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EARLY START

Pyongyang Threatens Guam, Mocks Trump; U.S. Embassy in Cuba Targeted?; FBI Raided Manafort's Home; Emotional Day at Swift Trial. Aired 4-4:30a ET

Aired August 10, 2017 - 04:00   ET

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


[04:00:09] MIGUEL MARQUEZ, CNN ANCHOR: Bereft of reason and letting out a load of nonsense. That's North Korea's take on President Trump, as Pyongyang levels a new specific threat at a U.S. territory. What will President Trump do now?

CHRISTINE ROMANS, CNN ANCHOR: And were employees at the U.S. embassy in Cuba targeted with a covert device? Hearing loss for some in Havana raising many questions this morning of some sort of acoustic attack.

MARQUEZ: Bizarre.

ROMANS: Good morning, and welcome to EARLY START. I'm Christine Romans.

MARQUEZ: And I'm Miguel Marquez, in for Dave Briggs this week. It is Thursday, August 10th, 4:00 a.m. here in the eastern part of the United States, 5:00 p.m. in Seoul, South Korea.

Just a day after the president promised fire and fury if North Korea made another threat against the U.S., Pyongyang does just that, leveling a very fierce, very specific threat to attack a U.S. territory, taking some personal shots at the president in the process. Now, the world waits to see if anything the commander-in-chief decides to do in response.

ROMANS: North Korea says it is, quote, seriously examining a plan to launch a missile strike targeting the sea about 20 miles off the coast of Guam, where the U.S. has two military bases. State-run media says the launch of four ballistic missiles would signal a crucial warning to the U.S. Pyongyang says its plan to launch missiles will be in place within days.

MARQUEZ: Now, the statement also marks President Trump for speaking from a golf range where he's -- it says he, quote, let out a load of nonsense about fire and fury, failing to grasp the ongoing grave situation. The North Korean statement says, sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him.

Joining us live with CNN's Anna Coren. She is live in Seoul, South Korea -- Ana.

ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: Miguel, that's right. What we heard from North Korea earlier today was that it was considering, seriously examining, in fact, a plan to strike Guam, that island in the western Pacific. It would involve four intermediate range missiles with nuclear tips, nuclear warheads, that, as you say, that would be ready to go in days. The military saying it will present to North Korea's leader, Kim Jong-un, by the middle of August, and then it will be up to him.

You mentioned those comments, that dealing with Donald Trump is bereft of reason, which obviously comes following the fire and fury language we heard a few days ago from the president. Obviously, his supporters saying that he's getting on Kim Jong-un's level, talking in a language that perhaps he understands as opposed to diplomatic language. His critics believe however that that is bringing certainly this part of the world, the Korean peninsula, and also the region, closer to war.

Now, Miguel, it's important to note that Jim Mattis, obviously, defense secretary, retired four-star general, that he also spoke up earlier and warned North Korea -- mind you, he called them the DPRK, which really I wouldn't say necessarily is a sign of respect, but certainly an acknowledgment of what they call themselves, saying that if North Korea should stop provocations, it could bring destruction to the regime and its people.

And as far as South Korea is concerned, well, a national security council meeting is held as we speak. We have yet to hear news from that. But certainly, earlier today, they said that the plan to strike Guam is absurd, that any provocation will be met with response. The South Korean president, Moon Jae-in, he has certainly said that he's open to dialogue, and the only way to resolve this is peacefully.

But with what's happened in the last couple of days, South Korea now is also looking to beef up its military presence -- Miguel.

MARQUEZ: Sounds like statements and reactions across the board, a very mixed situation. Anna Coren for us in Seoul, thank you.

ROMANS: So, now, with President Trump and Kim Jong-un trading insults and threats, reaction among Asian nations has been mixed. The governor of Guam stressing the importance of remaining calm, despite being targeted by the North Korean regime.

(BEGIN VIDEO CLIP)

GOV. EDDIE BAZA GALVO (R), GUAM: This is not a time to panic. These are -- many statements being made out there by a bellicose leader. But, at this point, there's been no change in the security situation here in Guam.

(END VIDEO CLIP)

ROMANS: Let's bring in CNN's Sherisse Pham live from Tokyo.

What's the situation there, Sherisse?

SHERISSE PHAM, CNN INTERNATIONAL CORRESPONDENT: Well, here in Japan, government officials are saying, we will not tolerate any provocations from North Korea. And they're taking a passive stance, which is the stance that Japan has maintained since the end of World War II.

[04:05:04] It's a little bit different from its neighbor, its nearby neighbor, South Korea, which has warned to North Korea to, please, look, dial it back or face military retaliation from us.

So, there's a little bit of a mixed bag going on across the region. And China coming out the most forcefully telling, look, all parties, everybody, please back off a little bit and tone it down. Now, all of this in Japan comes at a sensitive time, because this week marks the anniversary of the bombings of Hiroshima and Nagasaki, a very strong reminder that Japan is the only country to have suffered under the attack of an atomic bomb. Now the people across the region in Japan, in South Korea, and China, they are carrying on with their daily lives here, because look, they are used to this bellicose language from North Korea.

They are a little bit startled at the war of words coming out of the United States. But for now, life continues as usual. And we will see if the posture changes a little bit in the coming days -- Christine.

ROMANS: All right. Sherisse, thank you so much for that, live from Tokyo this morning. I mean, that timing is really interesting, Miguel, you know, when you talk about the anniversaries of those bombings, it reminds you that when you're talking about nuclear threats, there are moral, environmental, and just human questions that have to be asked about a nuclear --

MARQUEZ: The sensitivities to nuclear warfare in Japan are so on the surface still, this many years after the incidents.

So far, no official reaction from the White House to North Korea's latest threat. We have learned President Trump's fire and fury warning to North Korea was improvised. Sources tell CNN it was not part of a scripted statement.

The White House says chief of staff John Kelly and members of the president's national security team were well-aware of the tone the president intended to use, though the words were his own. A State Department spokeswoman says everyone in the administration sees things the same way.

(BEGIN VIDEO CLIP)

HEATHER NAUERT, STATE DEPARTMENT SPOKESPERSON: The United States is on the same page. Whether it's the White House, the State Department, the Department of Defense, we are speaking with one voice.

(END VIDEO CLIP)

ROMANS: That's debatable. Secretary of State Rex Tillerson and Secretary of Defense James Mattis struck notably different tones in their statements. Mattis focused on U.S. military capabilities and the risk North Korea would be taking if it attacked.

MARQUEZ: He said: North Korea must choose to stop isolating itself and stand down its pursuit of nuclear weapons. The DPRK should cease any consideration of actions that would lead to the end of its regime and the destruction of its people. Meantime, Rex Tillerson stressed diplomacy, saying he thought the president just wanted to be clear to the North Korean regime in order to avoid any miscalculation on their part.

ROMANS: But those reassurances seem to clash with the president's "fire and fury" message in his early tweets yesterday: My first order as president was to renovate and modernize our nuclear arsenal. It is now far stronger than ever before.

Worth noting, the president has made nuclear spending a budget priority, but nothing has actually changed yet.

MARQUEZ: He also tweeted: Hopefully, we will never have to use this power, but there will never be a time that we are not the most powerful nation in the world. He added that exclamation point.

Today, President Trump meets the vice president for lunch at Mr. Trump's New Jersey golf club.

ROMANS: All right. Rising tensions with North Korea is finally breaking Wall Street's calm. Global stocks down after U.S. stocks closed lower. A response to the president's warning to North Korea and its then-threat to Guam.

For months, stocks have coasted to record highs. But now, investors showing signs of caution. For example, gold, a typical safe haven, rising more than 1 percent. It's at a two-month high. Meanwhile, Wall Street's fear gauge is up 21 percent this week. The VIX index has previously been trading at historically low levels, and the U.S. dollar, once a safe bet in the global economy, is down 8 percent this year.

Of course, North Korea isn't the only catalyst for caution. Companies released some disappointing earnings reports this week. But overall, corporate profits remain strong this season. 2017 is on track from the strongest profit growth in six years. All three stock market averages are still up by double digits this year.

Defense stocks, by the way, had a big boost yesterday as the broader market fell. Shares of Lockheed Martin and Raytheon, among others, hit record highs. So, you saw energy and the defense stocks yesterday as tensions rose with North Korea.

MARQUEZ: I'm going to have a fear gauge installed in me.

(LAUGHTER)

ROMANS: Fear gauge.

MARQUEZ: Now, the State Department believes several of its employees at the U.S. embassy in Havana were targeted last fall by a covert sonic device that caused them to suffer hearing loss. Two staffers experienced such serious health problems they had to be returned to the United States for treatment, according to the State Department. An official there, the workers were not in the same place at the same time, but also reported a variety of concussion-like symptoms.

[04:10:07] Bizarre.

ROMANS: The FBI is now looking into this case. The Trump administration responding to the incident by expelling two Cuban diplomats from their embassy in Washington in May. Cuban officials call the expulsion an overreaction. But the Cuban foreign ministry says it is taking the matter with great seriousness.

Acoustic, some kind of acoustic device they're investigating.

MARQUEZ: You can make people sick with that stuff. Whether they were listening or trying to affect their health.

ROMANS: Sounds like Cold War spy games, you know? It seems like something from a time past.

MARQUEZ: Bizarre.

ROMANS: All right. A Republican senator's theory of why John McCain voted against the Senate health care plan left even a radio host stunned.

(BEGIN AUDIO CLIP)

SEN. RON JOHNSON (R), WISCONSIN: He has a brain tumor right now. That vote occurred at 1:30 in the morning. Some of that might have factored in.

RADIO HOST: Really?

(END AUDIO CLIP)

ROMANS: More of Ron Johnson's comments and what he's saying now.

(COMMERCIAL BREAK)

[04:15:01] MARQUEZ: A surprising new development in the Russia investigation. We've learned FBI agents raided the home of former Trump campaign manager Paul Manafort last month, confiscating materials for special counsel Robert Mueller's investigation. They used a so-called no-knock warrant to enter Manafort's Virginia home, an unusual tactic in a case already under investigation for months.

ROMANS: Sources tell CNN the raid took Trump's team by surprise and rattled cages in the president's inner circle. So, why did the feds take action here?

CNN's Jessica Schneider has more.

(BEGIN VIDEOTAPE)

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Christine and Miguel, it was a surprise raid where the aim was to secure material that Paul Manafort presumably hadn't already turned over to the feds. FBI agents descended on his Alexandria, Virginia, apartment predawn, according to "The Washington Post", and seized financial records, tax records, and some documents that Manafort had actually already turned over to Senate investigators.

But the fact that this raid happened as a surprise and in the darkness of those early morning hours on July 26th, it signifies that the special counsel may be sending a message and getting serious when it comes to Paul Manafort and this Russia investigation.

Paul Manafort's spokesman confirmed the raid but then reiterated that Manafort has, quote, consistently cooperated with law enforcement and other serious inquiries and did so on this occasion, as well.

Now, the raid did come one day after Paul Manafort talked behind closed doors with Senate Intelligence Committee staff. But CNN has learned that federal investigators have become suspicious of Manafort after they turned up intercepted communications from suspected Russian operatives discussing Russian efforts to work with Manafort to gather information that could hurt Hillary Clinton's bid for the White House.

Federal investigators are also looking into his lobby work for a pro- Russia political party in Ukraine -- Christine and Miguel.

(END VIDEOTAPE)

MARQUEZ: Thanks to our Jessica Schneider.

Republican lawmakers' failure to repeal and replace Obamacare appears to be driving a wedge between President Trump and the Senate majority leader. The president is pushing back on a critique from Mitch McConnell who said this week the president had, quote, excessive expectations in pushing his agendas, pointing to artificial deadlines set by the Trump White House.

ROMANS: So, the president fires back on Twitter, of course, saying: Senator Mitch McConnell said I had excessive expectations, but I don't think so. After seven years of hearing repeal and replace, why not done?

MARQUEZ: That followed a tweet from the president's social media director who said, quote, more excuses. The Senate majority leader must have needed another four years in addition to the seven years to repeal and replace Obamacare.

Tension between the White House and Congress has escalated since the efforts by Senate Republicans to pass health care legislation crashed and burned.

ROMANS: All right. Wisconsin Senator Ron Johnson expressing regret for his comments about fellow Republican John McCain. Johnson told a Chicago radio show that McCain's brain cancer may have played a role in his dramatic and decisive vote to derail the Senate's bill to repeal Obamacare.

(BEGIN AUDIO CLIP)

JOHNSON: I'm not going to speak for John McCain -- you know, he has -- he has a brain tumor now. That vote occurred at 1:30 in the morning. Some of that might have factored in.

AMY JACOBSON, RADIO HOST: You really think that played a factor in his judgment call?

JOHNSON: Again, I don't know exactly what -- we thought -- again, I don't want to speak for any senator. I really thought John was going to vote yes at 10:30 at night. By about 1:00, 1:30, he voted no. So, I -- you have to talk to John in terms of what was on his mind.

(END AUDIO CLIP)

MARQUEZ: McCain's spokesperson telling CNN that Johnson's comments were, quote, bizarre and deeply unfortunate. Johnson later walked back his remarks, saying the vote came at the end of a long day for everyone, and he should have been more eloquent, expressed his sympathy for what Senator McCain is going through.

ROMANS: All right. About 19 minutes past the hour. An emotional day in court as Taylor Swift's mother opens up about a difficult conversation with her daughter. The man, the singer accused of groping her also took the stand. We've got more from Colorado, next.

(COMMERCIAL BREAK)

[04:23:39] MARQUEZ: Emotions running high at the trial of a lawsuit against Taylor Swift. The pop star has yet to testify, but her mother took the stand. We also hear from the radio host who filed the lawsuit after being fired when swift said he groped her. The case back in court later today.

CNN's Scott McLean has the latest from Denver.

(BEGIN VIDEOTAPE)

SCOTT MCLEAN, CNN NATIONAL CORRESPONDENT: Christine, Miguel, Taylor Swift was inside a Denver courtroom yesterday for the third straight day. But she has yet to tell her side of the story. Instead, if was her mother, Andrea Swift, who gave a tearful account of the moment that her daughter came to her to say she had been groped by a man at a meet-and-greet session before one of her concerts four years ago.

Swift testified that she wanted to vomit and cry at the same time. Now, a big part of this trial centers on a single photo from that meet and greet. The plaintiff, David Mueller, says it shows Swift's skirt is in place, and there's no way he could be lifting it and grabbing her bottom. Andrea Swift, though, testified that to her the skirt does look out of place.

Frank Bell, Swift's liaison with local radio stations, also refused to concede anything about the photo, saying to him, it also does not look out of place.

Now, David Mueller himself, he finished up on the stand yesterday. His team is trying to frame this case as a powerful music star who's using her influence to get him fired. [04:25:01] Swift's team, though, says that its people like David

Mueller in the radio industry who hold the cards in the relationship because they get to choose the music.

The trial will continue today. It is not clear, though, when Taylor Swift herself will take the stand.

(END VIDEOTAPE)

ROMANS: All right. Thank you so much for that.

A dramatic rescue by the Coast Guard plucking a Navy pilot from the water off the Florida Keys after his fighter jet crashed into the ocean. Officials say the pilot ejected from the aircraft about 20 miles from the Key West naval air station. A Coast Guard helicopter crew observed an emergency smoke signal, responded quickly to the scene.

The incident is under investigation. The pilot, who has not been identified, suffered no serious injuries. He was conducting training operations when the plane went down.

All right. North Korea defying President Trump. Another direct threat to Guam by Pyongyang. What will the president do after promising fire and fury if they keep up their threats?

(COMMERCIAL BREAK)

ROMANS: North Korea says President Trump is bereft of reason and letting out a load of nonsense.