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Early Start with John Berman and Zoraida Sambolin

China's Stock Market Halts Trading; Birther Battle Over Canadian-Born Cruz; Casting Doubts on North Korea's H-Bomb; Griffey Jr., Piazza Elected to Hall of Fame. Aired 5-5:30a ET

Aired January 07, 2016 - 05:00   ET

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

[05:00:00] JOHN BERMAN, CNN ANCHOR: You're not going to win?

CHRISTINE ROMANS, CNN ANCHOR: You're probably not going to win.

BERMAN: All right.

EARLY START continues right now.

(MUSIC)

ROMANS: New overnight, another meltdown for markets in China. Stocks tumbling, trading suspended, and this fear, this anxiety spreading around the world. First to Europe and the U.S. markets pointing to an ugly open. What it means for your 401(k) and American economy.

BERMAN: New salvos in the battle over the citizenship of Ted Cruz. Donald Trump raising new questions about whether Cruz is eligible to run for president. And now, Cruz with a new strategy himself. He, for the first time, is taking the issue on, head on.

ROMANS: Condemnation giving way to skepticism over North Korea's claim of a successful hydrogen bomb test. Why now do officials think Pyongyang is lying? And what consequences could the regime face if any?

Good morning and welcome to EARLY START. I'm Christine Romans.

BERMAN: Nice to see you today. I'm John Berman. Thursday, January 7th. It is 5:00 a.m. in the East.

ROMANS: All right. Breaking overnight, more turmoil in the China stock market. The trading day in China ended almost as soon as it began. The Shanghai composite plunged at the open, down 7 percent. The tech heavy Shenzhen market down more than 8 percent.

This rapid selloff -- I mean, there was so much selling so quickly that they shut the market down basically, triggering these automatic circuit breakers designed to give investors a chance to calm down.

This is the second time this week trading has been halted in China, trying to calm investors, trying to issue new regulations. China will limit the shares traders can sell every quarter. But that's just actually raises more anxiety because people wanted to sell their stocks.

What's behind the selloff? Two separate reports this week that China's economy is slowing down and China guiding the value of its currency lower.

European markets also slower, spreading right out of China. You know, the Chinese market, you probably have zero, zero exposure to the Chinese stock market, but the Chinese economy, you do, and so do European companies. And this worry about a slowing Chinese economy is what's really, really the problem in Paris, and Frankfurt, and now, Dow futures. Two point three percent, that would be a brutal selloff, a triple digit selloff.

The Dow plunged 252 points yesterday. That is 1.5 percent. This is the worst start to the trading year since 2008. NASDAQ and S&P 500 also had a tough day yesterday.

North Korea's reported hydrogen bomb test, that set off the selling yesterday.

Concerns about China, the Middle East and plunging oil prices all adding into this cauldron of fear. A barrel of crude oil is just above $32 a barrel, the lowest since 2003.

And I've got to tell you, John Berman, has been fantastic for consumers of oil. But at some point, when a commodity like that that basically drives the world falls from its peak a year and ago 65 percent, that becomes destabilizing to economies, to global economies.

BERMAN: You know, and, look, you say it is the worst beginning of the year for the market since 2008. This is a long time, and that was a bad year. That was a bad start.

ROMANS: Anytime you are comparing something to 2008, I get goose bumps. That was a terrible time.

BERMAN: There are real concerns about China and that it could, you know, create serious headwinds here as well.

ROMANS: I have seen some stocks really get slammed, though, this week. You are hearing people talk about stepping in, when they're going to buy this, when they're going to buy that. So, we'll watch to see if there's any bargain hunting today or whether buyers just steer clear.

BERMAN: All right. Fascinating new developments in the political battle over the citizenship of Ted Cruz. This morning, Donald Trump holding firm to his claim that there is a real question about whether Cruz is eligible to be president. This despite the many legal scholars who say that Cruz, who was born in Canada but his mother is an American citizen. Legal scholars almost all universally agree he qualifies as a natural born U.S. citizen. That is the constitutional requirement.

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

(BEGIN VIDEOTAPE)

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 the questions over his citizenship. He is now calling for Ted Cruz to go to a court, ask a federal judge to rule whether he is indeed eligible to run for the presidency.

Here is what Trump told Wolf Blitzer yesterday.

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

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Well, I hope he is right. I don't -- you know, I want to win this 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: A Canadian passport.

BLITZER: His aides say he didn't have a passport.

TRUMP: Well, I have heard that he had --

BLITZER: He may have been eligible for a Canadian passport.

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.

SERFATY: And Ted Cruz is trying his best to brush this off.

[05:05:01] He does not want to mix it up with Donald Trump over this issue. He calls this a side show and the circus of politics, and insists that he never had a Canadian passport.

Here's what he told CNN's Dana Bash.

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

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: But it's never been tested. You know full well because you've done it on other issues.

CRUZ: Listen, the Constitution and laws of the United States are straightforward. 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 a non-issue. But, you know, my response as 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.

SERFATY: And the two frontrunners have largely avoided going directly after each other. So, this sort of ratcheting up of tensions is especially significant especially as it inches closer to the Iowa caucus -- John and Christine.

(END VIDEOTAPE)

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

Joining us now to break down the political back and forth, CNN politics reporter Jeremy Diamond from our Washington bureau.

Good morning to you. Nice to see you.

JEREMY DIAMOND, CNN POLITICS REPORTER: Good morning.

ROMANS: Let's talk a little bit. Let's talk a little bit about John McCain. John McCain and what he has to say about this whole thing. Because yesterday, 24 hours ago, we were talking, well, McCain was born not on, well, technically he was born in U.S. --

BERMAN: He was born in the Panama Canal Zone, which is U.S. territory, but in the Continental United States.

ROMANS: That's right. So, let's listen to what John McCain had to say about all this.

(BEGIN AUDIO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I do not know the answer to that. I know it came up in my race because I was born in Panama, but I was born in the Canal Zone which is a territory. Barry Goldwater was born in Arizona when it was a territory when he ran in 1964.

REPORTER: But you were born on a base too, weren't you?

MCCAIN: Yes, it's a U.S. military base. That's different from being born on foreign soil. So I think there is a question.

I'm not a constitutional scholar on that, but I think it is worth looking into. I don't think it is illegitimate to look into it.

(END AUDIO CLIP)

ROMANS: So, Donald Trump is right, that people are talking about this.

DIAMOND: Yes, absolutely. I mean, listen, there is no surprise that John McCain, you know, is not a huge fan of Ted Cruz. He is certainly not going to do anything to help Ted Cruz kind of assuage those concerns.

But certainly, you know, Ted Cruz has been facing more questions about this. Donald Trump not exactly bringing it up because it was asked of him in an interview, but he's certainly not letting it go. And, you know, he is doing this game where, you know, he kind of raises a question and he says some people are saying this.

So, it's certainly interesting to watch Donald Trump in the way that he's kind of trying to needle Ted Cruz without directly going after him without making it look like, you know, they are adversaries after they have been friendly and not going after each other for so long in this campaign.

BERMAN: Look, Trump is clearly fanning the flames here to be sure. You know, back in 2008 when John McCain was running, the Senate actually passed a resolution saying he was eligible to run.

DIAMOND: Right.

BERMAN: What interesting this time is Ted Cruz doesn't have quite as many friends in the Senate as John McCain did. So, it's is unlikely that Ted Cruz will get that kind of support, even though, again, to be clear, legal scholars are almost unanimous ins saying that they believe that Ted Cruz is a natural born citizen and therefore meets the requirements.

Also interesting to see, Jeremy, how Josh Earnest talked about this at the White House yesterday. Listen.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: It would be ironic if after seven or eight years of drama around the president's birth certificate if Republican primary voters were to choose Senator Cruz as their nominee, somebody who actually wasn't born in the United States and only 18 months ago, renounced his Canadian citizenship.

(END VIDEO CLIP)

BERMAN: I mean, clearly stirring the pot there as much as he humanly can, Jeremy.

DIAMOND: Yes, I mean, this is the thing that gets Democrats licking their chops, because for so long, you know, it is the same voters who support Ted Cruz, those Tea Party voters, who for so long questioned President Obama's citizenship. You know, they didn't just question Obama's citizenship on the grounds that say his mother wasn't American, which President Obama's mother was. They were questioning that Obama was born on foreign soil in Kenya, specifically, right?

Of course, President Obama since released his birth certificate and showed he was born in Hawaii. But still, there are lingering questions. And the people who support Trump and people who support Ted Cruz, many of them still don't believe that President Obama is a Christian, for example. They also don't believe he was born on U.S. soil. And so, they are raising the question of whether or not he is a

citizen based on those grounds. But, of course, Ted Cruz, you know, he concedes he was not born inside the United States and yet he is saying he is a natural born citizen because of his mother.

[05:10:02] So, of course, Democrats are saying, sweet, sweet irony. You know, they're kind of just relishing this moment. And it's certainly interesting to watch Ted Cruz and his supporters kind of having to play the other side of the ballgame now.

ROMANS: And everyone is talking about this. Even though it was asked to Donald Trump by a reporter and he took it and ran with it. Everyone is talking about this. They are not talking about Ted Cruz's poll numbers in Iowa. And now he is really resonating in Iowa. So, that's the way the politics works.

OK, thanks, Jeremy. Nice to see you. We'll talk to you again in a few minutes, OK? Thank you.

DIAMOND: Sounds good.

ROMANS: Thanks for getting up early for us. I love that.

All right. New criticism over the North Korea's claim that it successfully tested a hydrogen bomb amid worldwide condemnation of another nuclear test by the reclusive state. President Obama called South Korea's president. The two agreed on the need for stiff sanctions against North Korea for violating international law.

U.S. officials say they have serious doubts that 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 or disproving this claim.

CNN's Paula Hancocks joins us live from South Korea with latest.

And, Paula, why the skepticism now 24 hours later? Why the skepticism that this was not a hydrogen bomb?

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, Christine, we heard these grumblings just after what they saw the actual seismic activity, the level and force, the destructive force from that seismic activity, and it was very similar to what we saw back in 2013, which was expected or believed to be an atomic bomb.

So, it was really believed by many officials, by many analysts that it wasn't a big enough impact for it to have been a hydrogen bomb. Now, we know the sniffer planes are up in the air from Japan, the U.S. thinking of sending one of its own. They haven't found anything at this point.

Japan, China and South Korea all saying they haven't found any indication of radiation either in the ground or in the atmosphere. That could be a problem. One analyst tells me if they don't find any material that is radioactive, then they simply cannot test it. They will probably never know exactly what was in this nuclear test. They are saying it probably means North Korea is just getting better

at shielding these nuclear tests so there is less leaking out into the atmosphere. It is early days. It could take many more days to find the material and it could take weeks to analyze it -- Christine.

ROMANS: Paula Hancocks live this morning in Seoul -- thank you, Paula.

BERMAN: It is the one-year anniversary of the terror attack in Paris that took 17 lives and wiped out most of the staff of the magazine, the satirical magazine "Charlie Hebdo." Still today, that magazine just as provocative as it has ever been.

The latest special edition features a blood stained gun-toting God on the cover. This elicited a pretty angry response from the Vatican. It has been a week of remembrances starting with French President Hollande and the mayor of Paris unveiling plaques at the offices of "Charlie Hebdo", and the supermarket where four people were later murdered.

President Obama getting set for a very, very important event, the CNN town hall meeting tonight on "Guns in America". Can he win over his critics? The preview, next.

(COMMERCIAL BREAK)

[05:16:40] ROMANS: We are counting down the hours to President Obama's live town hall on gun violence tonight at 8:00 Eastern on CNN. The president will no doubt defend his executive action to a battle gun death. But his political nemesis, his biggest nemesis in the gun battle will not be there tonight.

We get more from 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 those 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 lobby, 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 which are aimed at strengthening the nation's background checks system.

Here's more of what he had to say.

EARNEST: I'm confident that there will be discussion of the politics of this issue, too. After all, 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.

ACOSTA: The town hall meeting on CNN is part of President Obama's big push on gun control in his final year of office. He's expected to challenge lawmakers to gun legislation for the final State of the Union for President Obama next Tuesday -- John and Christine.

(END VIDEOTAPE)

ROMANS: All right. Jim at the White House -- thank you.

Remember, tonight at 8:00 p.m., the president joins Anderson Cooper for an exclusive live town hall event on "Guns in America". He will discuss the executive action on guns he announced this week and he'll be taking questions from a live studio audience. A town hall on "Guns in America" with the president moderated by Anderson tonight at 8:00, only on CNN.

BERMAN: House Republicans made good on a promise by passing a bill to repeal Obamacare. It actually did more than that. For the first time, this measure is going to the president. This is the first time a repeal will get to his desk. He's going to veto it.

There are not enough votes to override the veto. Still, though, House Speaker Paul Ryan says it is important to confront the president with what he calls the hard honest truth about Obamacare, even though the bill and vote are largely symbolic.

ROMANS: Top intelligence officials deny that the NSA spied on any members of Congress during last year's debate over the Iran nuclear deal. NSA Director Mike Rogers and the director of national intelligence, James Clapper, they 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 that surveillance inadvertently picked up conversations with members of Congress.

BERMAN: Two new members enshrined in the Baseball Hall of Fame. One of them set a record for votes. Andy Scholes, he's going in. No. He has the details in the bleacher report, next.

(COMMERCIAL BREAK)

[05:22:57] BERMAN: Ken Griffey Jr. and Mike Piazza, the newest members of the Baseball Hall of Fame. Griffey received the highest percentage of votes in history.

ROMANS: Yes.

Andy Scholes has more on this morning's bleacher report.

Hey, Andy.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Hey, good morning, guys.

Only three people didn't put Ken Griffey Jr. on their ballot. He got 99.3 percent of the vote, which is the most ever, topping the great Tom Seaver. And Griffey, who had one up, if not the sweetest swings in baseball history, finished his career with 630 home runs, which is sixth on the career list.

And shortly after the news broke yesterday, Seattle raised a giant banner with Griffey's number 24 on it to the top of the iconic space needle. Now, Griffey will go in with Mike Piazza, who was widely regarded as the best hitting catcher of all time. He was elected to the hall in his fourth year of eligibility. Piazza ended his career with 427 home runs, which is number one all time among catchers.

Now, just missing out on the Hall of Fame this year was Astros first baseman Jeff Bagwell. You need 75 percent of the votes to get in. And Bagwell was 15 votes shy. He will likely get in next year.

The two most prominent stars from the steroid era, meanwhile, Roger Clemens and Barry Bonds, well, they both saw an increase in their votes, but far away from getting the 75 percent.

All right. The Tampa Bay Buccaneers joining the list of teams in the market for a new head coach. The Bucs parting ways with Lovie Smith last night after two seasons. The Saints will not be in the market for a new coach. Sean Payton announcing yesterday that he will be returning to the Saints next season.

All right. LeBron James' marketing firm is dropping Johnny Manziel as one of its clients. This comes after reports that Manziel was in Las Vegas last weekend on the eve of the Browns season finale. Yesterday after practice, LeBron said he hopes Manziel can turn things around.

(BEGIN VIDEO CLIP)

LEBRON JAMES, CLEVELAND CAVALIERS: He is a distraction for not only himself but for everyone that surrounds him, his family and the people that represent him and people around him. He will figure it out at some point, we all hope.

(END VIDEO CLIP)

SCHOLES: LeBron in action last night against the Wizards. He poured in 34 points as the Cavs got the win. After the game, LeBron hanging out with Leah Still. He said her being at the game absolutely made him play harder.

LeBron said other than his daughter, Leah is his favorite girl in the whole world. Pretty awesome things to hear if you're Leah Still. Now, she's going to complete her cancer treatment on Friday.

And, guys, her dad, meanwhile, Devon Still, he got a contract to play with the Houston Texans next season. So, just a pretty cool, great week for the whole Still family.

BERMAN: Good for all of them. That's a nice story.

ROMANS: Great photo.

All right. Thanks, Andy. Nice to see you.

SCHOLES: All right. Good to see you, too.

ROMANS: Twenty-five minutes past the hour. It doesn't look good, folks, for financial markets. Big trouble spreading around the world. A rocky day in China has U.S. futures in a tail spin. European stocks tumbling.

We will sort it all out for you, next.

(COMMERCIAL BREAK)

BERMAN: Breaking overnight: market mayhem. Chinese markets shutdown within minutes after a free-fall. Now, questions arising in the hours before U.S. markets open. Just how ugly of a day will it be?

ROMANS: A new different version of a birther controversy. It is back. Donald Trump pushing his claim that Ted Cruz may not be eligible for the White House. Ted Cruz now pushing back and not taking Trump in stride.

BERMAN: New questions about the claim from North Korea that it successfully tested a hydrogen bomb. Are they lying? And new information about what will the consequences might be.

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

ROMANS: I'm Christine Romans. A very busy morning for you this morning. It is 30 minutes past the hour.

I want to begin with this breaking news overnight. Turmoil in China's stock market, questions about its economy and pain spreading around the globe.