Obama to Unveil Gun Executive Actions; Campaign Trail Heats Up As Iowa Caucus Looms; Will Markets Respond? Aired 4:30-5a ET



As Iowa Caucus Looms; Will Markets Respond? Aired 4:30-5a ET>


[04:30:10] CHRISTINE ROMANS, CNN ANCHOR: President Obama taking action on guns. He is preparing to roll out executive orders he hopes will slow the cycle of gun violence. The early details and reaction to his plans moments away.

JOHN BERMAN, CNN ANCHOR: The campaign trail heats up this morning. Less than four weeks to go until actual real life and voting in Iowa. So who will make the most news today? That is ahead.

ROMANS: Will there be more pain and fear in global markets? Unsteady after a rough day in China. Will investors overcome their jitters and how this affects your money, that's straight ahead.

Welcome back to EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. Thirty minutes past the hour right now.

In just hours, President Obama will announce his executive actions on guns. We already know the general shape of the plans after a meeting with the attorney general and FBI director in the Oval Office, the president previewed his ideas to reporters. The significant part deals with which gun sellers and sales are subjected to background checks.

After this little preview, the president took to Twitter to lobby. He wrote, "The gun lobby may be holding Congress hostage, but they can't hold America hostage. We can't accept this carnage in our communities."

Now, for the most part, the plans, they are hardly expansive. Some ideas bypass Capitol Hill, but many require congressional funding and approval. Still, many Republicans are vowing to fight this in court, in Congress, and in the Oval Office if they win it.

CNN's Michelle Kosinski has more now from the White House.



Right, you look at this, and you can see the administration trying to make every change they possibly can because these are executive actions and not acts of Congress. Immediately, you see those limits that they are up against. I mean, they are presented as proposals or guidance or encouragements. By no means are these new laws.

The biggest deal is background checks. The White House now says if you are in the business of selling guns, whether that is two guns a year or 200,000, whether you're selling at gun shows or on the dark web, you need to register and all of your buyers need background checks. There will be harsh penalties if you don't do that. But the question is out there. How's the federal government going to make you do that and how they're going to track you down if you don't?

The White House also sent a letter now to every state governor, urging them to make sure more information goes into the background check system. Things like people who might be disqualified for mental illness or convictions over domestic violence, to make sure that information goes in. But again, enforcement is a question.

The White House now, too, wants to beef up the background check system itself with a lot more funding, more hiring, much more funding for mental health treatment in this country, but again, those are acts. Congress ultimately would have to approve that funding -- John and Christine.


ROMANS: All right. Michelle Kosinski, thank you for that.

Reaction to the gun proposal was swift from both sides. Hillary Clinton applauded President Obama and promised she would keep, even expand on his plan.


HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I am so proud of what the president announced today. What the president will be doing in the next week is an executive order. The next president on the very first day could wipe it away. No, I won't wipe it away.


ROMANS: Former Congresswoman Gabby Giffords gravely wounded five year ago that left six people dead, she tweeted this, , "Thank you, POTUS, Mr. President, for standing up to the gun lobby when Congress won't and ensuring fewer guns fall into the wrong hands."

On the other side, Ted Cruz promised to reverse any executive orders on guns if elected.


SEN. TED CRUZ (R-TX), PRESIDENTIAL CANDIDATE: The president is expected to roll out sweeping new executive orders trying to take away our Second Amendment right to keep and bear arms. Well, President Obama may have a phone and may have a pen, but if you live by the pen, you die by the pen, and my pen has got an eraser. (END VIDEO CLIP)

ROMANS: House Speaker Paul Ryan slammed the executive action at a statement. He said, "The president is at minimum subverting the legislative branch and potentially overturning its will. His proposals to restrict gun rights were debated by the United States Senate where they were rejected." Ryan added, "No president should be able to reverse legislative failure by executive fiat, not even incrementally."

A special programming note for you, this Thursday at 8:00 p.m., President Obama will join Anderson Cooper for an exclusive live town hall event about guns in America. One hot topic will be the executive actions he is announcing today. He will take questions from the live studio audience. The town hall and guns in American with President Obama moderated by Anderson Thursday night at 8:00 p.m., only on CNN.

BERMAN: All right. New attacks this morning on the race for president. The focus for much of the Republican field now squarely on Donald Trump.

[04:35:02] New Jersey Governor Chris Christie is trying to paint Trump as unprepared for the presidency.


GOV. CHRIS CHRISTIE (R-NJ), PRESIDENTIAL CANDIDATE: Show time is over, everybody. We are not electing an entertainer in chief. Showmanship is fun, but it is not the kind of leadership that will truly change America. If we're going to turn our frustration and anger with D.C. insiders, the politicians of yesterday and the carnival barkers of today into something that actually will change American lives for the better, we must elect someone who has been tested.


BERMAN: For his part, Trump is focusing his attacks on Hillary Clinton.

Let's get more now from CNN's Sara Murray in Lowell, Massachusetts.


SARA MURRAY, CNN POLITICS REPORTER: Good morning, John and Christine.

Donald Trump rallied a crowd of thousands here in Massachusetts last night, but he didn't unleash any of its recent attacks against Bill Clinton, holding back on criticizing those past infidelities. But he did go after Hillary Clinton, predicting that if she is elected, her presidency could be even worse than President Barack Obama.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: We don't need four more years of Obama. And that's what you're getting with Hillary. That's what you're getting. No, that's what you're getting. And I believe it might be even worse, if you want to know the truth. It might be worse, OK? We don't need that.

MURRAY: Now, skipping over those Bill Clinton attacks could be a shrewd move for Trump. A number of voters lined up to see him in Massachusetts told me they wanted to see Trump talk about the issues, talk about the border with Mexico, talk about foreign policy. They didn't want to see their politicians dredging up past fidelities, whether they belong to the Clintons or to Donald Trump.

And you'll note that I am in Massachusetts where Trump held this big rally last night, not in Iowa or New Hampshire. That is part of the Trump campaign strategy to keep their eye not just on first two nominating contests, but also on states that won't vote until March 1st. But rest assured, Trump is back on the trail today, this time in New Hampshire.

Back to you, John and Christine.


ROMANS: Sara, thank you for that.

Hillary Clinton responding to Trump by not responding at all. Asked what she thinks about Trump's claim that she and promise created ISIS, Clinton said this.


CLINTON: I have adopted a New Year's resolution. I'm going to let him live in his alternative reality and I'm not going to respond.


ROMANS: Today, Hillary Clinton continues her push through Iowa. Multiple events across the state. Busy for the Clintons.

Bill Clinton made his solo debut on the stump for Hillary. His speech in New Hampshire mainly focused on personal stories about his wife, although he did describe the entire Republican field as, quote, "kind of scary".

Bernie Sanders will be in New York to deliver a speech on Wall Street reform. Sanders previewed the speech last night while portraying Clinton as being in the pocket of the big banks.

Thirty-eight minutes past the hour. Time for an early start on your money. You are asking, what in the world is going to happen in world markets? They're struggling to recover this morning after a brutal start to 2016. The right side of your screen, you see futures are still lower.

Markets in Europe starting higher. Those gains are fading. Still a lot of concern about China and the Middle East plaguing investors.

The darlings of Wall Street yesterday, did you see some of them? They were not immune to the big selloffs. Shares of Amazon and Netflix, two of the best performing stocks in the S&P last year, they suffered huge losses yesterday. It spread to other tech titans, look at Facebook, look at Google's parent company, Alphabet. Big losses.

There was one big winner, gold, the scared investment. Prices shot up Monday topping $1,000 an ounce. We're seeing right now. Gold is traditionally a safe haven for investors.

BERMAN: All right. Some jitters on Wall Street, and China is the main worry right now. One issue for the selloff is a bad December manufacturing report following years of strong growth in China. Growth had been struggling last year as well.

What is going on right now in China's economy? Can their numbers even be believed?

For the latest, let's bring in CNN's Matt Rivers in Beijing.

Matt, what are we seeing today so far?

MATT RIVERS, CNN CORRESPONDENT: John, today we actually saw a little bit better numbers from the stock markets here than we saw on Monday, even though the Shanghai composite was down during the day. Today, not a nearly as bad as yesterday.

Given the manufacturing reports that you spoke about, a private survey that was released is one of the big reasons for the selloff that we saw. Another big reason that analysts we spoken to have talked about would be the ban that is set to be lifted late other this week.

There is a ban put in place in China that prohibited major shareholders from selling stakes in companies. Many investors were worried that would cause a major selloff.

[04:40:03] But the government here this morning putting out a statement saying it would do what to make sure that would not happen, and that seemed to put investor fear aside. At least at the moment, a more stable day in China.

BERMAN: And so far, Europe seems to be rebounding a bit. Perhaps the same will happen on Wall Street today.

All right. Matt, thanks so much.

ROMANS: Yes, I need to see the gains in Europe hold. You know, there's some indecision about it. A little bit of a pop and then not holding. So, still, you know, China still a really -- when China gets a cold -- (IANUDIBLE) U.S. gets a cold --

BERMAN: I'll take your word for it. You have a U.S. jobs report. We're going to get our own cold this Friday.

ROMANS: Exactly, exactly. I think wages are going to go up. But we have tough Friday to see that.

Forty minutes past the hour. The fallout between Saudi Arabia and Iran is deepening too. Moments ago, another Saudi ally pulled its ambassador from Iran. We're going to break down the worrying geopolitical battle, next. (COMMERCIAL BREAK)

BERMAN: All right. We have breaking news from the Middle East this morning. Moments ago, Kuwait announced it is recalling ambassador to Iran. The UAE has done the same. Key Saudi allies Bahrain and Sudan also severed ties with Tehran.

I want to bring in CNN senior international correspondent Frederik Pleitgen who was watching these developments.

Kuwait, you know, Sudan, Saudi Arabia increasing isolation for Iran this morning, Fred.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, certainly, increasing isolation and increasing war of words between Iran and Saudi Arabia that's going on.

The Saudis themselves, John, yesterday said they were not only cutting diplomatic ties with the Iranians, but also economic ties, banning all flights with the countries and also not allowing Saudi citizens to even travel to Iran anymore.

The Iranians for their part are still very angry about the execution of the very prominent Shia cleric that, of course, setoff all of this, which then led to the storming of the Saudi embassy in Tehran.

[04:45:04] However, there are more and more Iranian officials who are now acknowledging that allowing the embassy to be stormed was wrong. The Iranian U.N. ambassador came out yesterday, very late last night and said that the incident was being regretted by Tehran. There are also other politicians say those who were involved will be brought to justice. Apparently, 40 people have been arrested for the incident.

However, at this point in time, that is not soothing tensions between with the Iranians and Saudis. That, of course, is something that could very well have big implications for the broader Middle East. You look at the Syria conflict, the Iraq conflict, the Yemen conflict, all of them pit Sunni and Shia in some way, shape or form against each other. All of them are said to be involved.

BERMAN: So, Fred, where is the off-ramp here? I know Russia is offering to mediate. But I'm not sure that is welcome with open arms.

PLEITGEN: I'm not sure it will be welcome with open arms. I don't think Russia will be the country that's going to solve all of this. And also because Russia actually at this point in time is quite a polarizing nation to the Saudis. Russia, of course, started in late 2015, the bombing campaign in Syria, helping Bashar al Assad, who is allied with Iran. That is something the Saudis didn't take well at all.

So, it would be difficult for them to accept any sort of Russian mediation. The U.S., for its part, has said it wants both sides to go back to the negotiating table or at least back to diplomacy in some way, shape or form. However, it will not play referee and calling on cooler heads to prevail. That's something that many other nations are doing as well. But at this point in time, it looks as though neither of the sides is really willing to take a step back here and try to sort all this out.

BERMAN: All right. Frederik Pleitgen for us in London this morning -- thanks s a lot, Fred.

ROMANS: All right. There's been an arrest following a deadly bus fire in northern China that killed 17 people and injured 32 others this morning. Chinese authorities confirming they have taken a suspect in custody. He is identified as Ma Yongping. The incident took place in the town of Yinchuan. Flames engulfed the packed bus at 7:00 a.m. local time outside a mall. Police are not revealing the possible motive.

All right. Huge fines could be on the way for Volkswagen. Who is suing? For how much? You won't believe the dollar signs we are getting here. We will get an early start on your money, next.


[04:50:29] BERMAN: Freezing temperatures in the east give way to a warm up, but will that last?

Let's get to meteorologist Pedram Javaheri.

PEDRAM JAVAHERI, AMS METEOROLOGIST: John and Christine, good morning.

The cold weather pattern really short lived. You notice how quickly it exits the picture from Wednesday into Thursday. We get the mild pattern that comes in. Unfortunately, that will be very short lived as well.

And, you take a look, current temperatures from 4 degree wind chill in New York City to minus two in Philly, 8 below in northern Maine, talking about 20 below zero when you factor the winds.

But again, there's a pool of cold air Thursday afternoon. Look at what happens by Friday and Saturday is really moderates quite a bit. But you get a hint of cold air coming back in.

And once it settled from Sunday into next Wednesday, we are talking about record, cold temperatures after record heat, of course, that was set in recent weeks. Minneapolis temperatures are above normal the next couple days and the bottom just drops out with the incredible force there, getting down to about zero for high temp, minus 10 as a low temperature on Sunday morning. The average is 24 for this time of year.

Looking into next week, this is where the cold air settles across the upper Midwest, the northern plains. Notice above average temperatures still a possibility around the northeast. So, the forecast in New York City looks like this with quick rebound. Once the bottom drops out, we come back down to reality. But that is again considered normal or slightly above normal. So, we will watch this for the weekend.

ROMANS: All right. Pedram, thank you so much for that.

A stunning cold shoulder for embattled Chicago Mayor Rahm Emanuel. The governor of Illinois, Bruce Rauner, says he would sign pending legislation to allow Chicago voters to recall future mayors. The bill is not applying to the current mayor.


GOV. BRUCE RAUNER (R), ILLINOIS: I am very disappointed in the mayor and in the state's attorney for Cook County. Very disappointed. I'm not going to say more than that right now because there is a lot of investigation going on. But I'm very disappointed.


ROMANS: Justice Department is conducting an investigation into the Chicago police department. A spokesman for Mayor Emanuel says his focus is not on his own political fate. His focus is on reforming the culture of policing in the city.

BERMAN: The county sheriff in Oregon demanding armed militia members and occupation of the federal refuge for the fourth day. The people in there, though, they say they're not going anywhere soon.

This all begun this weekend over an argument of the treatment of two convicted ranchers, ranchers convicted of arson, Dwight Hammond and his son Steven. They served time briefly, but a judge determined their sentence was too short. They were resentenced to longer prison terms.

Hammonds themselves, they turned themselves in Monday at a federal prison in California.

Now, the occupiers, the people who have taken over that ranch or that wildlife refuge, they say they are protesting government action. They are saying they are protesting how the government handles federal lands in those states. They say the government is there illegally and it's unconstitutional. Of course, the government says that is not the case at all. In fact, there are armed resisters occupying federal properties. It's an interesting dilemma right now.

ROMANS: This is a wildlife sanctuary popular with birders actually from all over the world.

BERMAN: Founded by Teddy Roosevelt.

ROMANS: Founded by Teddy Roosevelt, and it is interesting because the people occupying the space now, relatives of the two men who have gone to prison say they are not affiliated with the occupation. It is cold out there. They hope they have provisions because they are not sure what it is all about.

The sheriff has said they are trying to spark an anti-government movement. But we'll see. We will watch that. So far, it looks as though the federal authorities are watching this carefully. They have not moved in. BERMAN: Not closely. They're very far away.

ROMANS: Yes, watching it closely from far away.

All right. Tonya Couch, mother of the so-called affluenza teen is expected in court today in Los Angeles for a hearing on her extradition to Texas. She is charged with helping her son flee to Mexico in the violation of the probation he received for the drunk driving crash that killed four people.

Ethan Couch remains in Mexico. He is fighting extradition. His attorney says it may be a couple of months before Ethan Couch is sent back to the United States.

BERMAN: Fired South Carolina police officer Michael Slager is free on bail this morning. Slager is charged with murder in a shooting death of Walter Scott last April. Video showed Scott was shot in the back as he ran away following a traffic stop. A judge placed Slager under house arrest as a condition of his bail. His trial is set to begin October 31st.

ROMANS: Three NFL teams are looking to relocate to Los Angeles area. But the league says it will support one new stadium shared by two teams in the L.A. The St. Louis Rams, Oakland Raiders and San Diego Chargers all filed applications to relocate in the 2016 season.

[04:55:05] NFL owners are expected to decide next week which team or teams will move, if any.

BERMAN: We'll see if any L.A. fans show up this time when they have a team.

The end of the era for the New York Giants. Head coach Tom Coughlin announced his resignation. The 69-year-old Coughlin coached the Giants for 12 seasons. He won two Super Bowls. That's a good coach.

There had been speculation Coughlin would be fired after the third straight losing season. His quarterback Eli Manning who's only had Coughlin as a professional coach he fought back tears talking about this.


ELI MANNING, QUARTERBACK, NEW YORK GIANTS: Some things you can't control. And you know, I think the Maras and Tisch know how I feel about Coach Coughlin and respect I have for him. I think he's done a great job and he definitely has not failed. I feel we as players, we failed him by not playing to the level that we could.


BERMAN: Look, Tom Coughlin outcoached Bill Belichick in two Super Bowls. That's not easy to do.

In a statement, Coughlin said it was in the best interest of the organization that he steps down. He is not done coaching. We'll see where he ends up.

ROMANS: See where he ends up.

Let's get an early start on your money. World markets struggling to overcome the wave of selling around the world to start the New Year. Slim losses overnight in Asia and stocks in Europe trying to bounce. I'll tell you, but they are fading again now. Investors still worried that the Chinese economic growth is coming to an end.

Volkswagen this morning faces some $18 billion in fines. The EPA and the Justice Department are suing the German automaker. The civil lawsuit seeks fine of up to $37,500 per diesel car that violates U.S. environmental rules and up 3,750 bucks for each piece of equipment put there to cheat the emissions tests. There are about half a million diesel cars on the road for Volkswagen and its luxury brand Audi that violate the environmental guidelines. That's according to the suit. That means the fines could top $18 billion if VW has to pay that full amount. That's a lot of money.

Speaking of a lot of money. It has never been more expensive to buy a home in Manhattan. The city that never sleeps. You have to work 24/7 to live here. The median sale price here in the Big Apple hit a record high of $1.15 million in the fourth quarter of 2015. That is the latest report by real estate appraisal firm Miller Samuel. And we're not talk about mansions folks. These are just plain apartments. The new price tag broke the record hit in 2008 right before Lehman Brothers collapsed.

BERMAN: Oh boy.

ROMANS: Inventory is low, credit is tight. Competition is stiff. I'm sorry, unless you own that apartment and then you're like, woo- hoo.

BERMAN: Unless it drops again by half like it did after 2008.

ROMANS: I hate to sound like an old lady, but I can remember when that price was $500,000.

BERMAN: And you're like, this is too much. I'll never buy into this. You could retire right now.

ROMANS: Crazy for one bathroom. My goodness.

BERMAN: All right. EARLY START continues right now.


ROMANS: President Obama going it alone on guns. Executive action set to be rolled out today. The big question, will the changes have any effect in curbing gun violence?

BERMAN: All right. Less than four weeks until the first votes in the very first voting state of Iowa. The candidates on the campaign trail today. Who will make the biggest news? That's ahead. ROMANS: All eyes on markets today. Stocks looking for some stability after a rough start to 2016. Is there a recovery in store in the face of jitters in China and what this means to your 401(k)?

Good morning. Welcome to EARLY START. I'm Christine Romans.

BERMAN: I'm John Berman. Great to see you. It is Tuesday, January 5th. It is 5:00 a.m. in the East.

And in a few hours, President Obama will announce executive actions on guns. We know the general shape of the plan. After a meeting with the attorney general and FBI director, the president pre-viewed his ideas for reporters.

The most significant part of the deal centers on which gun sellers and gun sales will be subjected to background checks. After this, the president went on Twitter to sell his notion. He wrote, "The gun lobby may be holding Congress hostage, but they can't hold America hostage. We can't accept this carnage in our communities."

For the most part, this plan really isn't expansive. Some ideas bypass Capitol Hill, but many would require congressional funding and approval.

Still, many Republicans are vowing to fight this in the courts. in Congress, and the Oval Office if they win it.

CNN's Michelle Kosinski has more now from the White House.


KOSINSKI: Hi, John and Christine.

Right, you look at this, and you can see the administration trying to make every change they possibly can because these are executive actions and not acts of Congress. Immediately, you see those limits that they are up against. I mean, they are presented as proposals or guidance or encouragements. By no means are these new laws.

The biggest deal is background checks. The White House now says if you are in the business of selling guns, whether that is two guns a year or 200,000, whether you're selling at gun shows or on the dark web, you need to register and all of your buyers need background checks.

(Byline: John Berman, Christine Romans, Michelle Kosinski, Sara Murray, Matt Rivers, Frederik Pleitgen, Pedram Javaheri)

(High: President Obama going it alone on guns, his executive action set to be rolled out today. Twenty-seven days until the first votes in Iowa, presidential candidates are making their final push, and Hillary Clinton taking fire and not just from Republicans. The Dow dipped below 17,000 for the first time since October, and it shows you the market having trouble here to start the New Year.)

(Spec: Barack Obama; Government; Guns; Policies; Elections; Politics; Business; Economy; Stock Markets; World Affairs)