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AROUND THE WORLD

Ice Floes Rescues; Dow and S&P At Record Highs; North Korea Rockets on Standby; Pope Francis' First Good Friday; Picasso Piece Sold at Record Price

Aired March 29, 2013 - 12:00   ET

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


ASHLEIGH BANFIELD, CNN ANCHOR: Have gone on to college. And you can learn more about Twanda's (ph) work. You can also nominate somebody who's doing his or her part to make the world better place for all of us. Just go to cnnheroes.com. You can do that any time you like, like now. Or you should wait because AROUND THE WORLD is coming up right now.

SUZANNE MALVEAUX, CNN ANCHOR: Welcome to AROUND THE WORLD. I'm Suzanne Malveaux.

MICHAEL HOLMES, CNN ANCHOR: And I'm Michael Holmes. Like to welcome our viewers both here in the United States and right around the world.

MALVEAUX: Happy Friday.

HOLMES: Happy Friday.

MALVEAUX: Yes, Friday.

HOLMES: Yes.

MALVEAUX: We begin with North Korea. That is where dictator Kim Jong- un delivering a new ominous warning to the United States. In a meeting with military leaders today, Kim said it is time to, quote, settle accounts with the U.S. imperialists.

HOLMES: He ordered rockets aimed at U.S. targets to be put on standby in case, they say, the U.S. provokes North Korea. Kim also revealed exactly what target he has in mind. We've got that coming up

MALVEAUX: And in Rome this hour, Pope Francis will preside over his first Good Friday service. It's being held at St. Peter's Basilica. During his short time as pope, he has already set a different tone than his predecessors.

HOLMES: And those are live pictures there we're looking at coming from the Vatican. Just yesterday the pope broke Holy Thursday tradition by washing the feet of a dozen prisoners, including one woman who happened to be Muslim.

MALVEAUX: And in Pakistan, the Taliban, they are claiming responsibility for a deadly suicide bombing near the U.S. consulate in Peshawar today. The attack killed 10 people, wounded 31 others. Police say a suicide bomber on a motorcycle drove up to a security checkpoint and set off 22 pounds of explosives.

HOLMES: Yes, no one from the consulate, fortunately, was hurt in that bombing.

We're going to start with a massive rescue operation that is just now wrapping up off the coast of Latvia. Had more than 200 people stranded on two ice floes.

MALVEAUX: And it's amazing. These are sheets of ice. They broke off. Started drifting away from the coast. Rescue crews say that the rough seas made it really hard to actually reach these folks. And we're actually hearing that the operation involves some boats and helicopters as well.

Chad Myers filling us in on all of this.

You know, strangely enough, we've both been to Latvia. NATO Summit, you know, it's held there every year. It's a cold -- it's a very chilly place. What happened?

CHAD MYERS, AMS METEOROLOGIST: Yes, let me -- let me set the scene. It's been 10 below Celsius or 10 above Fahrenheit for the past three weeks. Today, it gets to 32. The winds are blowing out of the south. Everybody wants to go party because it's 32 degrees.

HOLMES: Balmy.

MALVEAUX: Yes.

MYERS: So they walk out on the ice and they drill big holes to go fishing. How great is it you can catch like salt water fish without a boat just by walking out there.

HOLMES: Yes.

MALVEAUX: Wow.

MYERS: Well, the problem is, the wind was from the south. And they were on a north-facing beach. And when the wind blew, it broke the ice off and pushed it away.

Let me show you. I have a picture of this. This is a high-res satellite picture from one of our machines. We're going to zoom right into the place, as close as we can get. And you'll be able to see a crack between where the ice is and the beach.

HOLMES: Oh, yes.

MYERS: See that dark line right there? That's water. That's the water surface that broke away from the coast and they couldn't walk back to the beach.

MALVEAUX: Wow.

MYERS: They couldn't walk back to where they came from. They had to take boats and helicopters. There was still one guy out there about an hour ago, one, because he wouldn't get on a helicopter. He said, I'll wait for a boat.

HOLMES: Yes.

MALVEAUX: Really?

MYERS: Or, I'll wait for the winds to shift to the north and it will blow this piece of ice back towards shore.

HOLMES: Well, how do they develop? I mean, is it just the sea meets the land there and it just gets so cold and everything just freezes? Is it that simple?

MYERS: I was talking to CNN International and they said, when you go there, and you go to the beach, you can't tell where the beach stops and the ocean starts because it's just one solid sheet of ice.

HOLMES: Wow.

MYERS: You know, I mean it's Norway, Sweden. It's that parallel.

MALVEAUX: Yes.

MYERS: You know we're not talking about southern Italy. This is cold --

MALVEAUX: And, Chad, how thick is the ice? I mean is it dangerous to --

MYERS: Oh, no, it would be three feet trick where they were trying -- it would be harder to drill through it just to get the thing. So they find small cracks so they can -- the ice is maybe only about a foot deep and then they can drill through that and fish through that.

MALVEAUX: Yes, (INAUDIBLE), OK.

HOLMES: Well, you laugh now because it all ended well. I mean dozens of people.

MYERS: You know, it happens on Lake St. Clair, Lake Erie all the time. People go out there. They think it's going to fish, be OK. The winds shift directions, the ice cracks and goes (ph) off and they have to (INAUDIBLE).

MALVEAUX: And so they're prepared for this kind of thing. Yes.

MYERS: It just happens.

HOLMES: Well, I'm glad they're all well.

MYERS: That's right.

HOLMES: Hope they got some fish. OK, good to see you.

MYERS: Thank you.

MALVEAUX: Thank you, Chad. MYERS: Fish for Good Friday.

HOLMES: Exactly.

All right, well the stock markets, they're closed for Good Friday. But before the traders headed out for the long weekend, they did manage to push the S&P higher and actually set a record.

MALVEAUX: So, first -- for the first time in a while, you can actually take a look at the retirement fund, yours. And, you know, it might make you a little bit happy here. Smile. Zain Asher showing us what is actually driving this.

(BEGIN VIDEOTAPE)

ZAIN ASHER, CNN CORRESPONDENT (voice-over): Finally, Wall Street wins.

JAKE TAPPER, CNN: We begin with breaking news on Wall Street.

ASHER: The S&P topping its peak held six years ago. The index, along with the Dow and Nasdaq, are sprinting, finishing a first quarter we've all been waiting for.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I want to be very clear here. The U.S. is moving in the right direction. This week, a lot of economists in the U.S. actually raised their forecast for first quarter GDP. We talk a lot about what happened in the fourth quarter, but the first quarter is looking like it's going to be stronger.

ASHER: The Dow up 11 percent since the start of the year. The S&P up 10 percent. The Nasdaq charging ahead eight. Have you opened up your 401(k) lately? One of the brightest spots in our economy, housing. Prices are up, sales are up, mortgage rates are low and we're buying.

STAN HUMPHRIES, CHIEF ECONOMIST, ZILLOW: 2013 should be a very good year for the housing market. And we expect the spring selling season to be quite robust. We've got still historically low mortgage rates with a 30-year fixed being well below 4 percent.

ASHER: Optimists say it's all a sign things are getting better. People are more confident, buying more, investing more, investing in Netflix. The Internet movie site going gangbusters and leading the S&P. If you invested in the company on January 1st, you've doubled your money. The stock is up almost 107 percent.

JORIS EVERS, NETFLIX SPOKESMAN: We describe ourselves as an Internet television network. We program Netflix for our members. We really know what our members love to watch. So we licensed the content that we know that our members are going to love to watch.

ASHER: Other big movers this year, big box store Best Buy, up 87 percent. Hewlett-Packard, up 68 percent.

So what's next? Big bank strategist David Kelly at JP Morgan Chase tells us to enjoy the ride. He expects stocks to return between 6 percent and 8 percent a year for the next five years. (END VIDEOTAPE)

HOLMES: So, Zain joins us now to tell a bit more about this. The stock market, obviously, in pretty good shape. But, you know, what's interesting is, as it keeps going up and up, there are still some fundamental problems in the economy, right?

ASHER: Yes, Michael, that's absolutely right. So even though things in stocks do appear to be good, right, unemployment does remain stubbornly high, 7.7 percent. That means 12 million Americans are still out of work. So it's pretty hard for a lot of people to be excited about this rally when they haven't been able to get a job for months. And also, while the economy is growing, it's doing so ever so slowing. Plus, those forced budget cuts are still on the horizon.

Michael.

MALVEAUX: Do we know, Zain, anything about 401(k)s? How's that impacting folks who are just looking at the retirement funds.

ASHER: Well, people's 401(k)s are certainly shooting up. The S&P 500, the fact that it reached a record high yesterday, it's a better indicator because its 500 stocks, as opposed to the Dow's 30. So definitely people's 401(k)s getting a big boost from that.

Suzanne.

HOLMES: All right. Yes, Zain, thanks for that. Good news, I suppose, if you have retirement funds. If your unemployment, you're waiting for things to turn around.

MALVEAUX: Yes, still -- still rough going. Yes.

HOLMES: Exactly.

Let's go to North Korea now. Tensions there continuing to escalate after dictator Kim Jong-un put his rockets on standby to fire at U.S. targets. He says his country will be ready to launch an attack if provoked.

MALVEAUX: And he also laid out in detail the U.S. targets that he would hit first. Well, Jim Clancy's got the details.

(BEGIN VIDEOTAPE)

JIM CLANCY, CNN INTERNATIONAL CORRESPONDENT (voice-over): North Korea's young leader, with his military men on Friday, declaring it might be time to go to war with the United States, posing next to a map that drew lines to places like Hawaii and California. "The time has come to settle accounts with the U.S. imperialists," the North Korean leader Kim Jong-un was quoted as saying, listing U.S. bases in South Korea and Guam and declaring his military should mercilessly strike the U.S. mainland.

North Korean television broadcast marshal music with dramatic scenes of its million man army. The fourth largest in the world in action. It was theatrical, staged, and to some just a little too scary.

China's foreign ministry suggested now might be a good time for everyone to turn down the temperature.

HONG LEI, CHINESE FOREIGN MINISTRY SPOKESMAN (through translator): Maintaining peace and stability of the Korean peninsula, as well as northeast Asia, serves the common interest of all relevant parties. And it is also a joint responsibility. We hope relevant parties can work together to turn around the tense situation in the region.

CLANCY: Clearly, China considers the U.S. decision to send its nuclear capable B-52 on B-2 aircraft on practice bombing runs over South Korea as unhelpful. The U.S. insists it's just part of annual military exercises. But Beijing also seemed to send a message to Pyongyang that enough was enough. The message had little immediate effect.

Friday, North Korea staged a massive rally in Pyongyang, whipping up national fervor. Tens of thousands of soldiers and civilians marched, pledging their determination to fight for the regime and defend their national honor.

Amid the blistering propaganda, Kim Jong-un's Friday declaration had some fine print. All the talk about all-out war with America was conditioned on what they called a reckless provocation on North Korea itself.

CLANCY (on camera): Former U.S. Secretary of State Colin Powell, was in Seoul this week and he pointed out that any North Korean attack on South Korea, much less the United States, would provoke what he termed a regime-ending response.

It's also worth noting that regime preservation has always been North Korea and the Kim dynasty's paramount goal.

Jim Clancy, CNN, Seoul.

(END VIDEOTAPE)

HOLMES: So just how serious are these threats from North Korean Leader Kim Jong-un?

MALVEAUX: We're actually going to talk to a former U.S. diplomat who has a unique insight into this isolated regime. Christopher Hill led the U.S. delegation to the six-party nuclear talks with North Korea several years ago. Well, he's going to weigh in on the motivation behind Kim Jong-un's recent threats. That coming up.

HOLMES: And here's more of what we're working on this hour for AROUND THE WORLD.

MALVEAUX: It is something a pope has never done before. Washing the feet of a woman. Pope Francis continuing to break tradition.

HOLMES: Plus, toy guns that look so real, they're being used in robberies. This is a growing trend in Costa Rica. MALVEAUX: And, he defended Saddam Hussein, but this man, he's got no legal qualifications. How a fake lawyer slipped through the system and conned the notorious clients out of a lot of money.

(COMMERCIAL BREAK)

HOLMES: Here are some of the stories making news around the world right now.

Let's start in South Africa, where former President Nelson Mandela is said to be making steady progress as he undergoes treatment for a lung infection.

MALVEAUX: That is good news. A statement from the presidential office says Mandela is in good spirits and enjoyed a full breakfast this morning. This is the second time this month that the former leader has been admitted to the hospital.

HOLMES: In Japan, authorities have arrested a man accused of putting acid in a woman's shoes in an attempt to kill her. This alleged attack caused the woman to develop gangrene. Doctors, in fact, had to remove the tips of five of her toes.

MALVEAUX: So the man, he's denying that he tried to kill her. Police believe they had -- he had romantic feelings for her. Well, according to Japanese media, they both worked at the same company in a lab.

HOLMES: Extraordinary story

Well, Christians around the world are marking Good Friday, of course. That's when they believe Jesus died on the cross before being resurrected.

MALVEAUX: So, of course, many have gathered in Jerusalem where they walk the Via Dolorosa towards Jesus' burial place. The pilgrimage is known as "The Way of the Cross."

HOLMES: Yes, it's a very traditional thing to do.

In the Philippines, about two dozen men, well, they were nailed onto crosses. They go a little bit further there in the Philippines to reenact Jesus' crucifixion, considered an extreme display of devotion. No kidding.

MALVEAUX: And in the Vatican, of course, the pope presiding over his first Good Friday service. Our own Jim Bitterman joining us from Rome.

So, Jim, tell us how it's different this go-around. We know that this is a pope who likes to buck tradition.

JIM BITTERMAN, CNN CORRESPONDENT: Well, in fact, we just saw that service get under way here. It is going to be going for a couple of hours as they relate to the passages from the passion of Christ.

That will be going on several hours and then the pope is going to go over to the Coliseum on the other side of Rome, and he is going to do the stations of the cross, the 14 stations of the cross, a very symbolic repetition of what Christians believe took place 2,000 years ago when Christ was taken through the streets of Jerusalem then crucified and was laid into a tomb.

What's different? I think we are seeing a pope that's very much dispensed with the formality. When he entered the church this afternoon, there was no praying that was going on. There was no singing that was going on. It was a very silent processional into St. Peter's Basilica, a little bit different than what one would have expected.

This is, of course, a very solemn day, Good Friday. They are not really celebrating a mass here. They are, in fact -- it's a service.

There will be communion that will be served, but in fact, it will be communion wafers that were consecrated yesterday. It is traditional in the Catholic Church not to have communion -- not to have a -- celebrate a mass on Good Friday.

So we'll see the pope -- this is the reading of the passion going on right now. We will see the pope here assisting during this, and then later on at the Coliseum, making the stations of the cross.

HOLMES: Jim, yesterday, of course, the pope made news, again being unorthodox in a way. The tradition was to wash the feet of elderly priests. He didn't do that. He went and washed the feet of young prisoners, not only that, a woman, a Muslim.

BITTERMAN: Right, two women, in fact, but there was one Muslim among them.

And, you know, I think this is what we have seen the last 10 days or so that the pope has been pope.

The fact is, he is making a lot of changes. He is simplifying things, but also the message that keeps coming across in a number of his homilies is to his clergy, in which he is saying, get out, get out of the churches, get out into the streets, get out to where the people are and where the poor are, minister unto the poor.

He told journalists when he met with the media right after his election, he said that would suit him better than to see a poor church that ministered unto the poor.

So this is a message he repeated again and again and again, and one can only think this is going to be a major theme of his papacy.

HOLMES: All right, Jim, thanks so much. Jim Bitterman, there in Rome.

MALVEAUX: And this is a damaged piece of art, but it is rumored to be sold for $155 million, if you can believe that.

That is after somebody put their elbow through the famous Picasso painting.

(COMMERCIAL BREAK)

HOLMES: All right, check this out. One of Picasso's most celebrated paintings may have sold for the most a U.S. collector has ever paid for art, $155 million.

MALVEAUX: You've got that sitting around?

HOLMES: Oh, yeah, absolutely. I'll write you a check.

MALVEAUX: Alina Cho says that this is the same Picasso that the casino king, Steve Wynn, accidentally put his elbow through just last month.

HOLMES: (Inaudible).

MALVEAUX: Check it out.

(BEGIN VIDEO TAPE)

ALINA CHO, CNN CORRESPONDENT: This is the tale of an art sale between two giants.

Although there is still some mystery surrounding it, it is widely believed casino king, Steve Wynn, has sold one of Picasso's most famous painting to hedge-fund king, Steve Cohen, for a record $155 million. That's the most any U.S. collector has ever paid for a piece of art.

It's a painting of Picasso's long-time mistress, Marie-Therese Walter. The title is "La Reve," French for "The Dream."

AMY CAPPELLAZZO, CHRISTIE'S AUCTION HOUSE: It is an extremely famous Picasso from one of his most celebrated periods, 1932. It is a picture of possession, of passion, of love.

CHO: But "The Dream" is not without its flaws.

Wynn originally agreed to sell Cohen the picture back in 2006, but just a day after the deal was done, Wynn famously put his elbow through it creating a six-inch tear.

STEVE WYNN, HOTEL OWNDER: I turned to the right and caught her right on the arm and poked a hole in the picture the size of the end of my thumb.

We stood there in shock. I can't believe I've done it. Oh, no! Oh, no!

CHO: The restoration took months, but Cohen wanted it anyway and ultimately paid $16 million more for it, post-tear.

BEVERLY SCHREIBER JACOBY, BSJ FINE ART: We stood there looking for it, and it is so infinitesimal. It was so well-restored.

CHO: I think people are still sort of fixated on the fact that there's damage. CAPPELLAZZO: Well, the thing -- it's interesting. I think that, if you -- I mean, it was very cinematic to think of someone putting an elbow through a painting.

If I were the age of "La Reve," I would probably have some things wrong with me, too.

CHO: It's not just price and the tear. The timing of the sale is what's getting so much attention, coming just as Cohen's hedge fund, SAC Capital, settles two insider-trading lawsuits, paying the federal government a record $616 million.

The headline? "Cohen settles wrongdoing, buys himself extravagant gift, a masterpiece."

Why would anyone pay upwards of $155 million for a single piece of art, even one that was so famously damaged?

Art experts say that's because the very best of the best will appreciate the most.

One likened it to buying a penthouse versus a second-floor apartment. The house on top will always go for more.

A masterpiece is a masterpiece. "La Reve" will always hold its place in history and have its own place in Cohen's $1 billion art collection until he decides to sell it for what could another record price.

Alina Cho, CNN, New York.

(END VIDEOTAPE)

MALVEAUX: You think he will take better care of that one ...

HOLMES: I was going to say, as he long as he doesn't ...

MALVEAUX: Or put the other elbow through that one?

HOLMES: I'm glad it was Wynn who did it and not one of his workers. It could have been ugly.

MALVEAUX: In the U.S., thousands of people calling out Victoria's Secret's lingerie stores.

Here's why. They are upset about a new line for teens and tweens called "Bright Young Things."

HOLMES: Yeah, I know. I don't get this. I'm sorry.

Outraged parents say it's way too mature for that age group.

You can make up your own mind. Tell us what you think.

MALVEAUX: And you can tweet me, @SuzanneMalveaux.

We will talk about one of those who is very concerned, one of the parents, up at the next hour.

HOLMES: And a new picture of North Korea's leader surrounded by his generals, but look in the background. It's the map there that has everyone talking.

The unpredictability of Kim Jong-un, that's coming up next.

(COMMERCIAL BREAK)

MALVEAUX: Welcome back to AROUND THE WORLD to our viewers around the world and here in the United States as well.

Right now to Tanzania, rescuers are searching for dozens of missing people after a 16-story building collapsed. This was in Dar es Salaam, killing at least four people. Five children are among the missing.

The building was under construction when it collapsed.

HOLMES: Yeah, look at the damage there.

Witnesses actually thought there was an earthquake and then they heard the screaming. They described seeing the entire building just falling in on itself.

In Pakistan, another insulting shoe-throwing incident, a bystander throwing a shoe at former president, Pervez Musharraf. You can see it outlined in a little red circle. We're going to show it to you there.

It's not clear, though, from the pictures whether it actually hit. You see it there.

MALVEAUX: Yeah, and it's considered quite an insult.

Musharraf was headed into court for a bail-extension hearing. The judges granted a 15-day extension to prevent his arrest in at least three different pending court cases.

Now, he is accused of illegally deposing dozens of judges and not doing enough to protect a former prime minister from assassination

HOLMES: Now, if you thought your taxes were high, check this out.

How would you like to be left with 25 percent of your salary after the tax man has had his way?

Well, in France, President Francois Hollande wanted to tax big- earners, those making more than a million euros, 75 percent.

MALVEAUX: And because there was such an outcry over this, the parliament rejected that, flat-out, but the president is now trying to get around that.