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EARLY START

Trump Slashes Former Chief Strategist Steve Bannon; Nor-Easter Bears Down On Atlantic Coast; Trump Dissolves Voter Fraud Commission; Auto Sales Drop For The First Time In Eight Years; Record-Breaking 22 Women Now Serving In U.S. Senate; North Korea & South Korea Speaking On Hotline. Aired 4:30-5a ET

Aired January 4, 2018 - 04:30   ET

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


(COMMERCIAL BREAK)

[04:31:39] CHRISTINE ROMANS, CNN ANCHOR: The counter puncher in chief takes down Steve Bannon after excerpts of that Michael Wolff book leak out. Steve Bannon, what does he say? Take the high road.

DAVE BRIGGS, CNN ANCHOR: And President's voter fraud commission has been decommissioned. CNN has learned the effort to prove the un- provable had been in turmoil for months.

ROMANS: And the first big Nor' Easter of the season churning up the coast, a rough morning into up for millions of view in the Northeast after a very rough day for many of you in the south, EARLY START's coverage from Washington, Seoul and beautiful snowy South Carolina continues right now.

Welcome back everyone at EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. We'll get to the bomb cyclone that's hitting the east coast shortly, but first the bomb cyclone that hit the White House yesterday. President Trump delivering a crushing rebuke to his former Chief Strategist Steve Bannon.

The White House releasing a stinging statement after excerpts from an upcoming book came out. They quote Bannon calling the meeting between a Russian lawyer and Trump officials at Trump Tower, excuse me. Language is tough for me this morning, its cold.

Treasonous and unpatriotic is what Bannon called that meeting. Bannon also reportedly told author Michael Wolff they're going to crack Don Jr. like an egg on national TV.

ROMANS: The President now claiming Bannon, quote, lost his mind after he lost his White House job. The statement says -- it's a remarkable statement from the White House. I mean, I can't say that enough. "Steve Bannon has nothing to do with me or my presidency. Now that he's on his own Steve is learning that winning isn't as easy as I make it look. Steve had very little to do with our historic victory."

BRIGGS: Which was delivered by the forgotten men and women of this country. Bannon himself finally responding late last night speaking on SiriusXM Breitbart News tonight. Bannon seemed to take it on stride.

(BEGIN VIDEO CLIP)

STEVE BANNON, WHITE HOUSE FORMER CHIEF STRATEGIST: The President of the United States is a great man. You know I support him day in and day out. Whether going to the country giving the Trump miracle speech or on the show on the websites. So I don't think you have to worry about that.

(END VIDEO CLIP)

BRIGGS: Interesting. We also have a new insight on what he's feeling, President Trump's anger over the last few days more on that in a moment. But first, correspondent Jeff Zeleny begins our coverage from the White House.

JEFF ZELENY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Christine and Dave, an extraordinary war of words breaking out between President Trump and his former top strategist, Steve Bannon, all over the release of a new book coming out talking specifically about the Russian investigation. Steve Bannon, of course, fired from his job in August but still in touch with the President, accused the President, son, son-in-law and former campaign manager of treasonous behavior, unpatriotic behavior in his words, all about the 2016 meeting at Trump Tower with those three officials and a Russian lawyer.

Now, this is all coming out in new details in a book coming out later this month, "Fire and Fury, Inside the Trump White House." Now, Steve Bannon used extraordinary language here describing the President's family, describing their ambitions, their motive. The President shot back with a very harsh statement on Wednesday.

Now, in the White House briefing on Wednesday, Press Secretary Sarah Sanders, she described the book as trashy tabloid fiction. She also said the President's reaction was this.

(BEGIN VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I think furious, disgusted would probably certainly fit when you make such outrageous claims and completely false claims again the President, his administration and his family.

(END VIDEO CLIP)

[04:35:06] ZELENY: But these explosive comments actually undermine the argument of the White House for more than a year trying to discredit and down play the Russia investigation. Steve Bannon says he believes this is all about money laundering. That's where this will ultimately go.

Now, of course, the relationship between the President and Steve Bannon has been fractured, no question. The open question is, though, if they will stay separated or if they will somehow rejoin forces once again. The President, of course, so many times has been furious with some advisers only to bring them back into the fold. But this war of words, unlike anything we've seen in the first year of this Trump White House. Dave and Christine?

ROMANS: All right, Jeff Zeleny. So that remarkable statement from the White House, and then this. A cease and desist letter from the President's lawyers last night demanding Bannon refrain from making a disparaging remarks about Mr. Trump and his family.

BRIGGS: Sources tell CNN the President began the year furious at his legal team for repeatedly pushing back the timeline for the end of the Russian investigation. CNN reported last month some members of the President's inner circle feared he would erupt early in 2018 if the end of the probe was not near.

ROMANS: The President's rage boiling over Tuesday and rambling. Look at all those tweets, 16 tweets. Really a 16-tweet storm covering the range of topics including that bizarre taunting of Kim Jong-un when he said my nuclear button is bigger than your nuclear button. Aides inside the White House asking some of the President's top allies to speak to him about the risk those tweets present.

BRIGGS: Accounts of the President's volatility come from interviews with a dozen White House, officials, lawmakers and other Republicans. They paint a picture of a president who is intent on shaking up the country's political norms even as he faces crucial deadlines of the coming weeks on immigration, on government funding, and many, many issues.

ROMANS: There is just so much in that Michael Wolff book and we haven't even seen the whole thing, only these experts.

There's also this, Ivanka Trump may have set her sights on becoming the first women president. Wolff writes, Ivanka and her husband Jared Kushner made a deal when they came to Washington that if the opportunity arose, she would be the one to run for president. Wolff does not disclose his sourcing for this anecdote, but in the book, he writes that Steve Bannon was horrified when they learned about the deal. Bannon has made no secret of his disdain for the couple mocking their White House influence with the term, Javanka.

One big winner in all of this of course is the author, Michael Wolff. His book already hit number 1 on Amazon. The publisher is now speeding out the roll out plan. And we'll be seeing more of him. There is going to be in just a couple hours. The Hollywood reported we're told he's going to have another excerpt.

BRIGGS: More, he writes for them.

ROMANS: And -- right. He is a columnist there. And also he will start doing television appearances. So, the talk --

BRIGGS: Friday, tomorrow, yes. So the book is supposed to be out the 9th but they might move it up with all this publicity.

ROMANS: Move it up as they can. No problems with the publisher, but there's a lot of heat around that book and a lot of cold in the northeast, anyway. A fierce Nor' Easter making its way up the coast this morning major cities like Philadelphia, New York, Boston because -- the accumulations. Schools are closed in all three cities.

And one of the 2,800 flights have already been canceled for the U.S. -- the vast majority along the east coast. So check your flights, folks. The governor of Connecticut is urging drivers to stay off the road.

BRIGGS: In Boston, grocery store shelves are already bare as people hunker down and after the snow comes, the big chills, the cities will have to plow very quickly.

(BEGIN VIDEO CLIP)

MAYOR MARTY WALSH, BOSTON: On Friday night and Saturday we'll going have very cold weathers below zero. So it's important for us that we get the snow off of the ground especially 10:00 tomorrow because once the freeze comes in it will be almost impossible to move the ice that will be formed.

(END VIDEO CLIP)

BRIGGS: And that cold weather has already taken a fatal toll at least 12 cold-related deaths across the country since Tuesday.

For the latest, let's go live to meteorologist Derek Van Dam in the CNN Weather Center in Atlanta. Good morning Derek. Is this what bombogenesis is?

DEREK VAN DAM, CNN METEOROLOGIST: I'm going to give you actually a full explanation of what bombogenesis is in just one second. I promise Dave. I've got a graphic that we made just for you by the way. But if this graphic doesn't give you a headache, I don't know what will.

2,800-plus cancellations and that number keeps rolling out by the way. Here is the nuts and bolts. This is what we are predicting. Three to 6 inches in Philadelphia, the Big Apple 4 to 8, you could see over a foot in Boston, believe it or not. Couple this with winds in excess of 50, even 60 miles per hour gusts especially along those coastal areas, Cape Cod and into the coastal regions of Maine.

And just for Dave talking about bombogenesis this is the (INAUDIBLE) moment floating around the internet and some of the other media agencies. That's when we see the rapid intensification of a low pressure system. It's when it drops 24 millibars in 24 hours. But this storm, this is why this is making around in the internet is dropping 24 millibars in 12 hours. That is a good indicator to meteorologist that this thing is strengthening and it's strengthening very quickly. That's why we have blizzard warnings from Cape Cod through the eastern sections of New Jersey and Delaware.

[04:40:02] New York, by the way, you're in a winter storm warning. The snow is knocking on your doorstep in the Big Apple, the heaviest of snow 7:00 a.m. this morning to 2:00 p.m. this afternoon. Then we focus our attention on Massachusetts and Boston. Look at these wind chill values, those are not typos. It is going to be very cold. Dave, Christine? ROMANS: It sure will.

BRIGGS: Now, to see to figure out what a millibar is. I got what bombogenesis is, but I'm getting that Derek.

ROMANS: That's why we have meteorologist.

BRIGGS: Pressure.

ROMANS: All right, this is where, Philly?

BRIGSS: Philadelphia, it is on the way.

ROMANS: All right. Before it heads there, northeast, parts of the south east had a rare taste of snow. These people in North Charleston, South Carolina making the most of it, making a tube into an improvised sled, although, it don't really recommend that.

BRIGGS: Hopefully there's no oncoming --

ROMANS: As a mom of three boys, I'm going to say, please don't do this. Guys, please don't do this.

BRIGSS: Just fully know any traffic, yes, until mom gets home at least. This guy in Conway, South Carolina is casually posing on top of his frozen pool. He looks ready to do a little ice fishing perhaps.

Let's get in to CNN's Nick Valencia in Charleston, South Carolina.

NICK VALENCIA, CNN CORRESPONDENT: Good morning Dave and Christine. No, you are not seeing things. This is Charleston, South Carolina, a city that's more accustomed to gorgeous weather and picturesque scenery, certainly had a picturesque winter wonderland on Wednesday. New record snow fall totals about 5 inches fell. At one point, the city saw about an inch per hour.

A lot of atypical scenes here in the city specifically in Waterfront Park, one of the iconic fountains here, the pineapple fountain was completely frozen over. There were some hazardous conditions on the roadways as well. On the way into Charleston on I-26, we saw multiple accidents of a dozens of vehicles, some even overturned from that severe weather.

The power company here also tells us about 11,000 people were without power. But that's just a fraction of the customers they serve. About 700, 000 customers served over all.

We know that the city officials are still concerned today, Thursday. With the road conditions, there's an expectation that those roadways will remain frozen over. And if Charleston is expecting the weather to get any warmer, they're going have to wait a couple of days. The next time the temperature is expected to rise above 40 degrees is on Sunday. Dave, Christine?

BRIGGS: Nick, thanks. President Trump dissolving his highly touted voter fraud commission reason given by the White House that too many states are refusing to participate. Now the commission has been criticized as misguided effort to both to the President's false claim that he would have won the popular vote if not for massive voter fraud.

ROMANS: And CNN has learned there, has been concerned about the commission inside the White House for months, one senior adviser calling it a blank show. You can imagine what that means, that went off the rails. He was even concerned within the administration that some of the commissions request including asking for all the for voter rolls, secret voter rolls crossed a legal line.

BRIGGS: President Trump appointed Vice President Pence and Kansas Secretary of State Kris Kobach to lead the panel. A source close to the Vice President admitted to a recent lawsuit against the commission by one of the commissions own members didn't help. Kobach tells U.S. aid today disbanding the commission is just a change in tactics. The insistent investigation into voter fraud will move forward despite repeated studies that show voter fraud is extremely rare.

This is not good. This is a tough headline for them that came late in the day on a very busy day. One would presume the President needs to be asked. Does he still believe those claims about voter fraud?

ROMANS: But it is an executive order that I guess you can ask that --

BRIGGS: Not to the win column legislative order.

ROMANS: All right, the snow may keep you home this morning and your kids. For the powerball jackpot, well, you didn't win. You don't have to go and claim anything this morning when the pot gets bigger.

(COMMERCIAL BREAK)

[04:48:10] ROMANS: Welcome back. The numbers are in, in auto sales last year fell for the first time since the financial crisis. Fell demand slowed after years of incredible growth. It's an important economic indicator. But don't panic. The industry is still in pretty good shape.

Annually U.S. sales dropped just 2 percent to 17.2 million vehicles. It's a modest dip. It's just the third consecutive year though of 17- plus million cars sold. And global growth is still expected to be a record number.

The last annual decline occurred under very different circumstances. Auto sales plunged 21 percent in 2009 in the great recession. Do you remember that? I mean, that is a catastrophic for the industry. U.S. car companies dealt with high labor costs and low sales in a financial crisis.

The consumers today are buying cars and they're buying more expensive models. The average car price up 2.3 percent last year to a record high. In fact, the overall sales decline is mainly due to a drop in purchases by rental car companies, not everyday Americans. This is an important economic indicator. A lot of people watch car sales and continuing increases in car sales is a sign of consumer demand. So a couple of asterisks on that decline there.

BRIGGS: With the value of the cars increasing, does that make up for the loss in sales? Not quite.

ROMANS: Not quite --

BRIGGS: Yes.

ROMANS: -- because the sales are still down over. One thing that I watched, I'm concerned about is the length of the payment periods are getting longer, and longer, and longer. So that can mean problems down the road if the economies holds are slowed down.

BRIGSS: Cars sales an interesting indicator indeed.

Former Trump campaign Chairman Paul Manafort suing the Justice Department and Special Counsel Robert Muller. Manafort alleges the DOJ violated the law just by appointing Muller. He also acclaims Muller over stepped his authority by investigating matters unrelated to the 2016 elections such as his business dealings.

ROMANS: Manafort, he's been indicted on money laundering and other charges. The legal action represents a new tact in a broader effort by Trump supporters to push back against the Special Counsel. A Justice Department spokesperson calls a law suit frivolous.

[04:50:10] A record breaking 22 women now serving in the U.S. Senate, a new high Wednesday when Democratic Senator Tina Smith of Minnesota was sworn in to office following Al Franken's resignation in the sexual harassment allegations of Minnesota now joins California, New Hampshire and Washington where both sitting senators are women. Seventeen Democratic women and five Republican women are serving in the Senate.

The U.S. currently stands in number 102nd place for female legislative representation, that's according to the World Bank. All signed countries China, Iraq, and Pakistan.

BRIGGS: That is hard to imagine. Meanwhile, your retirement party that I have been imagining will have to wait. There is no grand prize winner in last night's $460 million powerball drawing. That means Saturday's jackpot worth an estimated $550 million.

One person in Florida did match the five numbers for a $2 million pay off. And the numbers from Wednesday 2-18-37-39-42 and the powerball was 12. And mega millions is also what over $400 million as well. So you have two massive jackpots you can win or not win.

ROMANS: I prefer and S&P 500 index funds personally over in the powerball. That's just me.

All right, 51 minutes past the hour. Computer security experts have found two major flaws. They put virtually all smartphones and computers at risk. The bad news on MoneyStream next.

BRIGGS: Let's come (ph) to it.

(COMMERCIAL BREAK)

ROMANS: President Donald Trump's nuclear taunt against North Korea has revived questions about the President's authority to approve the use of nuclear weapons.

[04:55:06] He sent this tweet Tuesday, threatening North Korea and touting the size of his nuclear button. Democratic Senator Ed Markey of Massachusetts says, "The cooler heads that once served is our last, best hope against the unthinkable seem less reassuring with every tweet President Trump sends."

BRIGGS: Leading Republicans are echoing Markey in some regard. Senator John Cornyn, the number two Republican in the Senate saying, quote, I don't know how anybody's interests are served by escalating that rhetoric. But the White House keeps defending the President saying his mental health is not a concern, but somebody's is.

(BEGING VIDEO CLIP)

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: I think the President and the people of this country should be concerned about the mental fitness of the leader of North Korea. This is a President who's not going to cower down and he's not going to be weak, and he's going to make sure that he does what he's promised to do.

(END VIDEO CLIP)

ROMANS: Politico is also reporting lawmakers concerned about President Trump's mental state called a Yale University psychiatry professor. Dr. Bandy Lee was on Capitol Hill last month for two days briefing. She warned lawmakers about Trump saying, "He's going to unravel and we are seeing the signs." She also said lawmakers' level of concern about the President's dangerousness was surprisingly high.

BRIGGS: Now, for the fifth time in two days, North Korea has spoken to South Korea in a newly reopened border hotline. It's been two years since the hotline has been operational. South Korea reporting no sign of an imminent missile launch by North Korea, although not everyone in the regime is calm.

Will Ripley has reported extensively from North Korea, he has the latest for his live from Seoul. Good morning to you, Will.

WILL RIPLEY, CNN INTERNATIONAL CORRESPONDENT: Hi there Dave. Yes, this hotline, imagine for two years, the South Koreans would call the North Koreans twice a day 9:00 a.m., 4:00 p.m. They never answered.

But then when Kim Jong-un gave the order, North Korea decided to reopen this hotline. But so far, there hasn't been any substance to the calls. They've been essentially testing the line and then telling the South Koreans that they don't have anything new to report just yet. The indication we were getting is that the conversations might send around the North sending a delegation to the Winter Olympics in Pyeongchang, South Korea. We know that there has been an offer made for all of the expenses for the North Korean delegation to be paid for them to come here as a sign of peace and friendship.

Even as the U.S. intelligence officials have been indicating to a number of U.S. media outlets including CNN that there are signs of an imminent ballistic missile launch even though here in Seoul. Government officials said that they have not seen any signs of an imminent launch. Of course they believe that North Korea could really launch a missile at any time. And they are hoping that there would be no provocative actions ahead of the Winter Olympics, an extremely important event for this country and for the world.

In general, also Japanese Prime Minister Shinzo Abe saying the situation here is the most dangerous in this region it's been since the end of World War II. And in Beijing, the Chinese government is saying that they welcome the reopening of dialog but they'll have to see where it all heads. Dave?

BRIGGS: Well, the countdown of the Olympics continues, 35 days away. Will Ripley live for us in Seoul. Thank you my friend. Meanwhile, Steve Bannon versus Donald Trump fought not just for political pundits, also Late Night host as you might imagine.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, LATE NIGHT WITH STEPHEN COLBERT: According to a new book called, "Fire and Fury," Donald Trump didn't want to be president. He didn't want him to win. There's a name for that, the majority of American voters. Really, Melania cried on election night. That is the first thing we have in common.

TREVOR NOAH, HOST, DAILY SHOW: Whoa. Don Jr. is going to crack like an egg. Honestly, I don't even know if that's a metaphor. Like -- I think there's at least 50 percent chance you'd find yoke where a brain should be.

As much as I enjoy watching this fight, I realize I don't know who I'm rooting for. Steve Bannon beefing with Donald Trump, like -- it's like alien versus sexual predator. Who do you go with?

(END VIDEO CLIP)

ROMANS: Wow.

BRIGGS: That's interesting movie coming out.

ROMANS: Yes. I think Stephen Colbert hit us big when he was really focusing on how this was a campaign that never thought this man would be the President of the United States. This was maybe going to be a TV network or was going to be --

BRIGGS: Right. ROMANS: -- maybe a reality show. And so many people, according to this book, so many people related to this campaign were really in it for themselves, for their own brands --

BRIGGS: Personal gain.

ROMANS: -- or their own personal gain. And then, here you, you are in the White House.

BRIGGS: But Wolff fosters in the book most agreed that he should not be President either. Not just that he wouldn't win but then he shouldn't be President. Again, this is according to Wolff, you cannot confirm over.

ROMANS: But because they didn't think he was going to win, that part was not relevant.

BRIGGS: Right.

ROMANS: Interesting, all right.

Let's go and check in CNN MoneyStream this morning. Global stock markets are higher today after Tech pushed Wall Street to fresh records. I feel like a broken record because the Dow, the Nasdaq, the S&P 500 all closed at all all-time highs. Ship maker stocks propelled Tech stocks higher. Tech was the best performing sector last year growing 37 percent in 2017.

Spotify is going public and is doing so in an unconventional way. The Wall Street Journal reports that Spotify confidentially filed for an IPO and that is known as a direct listing.