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CNN NEWSROOM

Dow Hits Five-Year High; Steenkamp Mourned at Private Funeral; Obama to Speak On Forced Budget Cuts; Report: Chinese Government Hacking Corporations; Backlash Grows for Drone Pilot Medal; "Big Brother in the Sky"

Aired February 19, 2013 - 10:00   ET

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


CAROL COSTELLO, CNN ANCHOR: Happening now in the NEWSROOM, Oscar Pistorius appears in a South African courtroom while the woman he is charged with killing is laid to rest. Pistorius' lawyers reveal his version of events while Steenkamp's family remembers her life.

(BEGIN VIDEO CLIP)

MIKE STEENKAMP, REEVA STEENKAMP'S UNCLE: There's a space missing inside all the people that she knew, and can't be filled again.

(END VIDEO CLIP)

COSTELLO: You're used to seeing drones target terrorists overseas, now drones like this one could be flying over your house recording your every move. And guess what, your neighbor could be controlling it.

Plus the money behind meteorites, Russians hoping to turn this amazing astronomical event into a money maker. We're live at the CNN NEWSROOM.

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COSTELLO: And good morning, thank you so much for joining me. I'm Carol Costello. We start this hour with breaking news. Wouldn't you know it? The Dow has crossed a five-year high this morning.

So let's head to the New York Stock Exchange to check in with Alison Kosik. The Dow makes no sense to me these days.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Does it ever? So we love these nice round numbers. So when it crosses that 14,000 mark we get all excited. So, yes, just a few minutes ago, the Dow did hit a new five-year high to be precise, 14,041.

The question though, Carol, will that stick? Will we see the Dow actually close once the bell rings today above 14,000? Better yet, will it jump another 130 points to get to the all-time high of 14,164? That really is the number that everybody's going for.

And a lot of traders that I talk to say once you see the Dow kind of get on this roll of getting closer to that 14,164, you may see it gather momentum. At this point, stocks are staying pretty stable. The Dow up 57 points, but we'll keep an eye on it for you.

COSTELLO: But I thought investors were worried about Congress not coming to some agreement over the budget and these draconian budget cuts that were supposed to go into effect on March 1st.

KOSIK: That is always the worry and it is the worry in the back of their minds. There is also the optimism out there that maybe a deal can be cut in the next couple of weeks that will keep those spending cuts from going into effect.

At the same time, there are always these technical levels here on Wall Street that once you see these numbers start going up and getting closer to that record 14,164. You see these numbers kind of gather that momentum.

And maybe it doesn't even make sense, but it's momentum that could push the number to that record level. But don't always expect it to stick because a lot of times it could even hit that record. It could then fall back -- Carol.

COSTELLO: Alison Kosik reporting live from the New York Stock Exchange.

Let's head to South Africa now. In an emotionally wrenching hearing today, a judge refused to downgrade the charge against Olympian Oscar Pistorius. He is now officially charged with a premeditated murder of his girlfriend.

Pistorius wept as his attorneys tried to persuade the court that Reeva Steenkamp's death was a tragic accident. Some key points from Pistorius' affidavit. Pistorius said, "I heard a noised in bathroom. A sense of terror overwhelmed me. It was pitch dark. I thought Reeva was in bed. I fired shots at the toilet door and shouted at Reeve to phone police. When I reached the bed, I realized that Reeva was not in bed. That's when it dawned on me that it could have been Reeva who was in the toilet."

Later Pistorius said, "She died in my arms." Pistorius' bail hearing is over for the day. But we want to get a feel for what went on in that courtroom. Jaco Van Vuuren is a sketch artist that was in the courtroom. He now joins us live on the phone. Good morning.

JACO VAN VUUREN, COURT SKETCH ARTIST (via telephone): Hi, Carol. How are you?

COSTELLO: I'm good. Thank you so much for being with us. What was the most striking moment in court in your mind?

VUUREN: I have to say when they read the statement out and, you know, it came to the part where she died in his arms and he went into tears. He had -- as well -- it was touching. And, you know, the punishment sitting in court doing your job, but still in the knowing of a friend and the incident playing with you in track and field.

COSTELLO: Just to make it clear because your court system is a little different from ours in the United States. The defendant in this case, Oscar Pistorius, he actually read his own affidavit in court explaining to the judge --

VUUREN: No.

COSTELLO: What happened that night?

VUUREN: No, he didn't, but his lawyers did. His affidavit, what happened, the events of the night. And, you know, it was for all South Africans it was extremely emotional, and everybody in the court had lumps in their throats. You know, because to see our big hero, a sport hero like that, you know, from, literally from a world hero to a weeping in the court -- yes. This was quite heartbreaking for all South Africans.

COSTELLO: When the judge decided not to downgrade the charge against him, what was his reaction?

VUUREN: It was all the people in the court. It was a quiet moment because everybody's eyes just went to him. We knew this was bad. This was not what we expected. I think all of us expected a schedule five, and so, you know, that was how it was. But it was a schedule six, and it's the worst you can get.

COSTELLO: So most likely the judge will not grant bail in this case.

VUUREN: In this case, no. You know, the chances are slim. I wouldn't speak for the judge, but schedule six is almost like first class murder. And, you know, so, it was the judge's call, so we have to live by that.

COSTELLO: Jaco Van Vuuren, thank you so much for enlightening us this morning. We appreciate it.

While the Pistorius hearing was underway in Pretoria, Reeva Steenkamp was mourned during a private funeral in her hometown of Port Elizabeth. Later, her uncle broke down while speaking with reporters.

(BEGIN VIDEO CLIP)

MIKE STEENKAMP, REEVA STEENKAMP'S UNCLE: We are today as a family, but there's only one thing missing, it's Reeva.

UNIDENTIFIED MALE: It's OK.

STEENKAMP: We've got together and we're missing one. You know, I think -- we'll get out of it all right. With the Lord's prayers, and what she stood for, abuse against women.

(END VIDEO CLIP)

COSTELLO: The day before Steenkamp was killed, she had come out in support of an event called Black Friday, a nationwide rape awareness day.

On to American politics, his vacation is over, now President Obama is diving right back into the world of Washington politics. This hour, the president is scheduled to speak about the looming sequestration, those enforced budget cuts.

The $85 billion in budget cuts set to take place next Friday unless Congress takes some sort of action. It will affect everything from education to your travel plans. At 10:45 Eastern, in just about 40 minutes, the president will deliver remarks from the White House flanked by emergency responders who will be affected by these budget cuts.

An American cyber security firm has linked one of the world's most prolific groups of computer hackers to the Chinese government. We'll tell you what they found, next.

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COSTELLO: Our new talkback show just about 20 minutes away. We're discussing some very controversial topics today including why Adam Lanza opened fire on Sandy Hook Elementary School.

A new report says he was obsessed with Anders Breivik, a vicious Norwegian serial killer who killed 77 people in 2011.

Our "Talk Back" question today, at least the first one: How should the media report on serial killers? Please join the conversation now, Facebook.com/CarolcNN or tweet me @CarolCNN.

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COSTELLO: A six-year investigation by an American security firm reports it observed a group of hackers called the "Common Crew," stealing information from hundreds of organizations and firms worldwide. It says the hackers were apparently connected to the Chinese government.

CNN's David McKenzie is keeping an eye on this from Beijing. Good morning, David.

DAVID MCKENZIE, CNN INTERNATIONAL CORRESPONDENT: Morning, Carol. Yes, it's quite extraordinary. Most of those 140 companies that Mandian, the Virginia-based company said were attacked were in fact in the U.S., including national security companies like aerospace companies, high-tech, I.T.

They say that this group of hackers, not just tens, but hundreds potentially working out of Shanghai in China saying that they were not just working alone, they were working in cooperation with the Chinese military.

And in fact, under direction from the Chinese government here in Beijing, it's a very serious allegations of terra bytes, hundreds of terra bytes of cooperate espionage, spying done from here in China -- Carol.

COSTELLO: I mean, what can the United States do about this?

MCKENZIE: The United States, particularly senators and congressmen in the committees, which look at this have said for some time now that the next real threat could be a cyber threat. Not necessarily just a nuts and bolts terrorist attack, but attacks coming from state- responsive groups and hacking groups.

Mandian, the U.S. company, said that the way that these attacks happened say that it had to be state-sponsored. The Chinese government for their part is denying it saying that this is rubbish and in fact that they are getting attacked. So certainly tit for tat arguments are going across from China and the U.S. definitely not the last we've heard of this -- Carol.

COSTELLO: David McKenzie, thanks so much, reporting live from Beijing.

There's a big concern right now, could we soon see our skies filled with drones? Not just military and police aircraft, but drones that happen to belong to your neighbor? And your neighbor could fly those drones over your house. I will ask one outspoken drone owner why he needs one.

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COSTELLO: It's 17 minutes past the hour. Time to check our top stories, less than a half hour from now, President Obama will be speaking from the White House about forced budget cut also known as "sequestration." Unless Congress has an agreement before next Friday, there will be $85 billion in budget cuts affecting everything from education to defense to your travel plans.

The Oscar-nominated film Lincoln has inspired change in Mississippi. After watching the movie, two men in Mississippi discovered Mississippi was actually the last state, which had not official ratified the 13th Amendment, which abolished slavery. State lawmakers approved in 1995, but did not take the final steps to make it official. They finally did that on February 7th.

The meteor that streaked through the Russian sky could make some people rich, offers of several thousand dollars from the fragments already coming in. Many people now searching for chunks of space rock as ads for would be buyers fill up the Internet.

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COSTELLO: There is now a White House petition against a new medal for drone pilots. The military Order of the Purple Heart wants the Obama administration to lower the rank of that proposed drone medal. The goal, make medals given to soldiers who served on the ground and in the line of fire worth more. The Purple Heart group finds this new medal insulting.

Let's talk about domestic drones, or as some say, Big Brother in the sky. Yes, some local police departments use drones and yes, some lawmakers are trying to restrict their use.

But Anthony Cumia, part of "Opie and Anthony" on Sirius radio, is way pro drone. He has his own drone and he uses it frequently with spectacular results. This is Anthony's drone. I think you saw it take off. It's equipped with two cameras.

Here it's flying above Long Island, New York after the blizzard hit two weeks ago. Now you don't get to see these kinds of pictures often. They are stunning and gorgeous. Still, it is a drone and it can get a lot closer to the homes on Long Island. It's all up to the operator.

In this case, Anthony Cumia, and Anthony join us now from New York. Good morning.

ANTHONY CUMIA, CO-HOST, "OPIE AND ANTHONY": Hi. Good morning.

COSTELLO: First of all, tell us how you operate your drone. Do you have a special room in your house, how does that work?

CUMIA: Well, it can be remotely operated with regular radio control unit that you'd see people using with a toy model airplanes and whatnot, or it can be autonomously programmed to go to a preset location, carry out whatever you want it to do, in my case, it's photography, and then return to where it came from.

Either way you can view where it's going on or what it's doing through a monitor system on the drone itself. And has a video down link that I could watch as its cruising through the neighborhood or wherever I deem to send it.

COSTELLO: So is it difficult to operate?

CUMIA: Not -- it's not easy, but it's not very hard. With a few hundred dollars you could get one to practice on before you to want send a few thousand dollars up on six propellers. It's -- it's relatively simple. It's more than a toy, but less than you would see something that would be firing hellfire missiles from.

COSTELLO: Thank goodness. You're part of "Opie and Anthony," which means you're a shock jock. And that you have a drone that can fly over cities and maybe fly low over homes kind of like makes me nervous.

CUMIA: Well, yes. I guess my neighbors probably wondering what I'm doing. But there's still an expectation of privacy there that I'm respecting, and it is the law. You can't just hover in front of people's windows and start taking video.

From the air, I love the technology, I love video, and to be able to get these angles that you could never get from a hand held camera is really amazing. And that it is available to civilians at this point is -- it's actually exciting to take video from something that's so high up.

I've gone to the world's fairgrounds and taken video of inside the observation decks up there here in New York. It's just fascinating to be able to get this up close video from pretty inaccessible places.

COSTELLO: It's just amazing. Apparently you can fly these things legally up to 400 feet. So you're well within the bounds of the law. Some people might think, I don't like this whole scene. It's just too easy to spy on me with this technology available to the everyday guy on the street. At some point, do you think that drones should be regulated by local, state governments, the feds?

CUMIA: I'm the last person to say anything for regulation and legislation, but I can see these things getting into some situations that might be a little dangerous. The potential for evil use is definitely out there. But it shouldn't interfere with people who to want use it for surveying their land if they have a lot of land.

Obviously law enforcement or private security firms might to want use these for surveillance of some sort and videographers, I mean, like I said, it's a great, exciting way to get angles on video. The opportunity is there for some not too legal and ethical things to do, but again, that's human nature, isn't it?

COSTELLO: It's human nature. That's why it scares so many people. I suspect one day that lawmakers will, I don't know, make -- at least have rules and regulations in place as to how you can use your drone specifically.

CUMIA: Yes, that seems to be what they do best.

COSTELLO: Sometimes. Anthony Cumia of "Opie and Anthony," thank you so much for sharing.

CUMIA: Thank you.

COSTELLO: Coming up next, our special "Talk Back" show: hot topics and conversation, and of course, your comments. First question: How should the media report on serial killers?

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