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Early Start with John Berman and Zoraida Sambolin

Ted Cruz Addresses Birther Battle Directly; U.S. Doubts North Korea Test was H-Bomb; Obama to Confront Gun Control Opponents; Aired 5:30-6p ET

Aired January 07, 2016 - 05:30   ET

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

[05:30:01] CHRISTINE ROMANS, CNN ANCHOR: Turmoil in China's stock market. Questions about its economy and pain spreading around the globe.

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. Now that rapid, rapid selling before traders could even have a cup of coffee, it triggered this automatic circuit breaker, it means shutdown the market designed to give investors a chance to calm down.

But there's nothing calm about this. It's the second time this week trading in China has been halted. Trying to calm investors, trying to also issue some new regulations. China will limit the number of shares traders can sell every quarter, but that just raises more fear and more anxiety.

Here's what's behind the selloff. Two separate reports this week that China's economy is slowing down. It's the second largest economy in the world. When China sneezes, the rest of the world catches a cold.

Also China devaluing its currency. Spending money to buy its currency to drive it down. European markets also lower amid China concerns.

I want to show you European markets. Paris down 2.8 percent. Frankfurt down 3.2 percent. And Dow futures there, pointing to an even bigger selloff today than we saw yesterday. 2.6 percent decline. Yesterday, the Dow was down 1.5 percent. That was an uproar a triple digit move. A 252 point move.

This is now the worst start to a trading year for the Dow since 2008. The Nasdaq and the Dow and the S&P also lower here. You know, adding to all this was the confusion and concern around North Korea.

North Korea has reported hydrogen bomb test. That started yesterday's selling. Many added this concern about China, the Middle East, plunging oil prices. All of it means investors in the U.S. looking abroad and are very concerned. A barrel of crude oil now just about $32, the lowest since 2003. Let me say that again. 2003. But it's been very good for American drivers, those low oil prices. At some point a crash in a critical commodity like that becomes destabilizing around the world. And that's what we're seeing here right now.

A lot of pain this morning, John. BERMAN: Again, you know, we've seen the Europe markets open by the

hour. Down. Way down. The U.S. markets open in, what, four hours from now. Expect more pain today. And there is growing concern that China, this driver of the world economy, could be having some serious problems.

ROMANS: We had record auto sales in the U.S. yesterday. We had a pretty good private sector payroll report in the U.S. yesterday. In a way, investors are looking completely outside American borders right now for what is happening. They are very concerned about the international picture. Could that shift? Could maybe by the end of the week you have people looking at strong internals in the U.S.? Maybe. But mostly people right now are concerned that China's slowing growth story is going to somehow affect the United States negatively this year.

BERMAN: But guard yourself for a tough day.

ROMANS: Guard yourself. Guard yourself for more politics today as well, foils.

Fascinating new developments in the political battle over the citizenship of Ted Cruz. This morning, Donald Trump is holding firm to his claim that there is a question, a real question whether Ted Cruz is even eligible to be the president.

This despite the many, many legal scholars who say Cruz, born in America -- born in Canada, rather, to an American mother does qualify as a natural born U.S. citizen. What is new, though, is that now Cruz, one day after trying to laugh off this controversy, is facing it head on.

CNN's Sunlen Serfaty has the very 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 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.

(BEGIN VIDEO CLIP)

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 thing 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: He says -- 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.

BLITZER: Yes.

TRUMP: And I never understood how he did. But everybody tells me he had a joint passport.

(END VIDEO CLIP)

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

(BEGIN VIDEO CLIP)

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

[05:35:01] 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.

(END VIDEO CLIP)

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.

BERMAN: All right. Interesting to see this political back and forth. Let's talk about it more. CNN Politics reporter Jeremy Diamond joins us from Washington this morning. Jeremy, very interesting. We're speaking with Dan Pfeiffer, a former

senior adviser to President Obama who lived through the birther controversy in the White House. He thought it was a mistake that the president waited so long now in retrospect to respond to it because he thought that the questions did seep in to the consciousness.

So it is interesting now that Ted Cruz, after joking about the Fonz for a day, now at least is addressing it more directly.

JEREMY DIAMOND, CNN POLITICS REPORTER: Yes. Absolutely. You know, Ted Cruz and Donald Trump are, you know, having a little bit of a war of words over this. And Ted Cruz is certainly trying to quell those concerns I think that Trump has raised in a way.

You know, Ted Cruz is saying clearly, you know, I am an American citizen. I'm a natural born citizen because my mother was born in the United States, because my mother was a citizen. Of course, it's interesting because, you know, Ted Cruz and his supporters -- his supporters in particular, the Tea Partiers, are the same people who led kind of the birther movement who questioned President Obama's citizenship on the grounds that he was not born in the United States.

And now Ted Cruz is finding himself in a position of convincing those same supporters that he is indeed also a natural born citizen. I think he'll have a little bit of an easier time than Obama did certainly, but he certainly has some convincing to do before the Iowa caucuses.

ROMANS: And of course the president of the United States was born in Hawaii. He was born in the United States. No question about that. Yet when you listen to Josh Earnest, the spokesperson from the White House, sort of savoring I think the -- an irony here. A real delicious irony from his perspective.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: It would be quite ironic if after seven or eight years of the 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)

ROMANS: I mean, he's almost trying to hold back his laughter, I feel like, Jeremy.

DIAMOND: I don't think he was holding back very much.

(LAUGHTER)

ROMANS: Right.

DIAMOND: I think you could kind of see it right on his face that they're kind of relishing this moment of bright irony in the Republican primary process.

But listen, and let's -- you know, going back to Donald Trump and Ted Cruz, let's just remember, you know, Donald Trump has gone back and forth on this himself. Of course at the very beginning, he was the one who kind of launched this -- you know, birther movement into a new phase with Obama in 2011 and ultimately succeeded in getting Obama to release his birth certificate.

And with regards to Ted Cruz in particular, Donald Trump has been on both sides. You know, at first, he said back in I think December of 2014 that Ted Cruz, you know, it was kind of a question, kind of a similar question with Obama. You know, is he an American -- you know, is he a natural born citizen, et cetera. And then later he backtracked on that and he ended up saying well, you know, a lot of legal experts have looked at this and I hear Ted is fine. I hear he's just fine, is what he said.

And now Donald Trump, you know, as the Iowa caucus nears, as Ted Cruz is being seen more and more as the frontrunner in that state, Donald Trump is certainly trying to see where he can, you know, cut into Ted Cruz's, you know, margin of support. And I think that's exactly what he's doing right now.

BERMAN: Donald Trump has never seemed like someone beholden to consistency. Nevertheless, when you hear statements from Josh Earnest at the podium in the White House and when you hear a statement like we're about to play from John McCain, my question to you is, does it prove Donald Trump's point that people are asking questions, that it is out there?

Listen to this, from John McCain, a Republican senator, who himself faced questions about his birth because he was born in the Panama Canal Zone. Listen.

(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.

UNIDENTIFIED MALE: But you're born on base, too. Are you?

MCCAIN: Yes. I was --

UNIDENTIFIED MALE: OK.

MCCAIN: It's a U.S. military base.

UNIDENTIFIED MALE: Yes.

MCCAIN: That's different from being born on foreign soil. So they think -- I think there is a question. I'm not a constitutional scholar on that. But I think it's worth looking into. I don't think it's illegitimate to look into it.

(END VIDEO CLIP)

[05:40:01] BERMAN: John McCain could have said a lot there. He could have said Ted Cruz is perfectly eligible to run for president. He didn't. He said it's legitimate to look into. This does show maybe that there are people out there asking this question, Jeremy.

DIAMOND: Yes, listen. I mean, Donald Trump didn't bring this question up, right? He was asked about it in an interview.

ROMANS: Right.

DIAMOND: But he's certainly taking the ball and run with it since. John McCain also not a person who's going to try and assuage those concerns. He is no fan of Ted Cruz. He's made that very clear in the past. And so even if John McCain does believe Ted Cruz is a natural born citizen, he's certainly not going to say that and he's going to kind of let it play out. So I think that's what's going to happen over the next few weeks and we're just going to have to see what shakes out.

ROMANS: All right, Jeremy Diamond. Nice to see you this morning. Thanks for getting up so early for us.

DIAMOND: Thank you.

ROMANS: Take it easy today.

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

U.S. officials say, though, that they have serious doubts that the underground test really was a hydrogen bomb. One official tells CNN the Air Force will now likely send a sniffer plane to sample air in the region for evidence to prove or disprove that claim.

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

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Well, John, there are already Japanese sniffer planes in the area. And there have been since just a couple of hours after that nuclear test on Wednesday. They have not found anything at this point.

We understand that Japan, China and South Korea all saying they have detected no radiation since this nuclear test. One analyst does said -- I spoke to said that there may not been any radiation in the air. There wasn't after the third nuclear test. They could not find any particles in the atmosphere to be able to test, to be able to pinpoint exactly what the nuclear test was.

It could be the same this time. The North Koreans they say are getting better at shielding these nuclear tests. But as you say more and more people now are believing that it was not a hydrogen bomb. In fact you'd be hard pressed to find anyone beyond North Korea and Kim Jong-Un who believe that it was a hydrogen bomb.

There are those, though, that believe it may have a hydrogen element to try and boost the strength of it, the destructive force of it which may well have failed because the seismic activity showed it was pretty much similar or even a little weaker than the 2013 effort -- John.

BERMAN: Answers not easy to come by, though. Thanks so much, Paula. Appreciate it.

President Obama tonight in a very interesting television event. A CNN town hall. Taking questions from an audience about how he plans to battle gun violence in America. He will take questions from critics, too. We'll have a preview.

(COMMERCIAL BREAK)

[05:46:00] BERMAN: We are counting down the hours to President Obama's live town hall on gun violence tonight. It's at 8:00 p.m. right here on CNN. The president will no doubt defend his executive actions to battle gun violence, but his biggest political nemesis in this fight will not be there tonight.

Let's get more now from CNN's senior White House correspondent Jim Acosta.

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 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.

(BEGIN VIDEO CLIP)

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.

(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 this final State of the Union for President Obama next Tuesday -- John and Christine.

BERMAN: All right, Jim, thank you so much. That event tonight 8:00 p.m. President Obama joins Anderson Cooper for this live town hall. "Guns in America." The executive actions that he just issued, they will be discussed. He will face questions from a live studio audience.

"Guns in America" with the president. Moderated by Anderson tonight at 8:00 p.m. only on CNN.

ROMANS: All right. Look. It's 47 minutes past hour. That means it's time to take a look at what's coming up on "NEW DAY." And Alisyn Camerota joins us now with that.

Hi.

ALISYN CAMEROTA, CNN ANCHOR, NEW DAY: Hi, guys. Good morning. So we will have more of Wolf Blitzer's interview with Donald Trump's and Trump's insinuations about Ted Cruz's citizenship.

Wolf will join us live to discuss it all. How does he thinks Trump's tactics will play out when voters go to the polls in Iowa and New Hampshire next month. How is Senator Ted Cruz reacting and what were Wolf's impressions of Trump.

Plus Chris is live in Paris this morning. He's marking one year since the deadly terror attacks at "Charlie Hebdo" offices. How has that city changed especially in the wake of November's massacre. Chris will bring us all when "NEW DAY" starts at the top of the hour.

BERMAN: Amazing to think it's been a year. A day that really changed France so much. And then not even knowing then what was going to happen next.

All right, thanks so much, Alisyn Camerota. Nice to see you.

CAMEROTA: You too.

ROMANS: 48 minutes past the hour. The Powerball jackpot sets a new record. But what are your chances of winning really? What if I told you, you have a better chance of being struck by lightning while drowning?

BERMAN: Both?

ROMANS: Yes. At the same time.

BERMAN: And being eaten by a shark.

ROMANS: Yes. I think that might be in there, too.

BERMAN: And dancing footloose?

(LAUGHTER)

ROMANS: We're going to have an EARLY START on your money next.

(COMMERCIAL BREAK)

[05:52:05] BERMAN: The chief justice of Alabama's Supreme Court is ordering all probate judges in that state to stop issuing marriage licenses to same-sex couples. Chief Justice Roy Moore says he is trying to clarify all the confusion, not cause it. Judge Moore claims Alabama probate judges are bound by a Supreme -- a state Supreme Court ruling last March that halts same-sex marriage even though the U.S. Supreme Court has now made same-sex marriage legal across the country.

ROMANS: The man accused of buying the assault rifles used in the San Bernardino terror attack, pleaded 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 trial for the officers charged in the death of Freddie Gray, the defense plans to appeal a crucial pretrial ruling by a Baltimore judge who says that 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. His name is Brian Encinia. He arrested Sandra Bland for he said assaulting him during a traffic stop. She was found dead in her jail 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 -- did not believe the trooper's claim. He made Bland step out of her car so he could conduct a safer traffic investigation. He faces up to a year in jail on the misdemeanor charge.

BERMAN: Bill Cosby will not face criminal charges in Los Angeles. The district attorney's office evaluated two separate allegations of sexual misconduct, from 1965 and 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 woman 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, $760.5 million earned by "Avatar" back in 2009. Even more impressive for the 7th installment of the "Star Wars" saga. "Avatar" was in theaters, John, for seven months.

BERMAN: I see you.

ROMANS: To make that record. The "Force Awakens" reached that milestone in just 20 days.

[05:55:02] Now that blue guy was not in the "Force Awakens." That must be "Avatar."

BERMAN: No, that the was "Avatar."

ROMANS: I never saw --

BERMAN: You never saw it?

ROMANS: Never saw it. Never saw it.

BERMAN: But you have seen "Star Wars" and are going to see it again?

ROMANS: I'm going to see it again. Yes. I have some questions. I have some plot questions I need to iron out. So I need to see it again.

BERMAN: All right. Speaking of people who have the force. Ken Griffey Jr., Mike Piazza. It is strong with them so they are going to the Hall of Fame. They are the class of 2016. In his first year on the ballot, Griffey received the highest percentage of votes ever, 99.3 percent. Just three shy --

ROMANS: Or try.

BERMAN: Try shy of being unanimous. Griffey played 19 seasons in the Majors mostly for the Mariners and Red Sox. Actually all for Mariners and Reds. He had 630 homeruns with makes him sixth all time.

Piazza is a 12-time all-star catcher. He hit 427 homeruns. Many people think the best offensive catcher of all time. This was his fourth try getting into the hall. He was drafted in the 62nd round by the Dodgers back in 1988. The lowest drafted player ever to make it into the Hall of Fame.

ROMANS: That's cool.

BERMAN: Yes, it is cool. All right. As for some players who have been connected to steroids over the years, Barry Bonds and Roger Clemens, they both got about 45 percent of the vote. That is up from last year. A significant jump but still far below the 75 percent needed to get in.

ROMANS: Mike Piazza, best offensive catcher. You're the best offensive maker --

BERMAN: I know. It didn't sound quite right when I said it.

ROMANS: All right. Let's get an EARLY START on your money right now. 56 minutes past hour. More turmoil in China stock market. The trading day in China ending just a half hour after it started, folks. The Shanghai Composite plunged 7 percent at the open. And that rapid selloff shutdown the market. It triggered these automatic circuit breakers designed to give investors a chance to cool down. It's the second time this week -- to give sellers a chance to cool

down. It's the second time this week, trading has been stopped in China. And that is spreading around the world. Fears the world's second largest economy is slowing down, sparking this global selloff. It's spreading to Europe, European markets down hard right now. U.S. futures also down hard.

Folks, you're going to see 200, maybe 300 points down on the Dow when trading opens later this morning.

Macy's slashing more than 4,000 jobs. It's closing 36 stores this spring. The cuts will save the department store about $400 million. They're trying to offset disappointing sales last year. Guess what, Macy's is blaming the warm weather for most of those declines. It lost money on cold weather goods like jackets, hats and scarves. You're going to hear this from more retailers. The retail store was one of the worst performing stocks on the S&P last year. Plunging more than 46 percent.

Powerball players will have to try again. There were no winning jackpot tickets sold in Wednesday's drawing. The jackpot was already worth more than $500 million. Saturday's drawing will be at least $675 million. The largest jackpot in U.S. history.

Your odds of winning are pretty terrible. Terrible. One in 292 million. You have a better chance of drowning while being struck by lightning than winning. But don't mind me. Don't mind me. I'm just trying to give you some perspective there.

BERMAN: All right. This morning, in politics, new questions, new controversy. New barbs over Ted Cruz and his citizenship. Is he eligible to run for president? Donald Trump fanning the flames big time. Now really for the first time Ted Cruz takes the issue on head on. Both candidates speaking to CNN. "NEW DAY" picks up right now.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Everybody tells me he had a joint passport.

WOLF BLITZER, CNN ANCHOR: He had a Canadian birth certificate because he was born in Canada.

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

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: But it's never been tested.

TRUMP: I'd go and seek a declaratory judgment if I was Ted.

CRUZ: This is a nonissue.

JOHN BERMAN, CNN ANCHOR: South Korea launching propaganda broadcasts into North Korea. JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The initial analysis

that's been conducted is not consistent with North Korean claims of a successful hydrogen bomb test.

UNIDENTIFIED MALE: North Korea is moving ever closer to a deliverable nuclear warhead.

UNIDENTIFIED MALE: The gunman went into the office during the editorial meeting.

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: It marks one year since the deadly terror attacks.

UNIDENTIFIED FEMALE: I think France has changed.

UNIDENTIFIED MALE: It was an attack on the very fundamental right of freedom of expression.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Chris Cuomo, Alisyn Camerota and Michaela Pereira.

CHRIS CUOMO, CNN ANCHOR: Good morning, welcome to your NEW DAY. It is Thursday, January 7th, 6:00 in the East. Alisyn and Mik are in New York. We are here in Paris. A city and a country forever changed by the terrorism that started a year ago today. That's when 12 people were killed in a terror attack at the offices of "Charlie Hebdo." And then just two months ago, a series of coordinated attacks targets anyone, murdering 130 and injuring hundreds more.

The investigation into both attacks not over. Authorities believe there may be parts of the terror teams right here in Paris.

We're going to bring you breaking information and the heartbreak of the Parisians, remembering the victims and how things have changed because of the global war on terror, Alisyn.

ALISYN CAMEROTA, CNN ANCHOR: OK. Chris, we'll be with you all morning from there as you bring us interviews about how they are marking it --