right at north korea. the u.s. government is expected to publicly blame the regime as early as today. the big question is what will the u.s. do about it? because so far the silence has been deafening. >> cnn learning that investigators have evidence that hackers stole the credentials of a system administrator getting access to the studio's computer system. meaning it was not an inside job. the losses for sony go far beyond canceling the release of the controversial film. it could be the costliest cyberattack against a company in u.s. history. let's begin with senior washington correspondent joe johns what do we know? >> the white house and the u.s. is waiting for investigators at the fbi and the justice department to wrap up their investigation as the administration tries to deal with the fallout. from sony's decision to essentially pull the film.

>> the obama administration is ready to point the finger at north korea for the unprecedented sony hack. a move that could come as early as this morning. >> we're considering a range of options about how to respond. >> among the possible options, more sanctions. the administration insisting the response will be strong. >>ky assure you the united states government is not blinking, we're not backing down, we're not in a crouching or fear position here. >> sources tell cnn there's evidence that the hackers stole computer credentials from a sony system administrator to get access to the company's computer system. the white house said it did not pressure sony to pull "the interview," the controversial comedy which depicts the assassination of north korean dictator, kim jong-un. >> take him out. >> for coffee, dinner? >> we believe that kind of artistic expression is worthy of protection. >> u.s. officials are considering exactly how to characterize the hack, which some are calling an act of

terrorism. >> i see it as cyberterrorism and cyberextortion. i think what they're doing is basically economic warfare and they have found a way that is disproportionate to the physical power that north korea possesses. to actually affect economics, a particular company, in this case sony. >> pressure is also coming from lawmakers, who want to see the white house deliver a forceful response. >> it's time for us to respond to this, in a very strong way. and show the rest of the international community that we're not going to allow this to happen without us imposing a cost on a regime that does it. >> a presidential news conference scheduled for today, mr. obama is sure to get questions about the sony hack before he leaves the white house for the holidays. chris? >> all right, joe, it's a complicated situation, but we've been waiting to see what the u.s. will do. and now we'll at least get an answer to that part. the question looms, if pyongyang is involved in this, and it is

confronted, how will it respond? for that let's go to kyung lah live on the ground in seoul, south korea. kyung? >> we don't know, but that's what makes north korea extremely unpredictable and extremely dangerous. previous hacks of south korea are any clue, here's what we're anticipating. south korea has been a victim, a number of companies here have been the victim of attacks from north korea. cyberattacks, that is. what we've heard from the regime -- deny, deny, deny. but underneath that veneer of denials, was cyberintelligence experts here in south korea say is happening is north korea has been building their capabilities for cyberwarfare, they're sending out more of these agents around the world, they are becoming better, they're becoming smarter, we heard one cyberintelligence expert tell us today that he considers them one of the top five threats globally, as a country, as far

as launching hack attacks. so certainly we're anticipating that they're going to deny it, regardless of what washington says, but they're going to be continue to be building their army. chris? >> kyung, proof of confidence, check. proof of intentions, check. what will be the response from the u.s.? and what happens next? thank you very much. let's get perspective from tom fuentes, a cnn law enforcement analyst and former fbi assistant director and sumi teri, a senior research scholar at columbia university's weatherhead east asia intelligence agency. it seems plausible that north korea is behind the hacking and threats, but what really is our evidence? >> the preponderance of evidence that the government is coming out and senior government official said 99% show that this is north korea. they have the signals

intelligence, intercepts with regional officials talking about this. saying that they probably did it. they have human intelligence, corroborating this. of course they can't tell us how they found out. but i'm pretty much positive that if the intelligence community is in agreement on this, that it is north korea. >> and yet tom, we have heard that sophisticated hackers can make it seem as though someone else did it, as though the hack originated from a different computer system. so can you be certain in. >> no, that's true, alisyn. and it makes it more difficult to be certain. but the reason they're more sure in this case is because it's very similar in methodology to other hacks that did come from north korea. especially into the south korean systems that kyung just mentioned. so they have that aspect. they're not going to reveal every way that they've been able to determine this. because much of the investigative technique in this area is classified. when the fbi goes in and looks at computer penetrations.

>> we are wondering about that. sue, you worked at the white house, will they release actual concrete evidence so the public can see it? >> i highly doubt that. that would go to sources and methods, and we don't want north koreans and everybody else to find out exactly how we found out it was north korea. >> today it's a movie studio. what's to say tomorrow it's not a nuclear power plant or it's not the electrical grid or it's not the nypd? is this -- do you fear that this is just a test run? or this is just the tip of the iceberg? >> actually no. and the reason is, because we've had these test runs going after 20 years against our systems. you know, we were dealing with this. i was having meetings, attending meetings within the fbi as far back as 1994. dealing with the topic of information warfare, which would, which means an attempt by one country to attack the computer networks of another country. to bring it to its knees. the problem is the u.s. is the most vulnerable of any country in the world because we rely on

our computers the most. if somebody hacked into your building right now, and shut down the water pumping system, you'd have to evacuate because you wouldn't be able to flush the toilet. so everybody in the u.s. is more vulnerable because of our sophistication. a country like north korea is less vulnerable from that standpoint, because they're already primitive. >> so given that, what should the u.s. do about this? how does it send a message and how does it prevent this, sue? >> options are quite limited. north korea is one of the most difficult problems that the u.s. has been dealt with. we've been dealing with this problem for 20 years. but there are a number of things we can do. for example i think we could put north korea back on the state sponsors of terrorism list that we took north korea off in the last year of the bush administration. >> what does that accomplish? >> well it's more symbolic than anything else. but further squeezing pyongyang. we can also pass house resolution 1771 in the senate floor right now that imposes additional sanctions on north

korea. but again it's really hard to combat the north korean problem in general. this is why we say it's one of the most difficult foreign policy challenges we face. >> tom, i hear people online say the u.s. should retaliate by hacking north korea. is that the answer? >> you know, alisyn, there's going to be much in the way of response by the u.s. that we are never going to know. so i think as chris mentioned earlier, the silence being deafening, prepare to stay deaf, because i think all of the measures that will be taken, in and are being taken at this moment, we're not going to know. >> what do we get, sue from a retaliatory hack attack? is that the right answer? does that send the message loudest? >> no. and i don't think that's what the u.s. government is going to do. so i'm sure they're trying to figure out right now how to respond exactly. but -- there's what are we going to attack exactly? north korea is one of the most unwired country in the world. so i don't think that's going to work.

>> tom last what about kyung lah was talking, about the shadowy group of hackers, the bureau 121, what do we know? >> we know they have it and we know they have probably a couple thousand people that they've trained with that. and this almost meets the exact definition of asymmetrical warfare. you have a country that can't reliably launch a missile, even as close as japan, much less reach the united states. but if you can train a couple thousand top-level hackers like this, then they can cripple sophisticated countries that rely more extensively on its computer systems as i mentioned, like the united states. >> sue, is there anything that congress can do to prevent a hack attack? >> i'm not sure what congress can do. >> it would more legislation help? would who cybersecurity help? >> tightenen cybersecurity i guess in general, but i'm not sure of specific things that congress can take. i think what they should do is pass a resolution and sanctions

against north korea. >> got it. sue mi terry, tom fuentes, thanks so much for all the information. over to michaela, other news. here's your headlines, breaking overnight, another horrifying tragedy in australia, eight children found stabbed to death in a home in cairns in the northeast coast, the children between the ages of 18 months and 15 years old. police say a 34-year-old woman is also wounded. she's believed to be the mother of seven of the children. no suspects have been identified at this time. we'll stay on the story. the white house is not ruling out the possibility of cuban president raoul castro making a visit to washington, despite the island nation's record of human rights violations. we've learned the name of the spy who was released with alan gross. sources tell cnn he's been identified as rolando trujillo, he helped lead the u.s. to a network of cuban agents and spies in the united states. boston marathon bombing

suspect dzokhar tsarnaev spoke briefly during his first court appearance in a year and a half. acknowledging the judge on procedural issues. during the hearing, the judge heard another push from the defense to move the trial out of boston. the judge did not issue a ruling on that yet. meanwhile, outside the courthouse, emotions ran high. survivor you see here, confronting tsarnaev supporters, showing them his prosthetic leg he has to use after losing a limb in the attack. the trial is scheduled to begin early next year. stephen colbert, bidding farewell to his colbert nation, signing off after nine years 0 on the air. >> the truthiness is all of those incredible things people say i did. running for president, saving the olympics. colbert superpac. treadmill in space, the rally to restore sanity and/or fear. and/or cat stevens' career. none of that -- none of that was

really me. you, the nation, did all of that. i just got paid for it. thanks. >> light lime curious choice. colbert led a sing-along to the popular hit, "we'll meet again." look at some of the faces in the crowd. our very own christiane amanpour, singing a robust song. colbert will replace david letterman as host of the "late show." >> cookie monster, fantastic, arianna. >> some as if they were doing it against their will. >> the power of colbert. he got franco out there. part of the sony hack situation, they said he wasn't doing any media. oprah-esque in its grandeur. >> who is the man behind the

colbert character. >> does he go full colbert. he's from canada. probably get the inside scoop. >> he's from canada. >> i don't think so. >> he had cuban coffee yesterday. -- >> it's still in my system. i'll get back to reality. president obama has a tough reality in front of him. it's supposed to be a lame duck session, but he doesn't seem to know that he's fighting back against a do-nothing congress by making some major historic moves just in recent weeks. what's next? because there was no accident. volvo's most advanced accident avoidance systems ever. the future of safety, from the company that has always brought you the future of safety. give the gift of volvo this season and we'll give you

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always look for the grown in idaho seal. president obama does not seem to get what lame duck means. he's like the aflac goose making all kinds of moves. especially since the mid-term election beat-down. let's discuss his actions, some historic. we have cnn political analyst john avlon and republican consultant, margaret hoover. margaret, i allow you to make the case for president obama's audacity, historic move in china

with the trade deal. another historic move with cuba. going after it on immigration. how impressed are you by these moves? >> right. that's what you call a tree falling in the forest. i'm not a huge fan. what we know is that presidents in their last two years, especially when it's a lame duck congress, when the congress begins, basically have authority to act unilaterally on foreign policy. that's about it. what president bush did in the last two years of his administration was focus heavily on iraq. the surge had been implemented and he was working hard to make sure that he left office with iraq in a more stable situation, but he did not take all of what he did. >> mission accomplished, i remember it well. >> that was after that. nobody is defending that any more. we won't go there this morning. but in this case, it's quite interesting, because the president hasn't even allowed the new congress to come into washington yet. so he didn't even give peace a chance. he's just gone straight to the

border, straight to immigration, straight to all of these pieces which he's going to call legacy pieces and you know, made it quite difficult or suggestive that he's not interested in giving it a go when the new congress comes in. >> should he have given congress a chance? >> i'm all for giving peace a chance, you can't be naive. the president is looking at a different style of a lame duck. this is a liberated lame duck. he's going to go full bullworth. take charge, say and do what he means, he's saying that, he's not simply marking time here, he's swinging for the fences, cuba a bold move overturning what ten presidents have done, status quo. immigration action and climate change, he's not going to be lucy and the football. mitch mcconnell saying he wants to work together -- that's great. but let's not put too much hope with the republicans work. he's going to take reaction. >> you saw my aflac reference

and you upped me, with bullworth and lucy and the football. strong. the word you left out of the analysis, margaret was latinos. the move with cuba will add implication witheno community. move on immigration, implications for the latino community. a big-minus there. >> influential, but normally, not aligned with going to be aligned with this policy. the majority -- >> that's why i'm saying plus-minus. i gave you an opening. >> i understand what you're saying, it's going to amielorate the -- >> president obama won cubans in south florida last psych until 2012 narrowly, but he did. there's a big generational divide. that's why he feels he can make the calculation without screwing democrats in florida going forward. >> one interesting thing that president obama is doing, some

would say tricky, is passing a whole slew of presidential memoranda, basically the same as an executive order, but it's a different name and it circumvents congress, he's passed more of these presidential memos than any of his predecessors. so what's going, what's he trying to do with this? >> this is the hallmark of a president who hasn't been able to pass landmark legislation with congress or work functionally with congress. they fall back on the powers of the executive branch. what's fascinating is the president has several times compared his record of executive orders to his predecessor's and said, you call me the person who is having executive overreach. but i've had less executive orders than george w. bush or any president before me. but then when you look at the difference between a presidential memoranda and executive order, functionally they're the same. there are subtle differences, but functionally, they're the same thing. they're almost interchangeable and he's had far more than anyone else. >> i think folks really, really want, they're so invested in the

imperial presidency metaphor, they'll go hunting around for anything that backs it up. >> but he did pass the presidential memos. >> the presidential memorandum is a junior version of the executive order. you've got to go apples to apples. it is a presidential action with the force of law. so it's absolutely worth factoring in. he's had i think more than anyone since carter on this topic. and if it trend continues it will be truman. so it is an interesting facet and factor, justice elena kagan when she was in the clinton white house talked about how presidents could use it more effectively and president clinton did. as we look 0 get perspective on the historic record, you've got to acknowledge less executive actions than any of his predecessors but more presidential memoranda. >> you go to great lengths to defend president obama, but --

>> i thought you were going to smack him. >> trying to be generous with my husband this morning. >> what do you think he will do going forward? will we see more of these? if so, what areas? >> i think there's no reason to suggest he would slow down. it sounds like it's pedal to the metal. the thing about these is they can be quite trivial as well. you can rename the national security staff with a presidential memoranda or an executive order. >> what do you think, john? >> first of all let's talk about the area where is i think he still can get something done with congress, i think it's going to be trade, it's going to be possibly infrastructure investment and maybe corporate tax reform. s that's the limited area. beyond that, almost anything he is going to look to do, will require probably executive action or be in the realm of foreign policy. the big obvious thing that we're going to have to deal with as a nation next year is isis, that's going to be all foreign policy, military policy. he's going to have to find a way to work with some extent with john mccain foreign services.

>> isn't everybody on the same page, fighting isis? >> they haven't even declared war. >> there's a real difference in strategy and a real difference in how to execute a war against isis. so while shouldn't we all agree that they're the bad guys? we don't agree on how to go about it. >> margaret, john, thanks so much, have a great weekt weekend. let us know what you think, can you tweet us or go to facebook.com/newday. we'll share your thoughts later. boko haram, they've been active. another mass kidnapping, murders, fears rising over what could come next. quiet is, is anything being done to stop this terror group? plus, u.s. officials now believe north korea is in fact behind this massive cyberattack on sony. so what is north korea's secretive bureau 121? this hand-picked pampered elite cyberwarfare terror cell? we have information ahead for you.

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. good to have you back with us on "new day." now to boko haram's latest

campaign of violence and terror this he overtook a nigerian village this week, killing dozens of men and kidnapping 185 women and children. and we're joined now from london with the latest. >> michaela, it is so difficult to get detailed information out of this region. we are building a picture of an extensive series of attacks, the first attack was in chibuk, the site of abduction of 300 women and girls back in april of this year. from there they moved on to an area where they hit again and abducted 185 women and girls there. speaking to nigerian authorities, there's no sense that they even have a trail to follow. there really is no sense for the nigerians as they start to look towards christmas. that they feel that there is any sense of push-back. any support from their government from their armed forces. many of those we've been

speaking to, michaela say they feel even more helpless than they have ever wildfire with these attacks. >> it took so long for the latest attack to be made public and for authorities to know of it. nemma al bagr. u.s. officials have confirmed air strikes in iraq have killed three senior leaders of isis, their deaths had been expected after air strikes going back to mid november. it's taken until now to determine conclusively that they were killed. military official tells cnn that one of the militants was a key deputy, the isis leader, abu bakr al-baghdadi. president obama going to hold his annual end-of-the-year news conference before heading to hawaii for the holidays. expect him to field questions on topics from action on immigration, to this week's deal do reopen relations with cuba. the senate c.i.a. torture report

and the hack attack against sewny. fresh calls for sweeping changes to the secret service in the wake of a new report. an independent panel appointed to review the agency says the secret service is stretched beyond its limits and needs more training. more staff and better leadership. the panel was created after a series of highly publicized security failures, including this, when the man jumped the white house fence, made it deep inside the building back in september. i have an amazing reunion to tell you about. a california man whose boat that he lived aboard sank during last week's brutal storm in california. he thought his dog, daisy went down with the boat. not so. steve aliota said he had gone out to help a friend last thursday, when he returned, he was horrified to see only the boat's mast sticking out of the water. daisy had escaped during the storm. she swam more than a mile to shore. found a church where she and steve sometimes get a free meal. when he arrived there, the

minister was happy to reunite them. they're staying on a friend's boat until they get back on their feet. >> that's an impressive piffle, a dog who can read a map. >> i was going with they don't swim well, because they don't have the webbed toes, but the read something good, also. let's turn to sports here, somewhere right now john berman is curled up in the fetal position, sucking his thumb and rocking slowly because that's how he sleeps. but he's also upset because the boston celtics just lost the last cornerstone of their championship team. and big news about kevin durant. arguably the best player in the league went down with an injury, let's bring in andy scholes with this morning's "bleacher report." >> that's probably all correct, berman is probably not doing too bad. this was expected, the rondo trade. but the thunder fans were holding their breath because

durant has missed 17 games, another injury last night this one was really unfortunate. he was on his way to a record-setting performance. he had scored 30 points in the game when he rolled his ankle right before halftime. he's the first player in 40 years to score 30 points in less than 20 minutes of action. the injury happened when durant stepped on a defender's foot while driving to the basket right here. without durant on the court, the warriors went on to win the game, 114-109. good news for the thunder. x-rays on durant's ankle were negative and he is considered day to day. now to the huge trade in the nba last night. the boston celtics finally unloaded rajon rondo, sending the all-star point guard to the dallas mavericks. in return the celtics received brandon wright, jay crowder, jameer nelson and it wirondo's arrival in dallas will give them the best shot.

last night was the worst thursday night game ever. you had the 2-12 titans taking on the 2-12 jaguars, you would think the players are going through the motions at this point. not jags d-lineman derek marks, he was one $600,000 clause on his contract. on the last play of his game, he brought down charlie widers for the sack. he popped up, made the money sign, mobbed by his teammates, jaguars won the game 21-13, i'm sure they had a fun time celebrating that third win of the season. marks said anyone who wanted to go out and party after the game, go out on the town. it was on him because he got the big $600,000 bonus check. >> i wonder if we're included? >> no. >> sadly not. >> back to our top story inside north korea's vast hacker network, how did this group grow without the world noticing? a north korean defector shares his secrets and we have the details. ♪

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the u.s. government getting set to blame north korea for the crippling hack of sony. but not everyone thinks this was the handiwork of north korea. who else could be behind it? let's bring in bobby ghosh, our cnn global affairs analyst and managing editor of "quartz" and martin williams, former tokyo bureau chief of idg news service and the founder of north korea tech.org, a blog. martin, you are not convinced that north korea was behind this. why not? >> well i'm not convinced with any of the evidence that we've seen so far. this doesn't look like a typical north korean hack. the country in the past has gone in and attacked things and hasn't been as noisy, there haven't been any of these public statements we've seen this time. also if we look at what happened in this hack, the hackers at the

beginning didn't say anything about this movie. so certainly based on everything we know so far, i don't think we have enough evidence to really conclude that north korea is behind it. >> in other words, the website that this shadowy anonymous group set up talking about the threats against this movie and what they would do and 9/11-style attack, you don't think that has the fingerprints of north korea? >> i mean, it could do. it could be a group that is linked with north korea or somehow aided by the country. but if this is north korea, this really is nothing like we've seen before. so it really does sort of raise a frightening new level in these kind of cyberattacks we've seen take place in the last few years. >> what do you think of this not having the hallmarks of a typical north korean attack. >> the crucial phrase was -- as far as we know. we know so little and so little information has been given out. what we know is so far there was no attempt at blackmail. which suggests this is political in some way.

>> what do you mean, there's no attempt at blackmail? >> the attackers didn't ask sony for money in exchange for removing the malware or giving them the tools to block it, which sometimes happens. north korean state agency has said this attack was done by sympathizers, which sometimes is code for we did it. the fact that they picked sony, the background of the movie, it's a japanese company, north korea, has a longstanding animus with japan, that's also indicative. and now the obama administration is about to announce we understand today, that they're going to finger north korea directly. they say that they've picked up digital fingerprints. we haven't seen it, martin and i, so it's a little hard to know for sure. but there's a lot of circumstantial evidence that does point to north korea. >> we ha former white house official on a few minutes ago who said that she believes that they do have evidence that it is north korea. she said they must have the signals intelligence intercepts

with regional officials and human intelligence pointing to north korea. what do you say to that level of evidence? >> i think the key thing we're going to see today is the exact language used by the white house or whatever part of the government announces this. there's a big difference between north korea attacking sony and attackers using north korean software. it's going to be really important to see what level of certainty the u.s. government has that north korea is involved in and quite what it thinks its involvement is. >> martin i want to stick with you for the technology of this. help us understand the amount of data that was stolen from sewny. ten times that of which is in the library of congress. are there no triggers, no red flags that go off in a company when that amount of data is being siphoned out of their computer systems? >> if that claim is true, then there should be, obviously. so far, the hackers have released online several dozens

of gigabytes of information, they're talking about 100 times that. so that's what they say they've got. we haven't seen evidence of that. hackers are prone to over-estimating, over-stating what they've done. but it looks like sony's security was lacking in this one. these guys should never have been able to get away with this type of information and all of the confidential stuff they got off the networks, the emails, movies, the financial reports, this is really very damaging for sony. >> does it suggest that there must have been somebody on the inside at sony who was helping? >> it would appear again, the hackers were able to get access to one system administrator's password within sony. that doesn't mean that the system administrator gave it to them, they could have stolen it. that sort ever thing has happened before. it's not conclusive one way or the other. hopefully we'll get more clarity when the obama administration or the fbi makes their statement today. the one thing that's an big w s

ambiguous, this is a company that had very poor security protocols. information that was released by the hackers, the passwords they were using was "password" in some cases, this is a company that needed a complete overhaul of its security protocols, it's a cautionary tale for all companies across america and around the world. there are people out there, whether they've north koreans, people out there who have the tools to break into major corporate systems and that means every company has to be on guard. >> by design, sony said they didn't want to beef it up because they thought it would be too expensive. martin, last, you study this for a living. you study what north korea is doing. what do you think north korea wants? what is next that we should be prepared for? >> i think we need to keep looking at the development of north korea's cyberinfrastructure and these

teams of hackers they have, the unit 121, the team that's been talked about in relation to this attack is one of several that the country has. one of the reasons we haven't seen much in the last few years is because a lot of the attacks have been on south korea. so it hasn't made news in the united states. or in the rest of the world. but if they're starting to turn their attention to outside of the asian, outside of the korean peninsula, and especially if they're starting to target companies rather than governments, this needs to be kept a close eye on. >> martyn williams and bobby ghosh, thank you so much. the price of oil is down, the price of gas is down, the dow is up, all good, right? maybe not. we'll explain why too much of a good thing can turn out to be bad.

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definitely cream. [ male announcer ] never made with hydrogenated oil. always made with real cream. the sound of reddi wip is the sound of joy. welcome back to "new day," more fluctuation in financial markets made for a great day on wall street thursday. the dow was up 421 points, the best day in three years, it comes amid great news for drivers, those of you getting ready to hit the roads for christmas week. gas prices continue the steep

decline. fuelled by the plummeting price of oil. hovering around $55 a barrel. the drop is wreaking havoc on economies of oil-producing countries, like russia, several countries in the middle east. venezuela that could lead to major economic repercussions, who do we talk about this? rona fruhar, cnn economist and "time" assistant editor. we should start with that let's start with the good news, a big day on the market. what was going on. what are the highs? tell us about it. >> yesterday, fed chair janet yellen said the fed is going to be careful about raising rates later in the year. they're going to take their time, they're not going to rock the boat and markets were happy about that. low rates are generally good for the stock market and you can see the buoyancy in the market. >> there's been a lot of movement, there's been a tremendous amount of movement this year. >> absolutely. i think you're going to see volatility. volatility is the word for the coming year. i think that the u.s. markets are still going to be you know

the prettiest house on the ugly block. but as the global economy, if you will. i think it's going to be up and down. so hang on, fasten your seat belt. >> that's good news, if you're looking at your own portfolio or own economy. we'll get to in a second when we talk about gas prices. let's talk about oil. there's been much conversation about the price of a barrel of oil. $55 a gallon, a barrel. that is a sharp decline. why are we seeing that sharp decline? >> it's all about supply and demand. there's more supply on the global markets right now. but also demand is down in part because china has been in a really sharp slowdown in the last year and china is now the single-largest energy-consumer in the world. when it slows down, the market goes off a cliff. >> how do we attribute that? we've been working on fuel economy and fuel efficiency and set new standards and we've put pressure on our countries, especially china. is that putting a dent in it as well? >> it's putting a dent. but the chinese are many decades behind the u.s. in terms of how

they consume energy, they still use a lot of dirty coal. they have a tremendous amount of factory consumption. they're at a different stage in their development where they're very energy-intensive. a lot of dirty fuels being used there still. >> comparatively, it's low here, $55 a gallon. but we look at this. what was that, 2009? >> $148 in 2008 and the financial crisis, global markets fell off the cliff. demand goes down and that's why you see the plummet. >> not quite to that level? >> no. i think we're starting to stabilize, you saw it in the last couple of days, another reason that markets were buoyant, people don't want it to go too low, it starts to have bad effects on other parts of the world. >> you talked about supply and demand. walk us through the graph, it's interesting to see the disparity between the supply and the demand. >> so a few things happening on the supply side. more u.s. energy has been coming online. countries like libya has come back into the global markets.

and the saudis, the single had been biggest oil produce nert world. say they would keep pumping, they're going to keep pumping, which will keep price low for a while. >> and for us in the united states and north america. we found more difficult ways to find oil, the oil sands and shale fracking. >> when prices go too low, that starts to impact u.s. energy independence, our oil is expensive to get out of the ground. it costs about $70 a barrel to get out of the ground. we're around $60 right now, that starts to make it not very economical. >> let's talk globally. there are several countries around the world that are oil-dependant. because of their use of it. when we look at the price of oil, it's going to have an impact globally. >> you look at the giant yellow mass, that's russia. you can see the headlines, all of the problems in this country recently. are basically down to oil. this is a petro state, it will

rise and fall on the price of oil. other parts of africa, angola, you can see the gulf region that's suffering. any major oil producer right now is going to have a hard time making their budgets. >> and i was thinking about texas, they're facing, when we talk domestically, they're facing some challenges with it the good news is for consumers, when is the last time we saw gas for $2.60 a gallon. >> it's such a big deal for middle class people, working-class people. this is like the equivalent of a $100 billion tax rebate coming up for the american population. so in the short-term, it's good news at home. >> we save money on the gas, you tell us how it doesn't mean good things globally. but for us personally, consumer spending is going to have up. you have $60 billion that you can spend. that's going to be infused into the u.s. economy. >> that's huge. >> that's a good thing, is it not? >> that's the best possible thing that could happen right now. because this is an economy that's made up of 70% consumer spending. when you get that kind of rebate

and you have people pulling out their wallets and spending, that's great news for the economy. >> but do we spend it? >> i've been online the last few days. i think that people are beginning to open up their wallets. people have repaired their balance sheets in this country. there's been a lot of savings in the last few years and think they're ready to spend again. >> a lot of people spending, do you think it's going to be a good holiday season overall. do you think retailers will come out saying, we did all right ♪ >> i think we're not seeing the huge bump-up right after thanksgiving. people aren't going into brick-and-mortar stores so much. but i think overall we're going to slightly over last year. >> thanks so much. thank you. we've got a whole lot of news we need to get to this morning, a lot of breaking news, we'll get to it right after this. clearly i believe this came from north korea. state sponsor of cyberterrorism. >> the hackers stole computer

credentials from a sony system administrator. >> the united states government is not blinking, we're not backing down, we're not in a crouching or fear position here. >> it's time for us to respond to this in a very strong way. hostage, terror in sydney. >> the taliban gunman entered the school after scaling its walls. the ruble losing half of its value to the u.s. dollar. i wouldn't rule out a visit from president castro. >> today the best-funded dictatorship in history. >> president obama breaking his own word, his own pledge. >> the policy of engagement with the cuban people will overtime help open things up. welcome back to "new day," i'm alisyn camerota alongside chris cuomo. >> the obama administration today expected to explain what they know about north korea's involvement in the massive sony hack attack. u.s. officials confirming evidence has surfaced linking

the regime to the hack. >> lawmakers calling the hack an act of terror. what will it mean and if they don't respond effectively, what does it mean about what could happen next? if the north koreans can hack into sony, what else could be at risk? we're going to cover every angle of the story. senior washington correspondent joe johns. joe? >> a presidential news conference is scheduled for later today. mr. obama is sure to get questions about the sony hack attack. the obama administration is ready to point the finger at north korea for the unprecedented sony hack. a move that could come as early as this morning. >> we're considering a range of options about how to respond. >> among the possible options, more sanctions, the administration insisting the response will be strong. >> i can assure you the united states government is not blinking, we're not backing down. we're not in a crouching or fear position here. >> sources tell cnn there is

evidence the hackers stole computer credentials from a sony system administrator, to get access to the company's computers. the white house said it did not pressure sony to pull "the interview," the controversial comedy which depicts the assassination of north korean dictator kim jong-un. >> take him out. >> for coffee? dinn dinner? >> we believe that kind of aristic expression should not be subject to intimidation. >> u.s. officials are considering how to characterize the hack, which some are calling an act of terrorism. >> i see it as cyberterrorism and cyberextortion. i think that what they're doing is basically economic warfare and they have found a way that is disproportionate to the physical power that north korea possesses. to actually effect economics, a particular company in this case sony. >> pressure coming from lawmaker who is want to see the white house deliver a forceful

response. >> it's time for to us respond to in in a very strong way and show the rest of the international community that we're not going to allow this to happen without us imposing a cost on a regime that does it. >> the white house is waiting for the justice department and the fbi to finish their review of all the evidence. as the administration tries to deal with the fallout from sony's decision to pull the film. alisyn? >> joe, we'll see what time that happens today and if the u.s. publicly blames north korea, what response can we expect from pyongyang? for more on that let's get to kyung lah, live on the ground in seoul. what are we expecting, kyung? >> well, if history is going to play any cue here, alisyn, it's going to be that north korea really loves to deny what it does. that's been its history. that's been its pattern. especially when we deal with cyberattacks. north korea/south korea, they've had this ongoing cyberwar.

it is very tough and the companies in south korea have been trying to protect themselves. but every time the south korean government has tried to finger north korea as being the culprit, what we've heard from north korea and pyongyang is -- an absolute blanket denial despite the evidence. that's what we're expecting. meanwhile, after they make that blanket assessment that they weren't involved, cyberintelligence experts here tell us that there's a lot of work going on underneath. they're trying to build up a cyberarmy, an army, alisyn, that certainly by the looks of what happened with sony, is becoming increasingly more sophisticated. ailsen? >> it will be interesting to see what happens a few hours from now. kyung lah, thanks so much. over to chris. the white house is suggesting north korea is behind the sony attack. how do they know? what if sony was taken down? what does that mean about who else is vulnerable? is there anything that's a real defense in the corporate and the personal governmental levels? tough questions, we have someone who can answer them.

howard schmidt, the cybersecurity czar for the obama administration and he was also former chief security strategist at ebay and chief security officer at microsoft. to be gentle about it, this is in your wheelhouse, sir, how confident are you that when the united states says we think it was north korea, that they have it right? >> well at this stage of the game, i would really be hesitant to say this is who it is. because there's a lot of evidence out there, there's a lot of different tricks that hackers use, that nation-states use that can make it look like it's going in one direction and two weeks later you find out it's somewhere else. this is why i'm really hesitant to say, this is one of the possibilities. clearly because the content and the intention here. it could be. but let's get all the facts together before we start pointing fingers. >> two points of criticism for the u.s. government. the first, why are they talking the talk then, that they know it's north korea if in your estimation, they can't really know at this point? why do that?

>> well, i think one of the things is, there's a desire for information. with the movie coming out, with all the release of emails and stuff from sony, it says okay, this looks like it is, some people out there that have said suggested this is the case. and there's a desire to get information. and there's oftentimes not the people in the positions that really understand how this works. how critical it is. the folks at the fbi, at the cybercrime unit really understand the forensics, how to dig this thing apart and be able to move from what appears to be one thing, to the reality here. and when you're getting pushed for answers, particularly from the white house, you come up with some hypothesis, that may may or may not be correct later on. >> that's not good. the pressure from the other side is, why doesn't the u.s. government seem to take cyberterrorism as seriously as ordinary terrorism? if this story had gone that somebody drove a big truck into the sony studios and broke in and stole all this stuff and ran

away and then started blackmailing the company, the u.s. would be all over it. you'd have the fbi, all of these guys in colored parkas running around. we're not seeing any of that. why not? >> it's because one, it's scalability, this is a very large, this is a very unique situation here. this goes on every day and there's only a limited amount of resources, both in the federal government and state and local law enforcement. we don't have any good agreements for norms in cyberspace between nations and nations. we have companies that are struggling to figure out how do we do this right? we created a society from the internet where we built a system to be open and accessible. then all of a sudden we find out there's bad guys out there. now we're trying to close that, while still running the business. at the same time, when you look at the government's role, if there was intelligence out there that they should have been collecting on particularly that regime, if indeed they're involved, why weren't they able to go to the company and say listen, we see them creating

some malware that's going to target you, so you better protect yourself. >> the malware supposedly written in north korean software language. whatever that means. if that's true, do you believe it is? and if it is, is that indicative, if not despositive of ownership. >> if i was a hacker, that's one of the first things i would do, i would find somebody to create the mallware that the operating system or malware is in chinese or russian or korean. that's one of the things that to throw people off automatically. so when you do this, you really have to get down to deciding whose fingers met the keyboard. it's very difficult to do in a situation like this. particularly after the fact. >> howard, sony was hacked before, supposedly they obviously didn't get a correct fix. let's analyze sony. are they a one-off? or is this an example that if sony is vulnerable, with your experience at ebay and microsoft, everybody is vulnerable? and if so, is there an answer to

the vulnerability? >> well, the answer is -- that there's vulnerabilities that exist, one of the big ones we've seen that gets repeated over and over again is vulnerabilities in software for insecure coding mechanisms, creating the software itself that aren't fixed in a timely manner. the other thing is the way we created this business process, is accessibility was the main thing, we have to sort of back off from that. look at this, how do we create an infrastructure that gives us the ability to be entertained, to be get electricity, to get fresh water, in an environment where use strong authentication, get away from user i.d. and pass words, by all accounts, this is one of the symptoms of this case. get encryption out there. so if you steal something, which could happen, that they can't do anything with it. and that we have to change that culture. so here's my concern, howard. you have me nervous. because it seems like what you're suggesting is, that this is a big risk, it's out there,

it's growing all the time. and that we are not set up to deal with it as a government or as a society or as a corporate structure if that's true -- then what is the limit to how often we're going to see this and how high it can go in terms of its disruptiveness? >> and that's one of the concerns we've had since 2003, when tom ridge and i released the national strategies to secure cyberspace. we basically called out there. we need better intelligence collection and sharing with the private sector. we need the private sector to sort of co-lens amongst themsselves. it's been a hit-and-miss thing almost the past 1 years now. so as a consequence, what we really have to do is sit down and say what does it mean to fix this? how can we make sure we prioritize it where it's the water and the electricity and the telecom is a higher priority than you know somebody doing online video watching. >> so one of the excuses for the

u.s. government here, although i'm not in the business of providing them with excuses, is that there's a lot of law about sharing of intelligence. and maybe the u.s. government wasn't able to tell sony butabout what it knew what might have been happening with sony. i don't think that should be an excuse, but what do do you about the law and the u.s. intelligence and what government can do to protect corporations and itself? >> that should not be the case. when i was at the white house the last time, we had an incident took place, that took over three months to notify the private sector and there was no reason not to. it was just we're concerned about intelligence, we're concerned about the bad guy knowing that we're watching them. in the meantime you're seeing things start crumbling down. the president actually signed an executive order that said, enough is enough. you will share unless there's some reason not to. but we're still not doing that. there's still holding on to the old -- belief is if we tell somebody classified information it's going do ruin an operation. all you have to do is tell

someone not where you got it. not how you got it all you have to say it look for this piece of malware. look at this i.p. address and you can better protect yourself and we're slowly but surely getting to that. but it's slow. >> you think there is a real chance that the u.s. knew that this was going to happen to sony? >> well, it's tough to tell. because you have so many different parts of the u.s. government looking at the cyberspace, looking at cybersecurity. some are reeling from the snowden issue, where there was a finger-pointing at the u.s. government for too much collection. but if you have focused collection doing these things, yes, quite possible that somebody somewhere said oh, gee, we see something taking place. whether it's korea or korea outsourced to china. whether it was some other nation. the bottom line, if they see it, how do you get through the bureaucratic system we have today. >> who is better -- the united states at defending or the hackers specifically this bureau 121, whatever that is in north

korea, in trying to disrupt? who is better? >> well it's a cat-and-mouse task. we get ahead a little bit and then we fall behind because an unknown vulnerability is discovered. we have somebody that's we're focusing on one piece, they go in on another. you mentioned earlier sony, the previous hack. they were focusing on the playstation and the whole system out there. because that's what was attacked. that's a different system than what we've seen this time. so we have to understand this is a very, very complex ecosystem. we have to look at all facets of it prioritize where to put our resources. and make sure we're developing for the future. because what we don't want to see -- i think it was mentioned at the top of the hour -- we don't want to be in a position, i don't want to be in a position to say you can't see this movie. i may or may not like it, i may not agree with it, i may not spend money on it, but that's my choice, not somebody that's out there hacking systems because they have a political motivation and prevent us from being

entertained the way we want to be entertained. >> well howard schmidt, it is very clear that not only do you understand the situation, but you understand the solutions we need and they're not in place, so hopefully things get better soon. if they'll do this over a silly movie, who know what is could happen next. thank you very much for your perspective on "new day." >> thanks, chris. a lot of other news this morning, let's get you to mick. >> ten minutes past the hour. here's a look at your headlines, breaking overnight, another tragedy in australia. eight children have been found stabbed to death in a home in cairns, along the northeast coast of that country. the children are between the ages of 18 months and 15 years old. police say a 34-year-old woman was also wounded. she is believed to be the mother to seven of the children. at this time no suspect has been identified or apprehended. is the white house is not ruling out the possibility of cuban president raul castro making a visit to washington. even though that island nation has a checkered human rights record. we've 11ed the name of the spy released along with alan gross,

sources tell cnn he has been identified as rolando trujillo, a cuban national who helped lead the u.s. do a network of cuban agents and other spies in the united states. ford is expanding the recall of takata air bags or cars containing takata air bags after extensive pressure from federal regulators. ford was one of five automakers encouraged to expand driver recalls nationwide. the total number of cars is now over 460,000 in the u.s. and another 80,000 overseas. ford said it was aware of one accident with an injury possibly related to those malfunctioning air bags which have been linked to five deaths. two states are manning a legal challenge to colorado's marijuana law over concerns the drug is being brought over state lines. nebraska and oklahoma filed a lawsuit with the u.s. supreme court. the states argue that marijuana has been begun to overwhelm their criminal justice system

since colorado legalized it at the start of the year. colorado's attorney general says he will defend the marijuana law, saying the suit has no merit. emotions running very high inside and outside as boston marathon bombing suspect dzokhar tsarnaev made his first court appearance in over a year thursday. the close of the brief hearing an outburst in the courtroom. outside, a bombing victim clashed with tsarnaev supporters. deb feyerick was there to see it play down. quite a crazy dynamic. >> this was supposed to be a very routine sort of pretrial hearing. but what happened, this was the first time tsarnaev was in court since pleading not guilty 17 months ago. the the first time i saw him back in jewel of 2013 he was still healing from wounds he had suffered. now he's got the principalor. he's a bit gray, his hair is long and messed. growing an odd little beard that he was playing with while he was in the courtroom. he was very respectful to the

judge. the judge asked him whether he felt he was, that his lawyers had his best interests and he said, very much so. he never looked back to see his supporters. but they were in the courtroom for him. the woman who ultimately stood up as he was being cuffed and led out of the courtroom is the mother-in-law of tsarnaev friend. somebody who was implicated in a triple murder along with tamer lan tsarnaev. fbi agents ended up killing that man when he was arrested. the woman was yelling in russian, don't kill innocent boys. but on the other side of the court there are a lot of bombing victims. i spoke to one woman who said don't get me wrong, i'm not here to see tsarnaev. i'm here so that tsarnaev can see us. she said, she asked, i said what question would you ask him and she said, why? because you didn't win, you didn't accomplish anything. we're stronger and that was the message that the supporters wanted to send to those people who were in the courtroom. >> powerful and intense stuff.

>> deb, thanks so much. let's get now to our forecast around the country. meteorologist jennifer gray keeping track of it for us, hi, jennifer. >> yeah, we're looking at a lot of rain across the gulf coast. we're going to see rain anywhere from houston all the way to new orleans through baton rouge, south of shreveport. we're going to look at possibly three to five inches of rain as we go through the south. so if folks are traveling through the weekend, ahead of christmas eve and christmas day, you'll run into a little bit of trouble there. we are also looking at rain and the west, we're going to see a little bit of mountain snow as well. sorry we're having a little bit of graphic trouble obviously. but we're going to see quite a bit of snow in the west as well as the rain. if you are traveling for christmas eve and christmas day, guys, it looks like we're going to see snow around the great lakes. so that's going to be your main trouble spot. >> jennifer, thanks so much. so the war on isis -- it is

raging on as we speak. the question is -- is there progress against the terror group? three isis leaders were killed back to back in recent air strikes. does it really matter when you hit people at the top of chain of command or do they just get replaced? >> chaos erupted around the world this week. the sydney siege, the pakistan school massacre. russia's economy tanking. fareed zakaria will be here to make sense of it. >> cuba. >> right. (vo) nourished. rescued. protected. given new hope. during the subaru "share the love" event, subaru owners feel it, too. because when you take home a new subaru, we donate 250 dollars to helping those in need. we'll have given 50 million dollars over seven years. love. it's what makes a subaru, a subaru. feet...tiptoeing.

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apparently hacks sony. here to explain this wild week of news is fareed zakaria, host of cnn's "fareed zakaria gps" great to see you. normally the week before christmas is what we call a slow news week in the business. can you remember a week like this? recent memory? >> with so many generally big stories, no. each of these stories on its own would have been a lead story. would have been something we would have discussed for hours and hours, here we've had as you know a situation, we can't get to this third world historical story, we've got two others ahead of it. think of the taliban attack on the pakistani school children. that would have occupied a week discussing it and understanding it. the tragedy, the politics behind it. it's kind of gotten pushed aside. >> do you think that's because of the exigencis of other stories or the fatigue that the

audience has for these types of stories? >> i think it's more because the cuba story was so huge until the north korea story came out, right? these people would have been interested in. because they combine human elements, drama, there's one underlying theme to almost all of them, which is the asymmetry of power. think about who has, who has been able to prevail or at least make a lot of trouble? it's been hackers against sony. it's been the taliban against the pakistani army. it's been currency traders against the russian central bank. all of these cases, what you have is what people talk about, asymmetries of power, the small guy empowered by technology and fanaticism, i think about sydney, able to hold a city hostage or take on the pakistani military or destroy the russian ruble. >> also the other thing too is the fact that all of these stories have global

implications. from sydney to the school in pakistan, to what's going on in cuba, it reaches all of us here at home in different ways. >> and they're all connected in a way. if you look at what's happening in cuba and what's happening in russia, they're essentially part in some way part of a larger drama which has been the fall of oil prices and the rise of the united states as the dominant oil power. why? because cuba relied for its cash, its subsidies on venezuela. after the soviet union stopped sponsoring cuba. the venezuelans picked up the slack. venezuela is in very big trouble. russia and venezuela probably russia, iran, venezuela, the three countries most affected by this drop in oil prices. because they have large populations, they need to subsidize these populations, fallen oil prices mean russians get into trouble, venezuelans get into trouble. cuba looks at that and says, our sugar daddy is going to start paying us.

and so maybe they're more willing to make a deal. >> between normalizing relations with cuba, between the devastation in pakistan, which of all of these do you think is most significant? >> going forward, i think clearly the two stories that are going to be most significant in the short-term are the north korean one. this is an attack. let's be clear what happened here. a government, one of the nastiest governments in the world has attacked the united states on its soil. probably inflicted about $100 million of damage. threatened a terrorist attack. if we, if an american company, what is essentially an american company were to show a work of art and has gotten away with that. something is going to have to be done and chris, you're right that so far the response has not been strong enough. >> imagine, we were talking to one of the cybersecurity experts about if they drove a truck foot lot in hollywood hand had blown up a building, god forbid and

stolen things, forget it. we would be in other parts of the world right now. >> and on a less sinister side, what if that had been "the new york times" or a major tv network and had been censored. this is a movie. granted our lives won't be dramatically changed, but yet still, the hackers essentially won. >> it doesn't matter that it's a comedy. charlie chaplain's "the great dictator" was a comedy, when he was making it in '38, the neville chamberlain government wanted to ban it. by the time it got made was 1940 and britain was at war. so in fact then they welcomed the new government, churchill's government welcomed it. it shows you the pressure exists. we stood up to the iranian fatwa against salman rushdie, it's the idea that you can intimidate. my point, chris, is there will be a response. i think it will be more, it's a more complicated story.

so one of the things we can do as cyberattack goes both ways, i very much hope and i suspect that the nsa is looking into what it can do. >> retaliatory or a counter, sort of? >> if there were a way to shut down the unit in the north korean military that does this, remember, the problem in north korea is 12 people have computers. but those 11 of those 12 are engaging in the cyberattack. that's an 1800-man unit in the north korean military that must be connected to the world possibly through chinese servers. we'll have to have a very serious conversation with beijing and say you've got to let us do this and assist us in doing this. otherwise we will you know there are things we can do that will make china's life tough. the second story i think longer-term is cuba. if this becomes an opening, if this has a snowball effect, you see the stories in the"the new k times" about american companies

desperately trying to make money in cuba. cuba was an american island, it was a place where almost everything was american. if that, if those waves of american commerce and companies start washing through cuba, you know we may look back on this and say, this turned out to be the turning point where cuba is one of the three main rogue countries in the world. north korea, iran, cuba. if cuba comes in from the cold, that's a big long-term story. >> we know you're going to be interviewing the sony ceo later this afternoon. what's the one thing you most want answered? >> why did you pull the movie. >> that's the big question. that's the censorship. fareed zakaria, thanks so much, always great to get your movie. >> huge interview at the right time, good for you, fareed. thank you, sir. >> tune in sunday at 10:00 a.m. and 1:00 p.m. eastern to watch fareed's full interview with the sony ceo, on "fareed zakaria gps" watch president obama's

end-of-the-year news conference we'll have it here. and sunday candy crowley's interview with president obama on the state of the union, at 9:00 a.m. eastern. you have a lot of viewing to do in the next 48 hours. also, three high-value isis targets wiped out in recent weeks by u.s. air strikes in iraq. does that mean the fight against isis is working? we'll discuss.

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almost 7:30 in the east. a look at your headlines, following security breaches, an independent review finds the

secret service is stretched beyond limits, a panel says the agency needs more training, more staff, and concluded the service is too insular, and needs a director from the outside. outside its ranks, the review recommended the white house fence be raised, saying it needs to be four or five feet higher. president obama is expected to field plenty of questions today, given all that's going on in the world as the end of his year conference, his news conference that will happen at 1:30 this afternoon. cnn will have live coverage. among the issues he's likely to address, the executive action on immigration, historic move to restore diplomatic relations with cuba and the senate's c.i.a. torture report. the first family will then head to hawaii for the holidays. tough times at the irs could mean tough times for your wallet. budget cuts at the agency could mean getting your tax refund will probably take longer this year. how much longer? that's unclear. the irs commissioner says half the people who call for help this filing season well you're not going to be able to get

through to an actual person and once tax returns are filed, there are going to be fewer agents to audit them. anyone who works for or with the city of south pittsburgh, tennessee, you better bite your tongue on social media. city leaders just approved a policy forbidding city workers or contractors for saying anything negative about their city on social media. their argument? it's becoming harder to do business when bad things get posted online. as would you expect, the city's decision is generating all kinds of negative publicity. some of it, go figure, online. including fake twitter accounts. and the cyberworld has spoken, alisyn. >> i hear that loud and clear. thanks, michaela. there is progress to report in the battle against isis. a senior u.s. military official tells cnn that airstrikes have killed three isis leaders in recent weeks. are these newest developments proof that the offensive is working? joining us to talk about this is lieutenant general mark hertling, a cnn military analyst

and former commanding general for europe and the seventh army. where are we today with the fight against isis? is progress being made? >> well, i think the announcement yesterday by my good friend lieutenant-general james terry, commanding the forces in iraq and syria, had good news to it. when he's talking about the three key figures that were killed in strikes in late november and early december, key elements of the fight, they were the top military commander in iraq for al-baghdadi, it included the emir of mosul, a critical position for the forces. and one of the key advisers, mr. al turkmeni, a friend of mr. ball gam baghdadi. those three are important for the continued fight and the attrition of daiche in iraq. >> they sound as if they would

have an impact. but realistically speaking, what will change? with those three gone? >> well, whenever you have strikes against key targets like this, it continues to hurt the organization at the key leadership level. it's affecting their command and control of the organization. they will always replace them very quickly. people who are not as capable. that's what you're trying to do with this kind of complex insurgency. continuing to strike the individuals who are leading the organization. putting mr. baghdadi in a spot where he has to maneuver folks around and endanger some of his key areas, especially mosul. i think we're looking at the iraqi forces attempting to seize mosul in the near future and i think these are all critical strikes, that will contribute to that. >> president obama agrees with you. he believes that the coalition has momentum. against isis. here's what he had to say this week. >> because of you, we have blunted their momentum and we have put them on the defensive.

and these terrorists are learning the same thing that the leaders of al qaeda have learned the hard way. they may think that they can chalk up some quick victories, but our reach is long, we do not give up. you threaten america, you will have no safe haven. >> general, that sounds good. it is comforting. but it feels as though this is the never-ending game of whack-a-mole. because they have such good recruitment efforts, there's always just more to fill the ranks. >> the difference this time, alisyn is the iraqi government is actually beginning to step up. we're seeing that in many areas. the replacement of some of their key generals, the reach from baghdad out to mosul in the northern and western provinces. the arming of the national guard, what they're terming the iraqi national guard, what we call the sons of iraq, but the tribal men who would continue to fight and provide security. and again, it was an argument that we always had when we were

in iraq. they needed to want it better, they needed to want it more than we did. and now, i think we're beginning to see that the iraqi government is wanting it more. they're wanting security. they're looking at ways to reach out to the kurds to reach out to the sunni provinces. and all of those are very important. >> general, last, how do you characterize what happened in sydney in this cafe where there was one lone apparent depraved isis sympathizer who brought the city to its knees for a day? >> well, there's been great commentary on that over the last few days. and it has to do with the fact that various extremist islamic organizations are reaching out to people by saying hey, if you can't join us in iraq and syria, do whatever you can. and i think it's a danger. all over the world, not just in australia, but in our country as well. we've got to continue to be alert. and truthfully, these kind of, these kinds of attacks are very difficult to thwart. we can pass intelligence, we can try and defend ourselves.

but you have one looney tune like this who does something extremely bizarre, and kills a lot of people, or attempts to kill a lot of people, it's just -- somewhat unstoppable. truthfully. >> that is the most chilling message. general mark hertling, nice to see you this morning. thank you. back to the sony situation, it is easy to say sony should have put the movie out, free expression matters most of all. that's easy to say if you don't understand the risk of the situation. that motivated sony's decision. what is bureau 121? the shadowy offshot of the noiken government specializing in virtual war? we have a north korean defector who says he knows about it, ahead. in this accident... because there was no accident. volvo's most advanced accident avoidance systems ever.

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korea is responsible for the crippling attack on sony pictures, there's increasing focus on a mysterious unit called bureau 121. experts say north korea withheld resources from its own citizens to build up this unit to carry out cyberattacks. for morors let's get to kyung lah live from seoul. what do we know, kyung? >> well alisyn, think of them as the shadow warriors, and their battleground is cyberspace, they're placed around the world, taking their orders from pyongyang, with one common goal -- these warriors aim to disrupt western interests. north korean soldiers, a technicolor parading force against the west. on state-run television -- a near ridiculous bravado of the military. but there are unseen soldiers in kim jong-un's cyberwar versus the west. they have no face, and only known by a number, bureau 121.

>> what is bureau 121? >> they conduct the cyberattacks overseas and against enemy states, says this north korean defector, a former pyongyang military systems computer worker, now in south korea attempting to crumble an agency nearly impossible to chase, bureau 121, a shadow agency with an unknown number of the regime's hand-picked shadow agents placed in countries around the world. chung believes there are approximately 1800 of them. he says the agents themselves don't know how many exist. we can't verify chung's claims about the shadow group. but he says he's obtained from a current operative hundreds of financial files hacked from south korean banks, complete with names and other bank account details. is the cyberwar the real war for north korea? raising cyberagents is fairly cheap, he says, the world has the wrong view of the north korean state. with that incorrect world view,

north korea was able to increase its ability to launch cyberattacks. south korea learned the hard way -- banks across the country last year were paralyzed, atms frozen for days. media outlets went dark, servers jammed or wiped. north korea denied it was a source of a hack. but in the wake of the attack, south korea beefed up its own cyberforces, declaring the online war -- as dangerous as pyongyang's nuclear ambitions. north korea craves most of all to be visible to the global community and with the stunning sony hack, chris, they've certainly accomplished just that. >> there's an odd contradiction, they want to be known, but they're not taking responsibility if in fact it was this bureau 121 behind it, hence fueling the intrigue. kyung, thank you for securing that interview for us. it's not the ability of the

north korean military to break bricks on their faces, that has people scared. it's breaking through firewalls that has companies all over the place on heightened alert. the big question, is it possible to defend yourself from a sophisticated hack? let's get guidance from a man once called the most wanted computer hacker in the united states. with us now, kevin mitnick, ceo of mitnicksecurity.com. are these guys at bureau 121 better than guys like you? >> well, i think bureau 121 would be pretty sophisticated because you have a nation-state behind it with a lot of money. what these guys probably do is find security flaws in software that they could exploit. or they purchase that software. you know, thinking about bureau 121, what about the nsa's tailored access operations group? if you remember about the snowden leaks, the united states has broken into numerous countries' computer systems.

so other countries do this as well. the difference in this case is they attacked a company and revealed all the information and made physical threats against, that affects public safety. but i kind of look at this as, this is not really big news, because every country attacks each other. it's common. >> right, but it's big news, because they raped this company and now they -- >> right, i mean -- >> they stopped a movie coming out. >> that's news. >> we don't know who did it and we don't know how to stop it that's the news. that's the news, but the groups exist, these government-funded hacking groups. that's not news. the other stuff is news, you're correct. >> well, but then how do we stop it? that's the thing, if everybody does it, it seems to suggest equal capabilities. it looks here like the u.s. is caught behind the ball so much that it doesn't even know who did it doesn't know how to respond. what's your take? >> it's treeextremely difficult

protect against cyberattacks, when companies hire myself and my company to do what we call ethical hacking, penetration testing, our success rate is 95%. we're able to break into a company. if we can do it as a commercial company, think about what a nation-state can do. it's not that difficult. and what companies really need to do is layer on the defenses. innovative companies need to come up with better security products and services, to help companies like sony protect their infrastructure. and i remember recently a reporter shared some documentation that was leaked from sony, and in the document was talking about sony's security monitoring, and how it was misconfigured and that they were not correctly monitoring certain parts of their network. >> i also saw that you tweeted -- >> sony has a problem here, too. >> i saw -- let's talk about that i saw thaw tweeted, i learned that the ceo of sony,

michael linton's domain passward was sony ml 3, how stupid is that. tell me, how stupid is it? >> i think it's a pretty stupid password if you ask me. i'm surprised that sony did not have complexity rules. in other words, the i.t. department could force users to choose more complex passwords and apparently they didn't do that at sony. but to tell you the truth when i'm testing companies the same size of sony, i find that a lot of i.t. administrators and people in the c-suite pick stupid passwords as well. you can't just blame mr. linton here, it's just common practice that companies need to change. >> so, okay. let's talk about the possibility of that. so is this that you can do better and make it so that you won't be sony? or is it that -- we haven't developed the capabilities to off-set the capabilities of the hackers, yet? >> well we can do better to make it much harder for the hackers

to break in. but by no means would it be impossible. >> if a, an attacker has enough time, money and resources, they usually will be able to get in. but the whole idea of information security is to actually raise the bar high enough so the cost is too high to the attackers so they go to attack somebody else. >> what should be the collective level of panic. if they want, they can turn off our dams, they can turn off our power grids. they can get to our nuclear weapons and the united states. what should we feel is a safe zone here? >> supposedly the chinese already breached our critical infrastructure and broke into telecommunications, energy type companies. so it's really nothing new. but i think this is a big wake-up call because of what happened to sony. i think companies need to really pay attention and either internally or find other companies on the outside that could actually adequately test their security to find their

security vulnerabilities. the companies could fix those vulnerabilities before, before they're attacked like sony. so i think it's really important to do these ethical hacking exercises, to find out how secure you are. >> and we also have a really unsophisticated dialogue between the private and public sector here, right? the u.s. government has some laws about intel and some policies about intel. the private sector doesn't really talk to the government about what's happening to it. so that's part of the problem here, also, right? >> yeah. well there's certain areas that are regulated by government. health, you know, any time there's a medical information about a patient, is governed under hipaa. there's certain you know critical infrastructure. they're governed by government regulations. any merchant that processes credit cards, it's not really governed by government at regulations, but the card associations like mastercard, visa, american express require merchants to follow certain

rules or they won't be able to process credit cards. >> well that's part of the problem, though, right? kevin mitnick, we got to get everybody on the same page. >> we need better technology to help companies stop these types of threats. >> great, go develop it. we'll see you again on the show. >> okay. later today, president obama is sure to take lots of questions about north korea at his end-of-the-year news conference. can you watch it right here, live, cnn, 1:30 p.m. eastern time. all right, also president obama was announcing big changes to the u.s. relationship with cuba. he literally made history all by himself. now, what will it do? all right. this was unthinkable for decades, could there be a visit by a castro to the white house? we're live from havana with the latest. will that be all, sir?

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now to a potentially historic and controversial development involving cuba. the white house saying it would not rule out the possibility of cuban president raul castro visiting d.c., despite cuba's history of human rights violations. patrick ottman is in havana with us. really good to have you with us. we've been hearing this normalized relationship to be established with cuba, that very well could mean a visit. what is the likelihood raul castro would come to the white house? >> you think, michaela, they've made enough history for one week but here's, is it an invitation, not an invitation? raul castro's daughter maria told me yesterday her father would be willing to go but it's

an incremental thing, much more likely foreign minister, cuban foreign minister bruno rodriguez to the united states first and perhaps see a visit by secretary of state john kerry here, work up a little bit these kinds of visits before you see a head of state visit but in terms of president obama coming here, the invitation from the cubans is on the table. we looked and never had a sitting u.s. president in cuba since calvin coolidge visited nearly 90 years ago so you have to go way back making history here and certainly breaking some long-held animosity between the two countries. >> president coolidge in 1928, a long time ago. i'm curious, now this news has settled in, i'm curious what cubans there you've had a chance to speak to are thinking, where their anxiety level is, what they're worried about, concerned

about, what they're hopeful for. >> you know, now that some of the joy has died down they have questions that frankly no one has answers to. for example, if they're normalized relations, will the wall known as wet foot/dry foot which allows any cuban to receive refugee status when they reach the u.s. shores, allowing them to stay, will that stay in place? it seems like an an achronism with refugees if we have normal relations and they fear the u.s. will now allow even though the embargo is still in place allow cubans to import construction materials badly needed in this country, everything you see is pretty much falling down. on the other hand the cuban government doesn't allow cubans to do that. will one embargo being lifted somewhat but a lot of restrictions here put in place by the cuban government. >> so many things to be worked out. i was curious how people were

feeling after the news sunk in. patrick oppman we appreciate it, thank you so much. ahead, u.s. officials are expected to lay out their evidence today against north korea over the crippling sony hack. the question is, how is north korea going to respond? our coverage of this massive cyber attack continues, right after the break. people with type 2 diabetes

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clearly i believe north korea state-sponsored cyber terrorism. >> we're considering a range of options how to respond. >> the hackers stole computer credentials from a sony system administrator. >> it's time for us to respond to this in a very strong way. >> engagement with the cuban people, will other time help

things open up. >> they're the best funded dictatorship in history. >> once again president obama has decided to do something absolutely without precedent. from the beginning of my show, it was my goal to live up to the name of this network, influence central. >> colbert will take over the retiring david letterman next year. >> seemed so sinister with the music. good morning, welcome to "new day," it's friday, december 19th, 8:00 in the east. chris cuomo and alisyn camerota here. if north korea can hack into sony's computers, what about yours? what about mine, even camero camerota's? are any computers safe in this country? disturbing new details come out as u.s. officials set to blame north korea on the attack. >> the government will explain how it knows the regime is behind the costliest attack in

american company history. one of the biggest names has lobbied to release the film but george clooney could not get enough from studio chiefs to stand up against the hackers. we'll talk about that. we have the story covered from all angles. we begin with washington correspondent joe johns. >> reporter: good morning, alisyn. it's not just about calling north korea out. it's what do you do next? one of the big questions in all of this is how to fashion a proportional response to a cyber attack on a movie studio. it's not that easy a question to answer. the obama administration is ready to point the finger at north korea for the unprecedented sony hack, a move that could come as early as this morning. >> we're considering a range of options how to respond. >> reporter: among the possible options more sanctions. the administration insisting the response will be strong. >> i can assure you the united states government is not blinking. we're not backing down.

we're not in a crouching or fear position here. >> reporter: sources tell cnn there is evidence the hackers stole computer credentials from a sony system administrator to get access to the company's computer system. the white house did not pressure sony to pull "the interview." depicting the assassination of kim jong-un. >> take him out. >> we believe that artistic expression is worthy of expression and not something that should be subjected to imtim dags becaui intimidation because you disagree with the views. >> i see it as cyber terrorism and cyber extortion. what they're doing is economic warfare and found a way disproportionate to the physical power that north korea possesses to actually affect economics, a particular company, in this case, sony. >> reporter: pressure is also

coming from lawmakers who want to see the white house deliver a forceful response. >> it's time for us to respond to this in a very strong way, and show the rest of the international community that we're not going to allow this to happen without us imposing a cost on a regime that does. >> reporter: the president is expected to hold a news conference here at the white house later today. he is sure to get questions about the cyber attack. chris? >> joe, this is falling in the category of easy to say, tough to do. if they do blame pyongyang officially, then what? thank you for the reporting. we'll take on the question what might happen if they blame the regime? could it start a dangerous back and forth between the feuding nations on the cyber level? we go to cue yang l.a. live on the ground in seoul, south korea. kyung? >> reporter: chris, we're getting a clue of what could potentially happen next. we are hearing from the south korean government that there was indeed a successful hack of the agency here in south korea that

runs a nuclear power plants of this country. certainly a very concerning escalation. now, there were some sensitive documents taken, including blueprints of a nuclear power plant posted on a website, a blog for hackers. that blog has since been removed but here's the takeaway here. if they're escalating in south korea, south korea is the practice ground, the big target for t in the united states. this is what may be coming as the cyber terrorism, the cyber warfare from north korea becomes increasingly sophisticated. alisyn? >> kyung lah thanks for that background. we bring in fran townsend, cnn national security analyst and former homeland security adviser to president george w. bush and philip mudd, cnn counterterrorism terrorist and former cia counterterrorism official. great to see both of you. phil, i want to start with you, because this cyber is tack is

likened to an act of terrorism. does it rise to that level? >> i wouldn't say it does yet. you don't have loss of life but we have to think about where we're heading in the future. we're talking about a hack on sony. think about a hack, for example, on air traffic control in america, where you could have thousands of lives at risk. we have to look at the situation -- i mean i would consider this potentially an act of terrorism, because you're talking about attack on civilians for a political purpose, which is sort of the definition of terrorism. it's just in the past it was a physical attack, and in this case it's a virtual attack. >> fran, they threatened on this website, a physical attack but obviously didn't do anything of the sort. >> right. it's not about whether or not there's a loss of life. it's about the attack, intended for a political purpose or to affect an outcome and by the way, they got that, so it certainly is an act of terror. >> fran, we had an expert on earlier who does not necessarily believe this has the hallmark of a north korean attack, primarily because north korea has been

quiet about it. they generally like to take credit when they do something that disrupts the united states. how is the u.s. going to prove that north korea was behind this? >> it's actually very technical and it's based on forensics. this isn't guesswork. what they'll do we reported earlier today and yesterday about the south korean attack last year. there are forensics associated with that kind of attack. there are ip internet protocol addresses that launch that attack. there's code associated with the malware with that attack. they'll take this attack against sony and compare it and i hear from law enforcement sources one of the ip addresses used in the south korea attack last year is identical to one of the ip addresses that was used to launch the sony attack and both will therefore be attributed to north korea. >> that sounds like a smoking gun that would be helpful. >> pretty much. >> phil, it's one thing obviously to identify the hackers, that sounds like something that the u.s. is going to do today. it's another question of how to

retaliate. what should the u.s. do in response? >> well, obviously the first option is to figure out whether we have a virtual response ourselves, for example against north korean military targets using the same capability north koreans used against us. i'm not sure we have a good protocol here yet though. when we faced the 9/11 attacks, i do not think four years, five years, six years down the road in '05, '06, '07 we could not have understood how that attack would generate the united states. we are in the virtual world trying to figure out a response and i believe that response will evolve dramatically over the next five to ten years because this attack is the wave of the future. >> fran, what do you think about the response today? what should the u.s. do? >> there's a number of things certainly you can respond in-kind as phil suggests, that is virtually, a virtual attack on north korea but think about putting him back on the

counterterrorism designation list, there are additional sanctions that can be levied and deny them access to the international financial system the nuclear option and doesn't involve anything having to do with cyber. >> hollywood says it has bigger implications for all of us. george clooney wrote a letter to studio heads, wanted them to support sony in releasing the movie. "it's not just an attack on sony. it involves every studio, every network, every business and every individual in this country. we know that to give in to these criminals now will open the door to any group, that would threaten freedom of expression, privacy and personal liberty." is this a message yes, we do cave when you try to threaten us? >> well, i think we've really got to consider this one. when fran was at the white house, i was over at the cia at the same time, we used to sit on threats that i think were far

more substantial than what we've just seen. i hope in the future we don't have the same response. i don't blame sony. the reason is, we don't have experience in dealing with this kind of situation. we're kind of struggling through it. three, four, five years down the road i hope we evolve in our response. remember back after 9/11, we developed the color coded system that people struggled to understand. we eventually didn't use that because i think it was confusing for folks. we're at the same stage with virtual attacks. we don't know how to respond, trying to sort our way through it. debris with george clooney. hopefully next time we can say we can handle this, everybody enjoy the movies. >> sony blew it, they could have weathered with it. after all the publicity they would have made money. be clear this is not about sort of their concerns for the security issues related to this, this is solely self-preservation. they were embarrassed by the e-mails. they don't care about free

speech and free expression. they care about sony and care about further embarrassment. >> weren't they also afraid, fran, if there were an attack, not necessarily from these cyber hackers, if some lone wolf used this as an opportunity to do something in a movie theater, then everybody would have said why didn't they pull the movie. >> that's right. that doesn't explain why sony didn't go over the top, on demand, premium distribution, you wouldn't worry about that. sony cared about sony and their own embarrassment. they did not care about free expression, george clooney is right. >> given the freedom of expression in our country should the white house have spoken out about this of what was going to happen with sony and this movie? >> there's got to be a partnership on this, because despite the fact that sony has the choice about what to do with the movie, you have not only u.s. commercial intercept risk, you have a state sponsor, north korean involved, no private

company can handle that risk. you also have lives at stake. i think you have to have a public/private partnership but i think the white house should have offered assurances to sony that we can handle this threat. sony was probably surprised. i agree with fran. i think they should have rolled this out and i hope in the future we sit down a little more soberly and figure out how to handle these threats. one more thing, you said if something happens here, if they had rolled it out and something had happened, what would people have said? we sat on risk every day in the counterterrorism room. if i responded, if fran responded to every if, nothing would have ever happened in america. we would have told people to stay home. i think you got to take some risk every day and this is a risk i would have taken. >> fran, what about the white house's reticence on this? >> they knew this was coming, this was an ongoing attack. the white house appears to be caught short by sony's response but they should have had it planned. as phil suggests when the threats develop, we develop plans we're ready to roll and the white house was caught

flat-footed. >> we'll see what the president says this afternoon. fran townsend, phil mudd, great to see you guys. over to michaela. breaking overnight another tragedy in australia, eight children found stabbed to death in a town along the northeast coast, between the ages of 18 months and 15 years old. police also say a 34-year-old woman was wounded, believed to be the mother to seven of the children. no suspects have been identified at this time. the white house says they're not ruling out the possibility of cuban president raul castro making a visit to washington, despite the record of human rights violations. in the meantime we've learned the name of that spy releaseed alongside alan gross, identified as rolando serif trijulli, helped to lead the u.s. to cuban agents and other spies in the united states. boston marathon bombing

suspect dzhokhar tsarnaev spoke briefly in his first court appearance in a year and a half acknowledging the judge. the judge heard another push from the defense trying to move the trial out of boston. the judge did not issue a ruling on that yet. outside the courthouse, emotions running high, a survivor you see him here confronting tsarnaev showing him his prosthetic leg he has to use since the attack. just in time for the holidays, a little boy in tennessee got the best gift of all. 6-year-old aaron williams thought nothing of it when santa showed up during story time at show. little did he know beneath that beard and under that hat was his dad nicholas. member of the air force he just wrapped up an eight-month tour in south korea. what a great hug. aaron's mom says he got his one christmas wish for daddy to come home. not a dry eye in that room i'm sure. >> that's beautiful. i love these stories!

>> awesome sauce. that really is. >> absolutely. >> especially the fighting men and women, they give up so much with their families as kids grow up and don't have the same connection we want to have with our kids. and of course as we all know, you know, could have been anybody under that beard because those are santas helpers. so no mystery there, when he pulled the beard off, it was somebody else, his daddy. that's amazing. >> chris is great at reminding us. >> elf on the shelf, you don't need to tell that to me. he's been telling me some things about you we have to talk about. here comes the cold. coming up, big moves from president obama, since the bruising midterm election, he's taken on action on immigration, now cuba. is this just the beginning? what else does the president have up his sleeve for the final two years in office and what can republicans do about it? we'll discuss this. (vo) nourished.

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president obama technically will be named in the lame duck phase of his presidency. he doesn't seem to be acting that way. the president has been working unilaterally since the midterm for diplomatic relations with cuba, the china deal. what's the end game for the incoming republican congress, will this work for or against the administration? we bring in republican strategist mr. kevin madden and cnn political commentator, host of "huff post live" marc lamont hill. kevin, are you impressed by what the president -- they'll stay on ma marc, doesn't matter what i want. are you impressed, the president made history in cuba alone, do you applaud his efforts? >> well, of course not, because i think he needs to do a better job working with the congress. if you look at the president's press conference after the midterm elections, he sent a

clear message with his body language he was not going to go quietly. lot of the recent actions that you've seen are consistent with that. i think what's interesting for folks up on capitol hill, look, that's a crucial audience for his next two years they see this as the president not really listening because his own popularity was a reason that his party lost at the polls. so i think in that sense, i think the president is doing what a lot of presidents do no the last two years, he is fighting that lame duck status that you mentioned, chris, it's hard as possible. >> it seems like the president has decided to go it alone. >> that might not be the right language, that suggests he's bucking what a lot of americans want and congress wants. >> election results. >> he's bucking the system. when you look at the midterm election results and the exit polls, people wanted financial relief. people wanted jobs for the middle class. people wanted protections, environmental protections and such and many of the executive

orders and executive memoranda he's written have been in that area. i don't think he's going against the american trend. >> here's the problem, kevin? >> yes. >> you are making an assumption we need to test which is it's okay for government to do nothing and that the president is, by going unilaterally, sending the wrong message to congress. they have opportunities to act on all these levels and "if you do anything mr. president/democrats we'll work to stop you." that's not accept either, is it? >> people want their government to work. the president is only one part of that government. >> but the other part won't work. let had's address that. >> the system is not if one of the branches doesn't get its way it acts unilaterally. the voters know that's the system and that's why they sent a message in the last midterm elections so i think the president has an opportunity to work with congress. look, if you look at what john boehner and mitch mcconnell said after the midterms, they said

look, they understand that we have to get the institution of congress working again. mr. president, come work with us on some of the big issues. so the big problem that some of these executive actions and some of the memorandums sent to capitol hill they look like essentially executive temper tantrums. the president doesn't get his way and acts unilaterally. long-term negative effect the congress, tnothing gets done. >> i disagree with you, kevin, and also with you, chris, even though you're supporting my argument. >> it's gratuitous? >> it's important, i think you can't defend legislative action or executive action by saying the legislative branch isn't doing its job. there's a constitution and if the constitution says you can't do it, you shouldn't do it even if congress is behaving like children. >> you think the constitution says the president has done

something up constitutional ? >> that's why i disagree with kevin. the executive actions and memoranda are within the scope of his power and not historically unprecedented. >> hold on, let me put up the graph here. president obama has passed more executive memoranda, another word for executive orders -- >> they're different? >> are they. president obama, this is the obama memos, so not executive orders, called a different name but he has passed more than any of his predecessors. >> yes. >> so some people would say he is taking advantage of it. we have some tweets from people who have wanted to respond about this. this comes in from chad "it's unconstitutional, it's inly what tant disregard for the design of our government's separation of powers by acting unilaterally." >> first to the sligly less important point but noteworthy anyway, many of the memoranda aren't executive temper tantrums. many are things like making sure that workers get, federal

workers get a day off after christmas, things that aren't controversial. i don't want people to think every executive memorandum is setting foreign policy or immigration. >> immigration and climate change and things that require debate. >> president obama when it comes to executive orders has the fewest of his recent predecessor when it comes to executive memoranda he has more. there is a reason for that. >> the reason is that the executive orders require a statement of authority. the executive memorandums they don't. so in many ways the president is creating new authorities for himself to act and that's where there is a lot disagreement. >> i disagree it's not new authority. there have been other executive actions describing what executive memoranda should enta entail. you you're right. i'm agreeing with you that they're not numbered, they're not logged in the federal register in the same way, very important distinctions between the two. >> marc for the record i'm agreeing with you agreeing with me. >> as a practical matter, they allow presidents to do things they can't do otherwise.

no disagreement there. but the president is also facing a level of opposition no one has faced probably since harry truman as a do nothing congress. i don't think these are out of step with what the american people want and that's why i'm comfortable with it. >> marc and kevin, thanks. what do you think about those all agree to disagree? tweet us at "new day" and go to facebook.com/newday. the president will have a news conference, here on cnn 1:3 p.m. eastern time. sunday candy crowley interviews president obama on "state of the union" at 9:00 a.m. eastern. tune in for that. one of the big strokes of the pen from the president is the relationship with cuba. history but with a question. where is fidel castro? there's been radio silence since the announcement. michael smerconish sat down with castro for an intimate dinner.

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u.s. officials say they have proof north korea's behind that sony hack attack. the obama administration is expected to reveal details and name north korea as the attackers today. the white house will not rule out a visit from cuban president raul castro even though with cuba's checkered human rights record. eight children between the ages of 18 months and 15 years old were found stabbed to death in a home in australia. 34-year-old woman was found wounded, believed to be the mother of seven of those children. president obama will hold his end of the year news conference today expected to address several things from his executive action on immigration to the senate cia torture report. we'll have live coverage on cnn at 1:30 eastern. >> the colbert report is off the air after nine years. the comedian taped his final episode thursday night. he thad his nation and led in a sing-along filled with all sorts

of celebrities, christiane am n amanpour there. he'll take the reins of "the late show" next year. visit newdaycnn.com for the latest. "new day" and you, you know the accepted wisdom, avoid other people in the winter if you want to avoid catching nasty colds. new concept for you today, and i love it! hugs can slow the spread of winter germs. is this true? if it is the case, you have to believe researchers from carnegie-mellon university, these two are rolling their eyes, i hug up on them all now. former disease detective, one of the most important here for the cdc because a detective would know about hugs i think. help me understand this, that we should hug people if we want to avoid getting sick. it is about building up our resistance exposing our self to the virus? >> absolutely. the reason you always look so radiantly healthy is because you

are a hugger. >> i'm a hugger. i admit it. >> i'm pro-hug. i just don't believe the connection between hug and health. >> the research is on two things, one is the actual hug itself. you get that cuddle from somebody that lifts your spirits, it has a physical impact on your health, but the second thing is, if you have folks around you who can actually be there to give you hugs, that also means you have a good social support system around you. you have folks there who you can call when you're feel down when you have any problem. >> we've seen this, remember, we've heard before that doctors want to know cancer patients for example somebody who has had a heart attack what support system around their roarry because that helps them get back on their feet and good health. >> makes a difference. people with wounds, who have had surgery. if you had good friends and family around you, you heal quicker. it has a direct physical impact on you. hugs are good for you and if

you're feeling well, that is if you have some kind of cold or flu, best to stay away from other people. if you're healthy, good hugs will keep you healthy. >> so shaking hands bad with people during cold and flu season but hugging good. >> if you're shaking hands you don't touch your hands to your face, hugs are a better idea, not with strangers, though. let's not be approaching strangers. >> we do draw a line. >> i'm not ready to embrace this idea. >> what is your concern? you're skeptical. >> i felt the bait here was there's some type of exposure buildup thing which would kind of fly in the face of my parenting experience with my little petrie dishes around, to bring me south more than they make me stronger but is there anything to that, you're getting little bits of exposure? >> that could make a difference. our immune system it's good to be exposed to different drugs as opposed to staying away from people. good to be close and good to get hugs. >> even you're telling that to chris he's going to lick my

face. >> that may be a little too -- >> do you have proof that would be bad for mickey's health? it would be bad for mine because she'd knock my teeth out. >> i'll stick to hugging with humans. >> i see a lot of behind-the-scenes secrets. >> we'll do a group hug during commercial break. >> she has it in her contract you can't hug me. >> you can't hug me. they were hugging it out gratuitously, wasn't a camera on them and they were hugging each other. >> they say you need 11 a day. i go with that, 11 hugs a day. >> i never counted but i'll take them. i love a hug. >> we love when you come to visit. thanks for going along with our silliness on a friday. >> thank you. what is the north korean regime capable of? big questions at pyongyang as the u.s. prepares to point the finger for the sony attacks.

plus the historic changes between the u.s. and cuba. michael smerconish will be here on all of that. >> come on, bring it in. hello... i'm an idaho potato farmer and our big idaho potato truck is still missing. so my buddy here is going to help me find it. here we go. woo who, woah, woah, woah. it's out there somewhere spreading the word about americas favorite potatoes: heart healthy idaho potatoes and the american heart association's go red for women campaign. if you see it i hope you'll let us know. always look for the grown in idaho seal.

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north korea is reportedly the prime suspect in the hack attack on sony. today, the obama administration set to lay the facts on the table.

how should the u.s. respond? plus let's talk about the new relationship between the u.s. and cuba. here for more on all of this is cnn's political commentator, michael smerconish. >> good morning, guy, how are you? >> let's talk about north korea. >> sure. >> how should the u.s. respond for this? >> tit-for-tat. everybody talks. more sanctions. they're not a financial player in the same way that we are. i don't think there's anything you could do of a receipt butte of manner of sanctions but drop a smart bomb in one of their computer systems. >> what message does that send? being the problem yourself? >> the message it sends is we're not going to stand for it. what are we going to do, take it lying down? today it's a movie. tomorrow it's the electrical grid, it's a gas line, it's infrastructure. you have to send a sear yis message and words alone are not enough. >> i'm a gray person, not a black or white. is there not somewhere in between that? the argument some will say is that by using their same medicine on them, we're better than that. >> i don't know that we're better than that, because we

won't be around much longer to endure the next attack. it would be great to live in a world of peace and lack of hostility, but with he need to be here to enjoy it and unless you send the right message i'm afraid it will happen again. >> i'm a vengeful person unlike michaela so i like the idea of retaliation but they're not tethered to their computers the way we are. they don't have a sony pictures, the infrastructure, the grid we do. it doesn't hurt them as well. >> they have some level of computer technology as is evident by the fact they launched this attack against us. if there's another measure we can use i'm open to it, but i'm not only vengeful, i'm also i think practical and what i really want to do is avert the next attack. >> i'm more strategical for lack of a word. so how about if you were to find out who they're using to facilitate these things because of their lack of critical infrastructure which probably points you in the direction of china and start really dropping some more heavy situations on china in terms of what they have

to do. >> like i'm describing, a computer situation? >> i'm not saying smart bomb china. i'm saying go to them and say if you are helping them, it better stop right now and we know and here's why. wouldn't that be the most damaging? >> it's double secret probation. i don't think it works. i think we've said that to the chinese about the north koreans. >> you don't think a stern talking to like chris cuomo talked about, a finger wag? >> i don't think that approach is going to work this time. >> let's move on to cuba. we want to talk about this normalizing of relations between the u.s. -- because you have an interesting interspective, you have a seven-hour meal with fidel castro. >> i was there with senator arl arl arlen specter and he wrote a book of the single bullet, he said that kennedy died at oswald's bullet and that was it but a lot of people think castro

played a role in the asa assassination of jfk. he interviewed castro to write his book and i equipped to him, if you ever go back, put me in the luggage. one day he called and said i am going back, you can join me. so we were for nearly seven hours in castro's presence. i went there believing that the embargo should end and came home emboldened in the view that the embargo should end. getting rid of the embargo is the best way to get rid of castro. i'm hoping that's what it will do for raul and fidel. >> not to be blunt but isn't time going to get rid of the castro brothers, they are in the end stages of their lives. >> one of the surprises, we sat at this long table and there were americans on one side and cubans on the other and i had this vision of communism as being an old man's game with an image of the soviet union in my head. there were a lot of young guys on that side of the table. >> they have family also, the castros. >> what occurred to me, there are a lot of individuals. i used to think the same way you just offered, when they die t will be over.

there are people there to take their place who believe in this ideology. my wife has the best idea, drop a bunch of game boys all over the island and give them a taste of what we've got going on here. >> it's not really communism. you understand the regime well from afar and being there. this is just an autocracy they have at the top of the food chain and the risk is if you remove the embargo anything you give that place you only give to them. that's the concern, it doesn't get to the people who need it. >> it's got to be done in a way then. look at the time that caterpillar wants to go in, marriott wants to go in. mitt romney is still on the board. >> financial infrastructure to skr secure capital. >> what was the dinner like? what was castro like? >> interesting, huge spread, right, i looked over at his plate, a salad. the guy was very lean. this was 2002, and interestingly, it was four months removed from september

11, and i think the most interesting substantive exchange came when i said, i'm going home next week to write for "the philadelphia daily news." please condemn the terror attack against the united states so i can tell readers this is what fidel castro said. he condemned the terror attacks and made the point cuba was the first nation to the united states for help, but wouldn't condemn bin laden by name. i said why? he said how do i know he's the actor. i said mr. president, he took credit for it on videotape. he said i'm not of the mind-set to be trusting video. because i referred to him as mr. president in my questions, when i came home and wrote up what had taken place, people sent me hate mail for literally years, mostly postmarked from miami area in florida, how dare you call him mr. president? what was i supposed to say, mr. dictator, can i ask you another

question? it would have been my only question. zblud >> you'd say it once. >> what was your feel? >> he's bright, i want him out but a smart guy and very intuitive about american politics. we had a conversation about the florida electorate. he well understood that to run for office in the united states, nationwide, you needed to appeal to that base in florida, to carry florida to hopefully win the white house and he understood that really was the impediment to the embargo. i think he loves the embargo. the embargo gives him a boogeyman, gives him something to blame every problem in cuba on the americans and their foreign policy but it's a whacky place, if if you saw "godfather ii" when fredo betrays michael corleone, the cars, just like that, wild. >> frozen in time. >> they have to have, chris, the best mechanics on the planet earth, because they are still driving 1950s american automobiles. >> remarkable.

michael smerconish, thanks so much. >> great to see you. watch smerconish saturday mornings at 9:00 a.m. eastern on cnn. also president obama is expected to address the sony hack, cuba and more topics today at his end of the year news conference right here cnn 1:30 p.m. eastern time. >> more answers from the president sunday in his sit-down interview with krle kcandy crow "state of the union" at 9:00 a.m. eastern. lights are dark on "the colbert report" the comedian taping his last show, what a sendoff getting ready to take over for david letterman next year. we'll weigh in on the final episode. big bird was there, christiane amanpour was there, when do you see those two in the same room? many suggest they are the same. what will this mean? not the same, cookie monster evidently. how will they do it? let's talk about it when we come back.

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the truth in this is, all those incredible things people said i did, running for president, saving the olympics, colbert's superpack, treadmill in space, the rally to restore sanity and/or fear, and/or cat stevens' career, none of that, none of that was really me. you, the nation, did all of

that. i just got paid for it. thanks. >> stephen colbert signing off on comedy central, a star-studded sendoff, crihristie amanpour in the middle. here to weigh in on his last show, his next show, all the shuffling going on, brian stelter, cnn senior media correspondent, host of "reliable sources." so interesting to watch the sendoff. >> sure was. >> we're go to see a transformation or are we? this stephen colbert character he carefully created, this is not the guy that is going to be hosting "late night." >> no, stephen colbert the character died last night. there was a joke about him being immortal.

maybe once in a while he'll come back. "the late show with stephen colbert" will be the father of three who teaches sunday school. he did something new with the format of late night television, created a character, embodied that form, satirized cable news blowheads and he'll continue to innovate but in different ways on "the late show" like david letterman did decades ago >> is it possible his new show won't be as entertaining because that character is gone? >> i'm nervous. i think he'll be a star for decades to come on cbs. cbs is making a generational bet colbert is the right guy. so many agree with that but i am nervous for him. he has nine months to prepare. he's not going to premiere until the fall so he has a lot of time to figure out what the real stephen colbert is. >> i'm so fascinated by that. >> what is the obvious challenge, going from a niche audience to a broad audience, the genius of let's say a jimmy fallon he has 50 different

arrows with him, his ability to act and the singing and his minimum mimicry. >> he has all the stars. last night, keith olbermann was there. >> it was like a birthday party. >> the 100 people you meet in tv heaven. he was able to get everybody there and he's going to have that pull on cbs more. >> around the dial to craig ferguson. i did not realize it, shame on me, he was leaving after ten years. why is he going? >> tonight is his last night. >> why? >> he's a domino that fell after letterman decided to retire. letterman and ferguson connected, the same company produces both shows. cbs probably gave him a slight push out the door because they'll totally redo both 11:30 and 12:30 next year. so james cordon, a guy that some of us know but a lot of us don't, he's coming over from britain to do the show.

he's been a broadway star, in television shows as well but not nearly as well-known to the american public as colbert is. >> why him? >> cbs is taking a risk here, like i said with colbert taking a generational bet they've got somebody that they believe can do this for decades to come. it's a little bit like craig ferguson. ferguson wasn't a big name the way letterman does. make it 12:30, take a risk and give it time to develop. >> leno, he's got something that's been in the pipeline and online that's now moving to a tv show. >> there's been all of these changes. leno stepped down a number of months ago from nbc. now he'll be on cnbc doing a show about one of his passions in life, his car collection. >> he's got one of the biggest there is, motorcycles is another. >> he walked away from "the tonight show" but couldn'tal together. bill carter of the "new york times," the late night guru. he's written books about this and working on another one, because this is just an interesting moment, with

colbert, kimmel, fallon and leno coming back to cnbc. what an interesting moment >> what's missing in the line-up? >> you tell me. >> a woman. >> you're right about that. netflix will try to reinvent what late night tv can be on demand. i'm not sure what form that will take. whether she's on netflix or not there's a paucity in that area. how can it be in 2014 there aren't late night shows featuring women. larry wilmore will be one of the few minorities in late night. it is still staggering. >> arsenio is back. didn't he come back a little bit? >> people never go away. >> just recycled. >> i guess so. >> brian, thank you. you're not going to believe what our friend and colleague mike rowe is doing for his charity this time. it is the good stuff for hour and it's come up. i thought that was me there for

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♪ you're a mean one, mr. grinch ♪ you know that song? >> yes. >> about to hear it in a different way and that's why it's "the good stuff." colleague mike rowe, you know him, love him, but did you know he's not just a avid singer. he was an opera singer.

>> what? >> he likes to turn his voice mail christmastime into the song from "the grinch" the theme song. one of his facebook friends challenged him to do it again only this time she'd pay him up to $1,000 for his mike rowe works charity, the catch he had to sing "the grinch" theme in a bath robe as a duet with his dog freddy. somebody's got to do it and mike rowe, rose to the occasion. ♪ your heart's an empty hole ♪ your brain is full of unwashed socks ♪ ♪ there's garlic in your soul, mr. grinch ♪ ♪ i wouldn't touch you with a 39 1/2 foot pole ♪ >> oh my, the voice! >> my gosh! >> he sounds great! >> in a bath robe with the dog. >> freddy did not howl at all but mike's charity still gets $1,000 and the mike rowe works

foundation is great, helps people by awarding scholarships to people who show skill and interest in the trades. >> mike rowe we love you. >> sounds wonderful. let's get you to "the newsroom" with carol costello. end it here, hug it out, resist the flu, carol, with a hug. we're hugging you digitally. >> oh, thank you. i feel all warm and fuzzy. i'm going to cry. have a great day. have a nice weekend. >> listen up! >> "newsroom" starts now. -- captions by vitac -- www.vitac.com good morning. i'm carol costello. thank you for joining me. they had the keys to the entire building, that's how one u.s. official describes the access hackers had to the sony computer system. thieves apparently commandeered the credentials of top level i.t. employees as early as today, t