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EARLY START WITH JOHN BERMAN AND ZORAIDA SAMBOLIN

New Information on Boeing 777 Pilot; Derailed Train in Quebuec: "It Looks Like a Warzone"; Heinz Kerry in Critical but Stable Condition; Cuba Defends Snowden; Defense on Deck in Week 3 of Zimmerman Trial; Earnings Season on Wall Street

Aired July 8, 2013 - 05:00   ET

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


(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Oh my god.

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MICHAELA PEREIRA, CNN ANCHOR: Pilot-in-training, new information about what may have caused the jetliner to crash at San Francisco International Airport. And new details about the man flying the plane.

JOHN BERMAN, CNN ANCHOR: Train derailed. The town looks like a warzone. Several dead, dozens more missing, when a train explodes on the tracks in Canada. We are live.

PEREIRA: And up in smoke, a home suddenly exploding and it is all caught on camera.

BERMAN: Good morning, everyone. Happy Monday. Welcome to EARLY START. I'm John Berman.

PEREIRA: We got a really early start on EARLY START today. I'm Michaela Pereira. It is Monday, July 8. It is 5:00 a.m. in the East. This is certainly a very big news day. We certainly have a lot to get to.

BERMAN: Want to get right to the news coming out of San Francisco right now, that deadly plane crash. New information about the man who was at the controls this morning. South Korean officials say the pilot did not have much experience flying a Boeing 777. He had never landed one at that airport before though he had been through there in other planes several times.

Two teenage girls from China died in the crash. More than 180 people injured. Our Miguel Marquez is at the San Francisco International Airport with the latest this morning. Good morning, Miguel.

MIGUEL MARQUEZ, CNN CORRESPONDENT: Good morning. In addition to what the NTSB is saying, we're also seeing some exclusive video to CNN from a person who shot the actual plane crashing. And that pilot that you talked about, though he was experienced, he had only flew a 777 a total of nine times as investigators are trying to figure out why he came in so steep and so slow into the airport here.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Oh my god.

MARQUEZ (voice-over): This morning, a stunning revelation, Asiana Airlines saying at the controls of the doomed flight was the co-pilot with 43 hours of experience in the 777. And he never landed a 777 at San Francisco before. Though he was a veteran pilot with 10,000 hours of flying time --

UNIDENTIFIED MALE: Oh, Lord have mercy.

MARQUEZ: This was considered a training flight.

Flight 214 clipping the seawall, sliding down the runway, and pinwheeling at one point almost fully vertical, then erupting into a cloud of dust and smoke.

JOHN HAYES, PLANE SPOTTER: I was watching it come in and my initial reaction was that it was trying to abort the landing.

MARQUEZ: Officials say the pilot tried to increase speed seven seconds before impact. At four seconds, the 350-ton plane shake stick jolted violently, a warning the massive jet was going too slowly, stalling.

UNIDENTIFIED MALE: I looked out through the window and I knew we were too low.

MARQUEZ: Just 1.5 seconds before slamming into the seawall, the pilot called to abort the landing.

DEBORAH HERSMAN, NTSB CHAIRWOMAN: There is no discussion of aircraft anomalies or concerns.

MARQUEZ: These new NTSB photos show seats crushed and jumbled together. Amazing so many survived.

WEN ZHANG, CRASH SURVIVOR: Everybody screamed. (Inaudible) most of ash -- everywhere was ash.

MARQUEZ: Some passengers thrown from the plane, suffering road rash from skidding along the runway.

UNIDENTIFIED FEMALE: We got there within three minutes. There were flames were coming off the planes.

MARQUEZ: The parents of two teenage girls killed in a crash grief stricken, their daughters headed for summer camp here in California. More than a dozen are still hospitalized, two of them paralyzed. Still, such a violent crash and so few injuries and deaths?

UNIDENTIFIED FEMALE: It is nothing short of a miracle that we had literally 123 people walk away from this.

MARQUEZ: A miracle prompting many questions.

UNIDENTIFIED MALE: Oh my god. Oh my god.

(END VIDEOTAPE)

MARQUEZ (on camera): And to add to the tragedy here, we now understand from the coroner that one of the two women who died here may have been struck by an emergency vehicle. It is not clear whether they were already dead when the vehicle struck and they are trying to figure that out. But just another piece of information here that is very frustrating and upsetting as the reality of what happened here comes out. John?

BERMAN: Yes, it's a tragic twist to an already sad story. Our thanks to Miguel Marquez in San Francisco in this morning. Thanks, Miguel.

PEREIRA: Meanwhile, a deadly plane crash also taking place this weekend in Alaska. A pilot and nine passengers were killed when their De Havilland DHC-3 went down at an airport about 150 miles south of Anchorage Sunday. The plane was apparently taking off and burst into flames. It was fully engulfed by the time firefighters arrived. Investigators are now looking into the cause.

BERMAN: "It looks like a war zone." That coming from Canada's prime minister after he got a firsthand look at the small Quebec town devastated by a train explosion. At least five people were killed and authorities expect that number will climb dramatically. Forty other people still unaccounted for.

Our Paula Newton is live in Lac-Megantic, Quebec, with the details. Paula, what is the latest?

PAULA NEWTON, CNN CORRESPONDENT: The latest, John, is that at least those rail cars have stopped burning. That means that investigators and, unfortunately, the people who need to be looked for the missing can get to the sight this morning. You know, John, it's tough to fathom what's happened to this town and what they have to go through.

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NEWTON (voice-over): For too many, there was simply no escape. An inferno so intense it incinerated everything in the path.

Minutes before the unmanned runaway train pulling 72 tankers filled with crude oil went careening into the town of Lac-Megantic, derailed with unimaginable consequences. Earth-shaking explosions followed, a fire burning for a full 36 hours.

The devastation was apocalyptic; the silence ominous. There was no word of sons and daughters who never made it home. Friends and family that, yes, vanished. Town officials say some were likely vaporized by the sheer intensity of the blaze.

BENOIT RICHARD, QUEBEC FORCE POLICE SPOKESMAN: Of course, we are working hand in hand with the coroner's office and with the victim unit from (inaudible) Quebec to talk with the families. All of the bodies were transported to the Montreal forensics to be expertised.

NEWTON: The fire utterly consumed the very heart of this town in every way. Waiting for word of the missing has been excruciating.

UNIDENTIFIED MALE: We are numb. We are just numb.

NEWTON: Canada's prime minister, Steven Harper, toured the devastation and foreshadowed the grim new that is sure to come.

STEVEN J. HARPER, CANADIAN PRIME MINISTER: But I know there is going to be waves of emotion over the next few weeks as the extent of this -- and this is a very big disaster in human terms -- as the extent of this becomes increasingly obvious.

NEWTON: The Montreal Main and Atlantic Railway Company, the American owners of the train, said in a statement that after the crew parked the locomotive for the night, the air brakes likely failed, leaving a lethal load to barrel its way into town, crashing just a few feet from where people were enjoying a warm summer's night.

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NEWTON (on camera): You know, John, many people here bracing themselves for what comes next, as you say, investigators now being able to get to that scene and start that search for bodies. John?

BERMAN: Yes, it's going to be a tough, emotional day there to be sure. All right, Paula Newton, thank you so much.

Six minutes after the hour. We have breaking news from Egypt where health officials say at least 42 people have been killed, another 300 wounded outside the Republican Guard headquarters in Cairo. That is where deposed president Mohamed Morsy is thought to be held at this moment. Morsy supporters say the military lobbed tear gas at them and then began shooting. But the government says it was attempted raid on the complex. They claim to have arrested some 200 terrorists who they say were heavily armed.

PEREIRA: Teresa Heinz Kerry is said to be in critical but stable condition this morning at a Boston hospital suffering from an as yet undisclosed illness. The wife of Secretary of State John Kerry was rushed to a hospital in Nantucket Sunday and later air lifted to Massachusetts General Hospital in Boston. The 74-year-old became ill while at the family's vacation home in Nantucket.

BERMAN: Defense workers today start feeling the pinch of the sequester. Nearly three quarters of a million of them will be forced to take a day off a week through the middle of September. The cuts impact civilian workers, not active duty military. They handle support tasks like repairs. All told, cutting some workers' salaries by 20 percent, it's expected to save just under $2 billion. But the Pentagon has to cut $40 billion from its budget. The military is warning these cuts will slow its ability to respond to needs around the world.

PEREIRA: A privacy rights group hoping the Supreme Court will force the National Security Agency to stand down on its phone spying program. "The New York Times" reporting the Electronic Privacy Information Center will file a petition today asking the high court to vacate the ruling that allows the NSA to gather domestic surveillance data.

BERMAN: More support for NSA leaker Edward Snowden. This time, it comes from Cuba's president. Raul Castro says Latin American countries have every right to give Snowden asylum, but he did not indicate if he would let Snowden fly through his nation on the way to Venezuela whose president has offered him refuge. A prominent member of the Russian parliament calls the offer Snowden's last chance. For now, the former NSA contractor is still believed to be at the Moscow airport where he has been stuck now for two weeks.

PEREIRA: Could Tropical Storm Chantel cause trouble for this country? It's way out in the Atlantic but it is expected to affect Barbados, Dominica, and St. Lucia in the next few days. Maximum sustained winds are only 40 miles per hour but some strengthening may happen in the next day or two and it could affect the mainland USA by the end of the week.

Chad Myers, I've been doing your work over here. I need to let the professional handle this. This is something to watch.

CHAD MYERS, AMS METEOROLOGIST: Yes, it is. It's something that we want to watch because now the water is warm enough. The first couple of storms that you ever get in June, even early July, they don't have a big chance. But here, because we're close to the equator, this storm actually does have a chance to get stronger, maybe make a run at the Hisponala, the Dominican Republic, and then even up to the U.S. We'll see.

If it stays on a southern track and doesn't get affected by the islands -- remember now Haiti is tall. Lots of mountains in Haiti. That will tear up the storm. But if it stays on the southern part of this cone, then it doesn't really get affected here. It could be a stronger system, possibly running over Cuba.

If you are out at an airport this morning, and you didn't expect to be because you planned on flying yesterday, you are not alone. There are many people out there that just didn't get to go where they wanted to go because the storms pop up in the afternoon. New York, Pennsylvania, there's a line of storms where you couldn't get across the country from west to east, even some flights out of Atlanta toward the Northeast were canceled last night.

So take your time this morning. It is going to be awhile. The problem is, you have a plane this morning that has ten empty seats. Well, the problem is there was 150 people didn't get on the plane yesterday and you have 140 people that are not going to get on these planes. It is going to take a long time to get this cleared up.

New York City today a couple degrees cooler than yesterday at 88. Everything changes this week where the rain is across the northern part of the country. That may be cooling us down a bit. That's nice. But even if it's hot here in the city like it was yesterday, you get a cloud or a shower, that helps a little bit. Yesterday was kind of brutal.

BERMAN: It was very brutal. All right, Chad, thanks a lot. Appreciate it.

PEREIRA: Well, it happened again and this time, no gorings. The annual running of the bulls in Pamplona, Spain, kicked off Sunday, thousands taking to the streets as always. Four people were treated for injuries. We're told, though, none were seriously hurt. Forutnately, no one was gored. I think that's somewhat miraculous. But as John Berman says, there's still time. The festival goes on for another eight days of insanity.

There's a lot of things in life that I would like to do --

BERMAN: That's not high on the list. It seems to me the bulls have a slight advantage.

PEREIRA: You think? How do you figure that?

BERMAN: All right, 11 minutes after the hour right now. Coming up, week three of the Trayvon Martin murder trial. The defense taking over now. Some big days ahead. Can they prove George Zimmerman shot the unarmed teen in self-defense?

PEREIRA: And a home up in smoke. A family lucky to be alive. The shocking surveillance video coming up next.

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PEREIRA: It is the third week of the George Zimmerman trial. The defense today will continue calling its witnesses, making a case for acquittal for the former neighborhood watch volunteer. As George Howell reports, friday brought family members to the stand to try and explain a critical piece of evidence.

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UNIDENTIFIED MALE: I have had George --

GEORGE HOWELL, CNN CORRESPONDENT (voice-over): A rare moment of emotion from George Zimmerman in the courtroom as this week's testimony could see more family on the stand to testify on his behalf.

Friday, Zimmerman was visibly affected listening to his uncle explain when he heard those highly-scrutinized screams for help on a 911 audiotape.

JORGE MESA, ZIMMERMAN'S UNCLE: I said that is George. And I stood up and looked at the TV.

HOWELL: Also, Zimmerman's mother.

MARK O'MARA, GEORGE ZIMMERMAN'S ATTORNEY: Do you know whose voice that was screaming in the background?

GLADYS ZIMMERMAN, GEORGE ZIMMERMAN'S MOTHER: Yes, sir. O'MARA: Who's voice was that?

ZIMMERMAN: My son George.

O'MARA: And are you certain of that?

ZIMMERMAN: Because he's my son.

HOWELL: It was a day of dueling testimonies between mothers. Gladys Zimmerman testified after Sybrina Fulton told the court what she heard before the fatal shot that killed her son.

BERNIE DA LA RIONDA, ASSISTANT STATE ATTORNEY: Ma'am, that screaming or yelling, do you recognize that?

SYBRINA FULTON, TRAYVON MARTIN'S MOTHER: Yes.

DE LA RIONDA: And who do you recognize that to be, ma'am?

FULTON: Trayvon Benjamin Martin.

HOWELL: Martin's older brother, Jahvaris Fulton, also testified the screams were from his brother. But in cross-examination, Fulton was put on the spot for once telling a reporter he wasn't positive about who was screaming only to later conclude it was Trayvon Martin.

For most of day nine, jurors listened to the medical examiner who did the autopsy on Martin.

DR. SHIPING BAO, MEDICAL EXAMINER: I believe he was alive for one to ten minutes after he was shot.

HOWELL: But when challenged by the defense, Dr. Shiping Bao admitted he only recently reached that opinion. Just three weeks earlier, he said he thought Martin was alive one to three minutes after the shooting. Defense attorneys also pointed out how Bao's team may have mishandled and even damaged some evidence. When asked to recall specifics about the autopsy, it was this.

BAO: I do not have any recall. I do not have any memory of the day of autopsy.

HOWELL: Attorney Mark O'Mara asked the judge to acquit his client after the state rested its case, arguing prosecutors had not proven second degree murder. Judge Debra Nelson denied that motion.

JUDGE DEBRA NELSON: The motions for judgment of acquittal are denied.

HOWELL: Putting the defense on deck as this trial moves into week three.

George Howell, CNN, Sanford, Florida.

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BERMAN: It will be a big week in Florida. Meanwhile, a man connected to the murder case swirling around former pro-football player Aaron Hernandez is expected to be arraigned today. Ernest Wallace is charged as an accessory after the fact. Prosecutors say he was in the car with Hernandez and Odin Lloyd. That's the man the ex-Patriot is accused of killing.

Meantime, at least 1,200 people have taken advantage of a Patriots team offer to exchange their Aaron Hernandez jersey for that of another player. At least 300 of those turned in over the weekend were in youth sizes.

PEREIRA: At the federal murder and racketeering trial of accused mob boss James "Whitey" Bulger, am admitted mafia henchman is set to take the stand. Kevin Weeks (ph) was one of Bulger's closest confidants, but cut a deal with the government to testify against his former friend. Prosecutors want him to identify what they say is Bulger's handwriting on a cryptic note that was found inside a safe. Bulger faces 19 counts of murder. Authorities say he was the head of Boston's notorious Winter Hill gang.

BERMAN: Dramatic pictures to show you from the Detroit suburbs this morning. That was a house exploding in Ypsilanti Township and the neighbors heard it all happen.

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UNIDENTIFIED FEMALE: I heard a serious loud boom. Loud.

UNIDENTIFIED FEMALE: They said, get out, get out. You gotta go.

UNIDENTIFIED FEMALE: It blew up. The house literally blew up and the whole back of it was down. Then we seen a guy come out. His pants were blew off of him. It was horrible.

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BERMAN: That guy, that man they saw, is being treated for burns to his legs. He apparently drove himself to the hospital. Police think the explosion was caused by a natural gas leak.

PEREIRA: It's amazing he had the prescience of mind. Maybe he was in shock.

BERMAN: Still, to drive yourself to the hospital after being hurt like that, you're right, presence of mind.

All right, coming up here, some big companies set to let us know how well they're doing. This could impact your investments. We're going to tell you what the earnings season means for you. That's coming up next.

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PEREIRA: EARLY START. Wow, what a beautiful skyline from our tower cam, Columbus Circle there. But what a beautiful start to EARLY START. BERMAN: Fiery sky over New York City. Welcome back to EARLY START, everyone. It is money time and Poppy Harlow fresh off the airplane here to join us. Tell us what's going on.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: Weather wasn't that nice when I was trying to get here late last night, but a beautiful morning here.

And stock futures are pointing higher this morning ahead of the opening bell on Wall Street. The major U.S. average is closing 1 percent higher on Friday. That's when investors kick off this week. Last week, the Dow gained a total of 1.5 percent, the Nasdaq higher than that. The S&P 500 up 1.6 percent.

And a much stronger than expected June jobs report on Friday gave investors a much needed boost of confidence. Investors will be watching closely on Wednesday. That's when Federal Reserve Chairman Ben Bernanke will give a big speech about where the Fed thinks the economy stands, and everyone will read into every word he has to say to see if we are really turning that corner and when the Fed is going to pull back their stimulus program.

Meantime, the earnings parade begins on Wall Street today. The traditional first company to report, Alcoa, that's an aluminum giant, they will report their numbers after the closing bell. Then later in the week, we'll hear from big banks, JPMorgan Chase and Wells Fargo, also Yum Brands. They own Taco Bell, KFC, Pizza Hut, a good indication of consumer spending. We'll hear from them as well this week. And corporate earnings will be under a lot of scrutiny because we're waiting to hear when the Fed is going to pull back all the stimulus that has been inflating this economy.

And here is my favorite story of the morning. Flush with cash, Chinese buyers are flooding the U.S. housing market and paying top dollar for our real estate. Chinese buyers actually account for 18 percent of the more than $68 billion, 18 percent of that, that foreigners spent on U.S. housing in the 12 months ending on March 31st. The median home price that they paid -- $425,000 showing us that they're buying more expensive homes than other foreign buyers. And nearly 70 percent of them are paying fully in cash, guys. Fully in cash for these homes. And that's not helping those of us who would like to buy homes here.

BERMAN: How does that happen?

PEREIRA: Well, if you're selling a house in California, that's good news.

HARLOW: So California is where this is happening most. So if you are selling a house in California, that's good news. If you are buying a house in California, and you don't have all cash, not so much.

But this is what we're seeing in New York, too. There are these outrageous numbers last week in terms of New York home prices. And it's a lot of foreign investors coming in and scooping up real estate.

BERMAN: Thank you so much. This is really interesting.

Twenty five minutes after the hour here. Coming up, it's been deadly night, deadly day in Cairo, too. Gunfire leaving dozens dead. Was it the military or was it what they call terrorists behind the shootings there? We're going to go live next.

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