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Brexit Fallout. Aired 15-15:30p ET

Aired June 24, 2016 - 15:00   ET

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

[15:00:02]

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN NATIONAL CORRESPONDENT: What is that like as an officer?

OFC. ROBERT SPARKS, SANTA MONICA POLICE DEPARTMENT: It's hard. It's hard to know that you took that life. Whether it was, I mean, again, you can compartmentalize and say, I needed to, I had to to protect other lives.

LAH: You realize how many lives you've saved, both of you?

SPARKS: Yes, well, each and every one of those rounds could have been a fatal round.

CAPT. RAY BOTTENFIELD, SANTA MONICA COLLEGE POLICE DEPARTMENT: I know without a doubt that we were supposed to be there and that we saved a lot of lives.

LAH (voice-over): Kyung Lah, CNN, Santa Monica, California.

(END VIDEOTAPE)

BRIANNA KEILAR, CNN ANCHOR: Top of the hour now. I am Brianna Keilar.

We are back with the fallout of the U.K.'s historic vote to leave the European Union, a divorce that will end a partnership that lasted more than four decades. We're watching the markets approaching record losses at this point, the Dow down almost 560 points there, as economic shockwaves ripple across the world.

As the closing bell fast approaches, I can tell you, your nest egg is probably shrinking. Wall Street and your 401(k) have taken a beating all day, the Dow down more than five -- fell -- the Dow fell more than 500 points after the opening bell. The question is, will it get to 600?

And the implications of this so huge that Britain's prime minister, David Cameron, who fought for the U.K. to remain in the E.U., just announced his resignation. President Obama, who had Cameron's back, imploring people to vote stay, he spoke just a short time ago.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A few hours ago, I spoke with Prime Minister David Cameron. David has been an outstanding friend and partner on the global stage. And based on our conversation, I'm confident that the U.K. is committed to an orderly transition out of the E.U.

I do think that yesterday's vote speaks to the ongoing challenges that are raised by globalization. But while the U.K.'s relationship with the E.U. will change, one thing that will not change is the special relationship that exists between our two nations. That will endure.

(END VIDEO CLIP)

KEILAR: Donald Trump, speaking from his new golf course in Scotland, making a prediction that America is the next nation to make a big statement.

I do want to bring in now Alison Kosik. She is at the New York Stock Exchange for us.

How is this playing out on Wall Street, Alison?

ALISON KOSIK, CNN CORRESPONDENT: It's certainly not playing out in a positive way if you're an investor these days. We're seeing the Dow down 549 points. It's close to the lows of the session.

You're seeing a lot of uncertainty, a lot of surprise play out here. And I'm not talking a surprise of the good kind, because what we really saw investors do all week to the lead-up of this referendum is to buy into the market, because many investors actually thought that the British people would vote to stay in the European Union, so it really was a big surprise to many investors when they woke up this morning and saw how the global markets were selling off because of this Brexit.

And all day, we have seen he the flight from stocks to safe investments, safe assets, including gold. Gold is up 4.5 percent. We're seeing investors really flock to U.S. government bonds. That's pushing interest rates lower.

And a bright spot there is that, with those interest rates going lower, that's expected to push mortgage rates lower. That is a good thing if you're on the market looking to buy a home, which would mean that the lower interest rates would make it cheaper to finance a home or even refinance your current home.

Now, we have got one hour to go before the closing bell. For many people, it can't come soon enough, because it's really been a rough day. The markets really stayed around this loss level of 450 to 550 points, talking about the Dow specifically.

Where it will end up, nobody knows. A lot of times, you will see the volume really pick up at the end of the day, and that's probably why you're seeing these losses kind of gain some steam right now and stick around these lower levels.

KEILAR: All right, Alison, thank you so much, Alison Kosik there at the New York Stock Exchange.

Let's go to live now to senior international correspondent Frederik Pleitgen in Romford, England, which had one of the highest leave votes in the U.K.

What are people there telling you, Frederik, about why they voted this way?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Yes, Brianna, they had one of the highest turnouts for the leave campaign.

About 70 percent of the people who cast their ballot here in this district voted to leave the European Union, and they actually also had a really high turnout as well. It was about 70 percent to 71 percent of the people who were able to register actually registered to vote here. So it was one where you could really see leave campaign mobilize its troops here in this area and get the vote out.

The main issue that we keep hearing from people is they say they voted for it because of immigration. They feel that European immigration policies here have been flawed. They feel that there's too many people from abroad coming to districts like this one. We also asked them what role the economy played in all this. Here's what they had to say.

[15:05:03]

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think, in a way, it's because of the immigration -- the immigration factor. And people have just had enough. You know, enough's enough. And I think everyone turned out and voted. It's a great result.

UNIDENTIFIED MALE: I think everyone's just fed up with being told what to do. (INAUDIBLE) housing. There's just a lot of issues. I think everyone's just had enough. They just want a change.

UNIDENTIFIED MALE: At the end of the day, it's nearly half and half. Nearly half the population wanted to stay and half wanted to go out. It was a close call, but, personally, I'm quite excited about the future. It's one of those, if you had a crystal ball and what would you know, we could be in a bad place in 10 years, we could be in a much better place. Who knows?

(END VIDEO CLIP)

PLEITGEN: Now, one of the things that we asked people is what they think the implications of all this are going to be, Brianna, because many people have told us they think that the economy is bad, that they weren't getting the kind of jobs they were hoping for.

And, of course, what we have seen since this vote has gone through is that, for instance, the pound has dropped. The stock markets have dropped. And we asked people whether they thought that there could be an economic downturn that's longer-lasting or whether things could change and improve over time.

Many people here are telling us they're not too worried about that. They think their economy will recover and they think, by and large, that they will be better off without the European Union -- Brianna.

KEILAR: All right, Fred Pleitgen for us, thank you so much.

I do want to bring in now Jeffries Briginshaw. He's the CEO of BritishAmerican Business. Austan Goolsbee is the former chairman of the Council of Economic Advisers and a professor for the Booth School of Business for the University of Chicago, along with Diana Furchtgott-Roth. She's a former chief economist for the U.S. Department of Labor. And now she's a senior fellow at the Manhattan Institute.

Diane, you first. As well as being an instrumental economic voice, you're also a dual citizen of the U.S. and the U.K. You were in favor of Britain exiting the E.U. Tell us about this. Why do you think this is a positive move?

DIANA FURCHTGOTT-ROTH, FORMER WHITE HOUSE ECONOMIC ADVISER: Well, Americans wouldn't like being governed by an American union headquartered in Buenos Aires made up of other countries in America.

The problem is that in England, any law passed by Parliament has to be compliant with E.U. laws. There's a lot of feeling against the unelected bureaucrats in Brussels who do everything from making food sold in kilos to other kinds of environmental and transportation regulations.

The most important thing is that the E.U. is a failed experiment. It has highly educated citizens. It's only growing at about 1 percent. Britain is one of the strongest members. It will be far better off outside the E.U. than in it.

The real loser in this is the E.U., not Britain. When the dust settles, investors are going to go back into the markets and they're going to find that Britain is a good investment and will grow faster without the European Union. We wouldn't want an American union telling us what to do, and they don't want a European Union telling them what to do.

KEILAR: Jeffries, what's your response to that?

JEFFRIES BRIGINSHAW, CEO, BRITISHAMERICAN BUSINESS: So, I think we have been living with the uncertainty of the referendum for a long time. The business community hates uncertainty. We woke up this morning with shock. That's turned into concern.

And I have got to as you know that from a business community point of view, international, domestic, that's probably towards the downside of the risk of what this all means. But we have got to look for sources of calm, for stability.

And we're saying that the transatlantic economy, particularly the U.S.-U.K. part of that, is a huge source of potential stability and opportunity, even as we worry about the downside risks what of exit actually means.

So we're looking for opportunities, hoping that no one acts too fast to pull any triggers that kick off processes that have their own timetables that can't be stopped, but also thinking about where other sources of growth can come from, and the U.S.-U.K. economy is a huge potential for that.

There's $1.1 trillion invested between the countries, $250 billion worth of trade. And that, although it could be affected by exit, is a source for future strength. And so we're trying to say, let's keep calm, let's look around us, let's not act too rashly, but let's also look for some different upsides that can help us through this.

KEILAR: Austan, I want you to respond to that. And just for context, of course, you worked for President Obama, you support Hillary Clinton.

So react to what Jeffries and Diana have said and also tell us what this means here in the U.S.

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: I think it hinges critically on what is the time frame you're thinking about. If you say five years from now, how much will it matter, I don't think it will matter that much, because, over a longer period, they can negotiate a different relationship to Europe than being part of the E.U.

[15:10:11]

Switzerland has done that. Norway has done that, Canada. But over the next four or five months, I think the answer to does this hurt Europe or the U.K., the answer is, it's going to hurt both. Nobody knows what's going on.

They have got -- are now the millions of people that are U.K. nationals on the continent, are they all going to have to get work visas? What's going to happen to the financial sector? I think it could easily send the U.K. into a recession in the short run, because any consumers or businesses that were going to invest are at least going to say, well, let's wait a few months and figure out how this is all going to play out.

So I think we're going to have a bumpy ride in the near term. And then over the longer run, these issues of is this just going to start the breakup of Europe and the breakup of the U.K., that the Scots are very likely to say, well, we don't want to have to be in the U.K. if they're going to do this, and then if you consider the Netherlands or Denmark or even Spain or Greece, there are going to be a lot of European countries who say that the country that had its own currency doesn't even want to deal with this, why should we deal with it?

KEILAR: Diana, what do you think about the ramifications here of the U.K.? We certainly would expect that Scotland might again try to have a referendum. What do you think?

FURCHTGOTT-ROTH: Well, Scotland's economy is relatively small compared with the British economy.

The E.U. has every incentive to sign trade agreements with Britain, because Britain has a net deficit with the E.U. The E.U. exports more to Britain than Britain imports from Europe. So, it's very -- it's to the E.U.'s incentive to sign these trade agreements, also the other commonwealth countries, such as Canada, Australia, New Zealand, that have been in some sense shut out of U.K. markets because of the E.U., the United States so.

So, I think there are a lot of people, including China, by the way, that was pushing for Brexit, that is standing by trying to do business with the United Kingdom. The big loser, as Austan said, is the E.U. Once the U.K. has left, then other countries are going to want to either renegotiate or leave themselves.

The E.U. is a place for weak economies, not for strong economies that don't get as much out of it, and are more hobbled by the different regulations from Brussels.

KEILAR: Jeffries, though, I want to ask you a bit of a -- sorry -- I see you want to respond to what Diana said. Please go ahead.

BRIGINSHAW: Yes, that's not really a scenario I can see.

I think trade deals are tough to negotiate, boil down to economic weight. And Britain will have less economic weight.

Trade deficits are relevant, but it's governments that negotiate trade deals, not business. And so you can see there's a lot of politics building up in this already. And I can't see France or Germany being in a hurry to accommodate British business or their own industries' trade deficits.

So, I think the trade scenarios are much more difficult than, you know, we're putting on the table right now. That doesn't mean that in the longer term...

GOOLSBEE: I totally agree with that.

BRIGINSHAW: ... things don't get worked out.

And at the end of the day, a country's prosperity depends upon its own productivity and innovation and capabilities and the ingenuity of its business community. But politics can help. Market access can help. U.S. business invested in the U.K., is invested in the U.K. for market access in part, not only. And that market access might shrink, so that is a negative that won't easily be solved through new trade negotiations.

But that's what we will have to do. It's just that it's not going to be that easy.

KEILAR: It's not going to be easy.

Jeffries, Austan, Diana, thank you to all of you. We certainly appreciate it. And coming up: moments ago, Hillary Clinton reacting to Donald Trump's

visit to the U.K. today. Trump, for his part, crediting Clinton and President Obama for today's Brexit result. We will discuss that.

And economist Ben Stein is joining me live as we monitor Wall Street's reaction. How will the markets close less than an hour from now? We will bring that to you live. You're watching CNN special live coverage.

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[15:18:44]

KEILAR: Welcome back.

We're keeping our eye there on the markets. You can see the Dow down now well over 600 points.

I want to go live now to the New York Stock Exchange. Alison Kosik is there for us.

So, this is what we were waiting for to see, if it would dip below 600. It has. It's sort of hovering there around being down about 635 points. Is this going to get worse, do we think?

KOSIK: That is anybody's guess.

Now, one thing to keep in mind, yes, the number is ugly, 639 points lower, now 640 points lower on the Dow. Not a good thing to see. But to put it in perspective, it would get really bad if the New York Stock Exchange had to step in and put in place what's called a circuit breaker to basically stop the trades to give everyone a breath.

And only that would happen if the Dow doubled its losses. So you would have to see the Dow fall 1,200 points. That's when you would really have to begin to worry. I wouldn't say worry just yet, because many traders have told me they think this is a one-day event, that this is really just a reactionary move, sort of a knee-jerk reaction to the Brexit that happened overnight.

You do, although, have others who say, look, this could -- this gloom over the market could continue. Just like any divorce, they're not quick. They're not pretty. And you could see this gloom continue over the market, though not in such a strong fashion where you see this kind of sell-off.

[15:20:07]

It's really anyone's guess where the market will end up. Usually, at the end of the day, you do see more volume head in and that's part of the reason you're seeing a bigger sell-off right now.

KEILAR: All right, we will keep an eye on this, down now 648 points, the Dow as we're watching it. All right, Alison Kosik, thank you so much. We will keep monitoring that. The Brexit bombshell landed in perfect time for Donald Trump. Just a

day ago, the Republican presidential nominee was criticized for going way off the campaign trail to promote his new golf course in Scotland. But in doing so, Trump gave himself the prime backdrop to explain why Brexit bodes well for him.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I really do see a parallel between what is happening in the United States and what's happening here.

People want to take their country back. And they want to have independence, in a sense. And you see it with Europe, all over Europe. You're going to have more than just -- in my opinion, more than just what happened last night.

You're going to have I think many other cases where they want to take their borders back. So I think you're going to have this happen more and more. I really believe that. And I think it's happening in the United States. It's happening by the fact that I have done so well in the polls.

(END VIDEO CLIP)

KEILAR: Trump's rival, Hillary Clinton, supported Brits staying in the European Union. She says the Brexit result means the U.S. needs her at the helm more than ever. She tweeted this.

She said: "This time of uncertainty only underscores the need for calm, steady, experienced leadership in the White House."

But just how much uncertainty will this unprecedented act by the Brits bring?

Well, here's one perspective from CNN political commentator Van Jones.

(BEGIN VIDEO CLIP)

VAN JONES, CNN POLITICAL COMMENTATOR: It just happened. Crazy hard- right lunatics just led the U.K. off a cliff into the vast abyss of stupidity and foolishness and soon-to-be economic chaos.

(END VIDEO CLIP)

KEILAR: Van Jones, former policy adviser to President Obama, joining me now. Also here is Boris Epshteyn. He's a Republican strategist who supports Donald Trump.

And to you first, Van. You posted that video. And that was just a snippet of it.

(LAUGHTER)

KEILAR: I think it's nine minutes or something. So you posted this with the comment that said, "Yes, Brexit proves Trump can win." Why do you think that?

JONES: Well, that thing has gotten more than a million views in less than 16 hours.

It's -- I think I'm speaking to and for a lot of people. Listen, who knows how all this stuff works out economically in the long, long run. You're going to see a lot of chaos and trouble. But it's not just about the economics. It's about the politics. It's about the social impact.

It's about the fact that you did get this movement going in Britain that said we are so concerned about immigration, we are so hostile to immigration that we're willing to blow up the whole machinery of Europe just to send a message.

Now you have got a lot people saying they wish they hadn't voted for it. It's too late now. And I think that bodes very, very well for Trump and very poorly for people like myself who believe that we should be a land of immigrants and can accommodate the immigrants that we have. But this, I think, is a very, very bad sign if you don't want Trump in office.

KEILAR: All right, Boris, I do want to ask you about something that Hillary Clinton said. In the last two hours, she came out with this attack ad. It's based on Donald Trump's comments about Brexit. Let's take a listen.

(BEGIN VIDEO CLIP)

TRUMP: We have taken the lighthouse, which is a very, very important building in Florida -- I mean, in Scotland.

UNIDENTIFIED FEMALE: We are in unprecedented territory.

TRUMP: Golfers will stop and they will go and get something to eat, and then they will go into the 10th hole.

UNIDENTIFIED MALE: The shockwaves truly global, political, and financial.

(END VIDEO CLIP)

KEILAR: So, Boris, explain that, because a lot of people looked at that and they said that -- well, certainly, the point of the Clinton campaign is that he's focusing on himself and he's not focusing so much on the big picture here and the problems.

And did this not just sort of play into what Hillary Clinton is alleging about Donald Trump?

BORIS EPSHTEYN, REPUBLICAN STRATEGIST: Absolutely not. You just heard Donald Trump talk about the big picture. He did support the exit of Great Britain, which is the people of Britain speaking for themselves, voting for themselves to be a country again. And it's absolutely their right. And it's ridiculous for anybody to

call over 50 percent of citizens of Great Britain stupid or far-right- wingers, as Van did.

As far as a country of immigrants, I'm an immigrant. I came to this country when I was 11. This country has been very welcoming to me and will continue to do so. What Donald Trump wants to do is prevent illegal immigration and keep our country safe.

Now, as far as Hillary Clinton saying we need a measured hand, we have already seen what happens when she's leading the government, Benghazi, Libya, Syria, Egypt, terrible relations with China, $300 billion deficit, trade deficit with China, terrible relations with Russia. So, we do not need leadership like that.

[15:25:05]

We need a leader like Donald Trump, who right now is tending to his business, just like he will tend to the business of America when elected president.

KEILAR: Van?

JONES: Well, there's so many things there, I can't respond to all of them.

I will say when you have one of the most important events in world history going down, this guy goes overseas, he doesn't meet with the prime minister, he doesn't meet with a single elected official. He doesn't meet with a dogcatcher. He goes to promote his own business. He seems to be profiteering off of his presidential run.

And that kind of thing I think...

(CROSSTALK)

EPSHTEYN: Just as the Clintons have profiteered...

(CROSSTALK)

JONES: Let me finish.

Every other American candidate who has gone overseas in the middle of a presidential race has gone over to do serious business, to meet with serious leaders. He went to go to own his golf course.

KEILAR: Boris, I know you want to respond.

(CROSSTALK)

EPSHTEYN: Fair enough. This is not a usual politician.

This is someone who is leading a movement. That's why over 14 million people have voted for Donald Trump. Now, as far as profiteering, if I were Van or any Clinton supporter, I wouldn't bring that up. The Clinton Foundation has taken over $50 million from Saudi Arabia, Qatar, Kuwait.

JONES: I would love to talk about that.

(CROSSTALK)

EPSHTEYN: Loaded -- now, let me finish. Now, let me finish, Van.

The Clintons have gotten filthy rich since Bill Clinton left the presidency. And why? For what? From speeches? From speeches made while she was secretary of state? What happened to the Clinton Foundation not taking any foreign money while Hillary Clinton was secretary of state? She broke that rule, just like she broke rules as secretary of state with the help of Bryan Pagliano, who, by the way, had to take the Fifth 125 times when talking about the e-mail server.

(CROSSTALK)

EPSHTEYN: So if I were the Clintons, I wouldn't be talking about profiteering or any rules, because they have been breaking them their whole career.

JONES: Well, first of all, I'm not a Clinton surrogate. I'm just an American citizens with common sense. And I have enough common sense to know a couple things.

(CROSSTALK)

EPSHTEYN: ... Clinton supporter.

(CROSSTALK)

JONES: First of all, hold on a second. I didn't interrupt you.

Hey, listen, you Trump people come on here, you interrupt everybody, you're rude and classless, just like your candidate. Let me finish.

EPSHTEYN: You said that last time too. There's no reason to take personal shots.

(CROSSTALK)

JONES: Yes. And I will keep saying it. I will keep saying it because you guys continue to act in this horrible way.

(CROSSTALK)

JONES: And that's part of the problem that we have right now.

I agree with Hillary Clinton. I agree with -- no, I didn't interrupt you, sir.

I agree with Hillary Clinton when she says this is a time when we need calm leadership. And we need people who actually know what they're doing. The problem that we have right now -- and, first of all, you were attacking the Clinton Foundation. I'm happy to point out there are people in the world right now who are alive today because the Clinton Foundation has done a remarkable job of getting medicine to people, helping people.

You can't find that kind of generosity or charitable activity from Donald Trump personally, the way that you can from the Clintons. So if you want to have an argument about who has served on the world stage, and who has put the people and the public interest first, Donald Trump is a strange person to raise that argument.

The other thing I want to say is simply this. When you have a situation like we have in the United States right now, where people are being stampeded into a fear-based decision-making framework, which is what happened in the U.K. and what's happening here, bad decisions get made. You're going to see bad economic outcomes in Britain, and you could have economic outcomes possibly here the United States.

KEILAR: All right.

EPSHTEYN: Well, we have seen terrible outcomes from the Clintons being in power, such as NAFTA, such as the trade deficit with China, horrible relations with Russia, and terrible political outcomes all over the Middle East.

We know what the Clintons can do and it's failed all over the place. Donald Trump's been successful.

(CROSSTALK)

JONES: He's got like a zillion bankruptcies. He's got bankruptcy after bankruptcy. What are you talking about?

(CROSSTALK)

EPSHTEYN: Thank you so much for having me.

JONES: He's a failed business leader and a con man.

KEILAR: Gentlemen, I'm going to have to leave it there. Boris, thank you so much, Boris Epshteyn, for being with us. Van Jones, as always, thank you so much for being with us. That was some kind of chat there. All right, gentleman, thanks so much.

And still ahead, we will check in with conservative economist and comedian Ben Stein for his predictions on what's next for the U.K. and global markets.

Plus, breaking news in West Virginia, where major flooding has killed at least 14 people. Many more are still stranded by this water. We will give you a live update from our severe weather team.

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