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Early Start with John Berman and Zoraida Sambolin

Stock Market Volatility Examined; Ted Cruz Citizenship Issue Continues; Clinton and Sanders in Nevada; Latest on North Korea H-Bomb Claim; Charlie Hebdo Killings Anniversary. Aired 4-4:30a ET

Aired January 07, 2016 - 04:00   ET

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

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[04:00:17] JOHN BERMAN, CNN ANCHOR: Breaking overnight, market mayhem. China shuts down trading after a free fall. Now, get ready for ugliness in the U.S. as well, the impact on your money moments away.

CHRISTINE ROMANS, CNN ANCHOR: Donald Trump and Ted Cruz digging in their heels on the issue of Ted Cruz's eligibility for the presidency, both sitting down to talk to CNN, and it appears the time for playing nice, is over.

BERMAN: New information coming in this morning about North Korea's claim it exploded a hydrogen bomb. Why they might be lying? What about the consequences?

Good morning everyone. A lot is going on right now. Welcome to "Early Start", I'm John Berman.

ROMANS: I'm Christine Romans. It's is Thursday, January 7th, it is 4 A.M in the East. Let's see what the breaking news overnight, more turmoil in China's stock market. The trading day in China ended almost as soon as it began. The Shanghai composite plunged at the open down 7 percent. Check of the Shenzhen market down with an 8 percent.

Now this rapid sell-off triggered automatic circuit breakers. These are designed to give investors a chance to calm down. But some are saying these circuit breakers are only causing more unease. The second time this week, trading has been halted trying to calm investors. China issued new regulations limiting the number of shares traders can share every quarter.

Again, what's behind the sell up two step (ph) for a report this week. The Chinese economy is slowing down and further devaluation of Chinese currency. The European markets are following suit. They are lower. They are concerned about what they see happening in the Chinese market and Chinese economy, those are big moves. Frankfurt, 3 percent, that is a big move for one morning for German stocks.

Here in the U.S. pointing to a brutal open coming off another big sell-off yesterday. The damaged report that DOW plunged 252 points, that's about 1.5 percent. This is now the worst start of the trading year for the Dow Jones Industrial Average since 2008, the NASDQ and S&P 500 also down more than 1 percent yesterday. North Korea's reported hydrogen bomb tests set off all that going.

Concerns about China, the Middle East plunging oil prices all adding to this cauldron of fear spreading around global market. A barrel of crude oil, just about $32 a barrel right now, that is the lowest level since 2003, again that's on those global growth concerns.

BERMAN: Again, the big picture here for the second time of the week, China's market shut down in a free fall down more than 7 percent. Today, it happened in less than 30 minutes, the old (ph} market opened and then closed because it was crashing.

ROMANS: Yeah, now, a lot of people telling you don't be too concerned about the Chinese markets, you've got the Chinese Government in there trying to manage how the markets behave that can cause more uncertainty. It's very difficult to manage markets.

BERMAN: Bigger picture though, it's this Chinese economic engine...

ROMANS: That is right.

BERMAN: ...which has been driving world economic growth for years seems to be slowing down and that is causing fear in China and in Europe and now in the United States as well.

ROMAN: Absolutely right, you know, Chinese growth has been more than 10 percent growth for years, for years. And now China is looking at 6 percent growth, maybe 7 percent growth. There's some uncertainty and quite frankly, there's some skepticism about the official statistics that come out of China. But as the huge Chinese -- second largest economy in the world, as it slows, that means, it will ripple for everyone and there's just not a good sense whether it will be a soft landing or hard landing for Chinese economy.

BERMAN: For over the next several hours, one thing we know is not a soft morning on the markets. They are going down big time. And more markets will open if you stick around with us for a few moments.

Meanwhile, fascinating new developments in the political battle over the citizenship of Ted Cruz, this morning Donald Trump holding firm to his claim of that there was a real question whether Cruz is even eligible to be president. This despite the many legal scholars who said that Cruz, who was born in Canada, but to an American mother, legal experts say he probably thus qualify as a national born U.S. citizen almost definitely.

What is new, thought, is that now Cruz, one day after trying to laugh off the controversy, he is now facing it head on. CNN's Sunlen Serfaty has the latest from Iowa.

SUNLEN SERFATY, CNN NATIONAL CORRESPONDENT: Good morning, John and Christine, well it's very clear that Donald Trump is not backing down. He is now escalating the attacks on Ted Cruz with these questions over his citizenship. He's now calling for Ted Cruz to go to court and ask a federal judge to rule if he is eligible to run for the presidency. Here is what Trump told Wolf Blitzer yesterday.

(BEGIN VIDEO CLIP)

WOLF BLITZER: He says he's a natural born citizen because his mother was a U.S-born U.S. citizen, and as a result he's a natural born citizen.

DONALD TRUMP, (R) PRESIDENTIAL CANDITATE: Well, I hope he's right. I don't -- you know, I want to win this things fair and square. I don't want to win on this point. What the Democrats are saying though, is he had a passport.

BLITZER: He says he didn't have a passport.

TRUMP: Right, a Canadian passport.

BLITZER: He says -- his aides say he didn't have a passport

TRUMP: Well, I've heard that he may...

BLITZER: .He may have been eligible...

TRUMP: I think that's wonderful if he didn't, and I never understood how he did. But everybody tells me he had a joint passport

(END VIDEO CLIP)

[04:05:10] SERFATY: And Ted Cruz is trying his best to brush it off. He does not want to mix it up with Donald Trump over this issue. He calls it a side show in the circus of politics and insists that he never had a Canadian passport. Here is what he told CNN's Dana Bash.

(BEGIN VIDEO CLIP)

TED CRUZ, (R) PRESIDENTIAL CANDIDATE: The legal issue is straightforward, "The son of a U.S.citizen legal born abroad is a natural born citizen".

DANA BASH: But it's never tested, you know full well because you've done on other issues.

CRUZ: Listen, the constitution and laws of the United States are straight forward, the very first congress defined, "The child of a U.S. citizen born abroad is a natural-born citizen, and by the way, many of those members of the first congress were framers at the constitutional convention. At the end of the day, this is an on issue, but you know my response that you and I were talking about just a minute ago, I tweeted a link to a video of Fonzie jumping a shark. You know, I'm not going to engage in this.

(END VIDEO CLIP)

SERFATY: And the two frontrunners have largely avoided going directly after each other, so this sort ratcheting of (ph) of tension is especially significant, especially as it inches closer to the Iowa caucus. John and Christine.

ROMAN: All right, Sunlen Serfaty for us this morning, thank you Sunlen. Now, Hillary Clinton and Bernie Sanders both campaigning in Nevada, each with a different focus, Clinton has her sights trained squarely on Republicans.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I have listened carefully to all of the Republicans running. And, many of them are very clear, very explicit. They want to chart a new course and they want to turn the clock back and rip away the progress that we've made.

It matters. It matters what works and what doesn't. It matters whether we are unified or divided.

(END VIDEO CLIP)

ROMANS: Sanders stumping in Las Vegas. He insists fire (ph) on Hillary, saying, he is the candidate who could drive democrats to the polls.

(BEGIN VIDEO CLIP)

BERNIE SANDERS, (D) PRESIDENTIAL CANDIDATE: Well, I think the safe bet is to make sure that we have a candidate who is going to l excite people and create a large voter turnout. Democrats win when we have a large voter turn out when young people and working people come out. Democrats lose when the turnout is low. Look at the crowds we are drawing. Look at the excitement, I think, we are generating.

(END VIDEO CLIP)

ROMANS: Nevada's expected to be a key state with big voter turnout, thanks in part, to the retirement of senate leader Harry Reid.

BERMAN: And that will be the general election. The caucuses though, turn out as generally low, it's a -- you know, it's an organizing event. Hillary Clinton has the support of all of the major unions. So, Bernie Sanders is being (ph) -- opening a number of offices there and does seem to be organizing.

New skepticism this morning over North Korea's claim that it successfully tested a hydrogen bomb, this amidst global wide common (0:02:53) of another nuclear test by North Korea. President Obama call South Korea's leader. The two agreed on the need for stiff sanctions against the north for violating international law. U.S. officials, they have serious doubts the underground test, really was a hydrogen bomb.

One official tells CNN the air force will likely send a sniffer plane to sample air in the region for evidence proving -- to try to prove or disproved the claim. CNN's Paula Hancocks joins us live now from South Korea with the latest. Good morning, Paula.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Good morning, John. Well, we just have heard from the presidential office that South Korea has decided on the first of it's responses to North Korea. It's not the North Korea would pay a price for this nuclear test, and they've decided that will continue or re continue that propaganda broadcasts on the border. Now this is effectively a mobile installation and they broadcast propaganda messages across the border, across that heavily fortified demilitarized zone. And they only pulled this back in August of 25th when the two sides were actually getting on a lot better than they are now.

This is something that really irritates the North Koreans, they become very angry when this propaganda broadcast happened. We've heard from defectors as well who have escaped North Korea saying that they have heard the propaganda broadcasts and in part, it actually helped them decide to escape.

So, certainly, Pyongyang will not be happy with this. This is likely to raise tensions on the peninsula even further. Meantime, there is still the hunt on to find out what kind of nuclear test that was that happened on Wednesday. Japan, China and South Korea, all neighboring countries said they have no indication of radiation. They are checking the ground. They are checking the atmosphere. And at this point, they have no indication of any radiation. And analysts say they may not find the -- those particles that they can test to give them an indication of what it is because it may simply, they're being shielded too well by the North Koreans, John.

BERMAN: All right, you may never know the answer to some of these questions that the west wants. Paula Hancock, thanks so much.

[04:10:00] ROMANS: All right, presidential candidates respond to the North Korea news with Republicans largely training their fire at Hillary Clinton and the policies of her husband, Bill Clinton.

(BEGIN VIDEO CLIP)

CRUZ: Why does Kim Jong-Un in North Korea, a crazy nut case, and these a technical term, have nuclear weapons? Because of the failures of the Clinton administration, where the Clinton administration led the world in relaxing sanctions against North Korea.

MARCO RUBIO, (R) PRESIDENTIAL CANDIDATE: North Korea has potentially tested a hydrogen bomb. That's not confirmed. But here's what's confirmed, he's a lunatic. It's reckless what's happened under this administration and what happened under Hillary Clinton's watch at the State Department.

(BEGIN VIDEO CLIP)

ROMANS: Hillary Clinton for her part released a statement saying threats like these are yet another reminder of what's at stake in this election. We cannot afford reckless, imprudent publicity stunts that risk war. We need a commander-in-chief with the experience and judgment to deal with a dangerous North Korea on day one.

BERMAN: Iraq is offering to mediate the growing dispute between Saudi Arabia and Iran. Iraq's foreign minister met with his Iranian counterpart in Tehran on Wednesday.

Meanwhile, Qatar is the latest Middle Eastern country to recall its ambassador from Tehran joining Kuwait, the UAE, Sudan, Djibouti, Bahrain, they have all severed ties with the Iranian. This dispute started or latest round in an ongoing long-term dispute between the Saudis and Iranian, started when the Saudis executed a top Shi'a cleric and protesters in Tehran that attacked the Saudi embassy.

ROMANS: One year after a terrorist attack took 17 lives and wiped out most of its staff, the french magazine "Charlie Hebdo" is more provocative than ever, the latest special edition featuring a blood- stained, gun-toting God on the cover drawing an angry response from the Vatican. It's been a week of remembrance in France starting with President Hollande and the mayor of Paris unveiling plaques at Charlie Hebdo and a supermarket where four people were murdered.

All right, President Obama getting set to sell his executive action on guns in a town hall meeting on CNN. Can he win over his critics? A preview next.

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[04:15:27] BERMAN: We are counting down the hours to President Obama's live town hall on gun violence tonight at 8:00 p.m. Eastern on CNN. The president will no doubt defend his executive actions on this issue, but his biggest political nemesis in this battle will not be there tonight. Let's get more from now CNN Senior White House Correspondent Jim Acosta.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: John and Christine, President Obama will be sitting down with both supporters and opponents of his executive actions on gun control later on this evening during a live town hall with Anderson Cooper here on CNN.

While the nation's top gun law being the NRA has declined to participate, White House Press Secretary Josh Earnest says, the president hopes to use the televised meeting to take on critics of his executive actions with their aim of strengthening the nation's background check system.

Here's more of what he had to say.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: I'm confident that there will be discussion of the politics of this issue too. After all, we've -- we do see, this is a very good example of how political dysfunction on Capitol Hill has serious consequences for the safety and security of communities and kids all across the country.

(END VIDEO CLIP)

ACOSTA: The town hall meeting on CNN is part of President Obama's big push on gun control in his final year in office. He's expected to challenge lawmakers to pass gun control legislation during his final State of the Union Address for President Obama next Tuesday. John and christine. (END VIDEOTAPE)

BERMAN: All right Jim, thanks so much. Remember tonight, 8:00 p.m., President Obama joins Anderson Cooper for this live exclusive town hall event, Guns in America. The president will talk about his recent round of executive actions. And much, much more, he will take questions from a live studio audience. The town hall, Guns in America with the president moderated by Anderson tonight at 8:00 p.m., only on CNN.

ROMANS: House Republicans making good on a promise by passing a bill to repeal ObamaCare. The measure now goes to the president who, of course, is certain to veto it. And there're not enough votes in the House or Senate to override that veto still.

New House Speaker Paul Ryan says it's important to confront the president with the hard, honest truth, he says, about ObamaCare even though the bill and the vote were largely symbolic.

BERMAN: Top intelligence officials denied that the NSA spied on any members of Congress during last year's debate over the Iran nuclear deal. NSA Director Mike Rogers and Director of National Intelligence James Clapper appeared before the House Intelligence Committee. They were responding to concerns raised in a Wall Street journal report about NSA surveillance of Israeli Prime Minister Benjamin Netanyahu, saying it inadvertently picked up conversations with members of Congress.

ROMANS: The chief justice of Alabama's Supreme Court is ordering all probate judges in the state to stop issuing marriage licenses to same- sex couples. Chief Justice Roy Moore says he's trying to clarify all the confusion, not cause it. Judge Moore claims Alabama probate judges are bound by a state Supreme Court ruling last March that halts same- sex marriage even though the U.S. Supreme Court has now legalized it.

All right, 18 minutes past the hour. $500 million bucks flagging (ph) enough, huh? Find out how much the next Powerball Jackpot is going for after nobody won the big jackpot last night.

BERMAN: (Inaudible) you weren't going to win and you didn't...

ROMANS: Nobody won.

BEMAN: ... you didn't win.

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[04:22:04] BERMAN: This morning, the father of a 10-year-old girl is outraged after his daughter was patted down for nearly two minutes by an agent during an airport security check. Kevin Payne recorded the incident in which he said his daughter was groped by a female officer. The TSA though says the agent did not act improperly and was following protocol. CNN's Rene Marsh has the details.

(BEGIN VIDEOTAPE) RENE MARSH, CNN AVIATION & GOVERNMENT REGULATION CORRESPONDENT: Christine and John, the father of that 10-year-old girl said his daughter received an invasive full body pat down at North Carolina's Raleigh-Durham International Airport. He recorded it all and posted it online.

Now, Kevin Payne said watching his 10-year-old daughter got a pat-down "made him sick to the stomach". The child was flagged for additional screening after officers found a box juice in her bag. Passengers are not allowed to bring liquids over 3 ounces past security checkpoints.

TSA also said a cell phone was in the child's bag and that set off an alarm on one of the screening machines. A TSA spokesperson said the officer "followed approved procedures and under certain circumstances, children can be given pat downs."

We should note the agency modified its screening procedures for children 12 and under in recent years to reduce the likelihood of pat- downs, but it did not ban the practice all together. Christine, John.

(END VIDEOTAPE)

ROMANS: All right. Rene Marsh, thank you for that.

The man accused of buying the assault rifles used in the San Bernardino terror attack, pleading not guilty to multiple charges. Enrique Marquez is accused of conspiring to provide support to one of the shooters Syed Rizwan Farook. Prosecutors say there is no evidence at this point Marquez knew about the attack that killed 14 people. Marquez allegedly bought the rifles in 2011 for a planned attack on a college that was never carried out.

BERMAN: The defense in the second Freddie Gray -- second trial of Freddie Gray, the officer of the trial accused of being responsible for the death of Freddie Gray. That second trial, there is now a pre- trial ruling by a Baltimore judge who says Police Officer William Porter must testify against colleagues also charged in Gray's death.

Officer Caesar Goodson faces the most serious charge, second-degree murder. He was driving the police van that transported Gray after his arrest. Prosecutors say Porter told Goodson that Gray needed medical attention. Goodson's trial is scheduled to begin Monday with jury selection.

ROMANS: Officials in Texas moving last night to fire the state trooper who arrested Sandra Bland after a grand jury indicted him for perjury. Brian Encinia arrested Bland for assaulting him during (inaudible). She was found dead in her cell three days later. Police say she hanged herself with a plastic bag.

Special prosecutor in the case says the grand jury did not believe the trooper's claim. He made Bland step out of her car so he could conduct a safer traffic investigation. When you listen to the audio on that, she's just over and over saying, "Have I failure to signal? Why do I have to get out of the car?" He faces up to a year in jail on the misdemeanor charge. [04:25:11] BERMAN: Bill Cosby will not face criminal charges in Los Angeles. The district attorney's office evaluated two separate allegations of sexual misconduct, one from 1965, the other from 2008.

Prosecutors determined they could not find sufficient evidence to back up claims including forcible rape. One woman alleges the comedian forced her to have sex with him in 1965, another female identified as Chloe Goins claims Cosby drugged and molested her in 2008 at the Playboy Mansion. Cosby is currently facing charges in Pennsylvania stemming from an alleged sexual assault in 2004.

ROMANS: "Star Wars, the Force Awakens" is now the biggest grossing movie of all time in North America. The JJ Abrams blockbuster shattering the record, $760 and a half million earned by "Avatar" in 2009. Even more impressive for the 7th installment of the "Star Wars Saga", "Avatar" was in theaters for seven months. "Force Awakens" has only been around for 20 days.

BERMAN: I have plans to see it for a second time...

ROMANS: Me too.

BERMAN: ... this weekend in 3D.

ROMANS: Me too. I have some -- oh, I saw it 3D the first time.

BERMAN: I did. I was in Vermont. And they barely have 1D up there so I was lucky.

ROMANS: I will say though I have a bunch of questions so I have to watch it again to see if, you know, it's what...

BERMAN: Darth Vader, Luke's father.

ROMANS: Is that so?

BERMAN: Have I said too much? Have I said too much?

ROMANS: Spoiler alert, that's not nice. You're not supposed to do that.

BERMAN: All right, big baseball news. Ken Griffey Jr. and Mike Piazza, they are going to the Hall of Fame. They are the class of 2016 and is very first year in the ballot. Griffey Jr. received the highest percentage of votes ever, 99.3%, just three short of being unanimous, who are you three people?

Griffey played 19 seasons in the Majors. He had 630 home-runs, 6-time. And you know what? He had a good time doing it most importantly.

Mike Piazza was a 12-time All-Star catcher. He hit 427 home runs, probably the best hitting catcher of all times. This was his fourth try getting into the Hall. He was drafted in the 62nd round by the Dodgers back in 1988 -- 1987, I think. No player drafted that low has ever made it into the Hall of Fame until now. Interesting though, you know, Ken Griffey Jr. was also the number one pick in the draft. He's the first player ever to be the number one pick to make it into the Hall of Fame so book ends there.

As for Barry Bonds and Roger Clemens who've been tied to the steroid scandals over the year vote, both got about 45 percent of the vote. And it's up from last year but they're still way below the 75 percent needed for elections.

Tim Raines robbed again in case you're a...

ROMANS: And he has to have some really nice thing to say about in that sense. He was like really waxing poetic about how wonderful they are, he couldn't have done it without them so.

BERMAN: Yes, nice way he skipped the Dodgers too who drafted you and brought you into the league game start, it's OK.

ROMANS: Yeah, all right, (inaudible), it's past the hour. Good news for just about everybody. There were no winning jackpot tickets sold in Wednesday's Powerball drawing. Jackpot was already more than a half a billion dollars. The new one for Saturday's drawing will be at least $675 million, the largest lottery jackpot in the U.S. history topping $656 million, mega millions prize in 2012.

What would you buy? If you won, what would you buy?

BERMAN: I would give it all away. No, I would feel like it's college tuition. I'm going to win. I never even think about. Why were you -- you're not going to win?

ROMANS: The rest of America is dreaming about what they would spend it on and you're just mister...

BERMAN: You're not going to win.

ROMANS: I agree with you actually.

BERMAN: All right, real money issues to worry about. The financial markets poised points for big trouble this morning. An incredibly rocky day in China, the markets shutdown within minutes after opening after a free-fall, it could be rough for U.S. markets over the next fewer hours. We will tell you what it means for Your Money next.

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