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AT THIS HOUR WITH BERMAN AND MICHAELA
Brexit Fallout: Global Markets Tumble; Aired 11-11:30a ET
Aired June 24, 2016 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATE BOLDUAN, CNN ANCHOR: Hello. I'm Kate Bolduan. The world is reeling shock waves being felt across the globe after a historic vote by the United Kingdom to break from the European Union. Right now, a global market selloff is under way the doubt summited more than five hundred points at the opening bell.
You can see where it stands right now down four hundred seventeen points but clearly a volatile trading day ahead. The British pound dropping to a 31-year low. the UK's stunning vote, a narrow? forty eight to fifty two in favor of leaving the? E.U., prompting the prime minister, David Cameron, to announce he is resigning. Vice President Joe Biden is set to address the vote and the result while traveling in Ireland a short time from now. Also on that side of the pond this morning, Donald Trump, after spending first thirteen or so minutes of his speech of his remarks promoting his new golf course in Scotland, he reacted to the vote as well, calling the result fantastic. Also drawing parallels to his own campaign message. Listen here.
(BEGIN VIDEO CLIP)
DONALD TRUMP: I think it will be a good thing. You are taking your country back. You are going to let people that you want into your country and people that you don not want or people that you do not think are going to be appropriate for your country or good for your country, you are not going to have to take.
(END VIDEO CLIP)
BOLDUAN: There are a lot of angles to this historic vote and the fallout today. Let us get to it all. First, let us get to CNN's business correspondent Alison Kosik she is live at the New York Stock Exchange for us. Alison, what are you seeing?? What are you hearing??
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Kate, you know we are watching the losses accelerate just a little bit from just let us say a half hour before, but certainly not as bad as it could have been. Before the market opened, we had an indication that the Dow could have dropped as much as seven hundred points. That did not materialize. So I have lots of questions I want to bring in Alan Valdez, he is with Silverbear Capital. A lot of people want to know is this a one-day event? Is this a overreaction to what happened, the UK leaving the E.U.
ALAN VALDEZ, SENIOR PARTNER, SILVERBEAR CAPITAL: Yes, you know Wall Street always overreacts. I mean on the upside and the downside and this is probably a one-day event, this kind of movement. I mean we will see volatility the rest of? the summer every time a little news breaks out, but basically it is a one-day event, yes.
KOSIK: Is this the kind of thing though that Wall Street is really going to be watching because the transition for the UK is not going to happen overnight, it is going to take years?? Is this something that is really going to dictate the trade and the trend here on Wall Street??
VALDEZ: Not at all. I mean today was like a sale day at Macy's. The traders took advantage. It was salivating to see it down five hundred points. They were buying. There is going to be about base point, line point where you can get back in. A lot of guys like us were shorting yesterday coming into the market so we did a lot of covering right on the open,? we just covered on the opening and walked away. So actually we are flat right now. And you are seeing I think a lot of traders do the same thing because the vines side up even though we are coming? in a little, but on lighter volume than this morning. So? it is a one-day event and like you mentioned, this is going to take years to unwind.
KOSIK: Alan Valdez, thank you so much. So not a lot of worry here on Wall Street despite all the red on the screen at the moment, Kate.
BOLDUAN: We will be keeping eye on that; we will be keeping close with you, Alison. Thank you so much. So from the New York Stock Exchange?, let us go to the UK where CNN's international diplomatic editor Nic Robertson, he is in London. Nic, a whole lot happened overnight for folks here in the United States, explain and lay it out for us
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes. It certainly did, Kate. I mean the evening began with the final votes being cast, and based on the sort of outlook and predictions by the financial markets they seem pretty comfortable and confident themselves at the vote would be a remain vote, and that was the mood the country went into the vote counting, but? within a couple of hours with the first results coming in, the leave campaign were getting bigger numbers in the northeast of the country. Scotland came out pretty solidly to remain part of the European Union, but much of the rest of the country outside of the capital London, a few of the big commercial cities, was voting to leave, and that is the way the numbers settled by early morning.
About fifty two percent leave, forty eight percent remain. David Cameron wasted no time coming out saying that he was going to resign. He did not set a time frame. What he is trying to do is to create a period of stability, a period of calm transition, support from some of his MP's has been coming forward, MP's who were saying they did vote for Britain to leave the European Union. So right now the political imperative is to promote an aura of stability. But the market leaders that I have talked to here, talked about volatility today and for weeks ahead here in Britain. The question and the value of the sterling is going to be something that is probably going to emerge within a few weeks. They say much lower, significantly lower than it was going into this referendum. So the financial markets the sense in the UK is they might be? feeling this is a one-day event, but the feeling in the UK is they kind of got it wrong going into this as well. There is concern.
BOLDUAN: Yes, uncertainty in financial markets not good but also the political uncertainty of what actually happens next in the short term and long term on the political front very important in the UK. We will get back to Nic as things develop. Nic, thank you so much. He is in London for us. Meantime, Donald Trump, he is embracing the UK vote as a sign, he hopes of things to come in the election here at home. The presumptive Republican nominee he was in Scotland to open his new golf course. You see some video of it from earlier today.
[11:05:01] In the midst of promoting the resort, he also took questions on this historic vote. He had already come out in support? of the UK leaving the E.U.. Scotland we should note, where he was, voted two to one to remain in the E.U.. Sara Murray is in Scotland traveling with the Trump campaign. Sara, Donald Trump covered quite a lot in that press conference this morning.
SARA MURRAY, CNN CORRESPONDENT: That is right. He did cover quite a lot. And in between promoting his golf course at Turnberry, he did take some time to applaud the BREXIT saying he feels like the UK made the right move and if there are economic repercussions, that those will sort of all even out in more time, and he did say that he feels like there is a similar angst, anxiety playing out here in the UK about the economic situation as well as about immigration as we are seeing from voters in the United States. Take a listen on what he had to say.
(BEGIN VIDEO CLIP)
TRUMP: I really do see a parallel between what is happening in the United States and what is happening here. People want to see borders. They do not necessarily want people pouring into their country, that they do not know who they are and where they come? from. They have no idea. And I think, you know, not only did it win, but it won by a much bigger margin than it thought it? would happen. It is the will of the people. You know it is not a question of approaching it. It is the will of the people. It is always the will of the people. Ultimately that wins out.
(END VIDEO CLIP)
MURRAY: So you heard in some ways Donald Trump actually feels like this is a positive sign for his own presidential campaign, feeling like there is sort of a similar strand of concern playing out here as well as in the United States. This was an interesting backdrop because, of course, Scotland voted to remain as part of the European Union not? to leave. He essentially said Scotland will have to work out for themselves what they want to do, If they want to have their own referendum to stay with the UK or rather to remain part of the European Union, but certainly a much different press conference than maybe Donald Trump was expecting to hold here at Turnberry, Kate.
BOLDUAN: Absolutely. Sara Murray, thank you so much. We will check back in with you. Appreciate it. A lot to discuss clearly on the global impact and the impact on the 2016 race. Joining me now to discuss is Rana Foroohar, she is a CNN global economic analyst and assistant managing editor at "Time." on economics and business, and also author of the new book "Makers and Takers," CNN's Phil Mattingly who not only covers politics for us, he also covers financial news for years.
Michael Caputo he is a former advisor to Donald Trump and Steve Elmendorf former deputy campaign manager for John Kerry's presidential bid and a Hillary Clinton supporter. Doug Heye is joining us as well, CNN protocol commentator, former communications director for the R.N.C. and for the sake of this conversation we should note he also has done some work with Boris Johnson's office when he was mayor of London. Those introductions can sometimes exhaust me. Let us get to the real point of this conversation now. Rana, to you, draw from this book that I am now walking through, "Makers and Takers." What does this mean?
RANA FAROOHAR, CNN GLOBAL ECONOMIC ANALYST, ASSISTANT MANAGING DIRECTOR "TIME," AUTHOR "MAKERS AND TAKERS": Well you know, I think that what drags the vote underscores there is a complete trust gap between the elites in many countries, the U.S., the U.K., many other countries, and the mass populations. I mean if you look at the way in which the markets missed this, the markets were pricing in about twenty five percent chance but this is going to happen. Sterling was rising yesterday.
So elites in Washington and Wall Street and many capitals around the world did not expect this to be the vote. But there is a huge gap between where the markets are and where main street is both in the U.K. and in the U.S., I see a lot of crossover there with a group of people that feels that the rules of globalization are not working for them. That they want things to be done? differently and they do not trust establishment -- political figures to do that.
BOLDUAN: Phil, what do you think? Kind of to Rana's point, how much of the market reaction, brought -- watching it be kind of volatile today here, how much market reaction do you think is the shock of the result or the actual vote, how the vote turned out, that they voted to leave the E.U.?
PHIL MATTINGLY, CNN POLITICS AND FINANCIAL NEWS CORRESPONDENT: I think Nic mentioned in his report, Rana as well this, this was not priced in. While the polls over the last couple of weeks were very, very close, everybody you talked to or been out to lunch with, lobbyists and bankers are paying close attention to this just assumed remain was always going to play.
But now that they have decided to exit, the very difficult technical details of this also play. How does the U.K. work with their $575 billion in trade with the rest of the E.U. Can U.K. banks, which are essentially the financial services center of Europe, can they actually even, do business with the E.U. How do U.K. companies deal with the $13 trillion single market in the E.U. All of these are very very real questions that do not have easy answers. Kate, you hit on it, uncertainty? is the biggest problem in financial markets. No certainty is coming anytime soon. -- Three months before even Cameron triggers this, and then he leaves, then two years of negotiations over this. So if you're a company domiciled in? the U.K. or really anywhere in the E.U. or even in the United States and you have international business, you have? no answers anytime soon,? that is also what is driving us.
BOLDUAN: Fascinating. And also when you kind of look at the political front, Doug, can you imagine the day? when the British Prime Minister resigning is not the biggest headline? I think that is one thing that kind of strikes a lot of us today.
[11:10:01] It also gets to, if you look at how this all began, is this a problem of David Cameron's own making?
DOUG HEYE, CNN PROTOCOL COMMENTATOR, FORMER COMMUNICATIONS DIRECTOR FOR THE R.N.C.: Well, no, I don't think it is a problem of David Cameron's own making. I can tell you anecdotally two years ago this month when Eric Cantor lost, obviously I worked for Eric Cantor then, I explained it to friends in London and overseas as if we had lost to somebody from the U.K. Independence Party, which was obviously a big spur of the leave movement. The fractures and fissures that we have talked about for the past two years, four years that the Republican Party has dealt with -- whether you want to call them the tea party or the house freedom caucus, the conservatives in the U.K. have dealt with these exact same issues. Our politics often mirror each other? this really shows how true that is. It is also while we are talking about Donald Trump and his weighing in and what it means for 2016.
BOLDUAN: You know, Phil hit on trade, Steve and you have a lot of experience in trade. You were deeply involved in major economic policy debates including NAFTA back in 1990's. President Obama, he hit on trade a lot when he came out in April I think it was when he was standing side by side with David Cameron saying that he wanted the U.K. to remain. I want to play a little sound bite just for our viewers of what President Obama said then.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: Our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done and the U.K. is going to be in the back of the queue.
(END VIDEO CLIP)
BOLDUAN: Is that really how this is going to work? The U.K. is really moving to the back of the line now? That sounds amazing.
STEVE ELMENDORF, FORMER DEPUTY CAMPAIGN MANAGER FOR JOHN KERRY'S PRESIDENTIAL BID and HILLARY CLINTON SUPPORTER: Well, it is obviously going to have a big impact on their relationship with the U.S. as a trading partner. You know, I think people should calm down though. I think you know, as you said, as your other guests have said, I think a lot of the reaction here is surprise. There is a lot of uncertainty because it was not priced into the market.
People were caught unaware. But over the next twenty four hours, forty eight hours, several days and weeks, you know, I think things will adjust. I think there is a danger in over reading too much into what this means for the U.S. elections. If this was a referendum in Great Britain between two different points of view, we are going to have an election in the? United States between two individuals who are going to -- we are going to learn a lot about in the next five months and I don't think it necessarily translates that this means one thing or another for the U.S. elections.
BOLDUAN: It seems one of the only people maybe not surprised along with a lot of voters in the U.K. is Donald Trump, Michael.
MICHAEL CAPUTO, FORMER ADVISOR TO DONALD TRUMP: It's interesting to me that people keep saying he was lucky. He was not lucky at all. I heard him talking about this for days, and when people were telling him when do you want to schedule your trip to Scotland? It is like this is it.
And he was the one that predicted it. Now, he is not some kind of soothsayer, he is just somebody who is tapped into the vein of the populist movement. I think while there is going to be two different people on the ballot in November here, it is also two different ideas. It is Americanism versus Globalism. It is very similar to the question that was on the ballot yesterday in Britain, and I think you might see a very similar result.
BOLDUAN: Is this coincidence?? Did Donald Trump want to find himself smack dab in the middle of this because when the vote and the result has? been known for a very long time?
CAPUTO: I have known Donald Trump a little while,? there is no coincidence in anything he does ever. And I will tell you, he was there for his kids. This trip was always about showing support for his kids, and? their business. They are now running his business, so when he said to the reporters, do you want to come along? They ganged right into the airplane and they went on it. Now, this is something that -- it is not just an accident. It is not just an accident but it is really about how it translates into America for the next couple months and if Donald Trump hits on the same -- you know, the same kind of differences that they hit on in Britain, you know, are you for America or are you for the globalism. I mean, let us face it, globalism is on the wane,? there is no question about that. Today shows you that more than ever before and I think it is on the wane here in America too.
BOLDUAN: Go ahead.
HEYE: If you listen to his message in his press conference this morning, it was about this was going to be good for his golf courses and selling time shares. It seemed to me the classic example of Trump with the wrong message in a particular moment. He sort of hit all the wrong notes, and so I don't think this? is going to help him --?
BOLDUAN: -- I would want to hit on that in a second. But globalism on the wane. One of the big uncertainties is the domino effect. What do you think?
FAROOHAR: Well it is interesting, I mean global trade flows actually have been down. There is a lot of concern about global mobility. I mean you cannot deny that people are taking? a second look at the status quo globalization. That said, there is a lot of other trends here, I mean, people are doing that in? part because the recovery is stagnant. We are still in the longest, weakest recovery of the post- war era. I think if the economy was moving at a better clip, you would not have some of this concern. There are also some bright spots.
I mean you know digital trade flows are up. People are communicating across border more than ever before. But I think what this is really about is globalization as a proxy for economic and security both in the U.S. and in the U.K., there are a lot of people that feel that the recovery has not reached them, and so that makes the question the global status quo.
BOLDUAN: A bad day for David Cameron is a good day for Boris Johnson. Everyone knows him and remembers him very well as the outspoken Mayor of London.
[11:15:01] Do you think -- and he also was one of the leaders of the leave movement. Do you think we are looking at the next Prime Minister?
MATTINGLY: The guy has great hair. --
FAROOHAR: From one man with good hair to another.
MATTINGLY: No, I do not think if you talk to people that know Boris Johnson, have talked to him repeatedly over the years, there has been no question that he has always been eyeing the possibility of it. I think there were a lot of questions, maybe two or three years ago how serious he was as a politician, how serious he was as an individual. That seems to have dissipated in the last couple of years. It would be fascinating to see him in that race, but I do not think there is any question that he wants it.
BOLDUAN: Doug, I want to get you to weigh in on that because obviously you know him. - You worked at his office. He also said something interesting earlier today and reacting to this. He said, "This does not make the U.K. any less European." One of his quotes that struck out to me, "We cannot turn our backs on Europe, we are part of Europe."? I feel like that was what just happened though.
ELMENDORF: Well, I think he is trying to take a mature step forward. I think he also knows that he has to be as people were projecting maybe their hopes or their predictions on him, that he has to be very careful in what he says. Certainly he puts himself in the? right place at the right time.
I also think he is somebody who is a real truth teller. When he made this move to support the BREXIT, it was a really big deal in the U.K. but we have also seen him be critical of Mitt Romney four years ago. He was critical of Donald Trump last year. He is somebody who tells the truth and that is one of the reasons that I think so many people in London and the United Kingdom react so positively to him.
BOLDUAN: Stick around. We will take a pause real quick but we are going to talk about the politics what this could mean for the election here at home. --? we are going to read into it, Steve. Breaking news we are going to continue, follow the breaking news. We
are watching U.S. markets, watching your 401(k) the U.S. reaction to the historic BREXIT vote. Around the world stock markets are facing record losses. Four hundred forty one points down right here. Here in the U.S. right now, we are watching it, we will continue to do so. Ahead, we will also going to talk to Donald Trump's senior trade adviser about this historic day. Why Donald Trump says running the U.S. is a lot like running one of his golf courses. We will be back.
(BEGIN VIDEO CLIP)
DONALD TRUMP: People will say the country is not a golf course, it is not, but you would be amazed how similar it is. It is called a place that has to be fixed and there is nobody that knows how to fix things like me and there is nobody that knows how to build like me.
(END VIDEO CLIP)
BOLDUAN: Donald Trump, the one American voters trust more with the economy according to a recent CNN poll, now embracing the British exit from the European Union. Joining me to discuss, Dan DiMicco, he is a senior trade adviser to the trump campaign and retired chairman and CEO of Nucor. Dan, thank you so much for joining me.
DAN DIMICCO, SENIOR TRADE ADVISER TRUMP CAMPAIGN, RETIRED CHAIRMAN AND CEO OF NUCOR: My pleasure. Thanks for having me.
BOLDUAN: Of course. So you heard Donald Trump right there from when he was standing in Turnberry this morning. In this moment following a historic vote in the United Kingdom, he is standing in Scotland, he holds this press conference. He says the U.S. is similar to a golf course. Explain that one to me.
DIMICCO: Well, I do not play golf so I am probably going to punt on explaining that on there. But what I heard him say through my ear phone was that golf courses have to be continually worked on and fixed, and that he knows how to fix things that are not working and he has done many of those things, including some of the issues that revolve around golf courses in his career. I know him to be somebody who gets things done. You do not become a successful CEO and build a business like he has without surrounding yourself with really good people, and that is what he is going to do.
BOLDUAN: Here is a little bit more of what Donald Trump said in this press conference this morning. One thing that has stuck out to a lot of people. He was asked about the value of the British Pound dropping in the aftermath. Listen to this, Dan.
(BEGIN VIDEO CLIP) DONALD TRUMP: Look, if the Pound goes down, they are going to do more business. When the Pound goes down, more people are coming to Turnberry, frankly.
(END VIDEO CLIP)
BOLDUAN: Donald Trump reacting to the British pound dropping saying that it is good for him personally. Dan, when I heard that, I thought that does not sound like? I am with you American people slogan that he pitched pretty successfully this week. Is that the position of the Trump campaign?
DIMICCO: Well, I think it definitely does talk to that because what he is saying is that just like with the U.S. dollar, when the dollar weakens; you have the opportunity to export more business to the world, more products. The weakening pound, currency has go a two-edged sword to it. You want it to be strong but you do not want it to be too strong.
You want it to be weaker so you can be globally competitive but not too weak. Right now, there is an overreaction taking place in the world, probably not -- unlike some of the ones we have seen in our history in the past? and the pound will balance itself back out as people get? this over reaction and emotional response to what the English people are doing is taking back their sovereignty.
BOLDUAN: Alright but Dan, when you look at -- when he is saying this just in the moments after this vote comes in, I mean, do you have any concern it is going to look like he is rooting for the British pound to tank for the success of the Turnberry resort??
DIMICCO: Not at all, not at all. That may be some people's interpretation, maybe yours, but, no. What he is talking about is the very, very well-known impact of currency movements and how they can help or hurt a country's ability to create jobs and to bring business in, and, you know, with a weaker currency, it is going to bring a lot of business in and hopefully counteract what might be lost otherwise.
BOLDUAN: Looking real quick, the election here at home, got to get your take on this. Bernie Sanders, he was on CNN this morning, and he said this to Chris Cuomo about the possibility of Bernie Sanders supporters supporting Donald Trump. Listen here.
(BEGIN VIDEO CLIP)
BERNIE SANDERS: He does not understand the people who have supported me. The people who have supported me are not going to vote for a bigot, somebody who has as the cornerstone of his campaign insulting Mexicans and Latinos and Muslims and women and veterans and African- Americans. That is not the candidate that I believe that people who voted for me will support.
(END VIDEO CLIP)
[11:25:01] BOLDUAN: People who have supported me, Dan, are not going to vote for a? bigot. I mean if this is how Bernie Sanders talks about Donald Trump, do you? really think that you can win over Bernie Sanders' supporters to your campaign??
DIMICCO: Well, listen, there are a lot of reasons why people will or will not vote for Donald Trump. I imagine there are a lot of people in the Bernie Sanders camp that value things like trade, the economy, creating good jobs, getting government out of the business of ruling our lives, and there will be some that would not. You know people were projecting that with this U.K. vote that it was going to be an overwhelming landslide for staying in the U.K., and they were wrong.
I think what people should be learning from was just taking place in the U.K. and what is taking place throughout the Trump primaries and will take place now. It is that voters have their own mind, and they will weigh what they think is important, and they will vote for who they choose to. I do not claim that they are going to en masse move to trump or not, and I think for Mr. Sanders to say that, I understand why he does, but there is no guarantee that they are going to follow that just because he says it. At the end of the election, we will know.
BOLDUAN: Do you think does Donald Trump need Bernie? Sanders supporters to win?
DIMICCO: You know, he needs all the supporters that he can just like Hillary does. I got to tell you though, as the senior trade adviser, these are some very interesting questions your putting my way because we have not talked about trade once.
BOLDUAN: I think it all kind of is involved in that. We are looking at the market reaction; we are looking at how Donald Trump reacted. Where it is actually interesting a lot of folks are saying how Donald Trump reacted to this vote and this moment when he was standing on that golf course in Scotland. Don't you think that was interesting??
DIMICCO: Well, here is what you should be focusing on with the senior trade adviser. Why are Trump's trade programs right? And I am here to tell you they are absolutely the correct thing to do. We have got to be tough negotiators, free trade has been? Trumped, excuse the pun, but trade mercantilism, from countries like China, free trade is a great thing but it has been destroyed by trade merchant solution, predatory pricing.
Act of Protection -- at home in China and other places in the world. He is going to negotiate from our positions of strength to get? back free trade as being the way things are really done in the global trading community as opposed to succumbing to the things free trade was designed to eliminate, which is massive trade mercantilism, state- owned enterprises and government ownership of the economy.
BOLDUAN: Dan DiMicco, thank you for getting that in. We appreciate your time.
DIMICCO: You bet. BOLDUAN: Coming up for us, Hillary Clinton, she had come out in favor of the U.K. staying in the European Union. How the former Secretary of State and now presumptive Democratic nominee is reacting this morning to the historic vote overseas, how does this vote impact her campaign, Her campaign's press secretary is joining us. Also right now the Dow is down we are looking at four hundred seventy nine points. Right now, our breaking news continues ahead as markets around the world react. We will be back.