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Wall Street Braces for Sharp Sell-off; Russia Accuses U.S. of Bombing Aleppo; Bernie Sanders Prepares for High Stakes Debate; Armed Occupiers to Surrender within the Day; High Stakes for Hillary in Tonight's Debate; Royal Caribbean Cruise Survives Storm at Sea. Aired 9:30-10a ET

Aired February 11, 2016 - 09:30   ET

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


[09:30:01] CAROL COSTELLO, CNN ANCHOR: Alison Kosik joins us live. It has something to do with oil prices, right?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Lot of activity on the floor as you can see. Get ready for stocks to be crushed at least here at the open. A lot of this has to do with testimony from Fed chief Janet Yellen who spoke on Capitol Hill yesterday, the first of her two-day testimony on Capitol Hill. And in her testimony, she talks about a lot about risk to global economic growth. And specifically risk to economic growth here in the U.S.

But here's the thing. She didn't take it a step further. She didn't take the possibility of a rate hike off the table which means the Fed still could raise interest rates in March. We're just a few weeks away from that. And that's as you see countries around the world, going in the opposite direction. We're seeing Europe cut its interest rates. It's Japan and Sweden, those central banks move into negative territory for their interest rates.

Now yesterday we did see the investment move turn negative. We're seeing that carry into today. Janet Yellen is going to be back on Capitol Hill today for a second day of testimony. We will see if she can now clarify what the Fed means if they can turn the market around -- Carol.

COSTELLO: All right. Alison Kosik, I know you'll keep an eye on things for us. Thanks so much.

It is a bizarre back and forth. The U.S. and Russia clashing over exactly who is bombing Aleppo, Syria.

Barbara Starr at the Pentagon with more on this. Good morning.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Good morning, Carol. The Russian government saying that yesterday there were two U.S. war planes that bombed Aleppo in northwestern Syria. This is of course an area everyone is watching very carefully. Thousands, tens of thousands of people at risk as regime Russian forces have encircled the city of Aleppo. It is a dire situation there.

Why would the U.S. be bombing there? That's the answer from the Pentagon. The Pentagon says that this is a fabrication, that the U.S. is not bombing in Aleppo and it's not bombing in Aleppo because there is no ISIS there. This is an area where the regime, the Syrian regime, backed up by Russian and Iranian forces, have been pounding the city and pounding the area there according to the United States.

All indications are that in fact the U.S. did not have any warplanes in this area and is not bombing there. That is according to the Pentagon and at the moment at least no evidence to the contrary, Carol.

COSTELLO: So why, Barbara, would Russia accuse the United States of bombing Aleppo?

STARR: Well, I'll tell you, they've done this before. Several weeks ago there was a claim from the Russian government that the U.S. was bombing Syrian military sites in eastern Syria in a place called Deir ez-Zor. The U.S. was not bombing Syrian military sites there according to the Pentagon. Some of it is pure propaganda efforts in the view of the Pentagon. Some of it is the Russian government putting out messages perhaps to its own people.

Certainly up to everyone to make up their own mind about this but the kind of aircraft that the Russians are saying the U.S. used in Aleppo, they are called A-10s. They would be very vulnerable to being shot down in that kind of heavy fighting environment right now. So again it seems pretty doubtful that the U.S. would risk pilots lives in such a situation, Carol.

COSTELLO: All right. Barbara Starr reporting live from the Pentagon, thank you.

Senator Bernie Sanders is on a roll, about to take the debate stage after a huge win in New Hampshire but he could take it on the chin if he is pressed to answer exactly how he will pay for his revolution. As Stephen Colbert pointed out with the candidate last night on "The Late Show." Listen.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (D), PRESIDENTIAL CANDIDATE: Why not? Why can't all people in this country have healthcare? Why can't we make public colleges and universities tuition free? Why not? Why do we have so much --

(CHEERS AND APPLAUSE)

STEPHEN COLBERT, HOST, "THE LATE SHOW WITH STEPHEN COLBERT": The answer is, the answer is that it's expensive. It's a very expensive thing to do. The top 1 percent has a lot of influence with the government and they're not just going to give it up, you know? They are going to fight you tooth and nail.

SANDERS: Well --

COLBERT: I'll tell you how I know. I'm in the top 1 percent. Why do you think you can make this change?

SANDERS: I think because we have reached a point in American society where people are just very, very unhappy with the status quo.

(END VIDEO CLIP)

COLBERT: As you heard, no real answer. A "Washington Post" op-ed echoed that theme, looping Sanders in with the Republican candidate Donald Trump calling both men, quote, "dangerously and seductively wrong in their facile diagnoses and predictions." And adding that, quote, "Mr. Sanders has not leveled with Americans about the true cost of single-payer healthcare."

I'm joined now by Harry Jaffe. He's the author of "Why Bernie Sanders Matters." Welcome, sir.

HARRY JAFFE, AUTHOR, "WHY BERNIE SANDERS MATTERS": Happy to be with you.

COSTELLO: Happy to have you here. So first off, are you surprised that Sanders is resonating?

JAFFE: Actually -- actually I am. Because I think that everybody expected him to be a flash in the pan.

[09:35:04] But then having written a book about him, that's the way politicians saw him way back in 1980 when he ran for mayor of Burlington. People thought well, he's going to go away. He didn't.

COSTELLO: He didn't and he's still here. Is he a pure ideologue?

JAFFE: Well, he certainly has a certain set of beliefs that he's not going to move from. And that's part of his secret sauce. Let's face it. We haven't seen somebody like this in American politics for a long time. He believes in what he says. He's been saying it for 40 years. And apparently people want to hear it.

COSTELLO: Well, they certainty do. And he does believe in what he says but he never quite gets to the part where, like, how is he going to pay for this? You know, besides people will rise up and there will be a revolution and it will force government to act. Is that his shtick?

JAFFE: It's absolutely his shtick. And I think that as a campaign it works really well. And I think that that is what we're doing now. We're having a campaign. And I'm not so sure that process is part of the process.

COSTELLO: What do you mean by that, process is not part of the process?

JAFFE: Well, how this is going to happen, how it's going to be specifically done, I mean suppose that he makes promises and he says we're going to redistribute wealth from the 1 percent to the rest of the country, suppose he says that we are going to tax speculation on Wall Street? He can say that. Politicians promise everything they can in the campaign. Then what happens when they come to office? Who knows?

So I think that at this point Sanders is just putting it out there. And he has a whole lot of momentum behind him.

COSTELLO: Would he be a good commander-in-chief?

JAFFE: Wow, that's a rough question. You know, he has been historically very skeptical of the military budget. He clearly is not interested in being the big shot with the big stick going to war. He said specifically the United States should not be the policemen of the world. At the same time he has voted for sending troops to Afghanistan so he's not afraid of deploying troops. I think that we would have a different kind of commander-in-chief. That's for sure.

COSTELLO: So if you are a betting man, and maybe you are, how far does Bernie go?

JAFFE: I think Bernie goes all the way do June. He's certainly going to the conventions. Is he going to beat Hillary Clinton? I think it's all together possible. He's a very smart politician. This is a guy who has run for office 20 times. He runs for office for a living. And he's good at it. And that is what he's doing right now. He's got a good team. He's got a lot of money behind him. He's fearless. He's patient. He's going to go a long, long way.

COSTELLO: All right. Harry Jaffe, thanks for being with me this morning.

JAFFE: Pleasure.

COSTELLO: Still to come in the NEWSROOM, armed protesters in Oregon say they will surrender this morning following a night of intense negotiations. But will they?

(COMMERCIAL BREAK)

[09:42:12] COSTELLO: Dramatic negotiations between the FBI and the last four armed protesters holed up at an Oregon wildlife refuge. Those holed up saying now that they'll surrender peacefully sometime this morning after a six-week standoff that included a chase and a shooting that left one occupier dead. But a calm resolution did not look quite as certain in the overnight hours. Listen as negotiators talk with the militia members.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They promised you, they wouldn't do this.

UNIDENTIFIED MALE: Well, they got their guys (EXPLETIVE DELETED) out there waiting and he's hanging out there. They're telling us to come out --

(CROSSTALK)

UNIDENTIFIED FEMALE: And they're getting closer and closer. Many in Portland on the ground willing to negotiate a peaceful resolution and exit strategy.

UNIDENTIFIED FEMALE: -- in Portland, Oregon, on the ground and he's willing to come here and negotiate with us. You need to stand down. She says you need to stand down. She's coming here to settle this peacefully, not your way.

UNIDENTIFIED MALE: If they cut our phones off, that probably means we're dead. Just so you know that.

UNIDENTIFIED MALE: Just trust and take a deep breath and don't do anything rash.

UNIDENTIFIED FEMALE: We're not. Our hands are at our sides, our weapons are down. If they come in, they cut our communications it's because they killed us.

(END VIDEO CLIP)

COSTELLO: All of these hours after the feds arrested Cliven Bundy, the father of protester Ammon Bundy as he got off of a plane in Portland.

CNN's Dan Simon is tracking all of the developments. Good morning, Dan.

DAN SIMON, CNN CORRESPONDENT: Good morning, Carol. Well, it appears that the last of these remaining hold-outs, and we're talking about four of them, are apparently going to turn themselves in to the federal authorities this morning. And perhaps in less than two hours from now they say they will do it at 8:00 this morning in Oregon local time there. This after the FBI apparently had enough of all this. They surrounded all of the entries and exits into that refuge and they decided enough is enough.

And so you had all of this playing out last night at a live stream on YouTube. At one point you had 66,000 listeners listening to the drama unfold. You had a Nevada legislator named Michelle Fiore who was part of that conversation. She has been sympathetic to the cause. She was calling in, trying to convince the hold-outs to turn themselves in peacefully. Apparently they are going to do just that. Again, in a couple of hours from now.

And of course you have more drama with Cliven Bundy, the patriarch who was arrested in Portland last night apparently related to his own skirmishes with federal authorities back in 2014. So now you have a father and son, both in jail, Cliven Bundy, Ammon Bundy, in jail, actually you have a third Bundy in jail, Ryan Bundy, another brother in jail. So apparently this is all going to come to an end hopefully at least in a couple of hours. But for now things remain tense -- Carol.

[09:45:01] COSTELLO: All right, we'll check back. Dan Simon, reporting live for us this morning.

Still to come in the NEWSROOM, Hillary Clinton readies for round two against Bernie Sanders. So what can she say -- what could she say to stop the Bernie momentum?

(COMMERCIAL BREAK) COSTELLO: A high stakes showdown for Hillary Clinton tonight as Bernie Sanders surges. Some Clinton allies may want her to avoid jabs like this one that earned boos at the previous debate.

(BEGIN VIDEO CLIP)

HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: But you will not find that I ever changed a view or a vote because of any donation that I ever received.

[09:50:01] And I have stood up and I have represented my constituents to the best of my ability, and I'm proud of that. So I think it's time to end the very artful smear that you and your campaign have been carrying out in recent weeks, and let's talk about the issues.

(END VIDEO CLIP)

COSTELLO: Ed Lee is the executive director of the Barkley Forum Center for Debate Education at Emory University. He joins me now live from Atlanta. Good morning.

ED LEE, EXEC. DIR., BARKLEY FORUM CTR. FOR DEBATE EDUCATION, EMORY UNIV.: Good morning.

COSTELLO: So in your mind, how critical is Clinton's performance tonight?

LEE: I think that that it's important, but one of the things that we are doing is that we are sort of inflating the value of the New Hampshire primaries, but South Carolina and Nevada seems to be places where she's doing well and it's a population of people that she's done well communicating with previously. So I think that it is important to shift the momentum and the trajectory of the conversation, but in the grand scheme of things, not the most important issue.

COSTELLO: Yes, in South Carolina, she is winning big time over Bernie Sanders.

LEE: Absolutely.

COSTELLO: You are correct about that. She is by I think 30 points in some polls.

So with that said, should Hillary Clinton come out swinging or just -- what should she do?

LEE: Well, I think that part of the thing that she's struggling with is an authenticity gap between her and Bernie Sanders. That -- that clip that you just showed indicates that she tends to be aggressive and that she comes off as being abrasive at times. And closing the authenticity gap means connecting with the public in ways that understands what their stories are and that she can communicate what her story is. And so that means being vulnerable but also being able to speak to having some sense of strength and doing that with stories, and stories about herself and stories about the communities that she wants to serve. COSTELLO: And she has done that before, and has connected.

LEE: Yes. She has been successful in doing that. But one of the things that I think ends up happening is that she falls into these sort of wonkish discussions about policies, and that these things that ultimately I don't think that most of the electorate finds important or all that relevant in figuring out who they want to connect with.

The thing that Bernie Sanders has done extremely well is that he's figured out where the vulnerabilities are for the public and he's tapped into those things. And while it's one note about economic inequality, it's a note that most of the public resonates with. And she has failed to find that note that the community resonates with.

COSTELLO: Yes, because she has tried to say, you know, Senator Sanders, I hear you, but how are you going to accomplish these things? And that hasn't seemed to resonate so far, but is that something she should do tonight?

LEE: No. I don't think that the challenge to Bernie Sanders is ultimately a question of policy. It's a ultimately a question of who do you trust and who do you want to lead the world and who do you think has your back.? And at this point in time, her emphasis on a set of universal values or a set of policy solutions will not connect with the public. And what she needs to do is speak to the particular needs of the communities that she's trying to have conversations with. Poverty in intercity Atlanta is very different from poverty in rural Appalachia, and the needs of undocumented communities in the United States are very different form the needs of black Americans in the United States. And her desire to speak to a universal notion of ethics or a universal value of rights will not translate. She needs to understand and speak to the specifics of the needs of each of those communities.

COSTELLO: Understand. Ed Lee, thank you for being with me this morning.

LEE: Thank you for having me.

COSTELLO: You're welcome.

Still to come in the NEWSROOM, a terrifying cruise through a powerful storm has many passengers now asking why the ship set sail in the first place.

(COMMERCIAL BREAK)

[09:58:01] COSTELLO: At least one U.S. lawmaker is calling into investigation why a cruise ship with 6,000 passengers on board sailed into powerful storms. The Royal Caribbean "Anthem of The Seas" returned to port last night. Passengers grateful to be on the dry land.

CNN's Michaela Pereira has more for you.

(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: Oh, my god.

MICHAELA PEREIRA, CNN CORRESPONDENT (voice-over): A 12 hour nightmare finally coming to an end for rattled passengers aboard Royal Caribbean's Anthem of the Seas cruise ship.

UNIDENTIFIED MALE: Free at last, free at last!

UNIDENTIFIED FEMALE: I at one point thought I wasn't going to see my family again. That boat never should have gone out.

PEREIRA: The massive vessel arriving back in New Jersey overnight after encountering a ferocious Atlantic storm off the coast of the Carolinas just three days into its trip to the Bahamas.

UNIDENTIFIED MALE: It's 30-foot waves, like the whole ship was on a 45 degree angle for, like, we're talking four or five hours. Windows smashed and chairs toppled over.

UNIDENTIFIED FEMALE: Oh my god.

PEREIRA: Terrified, motion sick passengers hunkered down in their rooms as the captain battled the monstrous waves and 125 miles per hour winds.

UNIDENTIFIED FEMALE: All that. I'm so nervous.

UNIDENTIFIED MALE: It was crazy. I mean, everything fell out of the bathroom, broke. Crash, crash, crash.

PEREIRA: Many criticizing the captain and cruise liner's decision to set sail despite the storm warnings days before leaving port. Royal Caribbean said the storm was worse than predicted and apologized to passengers, admitting, quote, "We have to do better. Our ship and our crew performed very well to keep everyone safe during severe weather. The event, exceptional as it was, identified gaps in our planning system that we are addressing."

Travel-weary passengers just happy to be alive.

UNIDENTIFIED FEMALE: To survive a hurricane is incredible, but to survive it at sea? It was amazing.

(END VIDEO CLIP)

COSTELLO: Michaela Pereira reporting. The cruise line will give the passengers full refunds plus a voucher that can be applied to a future cruise.

The next hour of CNN NEWSROOM starts now.

(MUSIC PLAYING)