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Red Line, Red Ink; Saudi America; Hack Attack
Aired September 7, 2013 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN BERMAN, CNN ANCHOR: A vote on military action in Syria looms. The president reaching out to a Congress that has blocked him at nearly every turn.
I'm John Berman, in for Christine Romans. This is YOUR MONEY.
In a moment, we'll be joined by Christiane Amanpour, CNN's chief international correspondent.
As the U.S. contemplates a strike on Syria, will congressional bickering again threaten America's standing in the world?
More than two years ago, the United States lost its AAA credit rating. Standard & Poor's downgraded the country following that epic debt ceiling debate. At the time, S&P said, quote, "The political brinksmanship of recent months highlights what we see as America's governance and policy making becoming less stable and less effective and less predictable."
Since then, cooperation between Congress and the president hasn't exactly improved.
So, is President Obama, by seeking congressional approval before taking military action in Syria, putting U.S. political dysfunction on display and risking America's reputation all around the world?
CNN's chief international correspondent Christiane Amanpour is anchor of "AMANPOUR" on CNNI.
And, Christiane, Syria aside for just a moment right now, what does the rest of the world know or think about the partisanship here in the U.S. over the last couple of years and has it weakened America's image abroad?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Well, I do think that people around the world have been looking at the ongoing battle between the parties in Congress, over every issue, even remember the debt ceiling, whatever it might, the budget, whatever it is. But when it comes to something as serious as the United States contemplating military action, an act of war, an act, a response to aggression by the Assad regime, that is something that everybody is watching to see how this debate in Congress goes, because many people are reeling from the shock that Britain delivered in its parliament when they voted down Prime Minister Cameron in his attempt to take action over Syria. And people are beginning to ask, well, then, you know, who is maintaining the world order? And I think politics sometimes can play a very sort of intrusive role in some of these majorly important interventions and responses that have to be taken.
BERMAN: One of the big problems facing President Obama right now is that many Americans are against the military action in Syria. Many Americans reeling from the wars in a Iraq and Afghanistan which cost more in blood and treasure than many originally estimated and it makes it difficult for the president to rally support both here and abroad.
So, Christiane, the question is, what does this country, what does this president risk if the United States fails to follow-through on holding that red line?
AMANPOUR: Well, you're absolutely right. It's unpopular in the United States. It's also unpopular in Britain where the prime minister was delivered a crushing and extraordinary blow when he tried to get a vote of confidence to go with the United States to respond to Syrian use of chemical weapons.
The risk I think of not taking action, though, is what President Obama himself is laying out right now, and has been doing so over the last several days. His last press conference as the G-20 summit in St. Petersburg wrapped up over the weekend has been very, very deliberate in the message.
He said, "It is not my red line, it's the world's red line." There are international laws against the use of chemical weapons. You know, 1,400 or 1,500 people, including 400 children were killed. If we do not respond what does it say to the world, what does it say about us, and what does it say about rule of law? And what a does it say about trying to prohibit the use of the weapons of mass destruction in the future?
So, that is the case that he's taking to the American people and he tried to take to his fellow leaders around the dinner table at the G- 20 summit in Russia. He's also going to address the American people, he said, from the White House on Tuesday and keep putting up his case. It is a very solid case in terms of international norms, and why action and punitive action needs to be taken.
But, of course, as you say, we are talking about politics, we're talking about people who are tired of war. And we're also talking about a president who has been really the reluctant warrior, and over and over again, he said it himself, "I was elected to end wars. I'm doing so in Afghanistan. I've done so in Iraq. I am not the president who was elected to launch another war."
But this is something that we have to answer, otherwise it could come back to haunt us in the future.
And because he has taken so long to articulate this case, because the Syrian debacle has been going on for two years, now, it's about weapons of mass destruction. So, the heavy lift is very, very heavy right now, trying to persuade the people and the Congress.
BERMAN: All right. Christian, we're going to come back to you in just a second.
Politicians continue to promise America energy independence. Does that mean your gas prices are more immune than ever to a conflict in the Middle East? If not, why not? That's next.
BERMAN: The threat of conflict in Syria is already hitting you in the wallet. Those fears and ongoing instability in the Middle East pushing oil prices to a two-year high. Now, Syria isn't a major oil producer, but investors worry the conflict could spread to neighboring countries and causing major supply disruption. That would push oil prices even higher and cost you money at the gas pump.
Now, the threat of fighting in the Middle East brings up images like these from the 1970s, cars stretched around the block and waiting for gas. But the U.S. isn't as dependent on Middle Eastern oil as it used to be. Less gas is being used.
In 2007, the average new car in the U.S. got 20 miles to the gallon. Today, it's getting nearly 25, and oil production in the U.S. is up as well. That means the country is importing less from overseas.
Tom Kloza is the chief oil analyst at the oil price information service. He says, right now, the U.S. is less reliant on the Middle East than anytime in the last 30 to 40 years.
(BEGIN VIDEO CLIP)
TOM KLOZA, CHIEF OIL ANALYST, OPIS: We're producing about 2 million more barrels of crude than we were during the first Arab spring back in the first quarter of 2011. We're producing much more crude than we did in 2003. And in addition, our Canadian neighbors to the north are sending us 2 million barrels a day.
(END VIDEO CLIP)
BERMAN: Christiane, fuel efficiency in the U.S. increasing along with fuel production, oil shale discoveries. Some has speculated that long-term, this will reduce America's diplomatic footprint in the Middle East.
Now, as someone who spent so much time in that region, do you think that's true and are we seeing it already?
AMANPOUR: Well, I think we are seeing it already, and I think certainly this administration has telegraphed a sort of moving on from the Middle East towards Asia. You remember the president's famous pivot to Asia.
But, you see, that assumes that the Middle East is taken care of and everything is smooth sailing -- and as we know it's not. And it's unlikely to be, because it's not just about the oil and the economy with the Middle East, it's about war and peace, it's about terrorism, it's about national security, regional security, regional allies -- it's all a network whether it's in the economy or in all of the national security issues.
So, the Middle East, the greater Middle East region that we are talking about is still of vital importance, and I think certainly in the second administration, the Obama administration is going to have to really take the whole area much more seriously than it did in its first administration. Not just the Arab Israeli conflict that continues, but the whole post-Arab spring situation that we have right now, whether it's the debacle with democracy in Egypt, or whether it's the continued carnage in places like Syria.
All of these things are still on America's plate and they won't go away no matter what the reliance on oil is.
BERMAN: All right. Christiane, hang on for one second, because we want to tie this now to YOUR MONEY.
Mohamed El-Erian is the CEO of PIMCO, the world's largest trader in bonds.
Mohamed, uncertainly over how Congress will vote on Syria could put the world economy, the U.S. economy, your personal economy at risk. The threat of U.S. military action in Syria has already put pressure on stock prices. It sent oil higher. And the longer President Obama and Congress wait, the more nervous investors seem to grow.
Check out the history here. 1991, Operation Desert Storm and the two weeks leading up to congressional authorization, the S&P 500 fell nearly 5 percent. Same story with oil that jumped 12.5 percent.
Once the bombing actually started, oil plunges and stocks recovered. We saw the same with the 2003 Iraq war and in 2011 in Libya.
So, Mohamed, the question is -- what does the threat of the Syria crisis mean to America's personal economy, especially with the jobs news that we're just getting this week, which frankly is not great?
EL-ERIAN: The reason Syria matters for your money and for markets is because of what we call the network affects. Syria is interlinked with other countries in the region. It is a battlefield for proxy wars.
So, what you see in the oil price is the concern that the disruptions in Syria could spread to other countries that are oil producers.
In terms of what it means domestically, we need to worry not only about the oil price but also about the fact that our Congress now is going to be discussing Syria, is going to divert attention from two debt and debt issues it must handle, how to keep the government functioning and how to avoid another debt ceiling debacle.
And then, finally, as you noticed, the unemployment last week suggests that while the economy is healing, it's healing in a gradual fashion. So, what investors have to recognize is that is foreign policies will also trump economic issues, and that in your own investment, you've got to recognize that a lot of cross currents going on right now, so be a little bit cautious. BERMAN: Mohamed El-Erian, Christiane Amanpour, thanks so much for being with us. Appreciate it.
Coming up, you think the conflict in Syria will be confined to the Middle East? Think again. Hackers promised to launch more attacks like the one that shut down "The New York Times" last week if the U.S. strikes Syria. What else is they're targeting? That's coming up next.
BERMAN: As President Obama scrambles to win support for a military strike in Syria, a new type of warfare is coming into focus, the emerging threat of cyber attacks.
CNN Money's Laurie Segall joins me.
LAURIE SEGALL, CNN MONEY, TECHNOLOGY CORRESPONDENT: Hi, John.
Well, as the United States debates military intervention in Syria, we are hearing more and more about a dangerous type of cyber attack, one that could actually target our nation's infrastructure. Take a look.
UNIDENTIFIED MALE: We call this a pipe rupture in this process.
SEGALL (voice-over): That pipe is filled with water. But it could be filled with oil, even acid.
UNIDENTIFIED MALE: There are safeties in here such that when the isolation valve is closed, we should also turn off this pump.
SEGALL: That didn't happen because these researchers were able to hack the controller.
UNIDENTIFIED MALE: You can't do anything. You are, as an operator, you are completely locked out
SEGALL: It's the same kind that's used at oil and gas facilities. That means this hack could cause gas pipes and water tanks to explode or overflow. It could also represent modern day warfare, taking down major infrastructure by infiltrating codes that makes it run.
DAVID KENNEDY, CYBERSECURITY EXPERT, TRUSTEDSEC: You could cripple an entire country through cyber means and attacking infrastructure.
SEGALL: Kennedy says if there is a conflict with Syria, Damascus could respond in cyber space.
KENNEDY: They have big allies that have decent capabilities out there, such as Iran and Russia, and they are definitely capable of launching, you know, some sort of cyber capability towards us in the United States.
SEGALL: With this hack, researchers from security consultancy firm Cimation took control of signals to change what an operator sees. To highlight the vulnerabilities they recently presented findings publicly.
UNIDENTIFIED MALE: And as this thing is actually filling, we can make it look to the operator that our process is actually lowering.
SEGALL: Hackers could do it because the unit is connected to the Internet with a public IP address. So are other parts of America's infrastructure that are remotely controlled like trains and water towers.
BRIAN MEIXELL, HACKER, CIMATION: They don't have the security controls in place.
SEGALL (on camera): How does it manifest itself in the lives of every day people?
MEIXELL: It could mean a train runs off the tracks and causes a huge accident. There is lots of kind of unpredictable things that could happen, because these systems are in a lot of different areas and in a lot of different industries.
SEGALL (voice-over): And the United States is already on the defensive, after a group calling itself the Syria Electronic Army took responsibility for disrupting Web traffic on major news sites like "The New York Times."
UNIDENTIFIED MALE: Come on.
KENNEDY: No one is going to be able to challenge the military, for me. No pure boots on ground, or, you know, warfare to warfare type situation. But what countries can do is impact us from the more information side of the house, what we do electronically.
SEGALL: And, John, none of this is a surprise to Washington. The Department of Homeland Security and the Pentagon, they have committed billions of dollars to actually fight against cyber terrorism. But I should mention, I recently spoke to a hacker who says he's a leader in the Syrian Electronic Army and he told me that they've actually already tested out these types of infrastructure hacks in other countries. Pretty scary stuff -- John.
BERMAN: It is scary. All right. Laurie Segall, working her hacker contacts, thanks so much.
We've all been talking about Syria and American fashion designer Kenneth Cole is no exception, know maybe he should be. Cole caused an uproar online when he tweeted, "Boots on the ground or not, let's not forget about sandals, pumps, and loafers." Cole says the tweet was meant to provoke dialogue. Guess it worked.
For more stories that matter to your money, give me 60 seconds on the clock, it's "Money Time."
BERMAN (voice-over): Remember this phone? Microsoft is buying once dominant Nokia for $7.2 billion. The move will put Microsoft up against Apple and Google in the smartphone market.
It's official, Apple sent out invitations for the September 10th event. That's this Tuesday. Tech enthusiasts are expecting the company to announce a new iPhone.
Forget the times, now you can check your e-mail on your watch. Samsung revealed its Galaxy Gear smartwatch. The watch has apps, a camera, and even a heart monitor.
Can you hear me now? Verizon is taking full control of Verizon Wireless, buying out partner Vodafone for $130 billion.
Careful where you park your car. A London skyscraper known as the walkie-talkie building is reflecting an intense beam of sunlight, so intense it melted part of a Jaguar and was used to fry eggs.
BERMAN: Coming up there, is something much different flying off a tall building in Rotterdam. Is it a bird? Is it a plane? Well, whatever it is has got these guys excited, but does it have anything to do with your money?
BERMAN: All right. You have to check this out. A trick shot from 321 feet above the ground off Rotterdam's Euromast in the Netherlands into a basketball hoop below. It took the shooter 62 tries, but he finally nailed it.
He's part of a group which calls itself How Ridiculous. The group beat its own world record with that sick shot.
OK. Now we have to admit that video has nothing to do with your money but we thought it was pretty cool.
Still big bucks and sports are never far apart. So, here is the score: President Obama hosted the Super Bowl champion Baltimore Ravens at the White House in June. Now, the Ravens will host events for Obamacare. Starting next month, the team will promote Maryland's health benefit exchange created under the Affordable Care Act.
And, apparently, Raven fans are a perfect target. The state's department of health says 71 percent of the uninsured population in Maryland have watched, attended, or listened to a Ravens game in the past year.
Corporate America now stepping in to help prevent concussions. Under Armour, General Electric, and the NFL are offering up to $10 million for innovative brain injury protections for any sport. All industries, organizations, and technical fields are welcome to participate. And finally, outside sports authority field at mile high in Denver, a sign about getting high. The 48-foot wide billboard sports the Broncos colors and says, "Stop driving players to drink. A safer choice is now legal here." That's a reference to the voter approved referendum in Colorado making marijuana legal for adults.
The group Marijuana policy project claim that the NFL has been encouraging alcohol use while punishing pot.
The NFL's 2013 season kicked off Thursday night. The Denver Broncos took down the reigning Super Bowl champions, the Baltimore Ravens. It was a blowout.
Broncos quarterback Peyton Manning matched an NFL record with seven touchdown passes and, Manning is also winning off the field.
Christine Romans takes a look at the business of being Peyton.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): Football is a family business for Peyton Manning, and business is good. Peyton's dad, Archie Manning, and brother Eli, played quarterback for Ole Miss. Both went on to play in the National Football League with Eli leading the New York Giants to two Super Bowl Championship.
But Peyton didn't follow in his family's footsteps, passing up Ole Miss to play for the University of Tennessee, breaking dozens of collegiate records along the way. In 1998, Manning was elected first overall in the draft by the Indianapolis Colts. He signed a 6-year $48 million deal and quickly turned the struggling team around. Not bad for a first job.
And in 2007, Manning finally silenced his critics and won his first and only Super Bowl ring to date.
But even Peyton Manning is expendable in the violent world of professional football. After signing a five-year $90 million contract in 2011, Manning went under the knife for a neck injury. The quarterback who never missed a game was out for the season.
And then the unthinkable, as Manning was nearing a $28 million bonus --
PEYTON MANNING, NFL QUARTERBACK: I leave the Colts with nothing but good thoughts and gratitude.
ROMANS: But this is not an unemployment story by any means. Peyton quickly joined the Denver Broncos, signing a five-year, $96 million deal.
MANNING: I'm very excited to begin the next chapter of my playing career for the Denver Broncos.
ROMANS: And the Broncos got what they paid for, finishing the year with the best record in the conference. UNIDENTIFIED MALE: That guy is pretty good if you're like 6'5", 220- pound quarterback's razor.
ROMANS: But you don't have to be a football fan to get your pail of Peyton.
He starred in commercials for Direct TV, MasterCard, Gatorade, Oreo, Sprint and Buick, just to name a few.
MANNING: I appeared in over half of America's television commercials.
ROMANS: The quarterback brought home an estimated $13 million in endorsements last year, add that to the $18 million the number 18 made on the field. That's 31 million bucks, making Manning the eighth highest earning athlete in the country.
Manning doesn't keep all that wealth to himself. As soon as he joined the NFL, he started the Pay Back Foundation to help at risk children. He helped fund the Peyton Manning Children's Hospital in Indianapolis and provided scholarships to Tennessee students every year.
At the age of 37, Manning isn't finished yet. He's already got one championship, but, remember, little brother Eli has two.
Football for the Mannings is quite the lucrative family business.
Christine Romans, CNN, New York.
BERMAN: Coming up next on CNN "NEWSROOM," before Edward Snowden and Bradley Manning were even born, there was another NSA contractor who became infamous during the Cold War for selling secrets to the Russians. His name is Christopher Boyce, also known as "The Falcon". And CNN sat down with him for his first on camera interview in 28 years.
CNN "NEWSROOM" starts right now.