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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Secretary Kerry Speaks in Seoul; North Korea's Nuclear Capabilities; Senate Debates Gun Control; Record Highs For Dow and S&P 500; Base Brawl; Tiger Lurking at Masters; Tornado Watches Extended for NC, VA; Best Time to Buy a House for First-Time Buyers

Aired April 12, 2013 - 06:00   ET

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


(BEGIN LIVE FEED)

JOHN KERRY, U.S. SECRETARY OF STATE: In the visit that we had in Washington last week and now today, we have covered a great deal of territory. And I want to reiterate, perhaps most important thing with respect to the immediate tensions that exist here in this region, neither the United States nor the Republic of Korea nor the international community, we are all united in the fact that North Korea will not be accepted as a nuclear power.

The rhetoric that we're hearing from North Korea is simply unacceptable by any standard. And I am here to make it clear today, on behalf of President Obama, and the citizens of the United States, and our bilateral security agreement that the United States will, if need, defend our allies and defend ourselves.

I also want to emphasize, very much in keeping with the conversation that I had a little while ago with President Park. President Park was elected with a different vision for the possibilities of peace and we honor that vision. She has expressed an articulate view about trust politic.

And we hope that that vision is the one that actually will take hold here. We want to emphasize that the real goal should not be reinforcing the fact that we will defend our allies, which we will.

But it should be emphasizing for everybody the possibilities of peace, the possibilities of reunification, the possibilities of a very different future for the people of the Republic of Korea, and ultimately for the DPRK.

The United States and the Republican of Korea both want to see a peaceful Korean peninsula and that means it must be free of nuclear weapons. We are committed to working with the Republic of Korea and the other six-party partners in ort to get the North to live up to obligations that the North freely accepted, and adopted.

And we are prepared to work with the conviction that relations between the north and the south can improve, and they can improve very quickly, and the world would be much better off if the leaders of the north and one leader in particular, would make the right decisions.

So I want to emphasize, that's our vision and that's the vision that we think the people of the world share. The foreign minister and I also continued our conversation from last week about a number of bilateral issues including our civil nuclear cooperation, furthering --

(END LIVE FEED)

JOHN BERMAN, CNN ANCHOR: You've been watching Secretary of State John Kerry delivering remarks in Seoul, right in the middle of this nuclear crisis right now. We believe that the North Koreans are poised to test one of their missiles.

U.S. intelligence sources also saying they believe that perhaps the North Koreans have the capabilities now to put some kind of nuclear weapon on top of one of these missiles. That's the context where John Kerry is speaking right now.

And he said a few things of real note here. Number one, he said that North Korea will not be accepted as a nuclear power that language very strong. He also said that the current rhetoric coming from the North Koreans is unacceptable, and thirdly, he said that the U.S. and the South Koreans will defend themselves, and the U.S. will defend its allies if necessary.

CHRISTINE ROMANS, CNN ANCHOR: He also did mention a pathway to peace and reunification on the peninsula. But he said that there can be no peace on the Korean Peninsula if there are nuclear weapons. A nuclear North Korea will not be allowed.

Let's bring in Jim Clancy. He is live from Seoul this morning. Jim, you're listening to these remarks, I assume, as well. What are you hearing here from the secretary?

JIM CLANCY, CNN CORRESPONDENT: What I'm hearing, or maybe what I'm not hearing, is that after weeks of all of this coming from Kim Jong- Un. Did you hear his name? Did you hear him mentioned in that press conference? No. He's not mentioned at all.

But he did call in a direct reference here, he said to the leaders in particular, and particularly one leader, make the right decision and he's really there calling for him to back down, and to come to the table, to start discussions.

Now, in his talks with President Park Geun-Hye, it is believed that she has assured the president, I know she assured the NATO secretary- general. That she was open to such talks to turn down the temperature on the peninsula. So there's a take-away from all of this.

The U.S. is sending out a message here. You know, one of the things, and he started it all off, he held up South Korea saying it had become an economic and a humanitarian force in the international community around the world, drawing a contrast there to the state of Pyongyang today -- John.

BERMAN: Jim, just quickly, do you think that was an off-ramp there when he said the relations and the situation can improve quickly if that nameless leader changes his rhetoric? CLANCY: Absolutely. What they're trying to do is take away, you know, control of the situation, and say, look, we've reached this point. We think that the rhetoric is wrong. We think your declarations of going ahead with the nuclear ministry is wrong.

But we think the right thing for you to do, the right choice for you to make, is to sit down, and talk with the people on the peninsula, and beyond, and sort this out in a peaceful manner, and turn down the temperature on the Korean Peninsula.

BERMAN: All right, Jim Clancy for us this morning. Thank you, Jim. Jim live in Seoul, South Korea, again, where the secretary of state is visiting right now.

ROMANS: Now let's go to Pentagon correspondent Chris Lawrence. Chris, Kerry said we will not accept North Korea as a nuclear power, but overnight we heard officials saying North Korea already has some nuclear capability. The secretary of state saying there cannot be peace on the peninsula if North Korea continues to move toward being a nuclear power.

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: That's right. And they are moving towards being a nuclear power, if they're not already there, Christine. You had this assessment, this military assessment by the Defense Intelligence Agency that was cited by a congressman in an opening hearing yesterday that basically concluded that they thought, yes, North Korea has nuclear weapons capable of being used on a ballistic missile.

Now later officials came back behind that and said they don't think right now, today, they're able to make one small enough to fit on a warhead. But without a doubt they're clearly moving the ball and moving in that direction.

And when Secretary Kerry says that North Korea will not be allowed to be a nuclear power on the peninsula, just yesterday the director of National Intelligence said, in a similar hearing, that he thinks the goal of all this rhetoric, that the end game for Kim Jong-Un is just that. To be recognized and accepted by the United States as an emerging nuclear power.

ROMANS: All right, Chris Lawrence. Thanks, Chris. We'll continue to watch this, this morning. Secretary Kerry is still speaking in the press conference with the foreign minister of South Korea. Also he'll be going to Beijing and Tokyo as well. So this trip just beginning.

A new development this morning in the Senate where debate on gun control legislation now under way. Sixteen Republicans joined Democrats in voting down GOP-led filibuster that attempted to stop the debate from taking place.

Senators from both parties thanked relatives of the victims of the Connecticut school massacre for lobbying lawmakers to at least bring legislation to the Senate floor for discussion.

(BEGIN VIDEO CLIP) SEN. CHUCK SCHUMER (D), NEW YORK: -- in darkness for 20 years when it comes to gun control, darkness, the lies, the misinformation and when people see you it means much more than when they hear me or anybody else. So, we've made a huge difference.

(END VIDEO CLIP)

ROMANS: The amendments to be debated include expanding background checks on gun buyers and banning assault weapons and high capacity magazines.

BERMAN: Another record-breaking day for the Dow and the S&P 500. The Dow is now within reach of the 15,000 mark closing at 14,865 yesterday. That's two record high finishing in the last two days for the blue chip index. That is the kind we like to see.

The S&P 500 also closing at an all-time high yesterday, less than seven points from the 1600 plateau. But, futures tell us the bulls could be taking a breather this morning. The Dow, NASDAQ and S&P 500 futures all pointing lower this morning, signaling a potential sell- off of sorts at the opening bell

ROMANS: We get a lot of data, bank earnings and retail sales report and inflation report all before the opening bell so it's just too early to say whether we'll have another record or a pullback.

An ugly bench clearing brawl turned out to be very costly for the Los Angeles Dodgers last night. Take a look at this. L.A.'s $147 million right hander Greinke hit Carlos Quentin with a pitch and Quentin charges the mound. The two players collide and Greinke winds up breaking his left collar bone.

As John Berman tells me is a very bad thing for a pitcher. Once order was restored, Greinke was unable to continue. It's not clear this morning how much time the 2009 Cy Young award winner might miss.

BERMAN: Yes, not a good thing. Again, that was the third time Greinke hit Quinton in his career.

ROMANS: Those two have a history then you say.

BERMAN: A little bit. All right, other sports news, round one of the Masters and four-time champ Tiger Woods is doing fine but certainly not fantastic. He posted a 200 par 70 putting behind a dozen golfers and tied with 10 others at four strokes off the lead.

How about the 14-year-old Chinese Phenom, five bogeys and four birdies in his first competitive round at Augusta National. He's impressive right now at 1 over par at 73. He is below amateur. He is actually ahead of last year's champ, Bubba Watson.

This is a look at your Masters Leader Board right now after 18 holes. Spain's Sergio Garcia and Australian Mark Leishman on top at 6 under that's one better than American Dustin Johnson and tied for fourth the 1992 Master champ, 53-year-old fan favorite Freddy Couples. He loves that course and he looks great. ROMANS: All right, from the Florida panhandle to Ohio, the threat for severe storms even tornadoes at continues at this hour. The latest on the storm's path coming up.

(COMMERCIAL BREAK)

BERMAN: Welcome back, everyone, to EARLY START. Happening right now, tornado watches have been extended for these states we're showing you right now after a series of powerful twisters and wild weather tore a path of destruction from Texas all the way to the Dakotas.

Cars tossed around like toys. Homes destroyed. Entire neighborhoods just trashed. At least one person was killed, five more injured, as this vicious twister ripped through Mississippi. Look at that. Seven counties in that state suffered major damage.

CNN's David Mattingly is there live with us with the latest this morning. Good morning, David.

DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT: Good morning, John. This storm was deadly, but it was also massive leaving behind scenes of destruction for hundreds of miles.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: It was probably the worst damage.

MATTINGLY (voice-over): For the second straight day, severe weather, menacing more than a half dozen states. The hardest hit, Mississippi, this tornado caught on video. In one county, one person was killed. Five were injured. In one rural area, there was a path of destruction at least 30 miles long, extending into West Alabama.

UNIDENTIFIED FEMALE: As I was cleaning up the spot where I'm fixing to put another mobile home and I went home to take me a quick bath and I heard the siren going off. That's when I jumped in my clothes and I come on out the house quickly.

MATTINGLY: The storm system swept across the southeast knocking out power to thousands, toppling trees and damaging homes. Into the night, watches and warnings, storm damage, all the way into Georgia.

UNIDENTIFIED MALE: I've lived up here about two years. It's about the third or fourth one that's come through this area. So we just seem to be in a topographical situation where the storms come right through here and it's very, very powerful. This one is pretty impressive, just the way it threw the metal around in the trees.

MATTINGLY: The southeast, accustomed to severe storms, is emerging from a colder than normal spring. These storms, a sign that the season is heating up fast.

(END VIDEOTAPE)

MATTINGLY (on camera): Typically in the month of March we'll see about 100 tornadoes across the country but because of the lower temperatures, we saw less than 20 this year. And now we're seeing April roaring in like a lion. John?

BERMAN: All right. Thanks, David. David Mattingly in Mississippi. And here's the thing. This weather not over yet. As we mentioned tornado watches have been extended in North Carolina and South Carolina, as well as Virginia this morning.

So let's go to Samantha Mohr live at the Severe Weather Center for the latest. Good morning, Samantha.

SAMANTHA MOHR, AMS METEOROLOGIST: Hi. Boy, we're going to have a lot of impacts across the East Coast today and as it moves into the megalopolis, we'll see major delays at the airports here. We've already had a few dozen cancellations out of Newark but we're expecting to see major delays set in at all of our major metropolitan airports in the New York City area. Philly, Boston, Minneapolis, and Detroit could see delays, but most likely staying under an hour here.

But definitely there will be some travel woes as this line of thunderstorms pushes to the East, this very strong area of low pressure with a lot of cold air associated with it. Of course it was warm and moist and unstable ahead of that, and still is, here, along the coastal Carolinas. So we still have our tornado watches in place for primarily North Carolina and into Central Virginia. This one in South Carolina will expire at the top of the hour, at 7:00. So we should start to see things slowly improve here.

But definitely still under the risk for some large hail and gusty, damaging winds could exceed some 70 miles per hour. So we're not out of the woods yet in the Coastal Carolinas, and that includes Elizabeth City, Washington, North Carolina, Hadlock and Wilmington. So we'll be keeping you apprised of any severe weather that develops here.

And then there is that wintry side. And we have a lot of freezing rain across the Northern Plains and snow will still be piling up there as the day wears on. This has been a storm that has affected millions of people. Christine and John?

BERMAN: That's right. And not over yet. Samantha Mohr, thanks so much.

Seventeen minutes after the hour, let's bring you up to date. Happening right now, Secretary of State John Kerry right in the middle of the Korean missile crisis. Kerry is speaking to reporters in Seoul, calling rhetoric from North Korea simply unacceptable by any standard. He said the U.S. and South Korea agree that North Korea will not be accepted as a nuclear power. Kerry is going to meet with South Korean officials before heading to Beijing where he will try to convince Chinese leaders to use their influence on North Korea to ease the ongoing missile crisis.

ROMANS: A 15-year-old northern California girl hanged herself after she was allegedly raped. Now three teen boys are charged with sexual battery. Prosecutors say Audrey Pott passed out at a house party. Pictures of the attack ended up on social media. Just before her suicide, Pott posted on her Facebook page that her life was ruined. This happened in September but authorities weren't ready to make arrests until yesterday. The suspects are all 16 years old.

BERMAN: Rapping about rape has cost Rick Ross a deal with Reebok. The shoemaker has ended a relationship with him. Ross rapped about drugging and raping a woman earlier this year. He has denied the lyrics condone sexual violence.

ROMANS: "Django Unchained" was abruptly pulled from theaters in China yesterday, the same day it was scheduled to open. No official reason why. It comes after reports that scenes from the Quentin Tarantino film were edited to conform with the wishes of Chinese censors.

BERMAN: All right, iPad versus Nissan and it kind of ended up in a draw here. You may have seen this on Facebook; it went viral with nearly 2 million views. A Georgia woman says she saw something flying at her car, but she didn't realize she had a head dash on collision with a tablet until later. The amazing thing -- the iPad still worked. It's now back with its owner. Apparently the owner had left it on top of the car and then went driving when it flew off and hit that car.

ROMANS: It's not clear if Apple Cares is still active anymore. You have to give that up.

All right, if a motorcycle and a car had a baby, it might look something like this. A company called Elio Motors plans to roll out this onto the market next year -- three wheels, two seats. This, John, is classified as a motorcycle but it's said to drive like a car, an American car.

(BEGIN VIDEO CLIP)

PAUL ELIO, ELIO MOTORS: We believe we're going to be able to bring this TO market with 95 percent north American content. So it's an American car company, built in America, with American parts.

(END VIDEO CLIP)

ROMANS: Green, a lovely color. Maybe it will come in more colors than that green, certainly an eye-watching color. The car should be able to go more than 600 miles on one tank of gas. It shouldn't cost more than $10,000. And the inventor, the owner of the company there, he also says it can go up to 100 miles an hour. You can get a ticket in this car. Don't think because it's small, it's slow.

BERMAN: You can probably get a ticket just for that color green. There's probably laws against that somewhere.

All right, so timing is a big factor when shopping for a new home. And now, now might really be that time. We'll have the details next.

(COMMERCIAL BREAK)

ROMANS: Good morning. Minding your business, minding your 401(k), because it is on fire. The stock market's on fire, too. Will we set another record today? Three straight record closing highs for the Dow this week. That makes a total, John, of 14 record closing highs in the last two months. It puts the Dow less than 150 -- 150 points away from 15,000. We have never been in this territory. The S&P 500 also at a record. The NASDAQ hit a 12-year high yesterday.

We're looking at futures this morning. They're pointing lower but as I was saying, we get a lot of data between now and the opening bell. We're going to have retail sales; we have a bunch of bank earnings, so that could change all of this. Lots of news coming out that could dictate where the market goes today.

A 2 percent gain for the Dow this week, heading in today, the best four-day winning streak since September. Money is pouring back into the stock market. Already this year, $61 billion put into mutual funds and other stock market funds. That's more than in any calendar year since 2004, and it's only April. More than any year since 2004. It's only April. We've spoken to several people this week who say there's even more room to run so it may still not be too late to get in.

Now may also be the time to buy for first time home buyers; that's according to HLN's consumer finance guru Clark Howard. I sat down with him yesterday. He told me that despite big-time investors helping to push some home prices up, for first-time buyers, this is the chance of a lifetime.

(BEGIN VIDEO CLIP)

CLARK HOWARD, TALK RADIO HOST: This is an absolutely great time to be a first-time home buyer. You don't have a house to dump. Even with these increases we're talking about, houses are so much cheaper than they were years ago in so many markets, and interest rates, this is virtually a once in a lifetime opportunity with these ultracheap interest rates.

(END VIDEO CLIP)

ROMANS: Be careful of those buying frenzies in some of those places. You heard of these flash sales where people can't get in and get a house. They've just been going like that. Be careful of that frenzy; that will go away. But look at these low rates. Average on a 30-year fixed rate mortgage -- 3.43 percent this week. Only a little bit higher than the record low of 3.31 percent from last November. You can see the rest of that interview, by the way, with Clark tomorrow morning on my show, "YOUR BOTTOM LINE" at 9:30 Eastern.

BERMAN: You know, with these record highs you can mind my business any time. That's all I can say. What's the one thing we need to know about our money?

ROMANS: OK, have you heard about the Justin Bieber prepaid debit card? I don't like it. Here's the Biebs promoting the card on YouTube, talking about budgeting your money properly. That's good advice, to budget properly.

But prepaid cards are almost universally a bad idea. Why? Because of the fees. This one will cost a flat flee of $3.95 a month, up to $2.95 every time you add funds. You don't use the card for 30 days, there's a $3 fee. Look at those fees very carefully. Lose the card -- $7.95. Get something out of an ATM -- $1.50. That really adds up. So if you want to teach your kids about money, there are better, less expensive ways to do it. And I encourage you to go to the personal finance section of CNNmoney.com to find some of those ways.

Be careful of prepaid cards. He's getting paid $3.75 million so that you can pay every month to use your own money. Don't pay to use your own money.

BERMAN: Beware of Bieber.

Twenty-six minutes after the hour right now. Coming up, gauging the mood of America. Is the glass half full or half empty? We have intriguing results from a CNN poll brand new this morning.

ROMANS: Think Bieber would come on and argue with me about whether it's good?

BERMAN: That would be awesome debate. Bieber, Romans, blood feud.

(COMMERCIAL BREAK)