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Dow Plunges; North Korea Threatens War; Hurricane Danny Strengthens; St. Louis Police Shooting; ISIS Number Two Killed; Controversy over Anchor Babies. Aired 2-2:30p ET

Aired August 21, 2015 - 14:00   ET

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


[14:00:07] ANNOUNCER: This is CNN breaking news.

POPPY HARLOW, CNN ANCHOR: Hi, everyone. I'm Poppy Harlow, in today for my friend Brooke Baldwin. Thank you for being with me.

We begin with breaking news on Wall Street. The Dow is now down just about 300 points right now. This is the fourth straight day of losses. The U.S. economy reacting to fears of a global slow down, particularly in China. Also, oil falling below $40 for the first time since 2009.

CNN Money's Cristina Alesci following it at the New York Stock Exchange.

Wow, another brutal day.

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: Yes, that's right, 600 points in just two days, Poppy. We're officially nearing correction territory.

HARLOW: Right.

ALESCI: We need another, about, 200 points to get there. And as you mentioned, there are three main things driving it. One is concerns about global growth. Bad manufacturing numbers out of China really adding to those fears overnight. And, of course, if you've got slower economic growth, there's going to be less demand for oil. So demand is down for oil. At the same time, supply is up. So continued pressure on oil is making investors nervous.

And then the third is really the Fed. What does the Fed do in this environment? And investors were confused about that to begin with. And on all of this uncertainty and fluctuation in the market, and that had a lot of people say - asking the question, what does the Fed do in this environment? Now, we had a Fed official come out just earlier today and say, listen, we're not going to react to the market, but it's kind of hard to believe that they aren't at least going to - this isn't going to be playing out in the back of their minds as they decide whether or not to actually increase interest rates, you know, next month and possibly into the fall or even winter, Poppy.

HARLOW: Yes. We'll see if this does actually officially becomes that correction you mentioned of a decline of 10 percent or more. We'll be watching, Cristina Alesci, in these critical last two hours of trading for us at the New York Stock Exchange, thank you. Now turning to North Korea and the big question of whether or not a

U.S. ally on the brink of war with one of the most unpredictable and dangerous dictators in the world could push this into war. I am talking about Kim Jong-un. And right now, he has his troops braced for a war with South Korea if a deadline to stop blasting anti-Pyongyang propaganda over loud speakers near the border is not met.

CNN can now confirm that the leader of North Korea has just held an emergency meeting with his military leaders and ordered front line troops to get ready, declaring a, quote, "wartime state." This comes after an exchange of artillery fire with South Korea over the heavily fortified area separating the two.

South Korea, home to some 28,000 U.S. troops, now also on high alert as they roll out barricades. We are also now hearing that the joint military exercises between the United States and South Korea have resumed after a brief halt.

Let's go straight to CNN's Kyung Lah. She's joins me now.

Talk to me about the sense on the ground that you're getting. Kim Jong-un has given the south until 4:00 a.m. Eastern Time. So sort of middle of the night here to switch off those loud speakers. What happens if they don't?

KYUNG LAH, CNN CORRESPONDENT: Well, South Korea says they have absolutely no intention of turning them off. In fact, they say they will continue to broadcast the propaganda from the South into the North. Propaganda about the North Korean government, that Pyongyang finds extremely offensive, and they intend to keep on going.

As that deadline approaches, what South Korea is saying is, if there is any sort of shelling from the North, any sort of gunfire, any action from Pyongyang, they will absolutely retaliate. South Korea taking the position of, according to the president, shoot first, ask questions later. That's essentially what she is saying. And the government is fully backing that position. The question is, though, Poppy, is, how can she move closer to that line without quite stepping over it -

HARLOW: Right.

LAH: Because a miscalculation could certainly spiral this entire situation out of control.

HARLOW: Absolutely.

Let's take a look at this. This is a rally in South Korea in Seoul, today. I wonder what you're hearing from people on the ground, if they are - if they're worried this time that it may be different than 2010 or 2013. That perhaps this may be a lot more than just saber rattling from their hostile neighbor.

LAH: Well, that video is certainly giving you a sense of some of the rage from a certain portion of the population. You're seeing images of Kim Jong-un being burned in effigy. There is a certain portion of the South Korean people very angry and very concerned. What they are comparing it to is looking at the recent past, but right now this has not led to any sort of casualties. What we have been hearing, though, is a ratcheting up of rhetoric. So people are paying attention.

But generally, the population, (INAUDIBLE) if you walk around the streets of Seoul, you're not getting the sense that there is any sort of mass panic. People are trying to go about their lives because, Poppy, when you live this close to the border, these two countries have essentially been in the state of war for so long, a lot of people have grown numb.

[14:05:11] HARLOW: Yes, understandably so.

Kyung Lah reporting for us live there from Seoul. Thank you very much.

Let's turn now to Jim Walsh, he's an international security analyst. He visited North Korea last in 2005. He's met with North Korea leaders and North Koreans countless times.

Thank you for being here, sir.

JIM WALSH, INTERNATIONAL SECURITY ANALYST: Good to be with you, Poppy.

HARLOW: Why is this different than 2010, 2013? You know, why is it different and is there really a chance of war?

WALSH: Well, I think you're right to invoke 2010. That was when they had the island shelling. And back then, the Korean government used similar language, this sort of semi-state of war, to the language they're using today. But I've got to tell you, as someone - I worry about escalation on the Korean peninsula. In the past I've said, we're one dead fisherman away from something spiraling. But in this particular case, it would be really, really odd for North Korea to be especially provocative when the U.S. and South Korea are having military exercises. We essentially have a gun at their heads and for them to choose this moment to escalate would be strange. So I think they're going to do something, but I don't think it's going to be on the scale of 2010 when you had the island shelling and four people died or when the Chenon (ph) was sunk. But they - they're - they're very clever at finding ways to be provocative but stay below a line that does not suddenly be the path to war.

HARLOW: There are 28,000 U.S. troops in South Korea right now. We just heard from our Barbara Starr at the Pentagon reporting that those military activities from - with the U.S. troops and South Korea troops have resumed after they stopped for a short time. What do you make of that halt?

WALSH: Well, I don't know the particulars of why it was halted. This is an exercise that has been planned for quite some time. We have a big exercise every year. Normally there's sort of a theater thing that goes on where we have the exercise and then the North Koreans condemn it and threat to set us all on fire and attack us and that sort of thing and then we all go back to where we were before. But we've had this series of things that have happened along with the demilitarized zone, maybe connected, maybe unconnected, but having it all happen at once makes people rightfully more nervous.

HARLOW: You know, you seem to be, I think, less concerned about all- out war, Kim Jong-un sort of crossing that line, if you will, than others?

WALSH: Yes.

HARLOW: But here's the thing. You're talking about such an unpredictable leader. Someone who has executed more than 70 of his own officials since 2012, according to South Korea.

WALSH: Right.

HARLOW: Fifteen of them this year alone. Someone who has his hands on nuclear weapons. Why should we trust that this time he won't cross that line?

WALSH: Well, it's never a matter of trust. It's almost more a matter of guessing because North Korea's the hardest country to figure out in the world. It's the one - we know more about it than we used to, but a lot less than compared to any other country on earth. It's not that I trust them, but I think you do raise - I just don't think they're suicidal. Even Kim, who could be said to be erratic, probably isn't suicidal and would start something when his enemy is right there ready to attack him, at least from the North Korean standpoint.

But you mentioned the purges.

HARLOW: Right.

WALSH: You know, that means no one's there to raise their hand and say to them, I'm sorry, dear leader, this is a bad idea, what you're about to do, because anyone who raises their hand is going to get shot. So that is a permissive situation where bad decisions could be made. So I am skeptical but I think it is worth watching these next whatever 8, 10, 12 hours to see what happens.

HARLOW: All right, Jim Walsh, an important perspective. Thank you, sir.

WALSH: Thank you.

HARLOW: We are getting more breaking news into us here at CNN that the most brutal terrorists on earth may have just escalated the war with chemical weapons. A senior U.S. military officer has just confirmed to us that traces of the agent sulfur mustard, so mustard agent, have been found on ISIS mortars. These were the weapons used to attack Kurdish forces in Iraq just last week. The mortars fragments were sent to the U.S. for testing and final tests are happening right now to confirm their initial discovery. More on that when we have it.

Coming up next, his death sparked violent protests in St. Louis this week.

And breaking today, the teen killed by police, we are finding, was shot in the back. Now officers are canceling vacation, bracing potentially for violence. We will take you there live.

Also, some say it is a racist slur. Others, like Jeb Bush and Donald Trump, say they won't stop using the term "anchor babies." We will debate.

Also, President Obama making a big comp - a big promise, rather, to Congress, in a new letter defending his deal with Iran.

(COMMERCIAL BREAK)

[14:13:49] HARLOW: Breaking right now, the first hurricane of the 2015 season has not only arrived, it has just turned into a Category 3 storm. Let's go straight to CNN meteorologist Jennifer Gray in the CNN Weather Center.

It's getting a lot stronger.

JENNIFER GRAY, AMS METEOROLOGIST: Yes, the first hurricane of the season becomes the first major storm of the season, Category 3, 115- mile-per-hour winds with gusts up to 125, making that westward march in the Atlantic. This is a very small storm, but it is very powerful at a Category 3. We'll widen out a little bit.

It will continue the track to the west, impacting the Leeward Islands and then headed for Puerto Rico. That's the latest cone. It is supposed to weaken as time moves on, becoming a Category 2 by Saturday morning, a Category 1 by Sunday and then by Monday possibly just a tropical storm. It has a lot of hurdles it has to overcome to maintain strength and it doesn't look like it's going to be able to do that.

For one, we have very dry air in place that's not a favorable environment for storms to thrive and so that's going to kind of rip it apart, cause it to weaken. There's a lot of wind shear and this wind shear will also rip it apart and so that's why we're thinking this storm will continue to weaken in the coming days by the time it makes it to the Leeward Islands and then Puerto Rico.

[14:15:05] But we're also looking at possible beneficial rains for Puerto Rico, which is good if it's just a tropical storm. You won't have those dangerous winds, but you will get the rain. So we'll be watching it in the coming days, Poppy.

HARLOW: Absolutely. Jennifer Gray, thank you for that.

Now to St. Louis we turn. Police there are cutting vacation days, adding hours to prepare for how the community may react to a deadly police shooting this week. An autopsy now showing 18-year-old man Mansur Ball-Bey was shot in the back. Officers say they opened fire after the teenager pointed a gun at them and ran from a house that they were searching. The officers shot four times in total. Ball-Bey's death set off protests, leading to nine arrests. Now the attorney for his family is giving a much different version of events.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Witnesses are saying just the opposite, he did not have a gun at all. They seen two police officers in plain clothes. The only problem is, they didn't know they were police officers. These guys never identified themselves as police officers. The only think they see are two plain-clothed men approaching them with guns. So they - Mansur and this other young man took off running and ultimately, after running about 20, 30 feet, Mansur was shot from the back.

(END VIDEO CLIP)

HARLOW: The former police officer who wrote this book, "Into the Kill Zone: A Cops-eye View of Deadly Force," joins me now. David Klinger is also a professor of criminology and criminal justice at the University of Missouri-St. Louis.

Thank you for being here, David.

DAVID KLINGER, FORMER LOS ANGELES POLICE OFFICER: Thanks for having me, Poppy.

HARLOW: Very direct but critical question, can a police officer legally shoot someone in the back?

KLINGER: Absolutely. The Supreme Court in a seminal case, Tennessee versus Garner 1985 said that police officers are permitted to shoot people in the back if they are fleeing essentially from a violent crime. And then another situation would be in defense of life, because situations where someone's facing someone can very quickly turn to a situation where someone is facing back if they're punching a gun out. And so both in terms of a defense of life and then what we call under the fleeing felon doctrine, which is what the Supreme Court talked about in 1985, would permit a police officer to shoot somebody in the back.

HARLOW: OK, to be clear here, we don't know what the situation was in the home. There's been no evidence or talk yet of any violent situation. That is still to be uncovered. But the attorney for the victim, who we just heard from, showed our Ryan Young how the bullet traveled - the trajectory it traveled. We don't have that sound right now but how important is the trajectory of the bullet in the back in determining, you know, if this shooting was justified or not?

KLINGER: I think it's going to be very important. One of the things that I do when I'm doing litigation consulting is I want to look at that autopsy report because that will give me an awful lot of information about the posture of the individual's body when he or she was shot. And so that information - rather the bullet path from the back to the front, was it a skim along the back, did it go directly from back to front, was there some deviation, all that's going to be very important and they'll be able to line that up with body positions and where the officers were, shell casings, the rest of the scene that they will work up and hopefully that will provide more information. Now, the allegation that there's no gun involved, that raises a whole other set of issues.

HARLOW: Right.

KLINGER: A gun from - on the suspect's part, that raises a whole other set of issues.

HARLOW: It absolutely does.

Also, the "St. Louis Post Dispatch" reporting that a different witness than the one who said there was no gun, a different witness came forward and says that they saw Ball-Bey throw his weapon before running away. You say the issue here is the perceived threat. The perceived threat at the time that the officer fired. But does this just come down to, then, who the authorities believe? Do they believe the witnesses or do they believe the officer who's talking about their perceived threat?

KLINGER: I lost a little bit of your question. I think you're asking me if it comes down to a question of credibility of the witness.

HARLOW: Yes.

KLINGER: That would be part of it. But if we have a witness who says that the suspect threw the gun, that is something that's very common. Anybody who's been around law enforcement knows there's actually a term called slopping (ph) a gun. The suspect's got a gun on him or herself and they're confronted by police and for some reason people do all sorts of stupid things with guns and one of them is they try to throw the gun away. And I've had four people look me right in the eye and take guns out of their waistband, out of a coat pocket, and through it on the ground. And fortunately, because of the tactical position that I was in, neither me nor my partner had to shoot these individuals. But I've talked to many, many officers who have been involved in situations where they shot people. The suspect takes a couple more steps and throws a gun or the suspect tosses the gun, the officer believes he still has the gun, and the officer goes ahead and shoots the individual.

So basically what it boils down to is being able to put together the physical evidence, the testimonial evidence, the eyewitness evidence, wrap the package up and then people who really have a fine grain understanding of what happened can look at what we call the totality of the circumstances to make a decision about whether the use of deadly force was justified or not in this case.

[14:20:02] HARLOW: All right, David Klinger, thank you. We'll be watching to see how the community reacts and the latest to come out of the investigation. Appreciate it.

Next, a new fight between Jeb Bush and Donald Trump, and it is over something which they actually agree on, the term, quote/unquote "anchor babies." It is stirring up a lot of controversy. Bush and Trump offering no apologies for using the term. Coming up, I will speak with someone who call it a slur, a racial slur, very hurtful and dehumanizing. We will also hear from a former contestant on Donald Trump's show "The Apprentice."

Stay with us.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Sir, do you regret using the term "anchor babies" yesterday on the radio?

JEB BUSH (R), PRESIDENTIAL CANDIDATE: No, I didn't.

UNIDENTIFIED MALE: Governor -

BUSH: I don't. I don't regret it.

UNIDENTIFIED MALE: You don't regret it?

BUSH: No. Do you have a better term?

UNIDENTIFIED MALE: I'm not - I'm asking you. A lot of folks find it offensive.

BUSH: OK. You give - you give me - you give me a better term and I'll use it. I'm serious.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[14:25:04] HARLOW: A huge development to tell you right now out of the Pentagon. We have learned that the number two leader of ISIS has been killed by a drone strike. Again, the number two leader of ISIS killed by a drone strike. Let's go straight to Barbara Starr at the Pentagon.

Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Poppy, this is a very significant development. We are learning that the administration is expected to announce shortly a man named Hajji Mutaaz, the number two in ISIS, the top deputy to the ISIS leader, Abu Bakr al Baghdadi, was killed this week on August 18th by a U.S. drone strike near Mosul in northern Iraq. What is so significant beyond that he was the top deputy, said to be very involved in ISIS finance. As top deputy, he would have been in touch with Baghdadi.

What we are told is this drone strike was carried out using what the military calls actionable intelligence. That means they had an eye on a vehicle, on a road, and that they knew that Hajji Mutaaz was inside that vehicle when they fired. They knew he was going to be there.

That is a very interesting piece of information because it tells us that the U.S. indeed has some level of battlefield intelligence -

HARLOW: Right.

STARR: In places like Mosul, in northern Iraq, where ISIS is supposed to have an Iran grip. This is a high-value target. It is very significant. And what we don't know, Poppy, is what intelligence they had.

HARLOW: Right.

STARR: Is it telling them anything about where Baghdadi may be.

Poppy.

HARLOW: But, Barbara, what does - what does this tell us about the - how much U.S. intelligence in this fight against ISIS has improved? Because that's been one of the key concern reiterated over and over again by analysts is the concern about the lack of intelligence about ISIS because of the lack of our troops on the ground. How much of an improvement have we seen?

STARR: Well, I think that - that still remains very much a point in several areas. You know, in Syria, the U.S. has no boots on the ground, obviously.

HARLOW: Right.

STARR: So all intelligence is gained from reconnaissance flights overhead or people on the ground in Syria. Essentially, people the U.S. can work with who will give them information. It is possible, you know, one can assume, perhaps, they have that kind of capability in Mosul, in northern Iraq, and it is no secret that the U.S. continues to try and eavesdrop on all cell phones and electronics communication. ISIS very savvy about trying to stay off the net. But this time, somehow, they got one of the very top ISIS leaders, Poppy.

HARLOW: Barbara Starr again reporting that breaking news for us here that the number two leader of ISIS killed in a drone strike. Barbara, thank you very much. I'll let you go get more reporting on that. We will have much more coming up on this program on that story.

But first this, new heat between Jeb Bush and Donald Trump. New heat between Jeb Bush and Donald Trump. Both of them under fire for using the term "anchor babies" when referring to babies born here in the United States to parents who are not citizens of this country. Many calling it offensive, a racial slur. But as they both defend using it, here's the new fight. Trump claims that Bush signed a memo vowing never to use the term. He says, "stay true to yourself." The Bush camp firing back, denying that Bush ever signed that memo during his role with the Hispanic Leadership Network. Take a listen to both of the candidates.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: A lot of people think that it is absolutely - in terms of anchor babies, that it is not covered. So we're going to find out. But, look, here's the story. Here's what happens. Wait a minute. Wait, wait, wait. Here's what's happening. A woman is going to have a baby. They wait on the border. Just before the baby, they come over to the board. They have the baby in the United States.

UNIDENTIFIED MALE: Sir, do you regret using the term "anchor babies" yesterday on the radio?

JEB BUSH (R), PRESIDENTIAL CANDIDATE: No, I didn't.

UNIDENTIFIED MALE: Governor -

BUSH: I don't. I don't regret it.

UNIDENTIFIED MALE: You don't regret it?

BUSH: No. Do you have a better term?

UNIDENTIFIED MALE: I'm not - I'm - I'm asking you. A lot of folks find it offensive.

BUSH: OK. You give - you give me - you give me a better term and I'll use it. I'm serious.

(END VIDEO CLIP)

HARLOW: Joining me to talk more about this, Raul Reyes, an immigration analyst and he just wrote a fascinating op-ed on cnn.com titled "Sorry, Jeb, Anchor Babies is a Slur." Also with me, Raj Bhakta, a former contestant on Trump's reality series "The Apprentice."

Thank you, gentlemen, both for being here.

RAUL REYES, IMMIGRATION ANALYST: Thank you.

HARLOW: Let me start with you, Raul, let me begin with you. You write this op-ed and you go through the reasons why you find this so offensive and you say despite Bush's family connections to the Latino community, his wife is Mexican, he's all face. You call the term dehumanizing.

REYES: Right, because when we talk about these children who are, remember, American citizens, when we tag them with this label, anchor babies, we're basically reducing them to this label based on our assumptions about their parents' immigration status.

[14:30:01] So, number one, it's dehumanizing. But, number two, this whole idea is based on a myth, which is the - the notion that people can come here illegally, have a child and somehow that baby anchors them in the country and can protect them from deportation. In fact, that's not true at all.