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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

Crisis in Egypt; Oil Markets Spooked; Where's Snowden?; Obamacare Delay; Wet and Wild Fourth; The 20th Firefighter; The George Zimmerman Murder Trial

Aired July 3, 2013 - 05:00   ET

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


JOHN BERMAN, CNN ANCHOR: Developing right now: crisis in Egypt. This morning, deadly protests, a defiant president refuses an ultimatum from his army to step down. Could Egypt now be heading for a civil war?

POPPY HARLOW, CNN ANCHOR: And storms flooding the East Coast as the sun bakes the West. Extreme weather from coast to coast, will it let up in time for the holiday weekend?

BERMAN: And that brutal weather fanning the flames this morning of the deadly Arizona wildfire that killed 19 firefighters. Now, we're learning now heartbreaking information about the sole survivor of that elite firefighting crew.

HARLOW: Good morning, everyone. Welcome to EARLY START. I'm Poppy Harlow.

BERMAN: And I'm John Berman. It's Wednesday, July 3rd. It's 5:00 a.m. in the East.

Great to see you.

We begin with the growing crisis in Egypt. The situation really could not be more tense or more perilous. And we could be hours away from a military coup or perhaps in the worse case, a civil war.

There were violent clashes overnight at Cairo University, including a number of deaths there. At this moment, the clock is ticking. The military giving President Mohamed Morsi just six hours from now to come up were a power-sharing agreement with the protesters who want him out of office.

However, he is not budging, saying he's the duly elected president and will abide by that nation's constitution.

Reza Sayah in Cairo this morning with the very latest.

Reza, we're hours away, less than six hours away. Any sign that they may reach some kind of agreement?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: At this point, there's no sign. And I can't imagine things getting more dramatic. What we're seeing is some deadly violence of what could be a sign of what's to come.

What's escalating the drama is now you have what appears to be three factions who are in conflict. Each side is drawing the line in the sands, not backing down. And now, you're hearing statements that could easily be perceived as incendiary, provocative, challenging one another.

Of course, today is the deadline for the ultimatum delivered by the military on Monday, giving the government and opposition factions 48 hours to fix things. Otherwise, the army says it's going to step in.

Last night, the president gave a televised address. And he said that he's prepared to die in protecting what he called the democratic transition, and the legitimacy of this government.

Then, you have the armed force's response -- on Facebook, no less. With a statement saying they're willing to give their live, instead of allowing people, terrorists, extremists and the ignorant, that's a quote, threatening the people of Egypt.

So, these are in your face statements that set the stage for a potential showdown today. Last night here in Cairo, at Cairo University, you also had some deadly clashes, 16 people killed. About 70 people injured. Could that be a sign of things to come today?

Egypt is bracing itself for a showdown today, John.

BERMAN: Deadline happens in about six hours from now. And the idea would be, what, the military just rolls in and takes over? Or do we just simply not know?

SAYAH: That's a big unknown at this point. If President Morsi doesn't step aside, doesn't resolve this conflict, how does the military take over? Do they surround the palace with tanks? Do they force themselves in?

These are all unknowns that really add to the drama, John.

BERMAN: All right, Reza Sayah for us right now in the middle of the situation. It's unfolding this morning in Cairo. We will come back to you in a little bit. Thanks so much, Reza.

HARLOW: Meantime, the unrest in Egypt is driving up the price of oil. You're probably going to notice it at the pump.

Benchmark West Texas crude, that's what it's called, ended the day trading on Tuesday, up 2 percent, finished just shy of $100 a barrel. In after-hours trading, it actually hit nearly $102 a barrel. This is important because Egypt itself is not a major oil producer. But, of course, it controls the Suez Canal and the pipeline that moves about 4 million barrels of oil every single day.

Oil prices are up about 16 percent in the last two months. And, you know, John, I talked with oil analysts last night who told me the bigger issue here is does this spread? Does this spread to Saudi Arabia? Does this spread to other larger oil-producing nations in the Middle East? What does that say for the price of crude?

BERMAN: It's a crucial country and there could be ripple effects throughout the world. No doubt about that.

HARLOW: Absolutely.

BERMAN: Four minutes after the hour.

Another diplomatic situation right now, the one surrounding Edward Snowden even more bizarre and complicated this morning. Right now, we have no takers yet for asylum. The NSA leaker is at a Moscow airport. And his 21 applications for asylum have not gone anywhere.

Venezuela's president says he'd consider a request but hasn't received one. And this now is the latest twist -- some international drama to tell you about. Bolivia's president -- Bolivia's president is in the midst of a tangle, apparently stuck in Vienna this morning.

Evo Morales left Moscow Tuesday after suggesting that he might be open to letting Snowden come to his country. That led to his suspension that Snowden was on his plane.

So, France and Portugal denied him the right to fly over their airspace. His flight was diverted to Austria. Bolivian officials are blaming the Obama administration to putting pressure on the countries that would not let them fly over. They insist that Snowden was not on board.

While this is all happening and while that plane sits in Austria, Snowden's father has written a letter with a lawyer calling his son a modern day Paul Revere, acting honorably to alert the world to government wrongdoing.

HARLOW: It is so bizarre, reading about that this morning and seeing, you know that the plane is still sitting there. But they're not searching the plane because they say they don't have any evidence to search the plane.

BERMAN: It's extraordinarily unusual. I would say even unprecedented to ground the plane of a president of a country.

HARLOW: Right. They said they have checked all the passports of people on board but have not searched the plane. It's completely bizarre, we'll keep you posted.

Meantime, a big delay for part of Obamacare. The Obama administration says it's pushing back the start of a key provision that mandated any employer with 50 or more workers to provide health care coverage. They're pushing that back now to 2015. It was set to take effect this January.

Businesses complained they didn't have enough time to implement the rules but individuals, me, you, others are still going to have to get insurance for themselves come January or face a penalty.

BERMAN: And that's a huge development. HARLOW: It's a huge development.

BERMAN: We keep saying big, big, big. While this is happening, we have serious weather situations. Really a tale of two coasts for the Fourth of July holiday.

HARLOW: Yes.

BERMAN: Scorching heat out West, soaking rain here in the East.

In fact, a threat of flash floods and storms up and down the Eastern Seaboard could put a damper on barbecues and fireworks and all things outdoors for the Fourth of July.

That's about the fun, but there are some serious, dangerous conditions here, Indra.

INDRA PETERSONS, AMS METEOROLOGIST: I'm not sure why I moved to the east coast. And the rain breaking the amount of records for the amount of rain in June.

Just take a look. There's still more rain on the way.

(BEGIN VIDEOTAPE)

PETERSONS (voice-over): Fourth of July is around the corner and flood concerns could dampen the holiday fireworks show. Tuesday's downpour turned this New Hampshire road into a rushing waterway. The same storm dumped two inches of rain in one hour in Lebanon.

UNIDENTIFIED MALE: I've never seen the roads wash out like this.

PETERSONS: The rain continued overnight.

UNIDENTIFIED MALE: It's just compounding rain after rain, the road is saturated. It can't take it.

PETERSONS: Storm after storm, buckled roads. Trapped residents had to be evacuated. At the local high school, the Red Cross set up an emergency shelter with dry clothes and foods. All of this rain along the East Coast could let up towards the end of the week.

In Rockport, New York, they're still recovering from last week's storm which dropped more than a foot of rain. The state is seeking FEMA funds to repair the damage.

SEN. CHARLES SCHUMER (D), NEW YORK: Getting this done will mean FEMA has to declare -- the federal government has to declare this a disaster area.

PETERSONS: And in Berkeley Heights, New Jersey, they're struggling to clean up after a tornado knocked out power and uprooted a string of trees.

(END VIDEOTAPE) PETERSONS: Surprise, surprise, we're still dealing with even more rain. We're sucked in this. You can see on the radar now, just showers in the morning hours, typically in the afternoon when we get a little bit more of that afternoon heat. And we get those thunderstorms building.

One of the changes we're seeing -- remember, it's all about the location of this high. Now, it's moving closer. Remember, winds go clockwise around that high. It's actually meaning we're going to see a little bit more of a clearing along the immediate coast and the actual rain will push farther inland, kind of a trickier thing to understand. But what it does mean that Fourth July could look better now on the Eastern Seaboard, inland, as we're going to see some of that heavier rain.

As far as today, we're talking three to five inches more additional rain into the Southeast. Unbelievable. The flooding threats are high, farther to the north, more of a scattered storm pattern. But really in the southeast is where we're having the toughest time. Flooding concerns will remain.

And this pattern is going to stick around for really the next several days. Out to the West Coast, we talked about this being a tale of two coasts, the West Coast dealing with that heat, 15 to 20 degrees above normal. Unfortunately, as you think about a holiday, more people outside, this is going to be a dangerous situation as well and what I'm concerned about, something that people don't think about, very dangerous.

BERMAN: Be careful if you're outside having that barbecue. All right, Indra. Thanks so much.

HARLOW: Thanks so much, Indra.

All right. Well, finally, this is a little bit good news in Arizona. Some progress being reported on that fire line in Arizona. The Yarnell Hill Fire is now, we're told about 8:00 percent contained. Of course, there's still a very long way to go.

As the fire rages, 19 members of Arizona's Granite Mountain Hotshots who died battling that blaze are being remembered for that bravery. We're learning more about the members of that elite fighting crew. The lone survivor, there was one survivor in all of that.

Kyung Lah has his story.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): Assigned to the lookout position, Brendan McDonough had no idea he'd be watching the fire that killed his entire crew. His position was above the team when the wind suddenly shifted.

WADE WARD, PUBLIC INFORMATION OFFICER, PRESCOTT FIRE DEPARTMENT: He radioed the crew that he had reached his trigger point and that he was leaving. LAH: That was the last radio call. Minutes later, the rest of his brother, all 19 of them, were gone.

Erratic 80-mile-per-hour winds, drought train brush led a fire that remained out of control for days. Firefighters blamed the extraordinary conditions, a perfect storm for the wildfire for the deaths.

RALPH LUCAS, BATTALION CHIEF, PRESCOTT FIRE DEPT: Basically the wind changed. You have a thunderstorm that was above. They have a tendency to push winds around just because of the dynamics of nature and the way they work. And that's what may have occurred during that time period.

LAH: Firefighters said there was nothing McDonough could do to save his brothers.

Reggie Day is a U.S. Forest Service firefighter who fought fires with the Hotshot crew.

REGGIE DAY, SAFETY SUPERVISOR, U.S. FOREST SERVICE: It's going to be tough. I mean, he lost his crew, you know, and he's -- you know, I don't really -- I couldn't put myself in his shoes. I couldn't. I couldn't even -- I couldn't do it.

LAH: What McDonough feels is guilt, says Juliann Ashcraft. Ashcraft's husband Andrew didn't come home. Her four children will grow up with only stories of their mother's stories of their dad.

JULIANN ASHCRARFT, WIFE OF FALLEN FIREFIGHTER: Their dad is amazing. And I will tell them every day of their lives how much he loves them. But he's here. I look in their faces and I see him. They look just like him.

LAH: Kyung Lah, CNN, Prescott, Arizona.

(END VIDEOTAPE)

BERMAN: Heartbreaking. So hard for those families out there.

Eleven minutes after the hour right now.

Sports news, big baseball news. Cincinnati Reds pitcher Homer Bailey has thrown the season's first no-hitter. He did it against the Giants home last night, dominating the defending champion, truck out nine batters. He allowed only a seventh inning walk. Otherwise, he was perfect.

Now, this is Bailey's second career no-hitter. His first was the last no-hitter of the 2012 season. So, it was last no-hitter last year, first one this year. Back-to-back no-hitters, if you will.

Bailey becomes the third Reds pitcher with more than one no-hitter. He joins Jim Maloney and Johnny Vander Meer, the answer to a terrific question, the only picture to throw back to back no hitters in consecutive starts. HARLOW: And only you would know that.

BERMAN: No, Johnny Vander Meer is one of those trivia questions a lot of people know.

HARLOW: Oh, just not me.

BERMAN: Maybe just me.

HARLOW: And stop ripping on my Twins, please?

BERMAN: The Twins just caved. They caved to the Yankees. The Yankees gone there and Twins roll over. Beat them. Step up.

HARLOW: I'm just a die hard Twin true and true.

All right. Coming up, folks, jurors shown pictures of a bloody George Zimmerman from the night he killed Trayvon Martin. But here's a key question, do his wounds prove his story of self-defense? A medical examiner weighs in.

BERMAN: Plus, a serious trend for women. A new women rising as a leading killer. We'll tell you what it is and you have to avoid this, coming up next.

(COMMERCIAL BREAK)

HARLOW: In the trial of George Zimmerman, the big question today is about his past. The judge will hear arguments over whether the jury should know that Zimmerman took criminal justice courses, and that he was turned down for a job as a police officer.

Now, the jury has already heard about Zimmerman's injuries. And what those injuries may indicate about what happened the night he killed Trayvon Martin.

George Howell reports.

(BEGIN VIDEOTAPE)

GEORGE HOWELL, CNN CORRESPONDENT (voice-over): Images of George Zimmerman bloodied and beaten up. Important visuals for his defense, trying to show that Zimmerman's head had been slammed against the sidewalk, and he had to fire his gun to save his own life.

That's not the way Jacksonville-based medical examiner Valerie Rao sees it.

UNIDENTIFIED MALE: Are the injuries in the back of his head consistent with having been repeatedly slammed into a concrete surface?

DR. VALERIE RAO, MEDICAL EXAMINER: No.

HOWELL: After examining dozens of pictures, Rao testified the injuries were not life-threatening, consistent with being punched or hitting a concrete surface once.

But during cross-examination, Rao admitted when pressed by attorney Mark O'Mara he could have been hit multiple times.

The jury also heard from a man who calls himself George Zimmerman's best friend. Mark Osterman says Zimmerman even gave him the play by play of what happened the night he shot and killed Trayvon Martin, enough detail for Osterman to write a book.

BERNIE DE LA RIONDA, PROSECUTOR: I think you quoted him as saying he took his hand that was covering my nose and went for the gun saying something at that point, correct?

MARK OSTERMAN, GEORGE ZIMMERMAN'S BEST FRIEND: He did.

DE LA RIONDA: What words did he outer?

OSTERMAN: He said you're going to die. He used the MF term again. I'm sorry, I don't like to curse in front of ladies.

DE LA RIONDA: And for the record, he used the word you're going to die now (EXPLETIVE DELETED), correct?

OSTERMAN: That is correct.

HOWELL: But prosecutors say there's no proof Martin reached for the gun. The state's latent fingerprint analyst examined it.

UNIDENTIFIED MALE: Did you find any latent prints of value on state's 183?

KRISTEN BENSON, WITNESS: No.

HOWELL: In cross examination, Kristen Benson told the court rain could have had a negative impact on finding any fingerprints.

Prosecutors also turned the table on their own key witness, lead investigator Chris Serino on Monday told the defense he believes Zimmerman was truthful and credible through the course of several interviews. The state objected the next day, saying Serino's opinion should not be considered as evidence. The judge agreed and ordered the jury not to consider Serino's statement when reaching their decision.

George Howell, CNN, Sanford, Florida.

(END VIDEOTAPE)

BERMAN: Some another legal news this morning: former Patriots tight end Aaron Hernandez remains in a Massachusetts prison this morning, and a wedding apparently not in his future. The county sheriff tells "USA Today" that he will not help Hernandez marry his longtime girlfriend so long as the ex-football star is in his jail.

Prosecutors say she was talking to police until Hernandez told her to stop. If they were married, she would likely be immune from testifying against him.

HARLOW: And the death toll from the MERS virus continues to rise. Saudi Arabia now says it has identified two more fatal cases of that virus, raising the total to 42 cases worldwide. There have only been 77 reported cases of MERS. But with about half of them deadly, health officials, of course, very concerned about that. It's still not clear how illness is being spread.

BERMAN: New research finds a stunning increase in the amount of deaths among women in an overdose of prescription painkillers. According to a CDC analysis there, there has been a five-fold increase since 1999. The data show that more women die from overdosing on pain pills than from cervical cancer.

When you delve into the data, you see more white women and African- American women are affected and more older women than younger ones.

HARLOW: All right. You're going away for the Fourth of July. If you and you're flying like I am, early tomorrow morning, you're likely to be dealing with other travelers who hog the arm rest, talk your ear off, recline their seat right in your space. Of course, it's mildly annoying.

But there's some interesting statistics about whether you would actually do something about this. According to an online survey by the Traveler Leaders Group, the answer from many people is no. They're just going to keep their lip zipped.

Half of those questions would say nothing if they were sitting in the middle seat. And people to the right and left took both arm rests. Around 40 percent of fliers would use the "I'm reading the book" excuse, so please stay quiet next to me. And nearly 20 percent would also put on headphones to keep talking bothering them to a minimum.

So, what does it take for travelers to actually speak up?

Well, the survey found that more than half of fliers would speak up if the person in front of them reclined so much that they couldn't put their tray table down.

And what about that screaming baby on your flight? Well, about 40 percent of folks would call the flight attendant if it looks like the parents aren't trying to calm the child down.

Now, you are a father of two --

BERMAN: Yes.

HARLOW: -- who has dealt with scream babies.

BERMAN: Yes.

HARLOW: I am an aunt of two who has dealt with screaming babies on the plane. And I have total sympathy for people that have to --

BERMAN: There's nothing that stresses me out more than my own kids crying on a plane. They don't do it anymore. It's very stressful.

As a frequent flyer, you know, you do kind of want it to be quiet. But that's what the noise reduction headphones are for.

HARLOW: Yes, get over it. I agree.

BERMAN: Do what you can.

All right. Twenty-one minutes after the hour.

Coming up, new questions about three big banks. Why a major credit rating agency is downgrading these financial firms and what it could mean for your money.

(COMMERCIAL BREAK)

HARLOW: Welcome back to EARLY START, everyone. It is money time.

Stock futures are lower this morning following a losing session on Wall Street yesterday. At one point, Tuesday, the Dow industrials were up as much as 74 points. Then the market fell into the red across the board. The Dow, NASDAQ, S&P 500 ended the day with slight losses. You see them right there.

The New York Stock Exchange closes early today, at 1:00 Eastern. That's ahead of the Fourth of July holiday. It will be closed all day tomorrow and then reopen on Friday morning. Just in time for the jobs report, which investors are a little hesitant about.

CNN Money poll says you can expect to see about 150,000 jobs added last month. The unemployment rate is expected to drop just slightly to 7 1/2 percent. But still, severely high unemployment, not enough jobs being added in this economy. Big move by the way will certainly impact stocks.

Meantime in Europe, three big European banks got a not so welcome wake-up call from Standard & Poor's. Today, the S&P cut the rating on three big banks, Credit Suisse, Deutsche Bank and Barclays, up from A- plus to A. Worried about the size of their investment and certain banking portfolios also worries about the impact of new regulations on those banks were cited for those downgrades.

And you know electric carmaker Tesla? Well, this is an interesting story. Tesla seems to be gaining ground in a grassroots effort to sell directly to customers, not through dealership. The electric carmaker says its petition on whitehouse.gov has reached 100,000 signatures in support for their plan. That crosses the threshold that requires some sort of response from the Obama administration.

The founder and CEO Elon Musk has been fighting to try to sell cars directly to the public, without going through that traditional dealership arrangement that we usually have. He's been fighting for this. Some states have been pushing back. And now, the White House going to have to weigh in.

BERMAN: I suppose it gives more options to consumers. HARLOW: The thinking here by Tesla is that they won't be marketed correctly, necessarily at these dealerships. Tesla, it's a unique car. It's an electric car. And they want, frankly, I think profit margin is bigger, too, if you sell directly.

BERMAN: They're trying to hip.

All right. Twenty-six minutes after the hour.

Coming up, the international manhunt for Edward Snowden is intensifying this morning. And there's a diplomatic snafu to tell you about. A president's plane forced to land, stuck for hours, connected perhaps, some think, to Snowden. The drama that unfolds, next.

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