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Futures Point to Big Open on Wall Street; Candidates React to Market Chaos; Source: Biden More Likely to Run Than Not; Bush Hit for "Asian People" Remark. Aired 9-9:30a ET

Aired August 25, 2015 - 09:00   ET

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


[09:00:02] CUOMO: Three Americans.

PEREIRA: Yes.

CUOMO: Christopher Norman, another American of French descent who is still in the hospital and another Frenchman. They all worked as a team. We want to remind you that.

CAMEROTA: Just a great shot to end, though.

CUOMO: They were the good stuff.

PEREIRA: Yes.

COOPER: There we go.

CUOMO: Time for the "NEWSROOM." Poppy Harlow in for Carol Costello. Carol is going to tweet me right now. She's angry.

(LAUGHTER)

POPPY HARLOW, CNN ANCHOR: She's go to -- you know, she's traveling. She's doing a story on the Pope, guys. Good to see all of you. Thanks so much for being with me. Have a great Tuesday.

CAMEROTA: You too.

HARLOW: NEWSROOM starts right now.

ANNOUNCER: This is CNN Breaking News.

HARLOW: Good morning, everyone. I'm Poppy Harlow in today for Carol Costello. I want to welcome our viewers both here in the United States and around the world.

Just moments before the Opening Bell will ring on Wall Street and it looks like another wild ride for U.S. markets after yesterday's dizzying losses across the globe, it looks like your nest egg could see a big rebound this hour. Dow futures soaring, up more than 500 points right now. It is a breathtaking reversal of fortune after yesterday's panicked selling.

And in just the last few hours two major moves by the Chinese government to try to lift its stock market off of its knees. China now cutting interest rates once again, pumping $23 billion into their economy.

There is a lot to get to. Our entire financial team is here to break it down.

CNN's Alison Kosik is at the New York Stock Exchange, Christine Romans, Richard Quest here with me in New York. We will also speak with Mark Zandi, the chief economist for Moody's Analytics.

Let's begin with you, Alison. You are on the floor of the New York Stock Exchange. Just want to show everyone the "Wall Street Journal" this morning, right? The "Wall Street Journal" this morning, "Markets Real and Global Selloff." I think today could not be any different, right?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: You know, a very different day. You know, you can even feel it on the floor. You know, no anxiety here today. It's more -- less anxiety, more excitement for what's to come for this big comeback on the Dow.

To talk more about it, let's go ahead and talk with Ben Willis. He's a trader here on the floor. What has changed from yesterday to today?

BEN WILLIS, SENIOR TRADER, PRINCETON SECURITIES: The fools are out of the market. Yesterday's selling was foolish. It's mostly what's called passive investment material, many ETFs, as I've just said. We need to sell X amount of shares and this is what we're going to do. It's what you saw in the opening. That was -- that's foreign and overseas.

It was also the fact that they needed to raise capital because they couldn't raise it in China, they couldn't raise it enough in Europe. So they sold. They couldn't in the United States. But it was -- obviously it was a mistake.

KOSIK: But the underlying problems with China are still there. The economy there still is slowing. Why would the market rally back so hard today?

WILLIS: Because again it was a function of passive investing style that had to do with China's stock market, not with China's economy. And we need to be very, very clear that this market is -- the global markets are trading on China's economy, not on its stock market.

Their stock market is a frontier market. It's an underdeveloped nation when it comes to the stock market. You need to put very, very little weight on the idea of what their stock market is doing.

KOSIK: All right. So what should come here in the coming days? Are we going to see more volatility? Are things going to settle down?

WILLIS: We probably are going to see more volatility because China was also down another 7 percent this morning coming in. So that shows as far as their stock market is not done so that will add to some volatility here. But volatility means opportunity for a long-term investor. If you had your shopping list ready to buy stocks yesterday, you made a lot of money by being here on the opening to buy stocks that were being put on sale for no reason other than somebody decided they couldn't hold them in their portfolio.

KOSIK: OK. Very quickly. The Feds expected to raise rates in September. Will that still stand?

WILLIS: I think they should. I think they should have already. And I think people need to understand, once again, that they are going to let rates normalize. They're not going to tighten. You can't look at this as a tightening. Tightening is a model that they use to try and restrict growth. They're not.

The fact of the matter is zero interest rates have done nothing for the economy. So they need to let them go back to a natural market and when that happens I think you'll see a stimulation of the economy.

KOSIK: OK. But you expect more volatility ahead?

WILLIS: I do.

KOSIK: OK. I say keep that seat belt fastened, even though we're going to be making that comeback today -- Poppy.

HARLOW: Alison, thank you very much. Ben, thank you as well.

I want to talk about with Christine Romans, Richard Quest and Mark Zandi.

Mark, to you first. He said some things that I think, you know, a lot of folks might take issue with just in terms of saying, you know, zero interest rates have done nothing for this economy. But also saying yesterday's selling was foolish, it was about China's stock market, not about China's economy. Do you agree with that?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, foolish, you know, I don't know. I mean, the -- what's going on in China is a problem. The Chinese economy is the second largest on the planet. It accounted for most of the growth over the past five years. So if it's struggling, that means the entire global economy, our economy, is going to struggle and our stock market is going to struggle.

But, you know I really think that the biggest weight on our stock market is the fact that it's come so far in such a brief period since five or six years. The value of stocks nearly rose threefold, three times. That's very argent so it's not at all typical. It's not surprising that you'd see a step back.

[09:05:11] HARLOW: Yes.

ZANDI: That you'd see a correction. And I think that's what we're seeing today. So, yes, the approximate cause for all of this may be China. But I think, you know, ultimately this is a bit of a breather. The stock market is just self-correcting.

HARLOW: Yes. Christine, to you. CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Markets typically

have a correction. A 10 percent refresh in a bull market every 18 months or so. This stock market went four years basically going straight up.

HARLOW: Yes. No (INAUDIBLE).

ROMANS: Six years of double-digit stock market gain, so what the catalyst was were these concerns about China, but the market was due for a correction. Today you're going to get a snapback. You're calling it turnaround Tuesday but perspective is really important here for investors. The past three days the Dow Jones Industrial Average is down 1500 points.

HARLOW: Right.

ROMANS: If you rally 500 points on the open, you are still a thousand points lower than you were in the middle of last week.

HARLOW: Right.

ROMANS: So we have had some very dramatic move here.

RICHARD QUEST, CNN BUSINESS CORRESPONDENT: I would suggest that if the rally takes place today and is followed by further days of rallies, this isn't a correction. Because what's caused this particular fall has been another event elsewhere. It's not based on the fundamentals of U.S. corporations at the moment. It can become that. So what we're just seeing is pure, unadulterated volatility.

HARLOW: The U.S. corporations are reliant on China.

QUEST: Exactly.

HARLOW: They're reliant on the emerging market. But it's not just China having problems. You've seen a huge flow of money out of investment out of Russia, out of Brazil. And I just wonder if you agree with what he said that this isn't about the Chinese economy, and those structural concerns, but it's just about the stock market?

QUEST: Well, I mean, I take what he says with a certain -- with a certain distance.

ROMANS: It's a trader view.

QUEST: It's a trader view.

ROMANS: It's a trader view which is a different view than --

QUEST: Yes.

ROMANS: -- the 30,000-foot view, I think.

QUEST: Yes. This is what we've seen -- the reason the market fell was because of worries about what's happening in the Chinese economy and the inability of the Chinese government to seemingly have -- HARLOW: To fix it.

QUEST: -- coherent macro policies.

HARLOW: Right. So now they step in, they do more.

Mark Zandi, to you. Just in the last two hours, China comes in and they cut rates again -- that key lining rate -- and they pump $23 billion in. This is on top of all that they have been doing over the past, you know, few weeks, months. Does it make a difference?

ZANDI: Yes. I think it helps. You know, they're clearly on high alert. And they're using all the tools at their disposal to try to support their economy. So yes, I think this will help support things. But they do have problems. You know, big, deep structural problems. They've taken on a lot of debt. Their banks are over laden with a lot of bad loans. Their real estate markets are overdone. So they've got a lot of work to do. And this -- you know, it's going to be bumpy. They're not going to get this exactly right. It's not going to be completely graceful.

So I agree with Ben, the trader, that there's going to be a lot of volatility ahead. But the Chinese are working hard at this. They have a lot of tools. They have a lot of resources. I think they're pretty good managers. They make mistakes but they manage their economy pretty well. So I think at the end of the day they'll land the plane, you know, roughly on the tarmac. And we will suffer a correction but I think it's going to be no more than that. I don't think it's going to be more serious than that.

HARLOW: Richard Quest, not so confident about that soft landing.

QUEST: Well, no, no soft landing. I venture to suggest that Mark is more of a diplomat in terms of describing the machinations of the market.

(LAUGHTER)

QUEST: Come on, Mark. The phrase that people are using, the way they've tried to mismanage the market mayhem is compounded.

HARLOW: Romans, before --

ZANDI: OK. OK. Richard, I -- you're right. I mean, what they did with this -- how they've handled their stock market, up and down, you know, leaves a lot to be desired. But, you know, just take a step back and look at how they've managed the economy -- their economy over the last 25 or 30 years. And you know, it's not all that bad. Look what they've done. They've really brought that economy from nothing to something, you know, really quite important in that 25-year period. So you have to give them some credit.

Yes, they got -- they got their stock market bust all wrong. Their stock market bust all wrong. But in the broad scheme of things their policy has been pretty good.

ROMANS: How they manage their economy and their stock market, Poppy, will be -- will be candidate fodder for the next year by --

(CROSSTALK)

HARLOW: It already has been.

ROMANS: Yes.

HARLOW: It already has been.

ROMANS: About whether that's in the best interest of the American investors.

HARLOW: It already has been. I will note oil prices, though, ticking higher after that. You know, big decline, let me tell you.

ROMANS: That's right.

HARLOW: Four bucks, a little bit higher this morning. Concerns about other commodities, though still.

Let's talk about the politics. Stay with me. Many of the presidential candidates were, as we said, very quick to weigh in on the stock market drive yesterday. Republicans seizing on the turmoil have denounced President Obama's economic policies. We heard from Wisconsin Governor Scott Walker blaming China, saying the White House should retaliate by cancelling next month's state dinner with the Chinese leader.

Democratic candidate Bernie Sanders criticizing Wall Street's gambling mentality, tweeting, "We need banks that invest in the job creating economy. We don't need more speculation with the American economy hanging in the balance." Donald Trump, of course, made the most of the situation.

[09:10:05] Let's bring in MJ Lee, CNN politics and finance reporter for that.

We heard from Donald Trump during this program yesterday morning with a tweet and many more came.

MJ LEE, CNN POLITICS CORRESPONDENT: Well, Poppy, when Donald Trump seized a political opportunity he is going to jump on it. When the Dow started to plummet yesterday morning, Trump quickly took to Twitter and talked about one of his favorite topics frankly. And that is China and the Chinese economy. He said that the U.S. is too dependent on China and Chinese markets and that the U.S. is frankly too intertwined with the Asian markets.

Trump was not the only person as you mentioned to address the issue yesterday and the turmoil yesterday. You mentioned that Wisconsin governor Scott Walker had an interesting response to everything that happened yesterday. He said that President Obama should cancel a Chinese President Xi Jinping's visit to the country next month. Trump was also asked about Xi Jinping's visit next month, then here is what he said.

(BEGIN VIDEO CLIP)

BILL O'REILLY, FOX NEWS HOST: He's the president. He's coming over.

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: And very smart.

O'REILLY: He's getting a big dinner free at the White House, addressing the U.N. If you were president, would you throw him a big dinner?

TRUMP: No, I would not be throwing him a dinner. We've had this -- I'd get him a McDonald's hamburger and say we've got to get down to work because you can't continue to devalue.

(END VIDEO CLIP)

LEE: I'm not sure how fitting a Big Mac would be for a state dinner but there you have it, Poppy.

HARLOW: Richard Quest is dying over here.

(LAUGHTER)

HARLOW: Our viewers need to see what's going on.

QUEST: I'm just going to jump in it. The U.S. for years has been saying that the Chinese currency needs to better reflect the fundamentals of the Chinese economy.

HARLOW: Sure.

QUEST: The moment the Chinese devalue the currency to try --

ROMANS: Complained that it's artificially too strong.

QUESTION: And then the moment they do it, Donald Trump comes out of the gate and complains that they are managing the currency. This is exactly what people --

ROMANS: They managed the currency in the direction the U.S. wants only when it suits them. Not when it suits you.

HARLOW: Only when it helps. Right.

QUEST: Because they want to play a greater role in the global economy. I'm not defending them. I'm just saying you can't have it both ways.

HARLOW: You can't have your cake and eat it, too.

QUEST: No, Mr. Trump is (INAUDIBLE).

HARLOW: Thank you, guys. Stay with me. Opening Bell just 18 minutes away here on Wall Street. We will of course bring that to you live. We'll see where the markets goes. Futures, though, pointing much higher than yesterday. Still to come, politics. Is Biden going to make a third run for the

White House? He just got a major green light. We will tell you who that came from next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

[09:16:42] JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The president has indicated, his view, that the decision that he made, I guess seven years ago now, to add Joe Biden to the ticket as his running mate was the smartest decision he had ever made in politics. And I think that should give you some sense of the president's view of Vice President Biden's aptitude for the top job.

(END VIDEO CLIP)

HARLOW: The political world absolutely buzzing after White House Press Secretary Josh Earnest said that, and news trickled out that President Obama has given the vice president his blessing to launch a 2016 campaign. That is if Biden wants to enter the race. Their lunch yesterday coming hours after a meeting between Biden and two longtime Obama advisors at his Washington home.

The question remains, will he run?

Let's talk about it with Jamal Simmons, a Democratic strategist, and principal with the Raben Group and cofounder of CRVIII.com, and also, Chris Kofinis, also a Democratic strategist and former communications director for John Edwards 2008 campaign.

Thank you both for being here.

Jamal, let me begin with you. You say that Biden should run for the sake of the Democratic Party even if he won't win. Why?

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Absolutely. I mean, right now, when you look at the political landscape, what are the stories out there? Donald Trump is a big story. There's some conversation about the surge of Bernie Sanders. There's conversations about Hillary Clinton are e-mails.

Biden is adding like a little pizzazz to the primary. And having Clinton have to fight through a tough primary with Joe Biden, either Joe Biden will win and he'll be the strongest nominee, or Hillary Clinton will win and she'll be a stronger nominee.

But either way, Democrats will win because we'll get organized, we'll get excited and will end up with a nominee who's ready to take on the Republicans.

HARLOW: Chris, you were the communications director for the Edwards campaign in 2008, do you agree with that? Or do you say Biden should only run not only if he's running really, really to win, which one would assume, but also to have a platform that is different enough from Hillary Clinton's? CHRIS KOFINIS, DEMOCRATIC STRATEGIST: I think when you're running

against someone who is as formidable as Hillary Clinton, you've got to -- you have to go into this race with a clear understanding of what your candidacy is about. I mean, listen, think the vice president is a fantastic candidate, great retail politician on the ground.

But I think some of the mistakes that sometimes candidates make when they decide to run for president, and Jamal and I both know from this from our own personal experiences is some candidates run to win and some candidates run to place. I think the vice president is going to run to win. But that means in terms of the race you run, it's going tov to be a much more pointed race. You've got to be willing to engage and to some extent critic Hillary Clinton. And that is sometimes a difficult thing to do for some candidates, especially if they know each other as these two to do.

HARLOW: Well, not just know each other. She was secretary of state in the administration that he was vice president in.

SIMMONS: Right.

HARLOW: Jamal, if you're in the Biden camp, right, part of Draft Biden, et cetera, what is your platform that is so dramatically different from Hillary Clinton and Bernie Sanders, by the way? You can't be sort of the far, far left populist and focus on income inequality because you've already got Bernie Sanders doing that.

[09:20:06] SIMMONS: Well, I think you can do that. But running in this primary is going to be as much as style as policy. The truth is the Democrats really aren't that far apart when it comes to policy question. But there is a real style question and there is also now -- what happened yesterday at the White House is significant because I think one of the things it does is it opens the field for African- American voters.

Hillary Clinton has wide African-American support. I'm not sure it's deep African-American support. And if Barack Obama is sort of signaling that he's open to Joe Biden as a candidate, you'll see African-American voters willing to take a look at Joe Biden, because he stood by the president, he's not looking to distance himself from the president, he's going to run on their record, and if he has a case to make, you could see him win a state like South Carolina.

HARLOW: Chris, if you were in the Biden camp, how are you advising the vice president if he does make a run to deal with the Hillary Clinton e-mail scandal? Do you really latch onto that that for someone who -- the e-mail questions were while she's secretary of state in the administration you're also serving in?

KOFINIS: No, I don't think you decide to run because you're going to come after Secretary Clinton about the emails. I think it's -- there's a bigger strategic question here is, when you have basically such a small amount of time to run, you've really got to come out of the gate with a bang. My guess is that if he does this, you're going to start hearing increasing chatter by the end of the month. And then he's going to come out before the first Democratic debate.

He's got to be in that debate because, really, there's just not enough time to build that momentum, let alone the infrastructure you need to run.

But when he decides to do that, he's got to be very clear about why he's running, you know? And it can't be simply we're going to run as an extension of President Obama, in a sense a third term. He's got to have a vision that's distinct from Secretary Clinton and at the same time be willing to critique and challenge her positions about what she wants to do. That is I think a really tough balancing act for candidates.

I mean, we've already seen this primary, you know, Governor O'Malley who I think is a good person, just not a very strong candidate because he hasn't been willing to do that. There's a consequence. You basically cede the field to the dominant candidate. In this case, it's going to Hillary Clinton. You've got to challenge that position.

SIMMONS: Poppy, I have one thing before we go.

HARLOW: Yes, sure.

SIMMONS: The tough thing is going to be staffing. The vice president has got to find the staff that come into his campaign and help run it, and he's got to also find a diverse staff.

One thing Hillary Clinton has been very good at, she's got the most diverse presidential campaign staff I've ever seen. The vice president has got to find a way to compliment that or emulate that, because now the Democratic electorate is so different than it was 15 years ago, or even 10 years ago when he ran the last time. He's got to be able to run a good campaign with a good team if he's going to have a chance.

KOFINIS: Poppy, let me just say real quick. I totally agree with Jamal. That's why I volunteer Jamal to be his communications director, all right?

HARLOW: I've got to leave it there, guys. Thank you. We're running out of time. Jamal, Chris, appreciate it, as always.

KOFINISH: Thank you.

HARLOW: As for Jeb Bush who is hoping to represent Republicans in the 2016 election, controversy surrounding his use of the term anchor babies only seems to be intensifying, despite his efforts to clarify those comments.

(BEGIN VIDEO CLIP)

JEB BUSH (R), PRESIDENTIAL CANDIDATE: What I was talking about is the specific case of fraud being committed where there's organized efforts. Frankly, it's more related to Asian people come into our country, having children, taking advantage of a noble concept which is birthright citizenship. I support the 14th Amendment. Nothing about what I've said should be viewed as derogatory towards immigrants at all.

(END VIDEO CLIP)

HARLOW: That comment coming yesterday during a campaign stop in McAllen, Texas, right near the U.S.-Mexico borders. Republicans seizing on the remarks, some calling on Bush to apologize.

For his part, Bush says the critics need to, in his words, quote, "chill out", when it comes to political correctness.

CNN's Polo Sandoval joins me now from McAllen, Texas.

You were there. So, he went very close to the border. He didn't actually go to the border. Some criticizing him for that. Is it warranted?

POLO SANDOVAL, CNN CORRESPONDENT: Yes, Poppy, at this point Jeb Bush's staff saying it wasn't necessary to travel to the border this time. They said that Bush is very familiar with the issues along the border and he didn't necessarily need to take a trip this time.

Had he made that six-hour drive south, this is essentially what he would have seen. I'm standing right next to a segment of the border wall in the southern edge of the city of McAllen, Texas. And really, this border wall hall runs on opposite directions. Mexico, in order to get to that, you have to drive through this gate, down a path and you'd be at the edge of the Rio Grande.

And, really, yesterday, what we heard from Bush is that he added to that chorus from Republicans saying that more needs to be done, that this kind of infrastructure is not enough to stop that seemingly endless flow of people and drugs making their way north. So, he says that need to be fixed, more boots need to be on the ground here along the U.S.-Mexico border before they can focus on potentially legalizing close to 11 million undocumented people in the country.

[09:25:02] That being said, as you heard, he also really took a turn and started explaining himself with respect to the controversial use of the term "anchor baby", saying that he was mainly referring to these Chinese birth tourism issues, something that's been recognized by officials in California as being the serious problem, not so much, Poppy, the people who actually cross this border illegally.

HARLOW: Well, he also released a new online video slamming Donald Trump's immigration policy. Any response from Trump on that?

SANDOVAL: Yes. Not only that video but also those comments from yesterday. Donald Trump extremely busy yesterday, taking to Twitter with several comments.

I want to read you his tweets from late yesterday, specifically addressing Jeb Bush's comments. It's a first tweet coming last night saying, "in a clumsy move to get out of his 'anchor babies' dilemma where he signed that he would not use the term and now uses, he blamed Asians." Now, just a few minutes later he tweeted yet another message, saying, "Asians are very offended that Jeb says anchor baby applies to them as a way to be more political correct to Hispanics. A mess."

Call it a mess. Call it politics, Poppy. The word war is clearly intensifying. It's only going to get even more intense as we get closer to 2016.

HARLOW: Yes, no kidding. All right. Polo, thank you, as always.

Still to come here, the opening bell on Wall Street. What will happen after yesterday's stunning losses in the market? We may see a beautiful open on Wall Street. We'll take you there live in just a minute.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

HARLOW: Good morning, everyone. I'm Poppy Harlow, in today for Carol Costello. Thank you for being with me.

All eyes on Wall Street this morning. I want to welcome our viewers both here in the United States and around the world. The opening bell is about to ring on Wall Street. U.S. markets today are set to surge. Dow futures up, this number, more than 600 points right now.

That is welcome news for you who saw your nest egg shrink yesterday. It's a big plunge we saw on the market. This is the time lapse of those losses before they added up for the lowest close in 18 months. We don't have that, but it was quite a day on Wall Street. So, why this rebound today?

We will break it down for you with our entire team.