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Newt Gingrich Criticizes Ron Paul; North Korea Holds Funeral Services for Kim Jong-il; A Connecticut Homes Burns with Three Children Inside; Arab League Observers Enter Syria; Summing Up the Shopping Season; Under Fire In Syria; Argentina's President Has Cancer; Yemen's Saleh Allowed To Come To U.S.; Mubarak In A Cage And On Trial; Syrian Forces Fire On Protesters; Syria Hiding Slaughter From Monitors?; Flight Aborted By Blown Tires in California; Investing In 2012; What to Do with Your Investments; New Medical Study Challenges FDA over Its Popular Anti-Clotting Drug, Plavix
Aired December 28, 2011 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
ALI VELSHI, CNN ANCHOR: Overwhelming grief on display in the streets of North Korea. Funeral services for the so-called dear leader, Kim Jong-Il.
NEWT GINGRICH, GOP PRESIDENTIAL CANDIDATE: It's baloney. If he wants to defend his negativity, show up in Iowa, 90 minutes face-to- face.
ALINA CHO, CNN ANCHOR (voice-over): With six days to go before the Iowa caucuses, the former House speaker is doing something he promised he wouldn't. Newt Gingrich is going negative.
VELSHI: And new details in a Christmas day tragedy. What caused a fire that killed three children and their grandparents?
CHO: And Iran playing the oil card, threatening to close a key Gulf route if new sanctions are handed down on this AMERICAN MORNING.
(END VIDEO CLIP)
VELSHI: Good morning to you. It is Wednesday, December 28th. Hump day in a week that for some people is very long, because it's between the holidays, and some of us are working. I'm Ali Velshi.
CHO (on-camera): Good morning, everybody. I'm Alina Cho.
Up first this morning, Newt Gingrich on the attack. With six days to go before the Iowa caucuses, the former House speaker has existed the high road and is now in attack mode. Listen to Gingrich in the "The Situation Room" with CNN's Wolf Blitzer challenging Mitt Romney to man up, and Romney was pushed to fire back.
(BEGIN VIDEO CLIP)
GINGRICH: Mitt Romney is the guy running the most ads attacking me, and he's doing it to disingenuous, oh, gee, I don't control all of my former staff and all of my millionaire friends. It's baloney.
If he wants to defend his negativity, show up in Iowa, 90 minutes face-to-face, let the people decide whether or not, in fact, he'll back up what he's been saying and let him back up his moderate record, not conservative record, as governor. And I don't think he'll do it.
MITT ROMNEY, (R) PRESIDENTIAL CANDIDATE: He's running his campaign the way he thinks best. Obviously, the Virginia setting was not the best hour of his campaign.
I think it's more like a -- Lucille ball at the chocolate factory.
ROMNEY: So, I mean, you know, you've got to get it organized.
(END VIDEO CLIP)
CHO: Gingrich didn't hold back when it came to his other challenger in Iowa, Ron Paul. Just listen to this bombshell Gingrich dropped on Wolf Blitzer.
(BEGIN VIDEO CLIP)
GINGRICH: You look at his newsletters and then you look at his ads. His ads are about as accurate as his newsletters.
WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": If he were to get the Republican nomination --
GINGRICH: He won't.
BLITZER: Let's say he were. Could you vote for him?
(END VIDEO CLIP)
CHO: When Wolf Blitzer asked Newt Gingrich if he would vote for Barack Obama over Ron Paul, the former speaker couldn't answer that, calling both choices bad for America. CNN political director Mark Preston live in Des Moines, Iowa this morning. So much for Gingrich keeping the campaign positive, right?
MARK PRESTON, CNN POLITICAL DIRECTOR: Yes. It didn't take very long there, Alina, where Newt Gingrich who pledged to have a positive campaign, to run a positive campaign, to talk about putting the country back on track, now is going negative. In fact, as we just heard, he had very strong words for Mitt Romney, in fact, challenged Mitt Romney to come to Iowa -- Mitt Romney is here, but to debate him, 90 minutes one on one with Newt Gingrich. Of course, Mitt Romney's not going to do that.
He also went after Ron Paul with very, very harsh words, as we heard. Well Ron Paul's campaign fired back. They called Newt Gingrich's comments "childish." They went on to describe Newt Gingrich as a "divisive liberal." So the glove are certainly off, Alina. We are less than a week before the Iowa caucuses. There is so much on the line here for Newt Gingrich. If he does not do well, placed in first, second, or third, the whole idea of Newt Gingrich being the front runner for the Republican nomination will quickly be erased, Alina.
CHO: By the way, Romney's campaign spokesperson was on television last night, right here on CNN, saying that as for that one on one debate, as you know, Mark, he said, well, there have been a dozen debates, and Gingrich and Romney have had plenty of time to spar on that. So I also want to talk a little about Rick Perry making news in Iowa telling voters why he has toughened his stance on abortions. What did he say?
PRESTON: Well, you know, Alina, he is here campaigning again. Again, a critical contest for Rick Perry, the Texas governor, who also needs to do very well. Prior to these comments he made yesterday to a crowd here are in Iowa, he said that, now when it comes to abortion, he opposes all types abortion, including for victims of rape and incest. He says he came to this transformation after seeing a DVD movie and in particular a woman who described a specific situation that was very personal to her. Listen to what Rick Perry said.
(BEGIN VIDEO CLIP)
RICK PERRY, (R) PRESIDENTIAL CANDIDATE: She said, "I am the product of a rape." And she said, "My life is worth it." It was a powerful moment for me.
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PRESTON: There you have Rick Perry, again, explaining how he has now changed his position on abortion. As you said, he has hardened it. That's very important in the state of Iowa where 60 percent of the Republican caucus goers in 2008 describe themselves as evangelical or born again. You know, Alina, could be coincidence, but the fact is, it's that that movie was produced by Mike Huckabee, the former Arkansas governor, who won the 2008 Iowa caucuses. Alina?
CHO: All right, CNN political director Mark Preston. Mark, thank you.
VELSHI: Thousands of apparently hysterical North Koreans lining the streets of a snowy Pyongyang to say good-bye to late dictator Kim Jong-il. Funeral services for the so called Dear Leader took place very early this morning. Memorial services are expected to last for two days. His son, the hand-picked successor, Kim Jong-un, was at the hearse's side as the world looks for sirens of stability. Paula Hancocks is live in Seoul, South Korea. Good morning, Paula.
PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Hello, Ali. This was highly choreographed event. This sort of pomp and ceremony is what North Korea does best, and it new that the rest of the world would be watching this very closely.
What we saw was Kim Kong-un, the supreme leader, as he's being referred to now by state media, walking alongside his father's hearse. He was also accompanied just behind him, his uncle, expected to be his keeper, his regent at the beginning of his reign as he's not even 30 and has very little military and political experience.
And also on the other side the hearse we did see some of the military leadership, the head of the military at the front. So this really was a chance for North Korea to show that they believe there is stability. They believe that this succession has gone according to script.
Of course, it's impossible to know what's happening behind the scenes because all we get to see is what North Korean television is showing us.
Now, we did see tens of thousands of mourners on the streets of Pyongyang, a very snowy Pyongyang. Many of them extremely emotional, many people wailing and weeping and beating their chests as the coffin went by. Of course, it's worth noting further back in the lines of people ling the street there were some who were not emotional and who were just watching proceedings as they carried on. But, of course, this is the kind of regime where you do have to show that you are grieving for a leader like Kim Jong-il. He really created a cult of personality around him. Ali?
VELSHI: Paula Hancocks, thanks. We'll continue to follow the memorial services which continue. Paula Hancocks in Seoul.
CHO: One fatal mistake turns a Connecticut home into a death trap when a fire killed three little girls and their grandparents on Christmas Day. CNN's Deb Feyerick here to tell us what happened. Deb, good morning.
DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning. And you know, you have to imagine this mom standing out there on scaffolding, knowing her three young daughters and elderly parents are inside trying desperately to find a way out. Of the seven people who were in that home Christmas day, only the mom and her friend made it out alive.
FEYERICK: As fire raced through the Victorian home just before dawn, Christmas morning, neighbors frantically called 911.
UNIDENTIFIED FEMALE: What's the emergency?
UNIDENTIFIED FEMALE: A huge fire at the house next door. The whole house is on fire.
UNIDENTIFIED FEMALE: What is the address, ma'am.
UNIDENTIFIED FEMALE: We're at 2241 Shippan Avenue. It's the house next door. There are three kids and a woman. FEYERICK: Trapped inside the Stamford, Connecticut home, two grandparents and their three granddaughters --
UNIDENTIFIED FEMALE: We're calling about a major fire with people in the house.
UNIDENTIFIED FEMALE: We have a fire crew on the way, ma'am.
UNIDENTIFIED FEMALE: Please, come quickly.
FEYERICK: The house was under renovation. It appears fireplace embers placed in an outdoor trash enclosure near the home ignited the blaze. The mom, Madonna Badger, managed to climb out onto scaffolding frantically directing firefighters to the third floor, where she said her children were sleeping.
ANTONIO CONTE, ACTING CHIEF, STAMFORD FIRE DEPARTMENT: The crew pushed through two rooms unable to find the children. They were pushed back by intense heat and flames.
FEYERICK: Grabbing two of the frightened girls, family friend Michael seen here on his Facebook page, reached the second floor.
CONTE: The heat drove them to get separated. It looks like one went back upstairs and another was found with the grandmother.
FEYERICK: The grandfather, Lomer Johnson, had spent Christmas Eve playing Santa at Manhattan's Saks Fifth Avenue. He managed to leave one granddaughter at the back the house and climb onto a roof and then died before he could pull her to safety.
CONTE: Just inside the window he came out of we found one of the young children. I guess there were a pile of books. It looks like she was placed on the books.
FEYERICK: The mother, a successful marketing executive, is said to be in shock. She was taken from the scene sobbing, "My whole life is in that house."
CONTE: When you don't make that rescue, that you failed, and I don't think anybody wants to fail.
FEYERICK: Now, the house was so fragile that firefighters had to lay ladders horizontally and crawl along them to reach and then remove the victims. The home was then torn down. There are questions about fire alarms and smoke detectors. There do not seem to have been any, but it seems the real question is how does a mom and a father from whom she was divorced survive this kind of loss.
CHO: That's right. And, again, just a reminder. A couple things they should know coming out of the story is check your fire alarm to make sure, fire detector.
FEYERICK: Absolutely. CHO: Make sure it's working. And what should they know about how to properly discard embers?
FEYERICK: What's interesting, clearly, the mom and her friend were trying to do the right thing by putting the embers outdoors. What you're supposed to do, put them in a metal tin, douse them, and then put a lid on top of that tin. Does not appear that that was a step they took. They put them in a bag and it was simply too close to the home. Once the fires kicked up, even though they may have seen the ashes and embers were cooling down, they reignited and shot them back up into the house.
CHO: Tragic story. Deb Feyerick, thank very much.
VELSHI: A bloody crackdown continues in Syria, apparently right under the noses of the Arab lead monitors in the country. They're going to visiting two new towns at center of the uprising today. An opposition group says another 39 people killed yesterday, including two children, 14 in the city of Homs as thousands filled the street to protest the al Assad regime. A human rights group is also accusing the Syrian government of hiding hundreds of political detainees from the Arab League observers. They're hiding them, they say, in military sites.
CHO: Iran threatening to stop the flow of oil through the Strait of Hormuz. That's if new sanctions are imposed on its crude exports. A fifth of the world's oil supply travels through there. Talk of the new sanctions going on after Iran's oil ramped up after a U.N. report claimed that Iran has been working towards developing a nuclear weapon.
VELSHI: A very close call in New Mexico. A police squad car crashes into a crowded restaurant. The officer lost control after he was clipped by another car on the highway. The cruiser stopped in front of one of the restaurant's fire pits right next to tanks of propane and kerosene. The restaurant started clearing the place out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We rushed everybody out the back door is what we did, because we didn't know if it was going to blow up.
UNIDENTIFIED FEMALE: We heard that all of this had happened, and all of these people were involved and no one was hurt. We just all said, it was like a Christmas miracle.
(END VIDEO CLIP)
VELSHI: And as they said, incredibly, no one was hurt. The cruiser also damaged three cars in the restaurant's parking lot.
CHO: Still ahead, is Syria hiding the slaughter from Arab League monitors? They're being escorted around by government caretakers. People saying they aren't seeing the real story. VELSHI: Trouble on the tarmac. We'll tell you why dozens of firefighters and rescue crews rushed onto the runway of a Southwest plane in Sacramento.
CHO: And with the holiday season winding down, how's the bottom line adding up for retailers? Was it better or worse than they expected? You're watching AMERICAN MORNING. It's 12 minutes after the hour.
VELSHI: Welcome back. It's 15 minutes after the hour.
The shopping frenzy is mostly over. Crowds are thinning out at the malls, and with most Americans tapped out retailers are dealing mostly with returns and gift card purchases now.
How did the holiday shopping season go? Let's ask retail expert, Marshal Cohen. He's the Chief Industry Analyst at the NPD Group. He's the author of a book, "Buy Me!" Marshal tracks shopping for a living. Marshal, good to have you here.
MARSHAL COHEN, CHIEF INDUSTRY ANALYST, NPD GROUP: Pleasure.
VELSHI: Let's take a look at some of the things that influenced the holiday shopping season this year. First of all, it got off to a strong start, then it looked like it weakened. So retailers offered some steep discounts. There was warm weather. And I'm going to ask you how that plays one way or the other.
There was a strange holiday calendar with Christmas on a Saturday - well, Christmas on a Sunday. And we'll talk in a minute about consumer confidence, which has continued to go up, despite the media wanting to tell you how terrible things are.
Let's start with - with these factors. How did they all affect the season?
COHEN: Basically this year was a really interesting one. We saw some new traditions that were formed.
Remember, the retailer this year decided to get into the 21st Century. So brick and mortar stores -
COHEN: -- decided to open even on Thanksgiving Eve -
COHEN: -- not only the eve, but also on Thanksgiving Day and Thanksgiving Evening.
VELSHI: Right. And that got a younger crowd in.
COHEN: That brought a whole new element of shoppers. VELSHI: Right.
COHEN: So the ones who used to get up at 5:00 in the morning, you know, they were able to shop both early and late.
VELSHI: Right, right. We all heard that (ph) people got up early on that day, those were shopping extremists. Now, by having late night shopping, you got regular folks.
COHEN: We got new consumers to start shopping in these holiday bargains. That brought out the self-gifting shopper.
COHEN: Forty-six percent of consumers bought product for themselves early in the season this year. That changed the dynamics. So now you had a front loaded holiday season. The lull was deeper than normal.
COHEN: Right. So you had an early start. You had a slow second period.
COHEN: The third period, which is crunch time, was actually on par. We saw traffic and shopping behavior pretty normal. Basically, the consumer said, OK, well, I bought for myself, but now I still have to buy gifts for those on the list -
COHEN: -- and they did. They took advantage of many of the sales. Some of the stores said we really do need to put a lot of product on sale. Particularly those that were selling apparel and cold-weather related products.
And also keep in mind, this is a very competitive environment now. Everyone sells electronics. Everyone sells nifty gifties.
COHEN: So retailers were finding that not only were they competing against their traditional competitors, other ones as well.
VELSHI: And you mentioned apparel. The warm weather affected those people who are selling cold weather apparel. I mean, I always think it's silly because I don't know what people do with their sweaters, their gloves and scarves every year that they've got to buy new ones. I have mine for years. But the fact that if it's not cold, people who are self gifting don't buy that stuff.
COHEN: Well, if you didn't lose your glove, you're probably one of those that wear the gloves -
VELSHI: -- I got the strings, correct.
COHEN: OK. But, really, what happens is, many people, it's all about replacement and/or, you know, when you don't know what to get someone, you get them the same kind of traditional gifts.
So this year, because there really weren't any new and exciting items with the exception of a few tablets and you know, e-Readers and some cell phones that came out, some smartphones, there really wasn't a lot of newness out there.
So that means we go back to traditional gifts. Cold weather gifts tend to be those of tradition. Sweaters and gloves and hats and scarves.
VELSHI: Let's talk about the National Retail Federation made a point of saying that the returns were higher this year. Now, the rationale is that every year we buy more stuff online. Returns tend to be higher with that kind of stuff.
Was there something unusual? I mean, Christine, my colleague, Christine Romans was worried that maybe people were having remorse because they spent so much at the front end.
COHEN: It's actually a combination of a lot of things. The consumers gets caught up in the frenzy when you see start seeing deals that are really good, you start getting free shipping and free returns, you take advantage of it.
COHEN: So when you buy so much of this self-gifting process, well what happens if somebody also got you that same gift? Well now you're going to return either the one you bought or the one they bought.
So what you're seeing is a combination of so few new, exciting merchandise, which means we're getting a lot of the same and similar items.
COHEN: Plus the fact that we bought and took advantage of the deals means we're going to sit there and say, wait a minute. Do I really need this? Or, you know what? I spent more than I really had.
COHEN: I do need to return.
VELSHI: Let's talk about the consumer. We talk about the things that make you feel prosperous in life and we've got, you know, housing and we've got your investments.
But ultimately, your job is the most important thing and people have, for whatever reason, been feeling a little bit more confident. We've seen more jobs created. We've seen unemployment drop just a smidge.
But now we're into - let's take a look at consumer confidence over the last six months. We just got some new numbers in this week. You know, after a rough beginning we started off well after a rough middle of the year, for the last five or six months, the consumer is getting more confident. Why?
COHEN: Basically what's happening is the consumer's becoming pretty comfortable with where we are. You know, even when gas crossed $3 a couple of years ago for the first time, it only takes two months for the consumer to sit there and say, you know what, we're getting used to this.
COHEN: I'll make due.
VELSHI: They've readjusted.
COHEN: Exactly. And we saw that the same thing happen when it almost hit $4 a gallon. And we're seeing the same thing with the European debt crisis and even the American debt crisis. We get used to these things and we begin to recognize that we still have to live.
The American consumer, despite the fact that this year there were no tax rebates, there were no, you know, stimulus checks, there were no payroll cuts. There was no jobs program. There isn't even a solution to the debt crisis issue that plagued us in August. You know, this is an issue that the consumers just finally said, you know what, we're going to keep living. We're going to keep spending. The consumer is driving us out of this recession.
VELSHI: All right. Marshal, great to talk to you as always. Marshal Cohen is the Chief Industry Analyst at the NPD Group and author of "Buy Me!" - Alina.
CHO: All right. Great. Thank you, Ali.
It is 20 minutes after the hour. Time to check on the weather now with Rob Marciano at the Weather Center. Hey, Rob. Good morning.
ROB MARCIANO, AMS METEOROLOGIST: Good morning, Alina.
A rough night across the Northeast. Some sporadic power outages and windy conditions. Right now, some video just outside of Philadelphia and Pennsylvania. King of Prussia seeing tremendous amount of rain yesterday. And for a lot of cities across the Northeast and the Midwest, some of the rainfall that we received put them over the top as far as breaking annual rainfall records. From Cincinnati to Columbus, Hartford, Burlington, Vermont, all those cities and much, much more just blowing away some of the records we've seen in years' past.
The rain for the most part has ended. It's been heading cross the Canadian Maritime. And in to replace it finally some colder air. But the colder air is going to be slow to infiltrate the air. You'll see temperatures pretty much peaked right there right now and then slowly dropped throughout the day today.
Hey, a little bit of snow on the radar. We shouldn't see a ton of it, but there are some advisories out on the typical lake effect in the areas from Buffalo, up through Syracuse through Watertown, four to five inches. But the wind is going to be the bigger issue I think, not only for upstate north of New England, but certainly across the major metro areas. New York metros, Philadelphia, Boston, D.C. as well.
So if you're traveling through any of those cities, be aware. Seattle and San Francisco finally also getting some storminess out here. Jet stream (ph) powerful one heading into the Pacific Northwest and Northern California. One of several storms that are lining up after a very dry and fairly quiet December, wrapping up the month and year with a bang across this part of the world.
Sixty-five- to 75-mile-an-hour winds expected over the mountain pass and finally starting to build a depleted snow pack. It's been an awful start to the year across much of the inner mountain west and we're starting to see some of that build now.
Across the midsection of the country, pretty mild mid-day, mid- week temperatures - 52 degrees in Memphis; it will be 36 degrees in Chicago, about where you should be for this time of year, but still it's been fairly mild; 43 degrees, as mentioned, temperatures will be falling throughout the day today and you finally feel some of that winter chill as we wrap up 2011.
VELSHI: I'm adding a word to my meteorologist -
MARCIANO: What is it today, Ali?
VELSHI: "Build a depleted snow pack."
VELSHI: I'm going to add - like yesterday's word was "on the backside of the precip."
MARCIANO: God, Alina - Alina, really, he is paying attention.
CHO: He is.
VELSHI: I'm - I'm learning to listen to you after - I got home yesterday with wet feet. I'm going to pay attention to you every day now. I had wet feet. There's nothing worse than being in leather shoes with wet feet.
CHO: It only took 10 years.
VELSHI: Right. But I'm paying very close attention. On the backside of the precip, we're going to rebuild some of the -
CHO: I can't remember.
VELSHI: -- the snow.
MARCIANO: Some are slower than others.
CHO: That's true.
VELSHI: Yes. Thanks, Rob.
CHO: Absolutely right.
VELSHI: Rob Marciano in the Weather Center.
All right. Still more to come this morning. Syria is being accused of hiding political prisoners and tanks as Arab League observers arrive. People begging the team to follow the gunshots and see where the real slaughter is taking place.
CHO: And how's your 401(k) holding up? Investment ideas that fit your lifestyle for 2012, that's ahead on AMERICAN MORNING.
Twenty-three minutes after the hour.
CHO: Welcome back. "Minding Your Business" this morning.
U.S. markets crawling to the finish line. Three trading sessions to go in the 2011 season. U.S. stock futures are trading slightly higher right now. But yesterday a bit of a snoozer. The Dow dropping just three points and the other major indices moving sideways in a sluggish, low volume session.
Consumer confidence up sharply for the second month in a row and a new survey by CNNMoney.com says economists are feeling more optimistic about the U.S. economy as the year comes to a close. Why? Because they're expecting that the economy grew at a stronger rate in the fourth quarter and chances of a recession are decreasing.
President Obama plans to ask Congress this week to raise the nation's debt ceiling by $1.2 trillion next year. That would put it at $16.4 trillion. The request is expected to be approved by the Democratic-controlled Senate.
Oil prices shooting up again. The price of a barrel of light sweet crude is just about $100 a barrel in electronic trading overseas now. The price of oil shot up more than two percent yesterday after Iran threatened to choke off oil supplies flowing through the Strait of Hormuz.
Same-sex spouses are spending up to $6,000 a year in extra taxes because the federal government doesn't recognize gay marriage. That's according to an analysis by tax specialists conducted by CNNMoney. Same-sex couples would be on equal tax footing as heterosexual couples if they were permitted to file joint tax returns.
Don't forget for the very latest news about your money, check out the all-new CNNMoney.com.
AMERICAN MORNING will be back after this.
VELSHI: Under fire in Syria. Protesters saying Arab League observers are being kept away from the slaughter that is happening only blocks away and they need real help on this AMERICAN MORNING.
CHO: Welcome back to AMERICAN MORNING. It's 32 minutes after the hour. Time for your top stories.
Funeral services for former North Korean leader Kim Jong- Il. Memorial services are still going on right now. His son and successor, Kim Jong-Un was at the side of the hearse as thousands of mourners screamed out in agony.
VELSHI: Argentine President Cristina Fernandez has thyroid cancer. A presidential spokesman said doctors detected the cancer during a medical examination on Thursday and she will undergo surgery next week. They also suggested that her chances of a full recovery are strong.
CHO: Yemen's embattled president will be allowed to come to the U.S. for medical treatment in New York that's according to a senior White House official.
The Obama administration is hoping the move will ease tensions in Yemen, but some analysts say it could trigger more violence. It will weaken America's standing in the Middle East and empower al Qaeda. Ali Abdullah Saleh was badly injured in an attack on his palace in June.
VELSHI: Former Egyptian President Hosni Mubarak on a gurney and in a cage this morning in court. His trial resuming after a three- month delay, he's charged with ordering the killing of hundreds of protesters to squash the revolt that ultimately ended his 30-year reign.
CHO: Back to our top story now, the bloody crackdown in Syria continues this morning apparently right under the noses of Arab League monitors who are now in the country. They will visit two new towns at the center of the uprising today.
According to Reuters, the head of the Arab League mission says the situation in Homs is, quote, "reassuring" so far. But what are they being allowed to see?
Mohammed Jamjoom is monitoring developments live from Cairo this morning. Mohammed, good morning to you. It doesn't appear, though, that these Arab League monitors are able to see all that they want to see? MOHAMMED JAMJOOM, CNN INTERNATIONAL CORRESPONDENT: Good morning, Alina. While the Arab League observers that we've spoken with are optimistic that they're going to be getting unfettered access to all of these flashpoint cities they started visiting yesterday.
Others in Syria especially activists and residents in places like Homs aren't so sure.
JAMJOOM (voice-over): Demonstrators under assault. Syrian security forces firing tear gas in Homs. This on the same day that Arab League observers finally arrived in the flashpoint city.
This video purports to show the head of the mission walking through Homs. Residents approach, show him what appears to be remnants of weapons. The monitors insist they will have free access to any place they want, but activists and residents question that claim.
ABU RAMI, SYRIAN ACTIVIST IN HOMS, SYRIA (via telephone): We need from these observers to move in a different way and nobody is telling them where to go or where to begin. We need them to visit these areas, these painful areas that are damaged.
JAMJOOM: CNN cannot independently verify this video, but it purports to show the monitors in this neighborhood. Residents argue with a man described to us as a government minder pleading for the team members to be taken to other areas.
An unseen voice is heard saying, there are unarmed civilians dying here. Go inside and see for yourself. They are slaughtering us then the sound of gunfire.
Emboldened by the presence of the observers, tens of thousands of protesters gathered in another part of the city for a huge rally. The people demand international protection, they chanted. But chaos would erupt yet again.
This video shows a building on fire. A voice describes how another peaceful demonstration was fired upon. It is as if the Arab League did not come to Homs, says the man. Elsewhere in the country, reports of more violence.
Protesters under attack as they demonstrated in the streets, tear gas being disbursed, security forces opening fire. All at a time when an international mission is hoping to put an end to this sort of violence.
JAMJOOM: Alina, we should mention that a new report by Human Rights Watch said that possibly hundreds of detainees in Syria have been moved to military sites so that they can be hidden from these observers. Meanwhile, the Syrian government on Syrian state TV just a short while ago issued a statement saying that 775 detainees have been released today. It said that these detainees had been involved in recent events, but that the blood of the Syrians were not on their hands -- Alina.
CHO: Mohammed Jamjoom live for us in Cairo. Mohammed, thank you very much.
Meanwhile, we want to tell you about a Southwest Airlines flight that was grounded in Sacramento. It was getting ready to take off to Seattle when its main tires blew out on the runway.
It happened yesterday. Emergency crews rushed on to the scene just as a precaution. All 130 passengers were taken off the plane, a little shaken up, but otherwise OK.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It felt like I blew a tire on the freeway doing 80. Just shook real bad and they stopped the plane.
UNIDENTIFIED MALE: Big bang, thump, thump, thump, plane was kind of listing to the left a little bit, but they brought it to a gentle stop, and, you know, the main problem is, they didn't have the P.A. system turned up loud enough for anybody to hear.
(END VIDEO CLIP)
CHO: Again, nobody was injured, but they're still trying to figure out what happened.
VELSHI: Well, still to come, does your 401(k) need help? I think it does because I've been getting a lot of questions about this. The 2012 investment ideas for your life and your cash and how to reallocate and rebalance your 401(k), we're going to give you some specifics coming up next on AMERICAN MORNING. It's 38 minutes after the hour.
VELSHI: Wake up, New York! Come on. It's 7:40, Wednesday. You had Monday and Tuesday off. It's time to get to work. It's 41 degrees. It's cloudy. It's going to be sunny and 44. Yesterday was a great day to have off because it was just rainy and miserable in the second half of the day. Wake up. Come on.
All right, before you get out of bed though, hold on, because you're probably wondering what to do with your investments. So it's time for me to mind your business.
What is in your 401(k)? Do you have any idea? Do you have a financial plan? Have you ever rebalanced your 401(k)? If you're not prepared in this unpredictable economy, it could cost you. You've got no margin for error.
What's the best place for your hard earned cash in the New Year? Let's ask Matt McCall, he's the president of Penn Financial Group. A good friend of ours.
Matt, you're getting it a lot, I'm getting it a lot. People sending me their portfolio and saying, is this right, this allocation?
So I want to put on the screen the allocation that you generally suggest and I say generally because it's different for different people, but basically two-thirds of it is in stocks.
About 15 percent each in commodities and bonds, and then a little bit in cash. I don't know if that's the number you'd use, about 5 percent, which gives you an opportunity to invest more money in markets go down. Good starting point?
MATT MCCALL, PRESIDENT, PENN FINANCIAL GROUP: I think it's a great starting point, because you look at allocation, about 60 percent and some people may say that's way too aggressive, this type of market.
I'm going to take the other view where the majority of people that are investing, as we talk, 20 to 45 years old, they have a long time frame.
There's a good chance they're not touching the money for 20, 25 years. If the stock market is not higher in 20, 25 years from now we have other issues to be concerned about.
Exactly, you need to believe in the market and to do that, to make money we must be in equities and stocks.
VELSHI: Now, listen, and you can go to money.com. There are quizzes. You can answer questions, a guy like -- Matt, would give you or we can answer and it will tailor this to your own specific needs. If you're substantially older or you've got a lot of other risk in your portfolio you may not want that much in stocks.
MCCALL: Well, absolutely. If you were five years, let's say, to retirement, bringing in no more income that cash level is going to go maybe from 5 percent to 20 percent.
You have a lot more in bonds because you want to bring in some income throughout the year that you want to live off of. So we would tailor that to them. There's also that risk level. Some people just -- I don't care if you're 35 or 65, just don't regress. Especially after the year we had.
MCCALL: People don't want to be in the market.
VELSHI: By the time folks like that decide to get into the market it's because it's been so robust and then you're getting into the back end of it. OK, when you invest, on most cases if we're talking about 401(k)s, your only opportunities are through the mutual funds that are presented.
But if you have an IRA or you have options or you lost your job and you roll it over, you have -- you can invest in anything you want. So of these choices, put it up on the screen.
Of the choices, should the average person be going to mutual funds that have a manager and a fee? Index funds, which mimick indexes, exchange traded funds, which trade like stocks, but their baskets of stocks or individual companies?
MCCALL: When I look at that list, four possibilities, I go right to ETFs, Exchange Trade of Funds. The reason for that is fees are very low. They're very tax friendly. They're what's called passive. So you know exactly what stocks you're investing in.
You could say I want to invest in merging markets, you could pull it up on the internet. These are the stocks I'm investing in. And majority of the time, they're going to do as well as the index if not better.
Where mutual funds, a lot of times, you had the 80-20 rule, 80 percent of your mutual fund managers aren't keeping up with the index that they're tracking and they cost a lot more money.
Then there's individual stocks. Of course, you know, you want to have some individual stocks. Everybody wants to own Apple.
VELSHI: Apple is the one everybody talks about.
MCCALL: And I do own Apple. It's going to go much higher, but as individual investors, if that's not your full-time job, there are 7,000 stocks out there to pick from. It's very difficult to pick the ones that are going to beat the markets.
So I think at that point, you probably want to turn to an adviser or go to CNN Money and figure out, you know, do some research on your own, but make sure you do your due diligence.
VELSHI: But if you're looking at your 401(k), you might have 10 or 20 different mutual funds to pick from, and they all have complicated names and most people can't make sense of them. How do you choose between those?
MCCALL: I think you actually get an adviser. I really do. I hate to say that, but, you know, what I find most about the individual investors, majority of their money is in a 401(k), right?
MCCALL: Put a lot of work into it, take $5,000, and pick penny stocks to try to make money. Where they have $100,000 in the 401(k) and it isn't working. They only look at it when the markets at the top and not the bottom, usually making the wrong decision. VELSHI: Pay some attention to it. All right, other choices, within your 401(k), you'll see things like small cap, large cap. If you are choosing between these, tell me which one you would choose at this point in the market?
MCCALL: Going into 2012, I think large cap.
VELSHI: Big companies?
MCCALL: There are big companies, McDonald's, Wal-Mart, Philip Morris. Companies that make products regardless what happens in a gloomy economy. People are coming out shopping at Wal-Mart, buying a Big Mac. Stay with those companies. What we've seen recently, a lot of these large companies pay nice dividend yields. You bring in possibly another 3 percent, 4 percent per year. S&P is up less than 1 percent. If you have McDonald's that's getting 3.5 percent yield, you're beating the market handedly.
VELSHI: Right. If you have two-thirds of your portfolio in stocks. You don't want it in one kind. You want to mix it up a little bit.
VELSHI: You might want a little bit of small cap, a little bit of growth. What about the idea U.S. companies verses international companies?
MCCALL: For the last five, six years I've been very invested in international companies. I made a switch in the last few months, and looking at landscape going forward, the U.S. is in the best possibility right now. A mess in Europe. A slowdown in China and India. Brazil is actually slowing down a bit too. So the emerging markets are slowing. The international developing markets have an issue. And then here's the U.S. People have forgotten about it for the last few years. It's the best place to put money but we have to be diversified. We have to have international exposure as well.
VELSHI: All of your advice comes with the caveat, you can't put all eggs in one basket.
VELSHI: Matt, good to see you as always.
Matt McCall is the president of Penn Financial Group.
CHO: All right, Ali, thank you very much.
Your morning headlines are next, including why thousands of nursing moms are planning to invade Target stores today.
Plus a health story affecting 40 million Americans. A new medical study is challenging the FDA for its popular anti-clotting drug, Plavix. Information you need to know.
Forty-six minutes after the hour.
CHO: Forty-eight after the hour. Here are your morning headlines.
Three more trading sessions to go in 2011. And after a sluggish session yesterday, the Dow, NASDAQ and S&P 500 futures are all up this morning, suggesting a higher open at the bell.
Syrian forces accused of hiding tanks and detainees from Arab League observers. The military fired on protesters yesterday despite the presence of monitors in the country. An opposition group says another 39 people were killed yesterday, including two children.
The trial of former Egyptian President Hosni Mubarak resuming in Egypt after a three-month delay. Mubarak in court today on a stretcher. He is charged with ordering the killing of hundreds of protesters to squash the revolt that ultimately ended his 30-year reign.
Funeral services for former North Korean leader, Kim Jong-Il. His son and successor, Kim Jong-Un, at the side of the hearse. Memorial services are expected to last two days.
Breast feeding moms expected to storm more than 100 Target stores today in 35 states to take part in a public nurse-in. The protest was organized on Facebook after a Texas employee was accused of harassing a woman from breast-feeding her child in public and allegedly told her to go into a changing room. They even have a logo, a strategically placed Target company's logo.
Fresh video into CNN showing Occupy Des Moines protesters. They're vowing to stage protest candidates at their events and at their individual headquarters. Hundreds of activists from at least 10 states are reportedly on hand.
Next Tuesday night, the country's first real votes and the candidates' first true test takes place at the Iowa caucuses, of course. CNN's special, live, "America's Choice 2012" coverage begins Tuesday night, January 3rd at 7:00 p.m. eastern time.
Keep it on CNN for the best political coverage on TV. Today in "The Situation Room" our Wolf Blitzer one on one with Mitt Romney, and his wife, Ann. That's 4:00 p.m. eastern right here on CNN.
That's the news you need to start your day. AMERICAN MORNING is back after this.
(COMMERCIAL BREAK) CHO: Good morning, Atlanta, Georgia. Wow, what a beautiful day. But it's chilly out there. Sunny and 36. Going up to a high of 52.
Welcome back to AMERICAN MORNING. Today, an "A.M. House Call" that affects 40 million Americans. That is how many people take Plavix, the anti-clotting drug used to prevent heart attacks and strokes. Nearly two years ago, the FDA slapped Plavix with its strongest warning, known as a black box warning. But now a new study in the "Journal of the American Medical Association" says that warning might not be necessary.
Here to explain this is Dr. Ajay Kirtane, a cardiologist at New York Presbyterian Hospital and Columbian University Medical Center.
Thank you for joining us.
So before we get to the new research, I just want to know, what was it about Plavix that prompted this black box warning in the first place?
DR. AJAY KIRTANE, CARDIOLOGIST, NEW YORK PRESBYTERIAN HOSPITAL & COLUMBIA UNIVERSITY MEDICAL CENTER: Plavix is a really interesting drug. When you ingest it and take it in, it's not thinning the blood at all. It requires conversion in the liver to its active form, which then thins the blood. In different patients, that conversion varies. So, for instance, if you or I took Plavix, you might convert a lot of it and I might convert a little bit of it. And when the FDA recognized that based on scientific studies, they were worried that different patients have different effects.
CHO: It has to do with a specific gene that occurs, not in everyone, but in some people, and you have to be tested for it, right?
KIRTANE: That's correct.
CHO: So this new research came out in the most respected medical journal, the "Journal of the American Medical Association," that is basically saying, hey, wait a minute, not so fast. Maybe we should take another look at this. What did it say?
KIRTANE: Basically, when it looked at over 32 studies, 40,000 patients while the gene actually affected the response of the drug, when you looked at the things that Plavix really prevents and has been shown to prevents such as heart attacks and strokes and other events, it really didn't matter whether you had a lot of the gene or a little bit of the gene, the effects seem to be the same.
CHO: Interesting. Even when the decision by the FDA to put this black box warning on Plavix was handed down, it was received pretty skeptically by the American Heart Association and other groups, who basically said there was insufficient evidence. So, at this point, we have this new research coming out, but not a reversal by the FDA. What should doctors be doing?
KIRTANE: I think doctors should continue treating patients with a drug that we know is very effective. And I don't think routine testing is warranted at this time. There was a lot of confusion. Initially, patients asking for tests. This is not something we do routinely. And for a lot of people, they can benefit from this drug.
CHO: Is it because the gene is rare?
KIRTANE: It's because the expression is rare and there's a lot of other things that impact your ability to respond to it.
CHO: Such as.
KIRTANE: Such as whether you have diabetes or have an acute heart attack or other things.
CHO: So if you have those types of things going on in your life, then maybe you should take a closer look, right?
CHO: What if you're a patient and you're on Plavix right now. Is there anything differently you should be doing.
KIRTANE: No, I don't think so, aside from taking reassurance from this study. A lot of people were concerned initially. This really reaffirms that the drug overall is very safe.
CHO: Generally, how closely does the FDA pay attention to, say, new research from the "American Journal" -- the JAMA study?
KIRTANE: I think they're going to take a very hard look at it and see if they want to revise this. They're very proactive in doing that.
CHO: You think that they might?
KIRTANE: I hope so.
CHO: Yes. And how soon will that come if it's going to come?
KIRTANE: It's tough to say. It takes a process. And they'll really analyze all the data together and come up with a recommendation.
CHO: Thank you very much, Dr. Ajay Kirtane. We appreciate it.
KIRTANE: Thanks for having me.
CHO: Your top stories straight ahead, including what is ahead for North Korea as the nation says good-bye to Kim Jong-Il. The leadership now in the hands of an even more mysterious man, his young son.
It's 55 minutes after the hour.