congress spending the money on mental health, and to hire new investigators at the FBI and ATF. Republicans have long said the president should enforce the nation's existing gun laws. The White House is responding. Now, they have chance to the just that -- John and Christine.

(END VIDEOTAPE)

BERMAN: All right, Jim. Thanks so much.

A special programming note: Tomorrow at 8:00 p.m., President Obama will join Anderson Cooper for an exclusive live town hall about guns in America. He will discuss these newly announced executive actions. He will take questions from a live studio audience. The town hall on "Guns in America" with the president, moderated by Anderson, tomorrow, 8:00 p.m., only on CNN.

ROMANS: All right. Time for an early start on your money.

The U.S. stock markets under pressure this morning. Mixed results in Asia overnight as North Korea's reported hydrogen bomb test adds to worries there. Europe is down right now as well.

Gun stocks are surging following President Obama's executive action on gun violence. Smith and Wesson jumped more than 11 percent on Tuesday. It had a 6 percent rise Monday. The company is raising its sales an earnings outlook for the greatest quarter of the entire fiscal year.

Rival Sturm Ruger popped almost. look at that, 7 percent. A number of ammunition makers and sporting goods stores also rallying. Now, we have seen this before. A big gain in these stocks, following

mass shootings. It seems every time there is a threat of more gun control or measures to restrain gun violence, Americans rush to buy guns. Those companies profit -- John.

BERMAN: All right. Germany's chancellor with some very harsh words following news of a series of New Year's sex assaults in one of Germany's biggest cities. The identity of the alleged perpetrators is causing some alarm. A live report, next.

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[04:46:58] BERMAN: This morning, angry protests in the German city of Cologne after 90 women reported being robbed, threatened and even raped on New Year's Eve. The suspect described by police is, quote, "Arab or North African".

German Chancellor Angela Merkel calls the attacks disgusting, but she is warning against anti-government backlash.

CNN senior international correspondent Frederik Pleitgen is tracking the latest developments for us.

Good morning, Fred.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, good morning, John.

The police there in Cologne is still trying to piece together what happened there early on New Year's morning. Apparently, it was a group up to a thousand men that started being rowdy outside the main railway station and then they say that these men came into groups and descended upon women, starting groping them. And then surrounding them and trying to steal their belongings. At least one woman also reported allegedly being raped.

This apparently went on for hours. And if you look at some of the eyewitnesses who were there, many of them describing in absolute fear, saying that they felt absolutely at the mercy of these people. Now, as you noted, this comes at a very tense time in Germany as the country is the trying to cope with the new arrival of 1.1 -- at least 1.1 million refugees into the country in 2015 and certainly there has already been some backlash.

But the authorities are saying, listen, it's far too early to tell whether any refugees were a part of this. They are warning people to stay calm at this point as police try to investigate. Police, itself, of course, is under fire for allowing the situation to escalate.

BERMAN: All right. Frederik Pleitgen for us in London -- thanks so much, Fred.

ROMANS: New developments this morning in the escalation feud between Saudi Arabia and Iran. Overnight, a Saudi billionaire prince announced he is cancelling all investments in Iran and scratching all flights to Iran for his budget airline. Secretary of State John Kerry is reaching out to leaders of both

countries, urging them to calm down and consider talking to each other.

We want to go live to Beirut, bring in CNN senior international correspondent Nick Paton Walsh -- Nick.

NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Deeply troubling how this has flared so quickly in a matter of days. A conflict between Saudi Arabia and Iran, that had been pretty bubbling much under the surface, much through posturing, much through the proxy wars in Syria and the more open confrontations between the Houthis in Yemen and the Saudi-backed forces there.

But you mentioned the commercial ties being damaged there. We now, of course, know about diplomatic damage. The closure of Saudi Arabia's embassy in Tehran and how many Saudi allies have, in fact, joined along with them in reducing the diplomatic relations.

But there are some signs over days of fiery bids to calm this down. It may be working. John Kerry has telephoned both Saudi and Iranian counterparts in a word of a spokesman to try and deescalate tensions. Restore some sense of calm.

Potentially, they may have gone through the most immediate crisis, that the U.S. needs Saudi Arabia and Iran to speak as closely as they can off the same script form, that's dealing with the Syrian civil war.

[04:50:05] The U.N. special envoy to that conflict met with the Saudi Foreign Minister Abdel Al-Jubeir, and said, as far as he could tell in a statement, there was no negative impact on the peace process they're trying to push forward of getting Saudi opposition groups, many backed by Syrian opposition groups, many backed by the Saudis to talk to the Syrian regime.

Of course, the border concern is we had a region racked by posturing, proxy war between Saudi Arabia or effectively under Iran now for over a year, so much of the tension in the Middle East really built on those foundations of conflict. Now that conflict is out in the open, commercial, diplomatic measures being used. The fear is it could go further.

Back to you.

ROMANS: Nick Paton Walsh for us this morning in Beirut -- thank you for that, Nick.

All right. Fifty minutes past the hour.

So, you think the stock market is making you woozy? You're not going to really win Powerball. That's probably the riskiest things you can do. I got three sure fire ways for you to make money this year. You're going to get an early start on your money next.

BERMAN: I'm cool with that. ROMANS: I promise. Three ways you're going to make money.

BERMAN: All right.

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BERMAN: The neighbor who likely bought the weapons used by the San Bernardino shooters in last month's deadly attack has his day in court today. The arraignment of Enrique Marquez comes as the FBI leans on the public now for help. Investigators are trying to fill in a gap in a time line, the husband and wife team's whereabouts during his 18- minute window the day of the massacre.

CNN justice reporter Evan Perez has that part of the story.

(BEGIN VIDEOTAPE)

EVAN PEREZ, CNN JUSTICE REPORTER: John, Christine, it's an unusual appeal from the FBI, asking the public to help piece together 18 months in the timeline after Syed Rizwan Farook and his wife Tashfeen Malik carried out a terrorist attack in San Bernardino, California.

The FBI released this map showing that the attackers stayed in an L- shaped area, seeming to drive around aimlessly in the San Bernardino area.

[04:55:05] They viewed traffic and under surveillance cameras and cell phone tracking, as well as more than 500 witness interviews that account for nearly four hours after the attack. Missing from the time line are details from a period from 12:59 p.m. to 1:17 p.m. Did they stop to meet someone? Did they stop at a business or other location to get rid of evidence? This could be key to the investigation.

Nothing so far indicates that this is an attack that was directed by ISIS or some other group. But investigators believe this was an attack inspired by jihadi ideology and still a mystery to investigators, why that day and why that holiday office party? John, Christine?

(END VIDEOTAPE)

ROMANS: All right, Evan, thank you for that.

Pretrial hearing is set this morning for the second of six Baltimore police officers charged in the death of Freddie Gray. Jury selection in the trial of Officer Caesar Goodson begins Monday. Goodson was driving that police van, in which prosecutors say Gray suffered a severe final injury. The first Baltimore officer to stand trial William Porter is trying to avoid testifying. Porter's trial ended last month in a hung jury. A retrial is scheduled for June.

BERMAN: The Powerball keeps on climbing. Tonight's drawing expected to top $450 million, making it the fourth largest payoff in Powerball history. There had been seven straight drawings without a winner dating back to November 7th. A lump sum payoff for tonight's game could be worth $275 million. Your odds of picking the winning number, one in 292 million.

ROMANS: Say that one more time. One in 292. Yes, I'm Debbie Downer, one in 292.

BERMAN: So, you're saying there's a chance. I make that joke every day.

ROMANS: There is barely a chance.

BERMAN: No, there is not. You're not going to win.

ROMANS: There's not a chance.

BERMAN: You're not going to win.

ROMANS: Just keep putting it in your retirement account.

After years of drought, spokeswoman of the wettest days in areas. I'll tell you where. Let's bring meteorologist Pedram Javaheri for the latest.

PEDRAM JAVAHERI, AMS METEOROLOGIST: Good morning, John and Christine.

What a trend here over the next couple of days. You take a look, temperatures uniform nationwide, at least on the eastern half of the country, with 40s and 50s spread across New York, Boston should make it up to 40 degrees.

We had northerly flow in place, Canadian air coming down the last couple of days. It is southerly air out of the Gulf here. So, the temperatures want to warm up a little bit. That will take you above normal in the next 24 hour or so hours.

Look at this, not much of a wind chill on New York City, but wind chills in Boston, down to around 9. Compare that to yesterday when it was minus 8 for a wind chill. So, again, a big time trend in the department with the temperatures.

Look at this, get up to 53, that is some 15 degrees above normal as we head in towards the latter portion of this weekend and the trend there, but again it goes back downhill early next week. Quick plans across the western U.S. you can't miss the storm system. It dives into portions of the southwest. In fact, one and three-quarters of rainfall has come down across San Diego. Similar amounts possible the next two days.

Compare that to what happened in 2014 and '15, non-existent almost when it comes to heavy rainfall, and still could be four to six inches across Southern California by the end of this week, guys.

ROMANS: All right. Pedram, thank you for that.

Let's get an early start on your money. World markets are already nervous. They are now digesting news of North Korea's H-bomb claim.

Here's what it looks like right now. Stocks here in the U.S. set to start lower. In China, solid gains, in Shanghai overnight. But look at markets in Tokyo, London, Paris, Europe, all lower right now.

Americans bought more new cars last year than ever before. This is a powerful, powerful economic signal, folks, about the American economy. Seventeen and a half million cars and trucks rolled out of dealership last year. That's according to figures from auto data. It's up about 6 percent from the year before that. That edges out the previous records set in 2000.

Why? Low gas prices, easier credit, strong job growth and pent up demand from years of depressed auto sales. And guess what? This year, forecasts call for another record high.

BERMAN: I think it was trucks and SUVs that were way up. Cars and sedan, their sales actually went down because --

(CROSSTALK)

ROMANS: Trucks and SUVs, I talked to a dealer who said they cannot satisfy the commercial demand for trucks and for delivery trucks because the economy is so good on that side of the market.

BERMAN: But if gas prices go up, sales of them will go down.

ROMANS: True, that's true.

All right. The stock market off to a rough year. A Powerball jackpot, you're not going to win it.

Here are three sure fire ways to make money in 2016.

One, refinance your mortgage. Rates are still low. They will rise this year, so consider moving from an adjustable rate loan into a fixed. There is money in your pocket right now in your mortgage if you haven't already financed.

Two, take savings from the tank to your bank. Talking about those gas prices. You saved about $540 bucks last year from lower gas prices, use it this year to pay down debt and to beef up savings.

Number three, make sure you're maxing out your 401k. You won't be surprised people leave money on the table. They don't get all the employee match that they deserve. This year, there are new limits. The IRS will lit set aside $18,000 pre-tax this year. You should do it.

BERMAN: If your company matches, that is free money.

ROMANS: Free money. There you go.

BERMAN: EARLY START continues right now.

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