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AROUND THE WORLD
Trying to Bounce Back; Sochi Winter Games; Another Winter Storm Hits the Northeast; Knox Ex-Boyfriend Sollecito Proclaims Innocence, Fights Murder Charge; Castaway Says He Was Lost at Sea for 13 Months
Aired February 4, 2014 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUZANNE MALVEAUX, CNN ANCHOR: Your 401(k), straight ahead.
MICHAEL HOLMES, CNN ANCHOR: Plus, Russia's president arrives in Sochi to see for himself how prepared the city is to host the winter games. A live report coming your way.
MALVEAUX: And reports of barrel bomb attacks in Syria. Drums packed with explosives and shrapnel destroying entire buildings with just one hit.
Welcome to AROUND THE WORLD. I'm Suzanne Malveaux.
HOLMES: And I'm Michael Holmes. Thanks for your company.
We're now two-and-a-half hours into trading on Wall Street. Investors have been hoping for a bit of a bounce back after Monday's nightmarish finish. The Dow dropped, of course, what was it, 300 points.
MALVEAUX: Three hundred points. Retirement savings, as well, felt the pain. Want to take a look at the big board right now. Stocks so far are up. We're talking 97 points. The analyst said that the market would show some life if there was at least some good economic news. So we want to bring in our experts here. Alison Kosik and Richard Quest here to explain what's going on.
Alison, let's start off with you first. We've gotten some good economic news, right, today. Microsoft, Michael Kors, we've seen the shares going up. Does that help at all in the bigger picture?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Earnings may be part of it, Suzanne. But to be quite honest, you know, this gain - the gains that you're seeing, really not based on anything. I mean this is really just the normal push and pull of the market, especially after a huge sell-off like what happened yesterday. Sure, the Dow is up another 100 points today, but it's nowhere near making up that 300-plus point loss yesterday.
And then you look at how it's been so far this year. We're just one month in. The Dow is already down 7 percent this year. Overseas, at least for Japan's Nikkei, the Nikkei dropped 4 percent. The Nikkei is actually in a correction. That's a 10 percent decline from recent highs. And you know what, that's where some -- some say that that's where we're headed. But they say, listen, it sounds bad but it's really healthy for the market because it keeps bubbles from forming.
HOLMES: Yes, it's a good point. What about the traders? You speaking to them on the floor there? What are they telling you?
KOSIK: You know, they're calm about this. But at the same time, they're also a little pessimistic. They're worried about all of the weak economic data that we've gotten over the past month. Here's how one analyst put it. Listen.
(BEGIN VIDEO CLIP)
MARK NEWTON, GRAYWOLF EXECUTION PARTNERS: We saw a fairly weak jobs number and payrolls number back in December. And so the ISM number coming in much below expectations causes a little bit of fear that maybe it's not just a blip in one month of underperformance for the economy. That potentially it could be long-lasting.
(END VIDEO CLIP)
KOSIK: So the thinking is that stocks at this point are catching up with the economy. And what a tough year it's been to give reason for stocks to catch up. You look at corporations that have been reporting fourth quarter earnings. They've been issuing weak forecasts about the road ahead. December's job number was really, really weak. Manufacturing is slowing. So you've got all this happening, plus you've got the Fed pulling stimulus money, really a support system, out of the economy and out from under the market.
HOLMES: Yes. Yes, exactly.
Richard, let's bring you in, Mr. Quest.
RICHARD QUEST, CNN CORRESPONDENT: Yes.
HOLMES: The Dow didn't just have a lousy Monday, 7 percent down this year, but I suppose last year was a good year. Let's keep it in perspective. What -- how do you see it all?
QUEST: I think you have to put it into the perspective of last year being a very strong one, 25, 26 percent up. And what we would traditionally expect to see is the so-called correction. And the correction is a fall of, say, up to 10 percent. Ten percent tends to be the barometer. Above 10 percent and you move into different areas.
Now what perhaps might be a little heart stopping and giving of indigestion is the way in which it's been done. We haven't just seen 50 points off there, 20 points off there over a short period of time. You're seeing these triple digit losses.
And that in itself, Michael, is a reflection of the new volatility that's come into the market as a result of high frequency trading, as a result of all sorts of different mechanisms of trading and stock markets. So we are seeing a new breed of stock market, but it is the same old rules, which says basically, after a very sharp run-up, you're going to get a correction.
MALVEAUX: And, Richard, what does this mean? I mean how big a hit are people going to take when it comes to the retirement accounts because of all of this, this volatility?
QUEST: Well, nobody should be looking at this and getting unduly upset because, of course, the nature of a retirement account is that you balance it over the lifetime of the account. So from high equity levels at the beginning, when you can take more risk, to more bonds and to more secure investments when you're going to need it.
Your investment, your IRA, your 401(k), they are long-term investment vehicles that you just tweak every now and again. They are not the sports car racing of left and right and left and up and down. It's the exact opposite. All you're doing with your retirement investing is just little fine bit of tuning to account for broader economic movements.
HOLMES: Swings and round-abouts.
MALVEAUX: But we are watching - we are watching the ebbs and flows of this.
QUEST: Yes. And here's the problem. That's exactly the problem, you're watching and you're doing on an hour-by-hour basis. You know, oh, Lord, my 401(k) is, you know, $250 less than it was 25 minutes ago or whatever. And that's -- over time, with a financial adviser, you decide to rebalance the portfolio. What you don't do is sell into a down market unless you absolutely, totally must and there is no option have to.
HOLMES: Knee-jerking. And, yes, you're right, Questy, of course.
MALVEAUX: Of course.
HOLMES: I was saying to Alison just the other day, (INAUDIBLE), you go back a couple of years, this is still a pretty good market. We've got to leave it there, though. Richard, good to see you. Richard Quest. Alison Kosik in New York.
MALVEAUX: He makes a good point.
HOLMES: He does.
MALVEAUX: But it's hard not to watch.
MALVEAUX: You know what I mean? But it is the long-term that ultimately makes the difference. Yes.
HOLMES: It's the long term. Exactly. If you're in your late 50s and you're pushing towards retirement or something, you move it into bonds and things that are less volatile. But --
MALVEAUX: Yes. If you're a little younger, you're still watching.
HOLMES: Like you, still in your 20s, you just right it out.
MALVEAUX: You're still watching. Well, I wish.
MALVEAUX: We're watching this as well. Three days away from the opening ceremonies of the Winter Olympics in Sochi, Russia. Russian President Vladimir Putin, actually we saw him today. He is now at the Black Sea Resort where he met today with the International Olympic officials.
HOLMES: There you go right there. The list of negatives, though, going into the Olympics. It's still there. We're talking about things like security concerns. There are also unfinished hotels. One of our own crew members had an unfinished hotel room. And also those anti-gay laws. Even the lack of snow.
MALVEAUX: So it could explain why a new Pew Research poll shows that nearly half of Americans, 44 percent, say that Sochi was a bad choice for winter games. About one third responded that it was actually a good choice.
Want to bring in our senior international correspondent, Nick Paton Walsh, joining us from Sochi. You've been there for many, many days and weeks, Nick. Does it surprise you, first of all, that people are a little wary of Sochi as a venue?
NICK PATON WALSH, CNN SENIOR INTERNATIONAL CORRESPONDENT: Not enormously. I mean this place, five years ago, it was in a real state. There's been a huge project just to get it ready to here. You can hear behind me helicopters. Now, there's three of them that have been doing circles for quite a lot of the afternoon. That could be because Vladimir Putin has arrived here, extra security for him.
But as for that broad anxiety people have been feeling about the choice of venue being in the North Caucasus in southern Russia where they're (ph) pretty much the exception of this holiday resort of Sochi. There's been violence pretty much across to the east of the Caspian Sea for about a decade now. So not the most calm choice of venue in Russia.
And then, of course, the big, obvious glaring question. This is one of the only places in Russia that doesn't have snow during winter. Why would you bring winter games here, Suzanne.
HOLMES: Yes. They stacked some up, stored it from last winter and they're going to be using some of that, apparently.
Mr. Putin, he's never one to shy away from a photo op. This video of him with leopards. What's that all about?
WALSH: Well, I mean, at least, in previous photos of him, he kept his shirt on doing this. He went to a leopard rehabilitation center. He went to a leopard rehabilitation center. You can see him in some of these pictures stroking some of the cubs there. Now, I understand from state media, they haven't all been named. The six-month-year-old one is called Thunder. This is a place clearly very dear to heart. The first place he went to since getting off the plane. So a big deal for him, clearly. And, obviously, it's about showing the soft side too.
There has been ecological criticism of this site chosen here, the damage done to the hillside. Perhaps by cuddling up to a leopard you're able to show that you're not afraid of nature's most savage elements. At the same time, you want to protect the vulnerable in the wild as well.
MALVEAUX: Yes, Nick, I mean, it might be obvious here, but what is a leopard rehabilitation center? What is the - what is the point of that?
WALSH: Well, across the former Soviet Union, there are different types of leopard, which have been endangered for some time. I understand there are some from Turkmenistan, here, a gas-rich nation in central Asia and others too. Brought here, allowed to breed.
Sometimes released back into the wild. I mean there's -- the snow leopard of Siberia, very rarely seen, not seen for almost decades, I think, correct me if I'm wrong. But, obviously, this particular wildlife resort, a bid for the Kremlin to show maybe the softer, more jovial side of Putin as he flies into (INAUDIBLE). People have been talking about security and corruption, rather than the soft, furry animals.
MALVEAUX: All right. A different kind of picture there, obviously, that he wants to put out there.
HOLMES: Well, as Nick pointed out, at least he kept his shirt on this time.
MALVEAUX: I know. Being a hunter, we've seen those photos.
MALVEAUX: Nick, thank you. Good to see you, as always.
Here's also what we're working on for AROUND THE WORLD. Another snowstorm headed to the northeast. This is the second one in just a week. We're going to tell you how much snow to expect ahead.
HOLMES: Amanda Knox's ex-boyfriend, Raffaele Sollecito, you see him there, says the jury only thinks he's guilty because he was the boyfriend, not because of evidence. Hear him speak out about his new murder conviction.
MALVEAUX: And this guy says he was lost at sea for more than a year. Well now this castaway is speaking out for the first time about his ordeal, surviving on his boat.
JOSE SALVADOR ALVARENGA (through translator): I did not think I would die. I thought I'm going to get out. I'm going to make it. Be strong.
MALVEAUX: All right, get ready for this. As many as 120 million people are about to get hit with another major storm, if you can believe that. From Wyoming east to Maine to D.C., all the way up the East Coast.
HOLMES: Unbelievable, isn't it?
MALVEAUX: Yes. Can you --
HOLMES: It just keeps on coming. Yes, it just keeps on coming. I don't think that's the last one either. Snow not the only problem. There's also going to be a lot of ice. And that's what I hate. That's for large parts of Virginia in particular. Jennifer Gray joining us from the Weather Center.
Jen, you know, folks are just recovering from the other storm. When is this one going to hit?
JENNIFER GRAY, AMS METEOROLOGIST: I know.
MALVEAUX: This is crazy.
GRAY: It is crazy. It will not let up.
GRAY: They get, what, one or two days to breathe and then another one on its way. And it's already starting to come together here, Wichita, Kansas City, Springfield, St. Louis, all getting snow. Ice for most of Arkansas, including Little Rock and Memphis.
Look at all of these winter storm warnings in effect. We have ice storm warnings in effect for the Ohio Valley. That does include the northeast. Again, New York City, Boston, you are going to get it again. And that is going to be on Wednesday.
Let's show the snow accumulation. This is through Wednesday morning. And you can see St. Louis, Indianapolis, Pittsburgh, we could see six to eight, eight to 10 inches in some places. And then this is the ice accumulation. And, look, it includes places like Cincinnati, Pittsburgh. We could see three quarters of an inch of ice. And you know what happens. Those power lines really get weighed down. We could see power outages.
Then the storm moves over to the Northeast throughout the day on Wednesday. By Wednesday evening, we could see up to a foot of snow outside Boston, Albany. New York City, not quite as much, could see four to six inches.
We're also talking about ice accumulation with this storm in the Northeast, as well, and so when we're looking at half an inch of ice possible in places like New York City and up the I-95 corridor.
Guys, travel this weekend is -- or travel the middle part of the week, Wednesday, is going to be really, really tough.
MALVEAUX: Wow. I mean, you know, I'm always counting on you for my travel. Can you travel to D.C. over the weekend?
GRAY: We're trying to get you to D.C. I would go early, because we're going to be talking about another system moving through this weekend, the end of the weekend.
So they just keep coming, one after another.
HOLMES: Wow. Amazing.
It's great, isn't it? When you want to go somewhere, all you have to do is ask Jen. How are we looking on Saturday?
MALVEAUX: And then we get stuck.
HOLMES: Yeah. You've got no excuses.
MALVEAUX: Thank you, Jen. Appreciate it.
HOLMES: A story that we have followed for some time, of course, Amanda Knox, her ex-boyfriend, that man right there, says he's returned to Italy to fight the new murder conviction that he and Amanda Knox face.
His name is Raffaele Sollecito. He and Amanda Knox were found guilty for a second time of murdering Knox's roommate, Meredith Kercher, back in 2007. Now, he got 25 years in prison. Amanda Knox got 28-and-a-half years.
Prosecutors said Knox and Sollecito and a third man, who is actually in jail for the crime, killed Meredith Kercher because she refused to take part in a sex game.
MALVEAUX: Sollecito has always said that he's innocent, and last night told Anderson Cooper that he's been unfairly targeted simply because he was Knox's boyfriend at the time of the murder. (BEGIN VIDEO CLIP)
RAFFAELE SOLLECITO, AMANDA KNOX'S FORMER BOYFRIEND: You all know that the focus was only to Amanda, to her behavior, to her peculiar behavior.
But whatever it is, I'm not guilty for it. Why does it come with me? Why do you put me on the corner and say that I'm guilty, just because in their minds I have to be guilty because I was her boyfriend? Is -- it doesn't make any sense to me.
ANDERSON COOPER, CNN HOST, "AC360": Do you hold Amanda Knox responsible for the situation you're in now?
SOLLECITOR: Actually, they -- they focused all their attention on her. And I don't -- I cannot understand really why.
But on the other side, I am not responsible for that, so I'm not saying that Amanda is responsible for all of this situation.
But they focus on her, and they accuse her all the time.
But I have nothing to do with all the circumstances and all of the accusations.
(END VIDEO CLIP)
HOLMES: Now, Knox is, of course, back in the U.S. in Seattle. She says she would never willingly go back to Italy. And there is an appeal process under way, of course.
MALVEAUX: We're watching that.
Buckingham Palace just announced that Queen Elizabeth will travel to Italy in April and visit with Pope Francis. The two are going to meet at the Vatican and the Queen will be accompanied by her husband, Prince Philip.
They were invited to visit Rome by Italy's president and will have a private lunch with him before their audience with the pope. How nice is that?
HOLMES: That is exciting.
How did he make it? That man there, showing up on the Pacific island, the Marshall Islands, claiming he'd been adrift for more than a year.
Well, now, he's talking about how he survived on the open water for so long. That story, coming up.
MALVEAUX: If this is true, it would be an amazing story of survival, would make a heck of a book or a movie, I would think. This is this fisherman. We've been talking about him. He's from Mexico, claims that he spent 13 months adrift in his boat in the Pacific Ocean after a storm blew him off course.
HOLMES: He says he survived on turtles, birds, rain water and faith.
And authorities in the Marshall Islands where he ended up say, at the moment they've got no reason to doubt his story. They can't prove he was wrong.
Rafael Romo with more details.
RAFAEL ROMO, CNN SENIOR LATIN AMERICAN AFFAIRS EDITOR: He speaks slowly and makes long pauses between words.
He's visibly weak and complains of constant headaches.
Speaking exclusively to CNN in the Marshall Islands, 37-year-old Jose Salvador Alvarenga says he was lose at sea for 13 months after he and a companion were caught in a violent storm on a small fishing boat off the Mexican Pacific coast.
They got lost, he says, just before Christmas 2012.
JOSE SALVADOR ALVARENGA, CASTAWAY (via translator): I didn't think I was going to die. I always thought I was going to make it out alive. I told myself, I had to remain strong.
ROMO: The castaway says he survived by eating fish and turtles he caught while his teenage companion, who he says, refused to eat, died four weeks into the drift.
Weeks turned into months and his initial resolve, he says, quickly started to fade.
ALVARENGA (via translator): Twice, I thought a couple times about killing myself. I grabbed the knife. When food and water ran out, I got depressed and I would contemplate killing myself.
ROMO: Authorities in the Marshall Islands are trying to determine if the story is true.
The trip from the west coast of Mexico across the Pacific to the Marshall Islands is roughly 5,600 miles or 9,000 kilometers of open ocean, although such an amazing ordeal isn't unheard.
Three Mexican fishermen survived a similar journey in 2006.
In an interview in Alvarenga's hometown in El Salvador, his parents said they never lost hope.
JULIA ALVARENGA, CASTAWAY'S MOTHER (via translator): My heart would tell me that my son was not dead.
But I would think about it so much, that I had started to lose faith.
ROMO: Alvarenga's father says he felt all along that his son was alive.
RICARDO ALVARENGA, CASTAWAY'S FATHER (via translator): God willing, my son is not dead. God willing, my son is alive and we're going to see him again one day.
I'm very happy after learning that he's alive and that we will have him back home soon.
ROMO: He hasn't seen his family since he left to work in Mexico eight years ago. The last time he saw his daughter, she was 4-years-old.
There are still many questions about how a man could survive by himself for more than a year in the open sea.
When asked about what kept him alive, Alvarenga raises his right hand, points up and says, "It was my faith in God."
MALVEAUX: Rafael Romo joins us.
So, we talked about this yesterday. We were all very skeptical yesterday. And -- but seeing your story, you say that you're a little bit -- it's more believable this go-round.
What changed your mind?
ROMO: He gave us a 30-minute interview. And you can hear -- first of all, he's very weak. There's long pauses between words. And at some point, he was like, I have this headache.
So he's not -- even though he doesn't look emaciated, he is definitely not 100-percent recovered.
Number two is that his story seems to match what he said originally, so he's been consistent. And based on a case we were talking about before, 2006, that it took three fishermen nine months to get from the coast of Mexico to the Marshall Islands, it's entirely possible that somebody would survive for that long.
There are still many questions, and yes, of course, people are very well within the right to question his story.
But I guess personally, I have moved from complete skepticism to a point where I can say it's possible. It could have happened.
HOLMES: Yeah, it could have. Yeah, it could have, too. Yeah. No, you're right.
And he not going anywhere yet, recovering for a bit, eventually, hopefully back home.
ROMO: He's still being treated in the Marshall Islands. It's probably going to take about a week before he leaves that Pacific nation.
HOLMES: All right. Rafael, thanks for that. Rafael Romo.
MALVEAUX: Lucky fellow.
Good news and bad news in the world of politics, just depends on who you are, where you sit, Hillary Clinton or Chris Christie, we're going take a look at the new numbers, up next.