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Britain Votes to Leave the European Union; Presidential Candidates Differ in Reaction to Brexit Vote; David Cameron Announces Resignation; Global Leaders React to Brexit; Aired 10-10:30a ET

Aired June 24, 2016 - 10:00   ET

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


ANNOUNCER: This is CNN Breaking News.

[10:00:34] JOHN BERMAN, CNN ANCHOR: All right. Good morning, everyone. John Berman here in for Carol Costello. Thanks so much for joining me. Hope you had a good breakfast.

This will be a long day. A historic morning here. The United Kingdom voted to leave the European Union. The shockwaves truly global, political, and financial. That's a look at the Dow Jones Industrial Average right now, down 393 points. Now that is a bad morning. It has been worse this morning. It was down more than 500 points and it could be a lot worse. This is not nearly as bad as some folks expected.

World -- around the world, stock markets, though, they had much bigger losses, some nearing record losses. Britain's currency, the pound, plunged to its lowest level in 31 years. Major political implications for some of the most well-known leaders in the world. Britain's prime minister David Cameron, he announced he is resigning. He will leave office sometime this fall. He placed a huge political bet on this referendum and he lost, and he lost big. Someone else will have to lead the UK out of the European Union.

What about U.S. politics? The presumptive Republican nominee Donald Trump, he happened to be in Scotland this morning to open a golf course. He celebrated his new greens and he also celebrated the British vote. What does the vote there mean for the vote here? Are there messages on immigration, border control, an anti-establishment anger?

This is a global story with huge implications. We are everywhere this morning. Want to begin with CNN's Chris Frates.

Chris, we just got reaction from Hillary Clinton. What are you learning?

CHRIS FRATES, CNN CORRESPONDENT: We did, John. And this point that you're making that this has ripples all across the world is particularly true here in American politics. Hillary Clinton putting out a statement and I want to read a bit of that to you right now. She says, quote, "We respect the choice the people of the United Kingdom have made. Our first test has been to make sure that economic uncertainty created by these events does not hurt working families here in America. We also have to clear America's steadfast commitment to this special relationship with Britain and the transatlantic alliance with Europe.

"This time of uncertainty only underscores the need for calm, steady, and experienced leadership in the White House to protect Americans' pocketbooks and livelihoods to support our friends and allies, to stand up to our adversaries, and to defend our interests. It also underscores the need for us to pull together to solve our challenges as a country, not to tear each other down."

And there, John, you hear a lot of what we've heard from Hillary Clinton on the campaign trail in that statement saying that you need experienced, steadfast leadership. She's been making the case that Donald Trump would be a terrible choice as president to lead the world's economy, and then she's been making the case that the world's economy would go into recession if he were to become president.

And you also hear her talk about this time of uncertainty and that you need to pull the nation together. We need to come together as a nation. That has been largely her message. If you contrast that with what we heard from Donald Trump, you know, he celebrated the UK leaving the European Union. You know, he made the point that the UK had declared their independence from the European Union and that America will have its time to declare its independence from the global elite, from the Washington elite, and to take back their own country.

So this is playing out here in America much like it did in Europe, and you're seeing these two separate messages from Donald Trump and Hillary Clinton today. It's going to reverberate through American politics and the campaign trail I imagine for days and weeks to come here, John.

BERMAN: Indeed. Donald Trump certainly hopes it reverberates in the U.S. like it did in the UK. An anti-elite moment to be sure in Europe. He's hoping that translates to the U.S. vote as well.

Chris Frates, thank you so much.

The implications in the UK cannot be overstated. A prime minister, it cost him his job. The role of the UK in Europe, fundamentally changed starting now. Our international diplomatic editor Nic Robertson is outside the prime minister's residence at 10 Downing Street in London.

Good morning, Nic.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, good morning, John. Well, David Cameron took a huge political gamble when he decided to call for a referendum on in-out of Europe. He did it to placate the growing number of right-wing skeptics in his party, right- wing skeptics skeptical about Britain's place inside the European Union, skeptical of the benefit that it would bring them, and it's a gamble that he seems to have lost.

[10:05:03] That's why just a few hours ago he stepped out of the doors of Number 10 Downing Street, his home right here behind me in the heart of London, and had these words to say.

(BEGIN VIDEO CLIP) DAVID CAMERON, BRITISH PRIME MINISTER: And I will do everything I can to help. I love this country, and I feel honored to have served it, and I will do everything I can in future to help this great country succeed.

(END VIDEO CLIP)

ROBERTSON: He really didn't appear to see this coming, not in the last closing days of this referendum campaign. The polls were indicating that perhaps his Remain campaign that he was heading was going to hold on, was going to be able to stay course and win the argument.

You could hear the emotion in his voice there, and even as the polls closed last night, he had a letter of support from 86 of his own conservative MPs who had all come out in favor of leaving the European Union against David Cameron's position. They were saying that they would support him and all of this to try to create a measure of stability, so come the morning, come this morning the financial markets would not go into turmoil whatever the outcome.

We've seen the way that they've reacted. However, we've also heard today from one of the main leave campaigners, David Cameron's principal political opponent, the former mayor of London, the flamboyant sort of right-wing leader, if you will, of the Conservative Party, Boris Johnson. He has said there's no haste for David Cameron to leave. This is what he said.

(BEGIN VIDEO CLIP)

BORIS JOHNSON, FORMER MAYOR OF LONDON: This does not mean that the United Kingdom will be in any way less united. Nor indeed does it mean that it will be any less European. We cannot turn our backs on Europe. We are part of Europe. Britain will continue to be a great European power. Leading discussions on foreign policy and defense and intelligence sharing, and all the work that currently goes on to make our world safer.

(END VIDEO CLIP)

ROBERTSON: So those words in huge contrast to what Boris Johnson has been saying in the last few days which is take back control from Europe, take back control of taxes, of finances, of everything that European manages in Britain, the laws. Take back control of it all. That's been his recent message.

Now, of course, toning it down. He's won his argument, but he needs to have those financial markets stabilized as soon as possible. Otherwise the Britain that he proposes for the future of this country is one that could be quite shaky in the coming months -- John.

BERMAN: All right. Nic Robertson for us in front of 10 Downing Street in London. Thanks so much, Nic.

What about the markets? It's been a fascinating morning. We're about 37 minutes into trading. The Dow had been down more than 500 points just after the Opening Bell, but now climbing up a little bit, now just down 380 points. Not a good morning but certainly not as bad as it could be.

Alison Kosik is on the floor of the New York Stock Exchange.

Alison, where do things stand now?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: John, the Dow certainly cutting its losses. We did see the Dow down as much as 539 points earlier. You are seeing the sell-off kind of settle in at this level at 381 points lower.

We're also watching oil prices which are actually down over 4 percent as well. Keep in mind oil is priced in dollars, so you're seeing investors flee oil. And where are they going? They're going to safe haven assets like gold. They're going to buy U.S. treasuries. Gold we're seeing up more than 5 percent. U.S. treasuries, you're seeing investors pile in there, pushing yields lower. Interest rates on the 10-year note are seeing their biggest single day fall since 2011, and what does that mean? Overall it's pushing interest rates lower.

It means your mortgage rates could go even lower than where they are now which would make it even cheaper than it is now to borrow money to go ahead and finance your house. Part of what could be calming the market, the Fed came out with a statement today basically joining other global central banks and the UK, the Eurozone, basically saying they stand ready to provide liquidity. They stand ready to provide support. That safety net certainly calming the markets -- John.

BERMAN: All right. Alison Kosik, thanks so much.

I think I have a trader on the phone right now. I want to bring in Allen Valdez, he's the director of floor trading at DME Securities.

Allen, are you on the phone?

ALLEN VALDEZ, DIRECTOR OF FLOOR TRADING, DME SECURITIES: Yes. How are you?

BERMAN: I'm OK. The real question is, how are you? And how are the people you're talking to?

VALDEZ: Well, you know, we were down about 500 but we kind of expected that. I mean, once we knew which way the vote was going to go, you knew the markets were going to get rolled, and we were actually buying on the opening because, you know, the markets always overreact either one way or another and sure enough they sold down so much we had to buy. It's like a sale day. So we bought on the opening because let's face it, this thing is going to take years to play out. We won't know the full effects for quite a while.

I think what's most concerning now to traders because EU is our biggest trading partner is what happens next.

[10:10:04] I mean, is France's national front going to get stronger? Is Italy's five-star movement going to get stronger? So, I mean, that could be a huge implication because at the end of the day only export about 5 percent, a little under, actually, to Britain. So it's not a major move to American markets. It's just this knee-jerk reaction to the news.

BERMAN: No, it is interesting. I mean, this has global implications. This is not what U.S. investors, not to mention politicians thought would happen. But, you know, the bottom is not falling out of the market this morning. I mean, 339 points is not a good morning but it's not nearly as bad as it could be. Are you somewhat reassured by this response, Alan?

VALDEZ: Yes. You're spot on. It could have been a lot worse, but we really thought it would bottom out down here in this range and then rebound because there's still a lot of cash on the sidelines and like I said, in the long run this doesn't really affect -- in the short run this doesn't affect American markets that much. We have to rebound, find the bottom here. It is a Friday. So like your housing instead, a lot of us are covering and just going into gold right now to play safe haven for the weekend, and see where it opens on Monday. But overall it could have been a lot worse and things are looking OK. No panic on the floor, put it that way.

BERMAN: No panic on the floor. Not chaos, not a happy time down there in the New York Stock Exchange --

VALDEZ: Anytime you're down 500 points on an opening, it's not a happy time but then again it's like a sale day at Macy's or something. You're buying a lot of stock that's a lot cheaper than it was the day before. So we piled up on some good international names and we'll see where that goes.

BERMAN: Well, good luck. It is still early. A long way to go to get through the today.

Alan Valdez, thanks so much.

Let's continue this discussion right now. I want to bring in CNN global economic adviser and "TIME" assistant managing editor Rana Faroohar, along with the CEO of Motley Fool Singapore, David Kuo. Thanks so much for being with us.

You know Rana, you know, we're just watching the markets here this morning, down 340 points. You know, I think there was a collective gasp overnight from investors because the polls had showed that the UK was going to vote to remain.

RANA FAROOHAR, CNN GLOBAL ECONOMIC ANALYST: Yes.

BERMAN: I think a lot of people thought when they got to the voting booth, the UK, they wouldn't do this.

FAROOHAR: Yes.

BERMAN: They wouldn't have the stomach to do this. So I think there was some surprise this morning.

FAROOHAR: Absolutely.

BERMAN: But this isn't chaos. This is not nearly as bad as things could be.

FAROOHAR: It's not, it's not, but it really shows you how the markets have been getting all kinds of political populism wrong. So the markets are pricing in about a 25 percent chance for a leave vote. Sterling was actually rising yesterday. People were really thinking this wasn't going to happen. And the markets have been wrong about so many different kinds of political populism. They've been wrong about Trump. They've been wrong about far right and left politics in Europe, and so I think that what this says is there is a huge gap both in trust and in understanding between the elites, the people on Wall Street, the people in Washington, and between mass populations in a lot of countries.

BERMAN: This is a decidedly anti-elite vote.

FAROOHAR: Absolutely.

BERMAN: That just happened in the UK.

FAROOHAR: Absolutely.

BERMAN: The question politically speaking is, does that translate across the Atlantic to the United States?

David, you know, I want to ask you one of the things we always say is the markets hate uncertainty. This morning they seem not as bad as they could be with it down 350 points. It could be worse. One of the issues here, though, is the uncertainty after this referendum. This continues for days and weeks, if not years. You know, what happens to Scotland. How does the UK actually extricate itself? What happens to three million Europeans living in the UK? What happens to one million people from the UK living in Europe. These are unknowns.

DAVID KUO, CEO, MOTLEY FOOL SINGAPORE: Well, they are unknown, John, and that is why you've got to focus on the company rather than focus on politics, and I think one of the big dangers we have, you know, as this episode has shown, is that people tried to mix politics with economics. And, you know, I like the phrase you used earlier on which was organized disappointment. I think it was organized. Organized disappointment. And I think the disappoint really was with themselves because they got it so wrong.

They were placing the wrong bets and they were betting, you know, that sterling was going to be OK. And I think what they actually found this morning -- they got it very badly wrong. And then, of course, the market sold off. But ultimately what they did do was to go back into the market and say, which other cheap company is there? Is there anything worth buying? So even when you have to look at the UK, not all companies in the UK actually have fallen. Some of them have actually risen today which is a testament, you know, of how strong the market is right now.

BERMAN: Rana, you know, what does this mean for the rest of the summer at this point? If you're looking at this today, if you're looking at the markets today, it's going to be a little bit of a nutty summer.

FAROOHAR: It's going to be a bumpy summer. You know, it's already been a bumpy year much more so than last year. I think we're in, in the next few days, weeks, even months, more volatility. If you think about all the events that you have coming up, Spain has an electoral vote on Sunday, there's a lot going on in Europe. You know, we've got our presidential politics continuing. And so any time the market gets a sense that there is going to be more of a populist resurgence, that there's nationalism on the rise, that there be -- maybe a group of people that feel like globalization is not working for them and they want to turn it back, you're going to see volatility. You're going to see markets get anxious.

[10:15:07] BERMAN: And the question will be, if investors, you know, and the so-called elites, do they get this message?

FAROOHAR: Yes.

BERMAN: And how do they respond to that message?

FAROOHAR: That's absolutely right. That's the big question.

BERMAN: All right, Rana Faroohar, David Kuo, thanks so much. Appreciate you being with us.

Still to come, Donald Trump, he talks golf and this vote in the UK. We're going to talk about what this all means for the U.S. political race. That's coming up.

(COMMERCIAL BREAK)

BERMAN: All right. John Berman here. The breaking news this morning, after the vote in the United Kingdom to leave the European Union, the Dow down about 384 points right now. Not a good morning but not as bad as it was. It was down more than 500 points after the Opening Bell. And there have been a lot worse days than this. The market fairly stable right now down about 380 points. We're going to keep our eye on that.

What about politics? Well, you know, David Cameron, the prime minister of Great Britain, he's a strong ally to the United States, a good friend of President Obama.

[10:20:06] I don't think either of them thought that David Cameron would be out of office before the president, but that is what is going to happen. The British prime minister announced he is resigning, he'll leave office this fall. Just part of the implications here for the U.S./UK relationship.

CNN's Suzanne Malveaux live at the White House with the reaction there.

Good morning, Suzanne. SUZANNE MALVEAUX, CNN NATIONAL CORRESPONDENT: Good morning, John.

Really an extraordinary development overnight. The president has been notified and he's been keeping up on all this. We do expect that he's going to reach out to the prime minister later today. But we did just get a statement because what we've seen from the administration is really this coordinated messaging effort trying to diminish and downplay any kind of alarm or panic that might occur when you see the stock and see the markets reacting to what is taking place here, this news.

The president releasing the statement and the first line is almost identical to all the other principals who have come out and made statements saying that the people of the United Kingdom have spoken and we respect their decision. The president going on to say that the relationship between the United States and the United Kingdom remains strong but then also making this point which is really critical saying that the United Kingdom's membership in NATO remains a vital cornerstone of U.S. foreign security and economic policy, saying that the United Kingdom essentially is not going it alone, that it has very much a vibrant role in the global community.

Also hearing from Treasury Secretary Jack Lew saying that they are looking at the markets, that there are still mechanisms that make the markets -- the international markets and UK markets stable and that that is going to be something that they will be looking at but they want to reassure people that this is not going to be devastating but certainly disappointing, John.

BERMAN: Yes, we've heard paper statements or read paper statements from the president, from the Treasury secretary, from the Fed as well, all trying to reassure investors not just in the United States, but around the world.

Suzanne Malveaux, thanks so much.

What about some of the people who want to be the next president of the United States? Donald Trump, by scheduling, you know, a bit of luck for him, he was in the United Kingdom this morning. There you see him here at his golf course in Turnbury, Scotland. He was there to reopen his golf course there. And yes, after promoting the new greens and the refurbished hotel, he did take questions about the UK referendum, and he tried to compare it to the situation here in the United States. Listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: I think people really see a big parallel. A lot of people are talking about that, and not only in the United States but other countries. People want to take their country back. They want to have independence in a sense. They want to take their borders back. They want to take their monetary back. They want to take a lot of things back. They want to be able to have a country again. So I think you're going to have this happen more and more.

(END VIDEO CLIP) BERMAN: Donald Trump wearing a "Make America Great Again" hat as he reopens a golf course in Scotland which, by the way, just voted to remain part of the European Union even as the UK voted to leave it.

CNN's Sara Murray there for the whole thing. Good morning, Sara.

SARA MURRAY, CNN POLITICS CORRESPONDENT: Good morning, John. Yes, it was quite a day. Donald Trump covered a lot in this press conference this morning. In addition to talking about the sprinkler system here, as you pointed out, he also went over what he felt like was a good move by the UK, the decision to leave the European Union. He drew a lot of parallels between anger and angst over immigration and over the economy here saying that that's what the voters in the U.S. are feeling like too, and that's why he feels like he's done so well so far, and could continue to do so well in the run-up to the vote in the U.S. in November.

But he also made some comments that might not sit well with voters here in the UK. He pointed out that if the pound takes a hit, that's good for his businesses in Turnbury. It means more international travel. Obviously that not what residents here are hoping will happen to their currency but we've been seeing plenty of turmoil in international markets this morning.

And he was also very critical of Hillary Clinton and of President Obama. Of course President Obama wanted the UK to remain within the European Union. He essentially said that these are people who just don't get it right now, they don't get the feeling of the country, whether we're talking about the UK or whether we're talking about the United States -- John.

BERMAN: All right, Sara Murray for us. She was there at the golf course in Turnbury in Scotland to see it all. Thanks so much, Sara.

Want to talk much more about what this means for the 2016 race here in the United States. Our panel of experts joins us next.

(COMMERCIAL BREAK)

[10:28:53] BERMAN: John Berman here in for Carol Costello. Thanks for being with us. Quite a morning. Let's quickly check the Dow. Now down 380 points. It has been a rocky morning. This after the United Kingdom voted to leave the European Union. The Dow opened and dropped nearly 500 points shortly after the opening bell. And it's off those losses now. Down about 380 points. Not a good morning but we have seen much worse and we are told it is not chaotic on the floor right now. Sort of organized disappointment at the stock market right now. They are adjusting to this new reality.

Well, what about politics? We heard from Donald Trump just a short time ago. Hillary Clinton has also weighed in on the vote in the UK. She released this statement saying, "We respect the choice the people of the United Kingdom have made. This time of uncertainty only underscores the need for calm, steady, experienced leadership in the White House to protect American pocketbooks and livelihoods to support our friends and allies, to stand up to our adversaries and to defend our interests."

I want to bring in CNN political commentator Mary Katharine Ham, she's a senior writer for the "Federalist," CNN political commentator and Democratic strategist Maria Cardona, a Hillary Clinton supporter, Arkansas attorney general Leslie Rutledge, historian and professor at Princeton University Julian Zelizer.