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Parliament to Hold First Meeting Since Brexit; More Brexit Volatility in New Trading Week, British Voters Feeling "Regrexit"; Sturgeon Seeks to Keep Scotland in EU; Brexit's Impact on Turkey; UK Parliament Set to Meet After Brexit; Brexit's Impact on Global Trade; Major Victory in Fight Against ISIS. Aired 12-1a ET

Aired June 27, 2016 - 00:00   ET

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

(COMMERCIAL BREAK)

[00:00:24] MAX FOSTER, CNN ANCHOR: Hello and welcome. I'm Max Foster in Westminster, London where it's 5:00 a.m. in the morning.

AMARA WALKER, CNN ANCHOR: And I'm Amara Walker in Los Angeles where it's just after 9:00 on Sunday night.

The U.K. Parliament is set to meet for the first time since the Brexit vote and the country's leadership is in chaos. Prime Minister David Cameron will chair a meeting with his cabinet after announcing his intention to resign Friday.

And there is a revolt within the opposition Labour Party after losing the Brexit campaign. Several prominent members are stepping down but leader Jeremy Corbyn is refusing calls to resign as well.

In the meantime trading is underway in Asia and the European markets will open just a few hours from now. The Brexit triggered a global sell off Friday. And we will see if that gets any better after the weekend.

Let's go back to our London correspondent Max Foster who is standing by live from outside the parliament. As you were saying Max, a lot of resignations, conservatives are in disarray so are the Labour Party. I mean it's really a mess, politically, isn't it?

FOSTER: What is this place going to throw at us today -- Amara? It's been extraordinary. It's been extraordinary ever since we had that vote on Friday morning. Over the weekend -- absolute chaos in British politics. Not only has the prime minister gone. We don't know what's going to happen to his number two, the finance minister George Osborne. He's due to speak this morning. We'll bring you any updates on that but his position is seen as untenable.

Meanwhile as you're suggesting the Labour Party in absolute disarray, so pretty much half the shadow cabinet resigned yesterday. Jeremy Corbyn, the leader of the Labour Party absolutely refusing to budge. His argument here is that he was voted in by grass roots supporters. He's never had much support in the parliamentary party. He's going to stick it out though because he wants a new kind of politics where the grass roots control the party and not the parliamentarian peer. So he's sticking with it.

He says, fair enough, if we have a leadership contest, go ahead with this but I'm going to be putting my name in the ring. So an absolute lack of leadership here in London and at a time when people are really, really worried about what's going to happen next. They're hearing things from Scotland. They're hearing things from Europe and they just don't know where things are going to go. They've got nowhere to look.

WALKER: Yes. A lot of concern about what the next steps are going to be. Max -- stand by because I want to first touch on what we know about what form the British exit from the E.U. might take. Prime Minister David Cameron has said he would invoke Article 50 of the Lisbon Treaty quickly but now that will be up to his successor.

Now Article 50 gives E.U. countries two years to come up with an exit deal. It's possible that parallel negotiations on a new trade deal would also take place. Now, if a deal is not reached after two years the E.U. could extend the timetable but that decision would need be unanimous otherwise the U.K. is out of the E.U. with no deal at all.

Now, Boris Johnson, a vocal leader for the Leave campaign and a front- runner to become Britain's next prime minister is in no hurry to trigger Article 50. He called for unity in an op-ed in "The Telegraph" newspaper. And here's what he had to say. Quote, "We who are part of this narrow majority must do everything we can to reassure the Remainers. We must reach out. We must heal. We must build bridges because it is clear that some have feelings of dismay and a lot of confusion, a lot of loss and confusion." Johnson goes on to say "I cannot stress too much that Britain is part of Europe and always will be. E.U. citizens living in this country will have their rights fully protected and the same goes for British citizens living in the E.U."

Again, Max, I mean Article 50 has never been invoked before. So against, there's just not a lot of clarity about what's going to happen next. The concrete steps for what's next are not laid out -- right?

FOSTER: Well, no. Before the referendum, David Cameron made it very clear that if there was a vote to leave within a matter of days the article would be invoked straight away. That's not happening now. So a huge amount of confusion there.

Meanwhile Nicola Sturgeon, the first minister of Scotland just made clear pretty much every region in Scotland voted to remain in the U.K. She's now arguing that all of her -- all the people that she represents voted to stay in the European Union. So she's not going to allow Britain effectively to just take Scotland out.

[00:04:58] So she's having conversations in Brussels about this while there's this vacuum of leadership here in Britain. She says she can't just wait around to see what happens. And now she's threatening to actually block that invocation of that article saying that there's actually a power in Edinburgh that can actually block Britain coming out of the European Union. So that's causing even more uncertainty. While in Brussels, in Frankfurt, in Berlin and in Paris all these conversations going on saying if Britain's going to leave it has to leave now. It has to happen very quickly. But who do they actually speak about doing that because David Cameron is not going to do it. He's waiting for the next leader. And Boris isn't being very clear on what he's going to do either. It's clear they want to stretch this out here in London. But they don't want that in Europe. That's already causing massive tensions.

WALKER: I'm also curious Max to know what it's going to take to unify the people as Boris Johnson is calling for unity. But we know that emotions have been running quite high. And there was a lot of shock and anger, quite frankly, right after the referendum results -- a lot of divisions between the young and the old, of course. You know, a generational gap, also divisions between, you know, big cities versus the countryside.

Just give me a sense of what people are saying, what the mood is.

FOSTER: Well, people develop very strong views to the campaign. It wasn't along political lines, either -- party political lines. So you're either in or you're out. There aren't many undecided people anymore. I mean there's huge amounts of frustration boiling over.

So the Remainers, for examples, are all signing this petition -- millions of names on it for a second referendum. While those who voted to leave the European Union feel that the Remainers are being a bit superior about everything.

But at the same time everyone pretty confused about what's going to come next because the one person that can give us that direction is Boris Johnson. The only thing we've had from him is that op-ed that you just read there. And actually it's not very clear what he's going to do.

It's not even clear actually that he's going to be the next prime minister. I have to say, Amber, when you speak to members of parliament here, conservative members of parliament, a lot of divisiveness in that party about Boris Johnson. Certainly those on David Cameron's side aren't fans of his at all.

So we may end up with some sort of compromise candidate who isn't as high profile. Perhaps isn't as popular with the public but isn't Boris Johnson crucially. But he's certainly steering the ship right now.

WALKER: A lot to talk about. We'll see you throughout the hour, Max Foster. Appreciate that live from outside the Parliament.

Now, the stock markets in Asia opened mixed on Monday with lingering uncertainty over the Brexit. However, Japan's Nikkei was actually a bright spot, gaining back some of its nearly 8 percent loss on Friday. You can see mostly a positive day. The Hang Seng though finishing -- not finishing but down right now about 0.73 percent.

The European markets are expected to be volatile. They are opening in about three hours.

With more on the markets, Andrew Stevens joining us now from Hong Kong. Hi there -- Andrew.

ANDREW STEVENS, CNN ASIA-PACIFIC, EDITOR: Hi -- Amara. Yes, you're right. There seems to be much a calmer mood prevailing in the Asian markets. And I think if you go back to Friday what you saw was that massive, knee-jerk reaction which brought that incredible volatility on Friday in response to Brexit.

And basically, the markets had not in any shape or form expected that vote would go that way. So they had been bidding the market up and as soon as it went against what the expectations were, we saw those massive sell offs.

So today a little bit calmer. But if you want to look at the real bellwether, the gauge of what's happening in the financial markets as to the fear index, if you like. Look at the pound. Look at the sterling. The sterling as we know, the British pound absolutely tanked on Friday, down some 8 percent. And it's continuing to fall in Asian trade today. It closed around 1:36 on Friday and now as you see it at 1.34 -- that's a near 2 percent fall there as well.

So there's still a real concern out there. A real fear as to go to what Max was saying really. The confusion in Westminster, the confusion across the country showing no signs of easing at the moment.

So look at another gauge, if you like -- safe havens. Now, the Japanese yen has been seen as a safe haven here. And again that strengthened sharply on Friday and it continues to strengthen today against the U.S. dollar. Not to the same degree but it's still up around 101.

And gold was another big safe haven play as it always is in times of turmoil -- up another four or so percent today -- Amara after that 6 percent to 7 percent rise on Friday. So there's still a real concern out there. There's still confusion about what or how this is going to end up.

And underlying it all, of course, is the fear of contagion. Contagion that the Brexit vote could lead to a dismantling of Europe -- that's the real fear here in the global financial markets.

[00:09:59] We have the IMF boss Christine Lagarde say a few hours ago that she thought Britain should move quickly to the Brexit. But as we hear, it's not happening and there is still real live fear that where Britain goes, Europe could still follow.

WALKER: Andrew Stevens with a view there from Hong Kong. Many thanks -- Andrew.

Let's talk more about the quote-unquote, "chaos and confusion". Economist and former professor of law and economics at Pepperdine University Ben Stein is joining me here in studio and he says the world is overreacting.

First of all -- appreciate you coming in. Thanks for joining us.

BEN STEIN, ECONOMIST: My great pleasure.

The world is widely overreacting. Markets are about corporate earnings, their way of just counting -- it's just counting up corporate earnings and nothing that's happened really affects corporate earnings very much. And especially in the U.S. there's no reason whatsoever that the U.S. stock markets should be moving anymore than a hair's breadth. We don't depend on exports to England at all except in the most trivial way.

WALKER: Ok. So just to break it down -- because you're saying that the reaction does not equal the reality. Because we're hearing so much. Words like panic, volatility, turmoil in the global financial markets.

STEIN: You know, that's nonsense.

(CROSSTALK)

WALKER: You're saying everyone calm down.

STEIN: Right.

WALKER: Stop panicking, this is not the reality.

STEIN: The markets are knocking trillions -- they were knocking trillions off the value of stocks on Friday over a possible change in exports of billions. So there is a wild disconnect between what the traders did and the reality of the situation.

Traders like volatility. Traders like fear. They are going to move the markets as much as they can. They make money on it. People who follow the traders and jump into the pit and sell into a panic I think generally regret it.

WALKER: You know, you say there's a wild disconnect. But, you know, we heard from the IMF warning that a Brexit could be catastrophic for the economy. President Obama also, you know, warning against a Brexit and the economic impact. And also we're seeing reaction in Asia where Andrew Stevens was reporting from. China's finance minister saying that the Brexit is going to cast a shadow over the global economy and the fallout's going to be felt for years.

What would you say to these world leaders who are voicing concern?

STEIN: I would say that they're adding to the panic and I don't know why. China's economy is not going to be affected by this at all. China's a huge, gigantic economy. Its main trading partner is not Britain. It's not going to have any problems getting into its enormous exporting power. I'm not sure what Miss Lagarde is talking about at all.

But in terms of the United States investor or even the European investor or the Japanese or the Chinese investor whatever is going to happen, at most will be a small change in tariff rates. There's never been a recession in the entire period since the 1920s caused by a change in tariff rates.

There's just no mechanism here that could lead to a giant recession. Now, maybe one is about to happen. I don't know. Maybe something will happen that we don't about yet. So far all that's happened is a threatened change in tariff rates of a very small order.

WALKER: What about the U.K.'s economy? Again, because there were so many warnings and concerns -- I mean are they in for a shock?

STEIN: No, I don't think so at all. It's going to be good for them because generally speaking, England is a big -- it's a exporting power. As the pound goes down they can export more. I think -- for the Americans, by the way, it's a good time to visit England. But I think the British are not going to be affected negatively by it except perhaps in the most trivial and fleeting --

WALKER: Well short-term they will.

STEIN: -- well, why will they be?

WALKER: You don't think even in the short --

STEIN: I mean -- if people sell into the panic they will be. If they stay put, if they're patient. You know what we always need to remember? In the short run, the market is a voting machine. In the long run, it's a weighing machine. Warren Buffett said that. In the long run, the weights have not changed.

WALKER: What about when it comes to, you know, the U.K.'s financial center. I mean do you feel like their influence in the global markets is going to change and you're going to start seeing big American banks or other corporations moving their base from London to Frankfurt?

STEIN: Well, they're already in Frankfurt in a gigantic way. But I don't see why they'd move. The main assets of these financial corporations are very tough, smart, brilliant, talented, hard-working people. They can operate just as well from outside the E.U.

After all New York is outside the E.U. Singapore is outside the E.U. Hong Kong is outside the E.U. All those countries are operating just fine. Britain will do fine.

Look, this is the British people, the most resilient, smartest, toughest, most resourceful people in the world. This is a blip in their history.

WALKER: Just quickly because you mentioned Warren Buffett. You once said be fearful when others are greedy and greedy when others are fearful.

STEIN: Right. A very good time to buy, just in my opinion. I could be totally wrong.

WALKER: Ok. Thank you for that warning -- Ben Stein. Appreciate you coming in. Thanks for that.

STEIN: Thank you very much.

WALKER: All right. We're going to take a short break.

Later in the show -- a very different perspective we're going to have. We're going to speak with an entrepreneur who says a Brexit will lead to the biggest financial mistake in the history of world trade -- of course, the polar opposite of what Ben Stein and I have been talking about. That is in about 20 minutes from now. So stick around for that.

[00:15:02] But first, Scotland's first minister wants to keep the country in the European Union. And one strategy may be Scottish independence.

Also, Turkey's dream of joining the E.U. may be in limbo after the Brexit vote. How the country is responding to the United Kingdom's momentous decision, just ahead.

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PEDRAM JAVAHERI, AMS METEOROLOGIST: Thunderstorms (inaudible) across portions of the United States for the past couple of days -- massive frontal boundary here, of course. Some excessive heat as well in place in recent days over this area. In fact, if you take a look, this is a 3,200 kilometer stretch of land there where you're seeing continuous line of active weather pushing in.

Some of the strongest storms locked in around portions of Indianapolis, just south of Indianapolis -- just say north of Louisville around Columbus in the state of Ohio there getting in some strong storms in the last couple of hours. And as you go into the morning hours, a lot of the heat in the atmosphere, of course, depletes here so thunderstorm activity expected to follow suit as well into the early morning hours.

But back towards the West around portions of the plain states, around eastern Colorado, parts of Kansas on into Nebraska, southern Wyoming -- that's where the best bet is for severe weather come Monday afternoon.

Temperatures really warming up across the I-5 corridor down towards Los Angeles at 26 degrees. Vancouver, British Columbia -- not too bad, up to 24 degrees there and sunny skies. Work our way down towards Havana, Cuba, looking at the lower 30s.

It should remain dry around Mexico City out towards Chihuahuas. Temps there from the mid 20s around say 33 degrees. And to the south we go where you expect the rainy season to pick up in intensity -- Paranam, Belim -- temps there around 32 or so. Salvador, around Rio should stay dry the next couple of days. Temps around 27 or so degrees in this region. And we'll take you to the south with a view of the coolest weather on Rio Gallegos.

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WALKER: Welcome back, everyone. The economic fallout of the Brexit has been swift and severe. Some leaders are also walking back campaign promises like money going to the National Health Service and now many voters are having second thoughts.

Our Michael Holmes has the story.

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MICHAEL HOLMES, CNN CORRESPONDENT: Days after the U.K. voted to leave the European Union, many voters experiencing a Brexit regrexit. An online petition demanding a second referendum on the decision has passed three million signatures -- 30 times more the signatures required for parliament to consider the issue.

[00:19:56] Many say who voted leave say they would their vote if given the opportunity. Some say they didn't realize the backlash of their votes.

MANDY SUTHI, "LEAVE" VOTE: We would vote to remain because obviously the facts are coming in now and we're more -- I've actually woken. In another sense that should mean opened up after seeing what's happening.

HOLMES: With at least one leader already pedaling back on one of the most popular issues among Leave voters.

UNIDENTIFIED FEMALE: The 350 million pounds a week we sent to the E.U., which we will no longer send to the E.U., can you guarantee that's going to go to the NHS?

UNIDENTIFIED MALE: No, I can't.

HOLMES: Other voters simply felt duped. One voter tweeted "When is the second referendum? Feel cheated I voted leave based on NHS getting the extra money and they lied to me."

Another wrote, "I voted leave and after seeing Farage admit on live TV the adverts about money going towards NHS was a lie, I am sick."

Conservative MP Ben Howlett confirmed via Twitter that the petition will be discussed by the House of Commons Petition Select Committee on Tuesday.

Further complicating matters, just when the opposition Labour should be banding together, it is falling apart. Labour leader Jeremy Corbyn sacked Hilary Benn, the Parliament's shadow foreign secretary and then a number of other shadow MPs have penned their resignations saying they don't have confidence in Corbyn's ability to win a snap election if one is called. Despite the turmoil Jeremy Corbyn's tells CNN Corbyn will not step down leaving the Labour Party and the U.K. itself on the brink of political crisis.

Michael Holmes -- CNN, Atlanta.

(END VIDEOTAPE) WALKER: Now, Scotland's first minister says the country will do whatever it takes to stay in the E.U. Nicola Sturgeon says she wants to make sure the country's democratic will is respected after a majority of Scots voted Remain in Thursday's referendum.

(BEGIN VIDEO CLIP)

NICOLA STURGEON, SCOTLAND FIRST MINISTER: Now, my challenge but also my responsibility as first minister is to seek to negotiate to protect Scotland's interest. What's going to happen with the U.K. is that there are going to be deeply damaging and painful consequences of the process of trying to extricate the U.K. from the E.U. I want to try and protect Scotland from that.

(END VIDEO CLIP)

WALKER: Sturgeon says one option is to try negotiating directly with the E.U. to keep Scotland in the bloc. CNN's David McKenzie has more now on her game plan.

DAVID MCKENZIE, CNN CORRESPONDENT: The government in Westminster appears like a deer stuck in the head lights to many. But here in Scotland, the first minister, Nicola Sturgeon seems to have a strategy in place to try and keep Scotland inside the European Union. Of course, Scots overwhelmingly voted to remain in the E.U.

The latest strategies she's putting forward may be the Scottish government vetoing the U.K. from starting the process to remove themselves from the E.U. She's also saying that a new referendum here in Scotland to go independent is very much on the cards.

Many people I've spoken to here are bitter that they feel forced out the E.U. They are much more east ward looking than south at the moment and it seems like their first minister is trying everything she can to keep Scotland in.

Back to you.

WALKER: Anxiety about what comes after the Brexit vote isn't limited to Europe. Turkey is also concerned about its relationship with Britain and its chances of joining the European Union. Jamana Karachi has the details.

(BEGIN VIDEOTAPE)

JAMANA KARACHI, CNN CORRESPONDENT: Europe's worst refugee crisis since World War II. Hundreds of thousands of men, women and children fleeing conflicts in places like Iraq and Syria Seeking refuge in Europe -- the gateway for some, Turkey.

To try and deter migrants from making the journey cross the Mediterranean, Europe signed a controversial deal allowing the E.U. to send back anyone arriving in Greece illegally to Turkey. In exchange Turkey could get financial aid and the hope of visa-free travel across Europe for its citizens and some thought it would refresh negotiations for it to join the EU. For decades, the European Union membership has been an elusive Turkish dream. And since 2005 Turkey has been in formal talks with the E.U. but the process has stalled.

SOLI OZEL, POLITICAL ANALYST: Remember the problem has always been that Turkey was too poor, too big and too Muslim. And I think it was -- the most important was always the too big. Turkey is no longer that poor. But it's still big. And this Muslim aspect which was always an important factor now is a more important factor because of what went down in the past ten years in the world.

KARACHI: Britain was seen as one of Turkey's main backers and now many Turks worry that Brexit means losing that crucial ally.

OZEL: A new Europe is afoot and is Turkey really ready to either dump it or to pursue it seriously will also be posed and it will be a question in front of us.

[00:25:10] KARACHI: So far Turkey's reaction to Brexit has been measured. President Recip Tayyip Erdogan on Friday saying he didn't expect the U.K. to leave and again, lashing out at Europe.

"Double standards are no longer hidden. They put more obstacles on Turkey's path. They've been keeping Turkey waiting at their door for 53 years. I'm saying now that the E.U.'s approach to Turkey is Islamophobic," he said according to a state news agency. Erdogan has also suggested Turkey would have a referendum of its own to decide whether to continue pursuing E.U. membership or not.

To join the union Turkey would have to meet a list of conditions in various categories like human rights and foreign policy. Government critics worry. If Turkey drops its E.U. bid the country's human rights record which watchdog organizations say have deteriorated over recent years could get even worse.

Whether Turkey decides to continue this uphill battle will likely be influenced by what kind of E.U. emerges once the Brexit dust settles.

Jamana Karachi -- CNN, Istanbul.

(END VIDEOTAPE)

WALKER: The chaos in the U.K. may have helped shape the outcome of Spain's parliamentary elections. The ruling conservative party won the most seats during Sunday's re-run vote, the second in seven months.

Now it gives the Prime Minister Mariano Rajoy, the boost he was hoping for after the uncertainty following Brexit results. Still his party did not win enough seats for an outright majority.

Britain's Labour Party is reeling with internal division after the Brexit vote. More on the party's leadership shambles from the U.K. Parliament when we come back.

[00:26:57] (COMMERCIAL BREAK) [00:30:20] MAX FOSTER, CNN LONDON CORRESPONDENT: I'm Max Foster in Westminster, London, with the very latest on the Brexit fall out.

AMARA WALKER, CNN ANCHOR: And welcome, everyone. I'm Amara Walker in Los Angeles. Britain's parliament is said to meet for the first time since Thursday's Brexit vote.

Prime Minister David Cameron is also expected to hold a cabinet meeting. This while the opposition labour party is in turmoil.

Labour leader Jeremy Corbyn said he won't step down despite multiple resignations from his shadow cabinet. Corbyn backed the Remain camp, but has been criticized for what some say was weak support for it.

European markets are also set to open in a few hours as Asian markets close on Friday. The British pound suffered its biggest one day fall on record.

For more now on these developments, let's go back to Max Foster, who is standing by outside parliament.

And Max, the political crisis in the UK just getting worse.

FOSTER: Yes. You're talking there about the markets. We actually got an emergency statement in about an hour and a half from the finance minister George Osborne. He's going to say something to reassure the markets and the financial system here, he says.

But a widespread speculation that he's also going to step down. So that's going to cause yet more uncertainty here. But he's had the weekend to think about it. Many thought he would step down on Friday. He may choose to stay in. But he doesn't, he doesn't visibly have a political future simply because he was front and center of the Remain campaign. Very clearly lost.

But he also does have to be aware of the markets open about an hour after he makes a statement. He does need to say something which isn't yet more unsettling for investors around the world. So all eyes on that.

And then we're going to be looking to Jeremy Corbyn to see if he continues to say in his position many members of the shadow cabinet who walked out yesterday. We're hoping he was going to resign yesterday. Doesn't look as though he is going to do that.

Then we're also looking to hear from Boris Johnson, Amara, because he's seen as the next prime minister at the moment. Whether or not, he will be, we don't know. But leadership is very much resting it in his hands.

How is he going to negotiate? This extraction. The very complicated European system.

WALKER: Yes, Max, and if we could also talk a little bit about the atmosphere there in the UK. Now we are seeing on social media, and also the British police, are reporting that there were several racist incidents that happened over the weekend following the Brexit referendum.

What can you tell us about that?

FOSTER: Certainly. Lots of social media chatter about events in Hammersmith, for example, in West London. Attacks of -- verbal attacks on a Polish community there. And also up in Newcastle as well. (INAUDIBLE) there saying send back, basically, immigrants.

Also, we've heard from Cambridge police. They said they are investigating reports I'm reading here. I want to get it right because it's very sensitive issues as you say.

Reports that there had been signs up in Cambridge saying "Leave the EU. No more Polish Vermin."

And these sort of leaflets are being put through letterboxes as well. So it's getting pretty nasty.

We've also had the Baroness Warsi who was in the Leave campaign. The last minute, she switched to the Remain campaign. She's a conservative minister as well. And she has been quite vociferous on social media.

She said this responding to one comment that she said. She described these people as sad, racist loons and xenophobes. They're shouting the loudest. And she's saying that's very sad. She doesn't believe people in the exiting group of campaigner are necessarily all bad. But the problem she has is the voices of the racists in that group are being heard over the main -- the majority. So she's very concerned that everything remains measured.

And we do have this backlash. Certain promises were made in the Leave campaign, which they can't now live up to.

For example, the suggestion that the number of immigrants would fall. They can't promise that that would happen. That was said on the political rounds of the TV interviews yesterday.

Also concerns about this huge amount of money promised to the National Health Service, that can't be promise either. So there is a backlash. Members of parliament coming back here for the first time after campaigning. It's going to be vicious here, I think, Amara.

WALKER: Yes, absolutely. Clearly, a lot of confusion and a lot of anger as you say. Max Foster, good to have you. Live for us there in London. Thank you for that.

Well, more volatility is expected when the European stock markets open in just a few hours from now. The Asia markets opened mixed on Monday. It's still struggling with the aftershocks of the Brexit vote.

You can see a lot of green arrows there, actually. But the Hang Seng down about three-quarters of a percent.

[00:35:00] All right, let's have more about how the Brexit could impact world trade.

Eric Schiffer joining me now. He is a CEO of Patriarch Equity.

Thanks for your time.

ERIC SCHIFFER, CEO, PATRIARCH EQUITY: Good to be here with you.

WALKER: You say that the financial implications of this Brexit will hit the shores of America like an Atlantic tidal wave. You say this is the biggest financial mistake in the history of world trade.

You are obviously the polar opposite when it comes to perspective from what Ben Stein, the economist, was saying.

He was saying, look, investors are blowing this way out of proportion. There's no reason to panic. If anything, the worst case scenario, there would be higher terrorist. That's it.

Your response?

SCHIFFER: Right. Look, I like Ben Stein. I think he's a very funny guy. But I think he's clueless with respect to what's happening. With all due respect to him.

I think that right now, we've got huge volatility ahead. This will be like being on a race boat at 60 miles an hour knots, with a lot of waves. So I thin you're going to see tremendous amount of volatility. At some point, it's going to slow down. There's no question. And it will. But short term, hold on. It's going be really rough.

WALKER: When it comes to trade, I mean, how do you think this is going to pan out, at least for Britain when it comes to negotiating some kind of trade deal with the EU.

SCHIFFER: I think there are going to have -- there are challenges.

Look, this will be delayed for a while. You hear people are now regretting that they actually voted for this. And that's a big issue.

What's fascinating to me is this parallels so much Donald Trump in the United States. At the same time, people have been saying this is going to help Donald Trump. I don't think that's the case.

I think that what is happening is people are now getting what I would call buyers remorse. And I think you're going to see that happen here.

Maybe this establishment isn't so bad when you actually get these things passed. Maybe they can't do the things that they say they're going to do. So I think it's going to be a wake up call. I don't think that it will hurt Hillary Clinton.

WALKER: When you call this the biggest financial mistake in the history of world trade. I mean, what do you mean by that? And what tangible things do you see the implications that will hit the world as the result of the Brexit? SCHIFFER: Well, I think when you take a country that as big as England and you basically take this gigantic shotgun and you shoot the engine of trade for them, which essentially is what is happening. You cannot do that and not expect strange facts and major, crazy effects to occur.

And I think some of those effects we're beginning to see in the market. Certainly, it's going to affect banks, et cetera. It can be fixed. So we can get policy makers to step up.

The problem is the central banks are really weak right now. They've shot a lot of their weaponry. So they are not necessarily the answers. It's really going to come down to policy. And I think if the policy makers can step up, there's a lot that could be done that can stimulate things that can really help England and certainly other countries in the EU.

You know, Ben Stein, he was on another CNN program. And he was, basically, he was talking about the U.S. and how, you know, there will be this will just be a blip on the radar in the United States. And he mentioned U.S. exports worth about $55 billion of goods and services to the UK. So let' say, you know, if we export $10 billion less, he said that won't even register on the GDP. We won't even notice it.

SCHIFFER: OK, well, Ben Stein is forgetting the fact that people have emotions, OK. And so if you slow down trade, you're going to slow down consumers in general because, you know, people are not going to buy as much.

You certainly are not going to have CEO's investing. And when that occurs and people watched TV. I mean, they're watching what goes on around the world. This is a global village today with CNN and others. So forget about it. This will impact unless they get a handle on it. To say that it can't impact the United States is foolish.

WALKER: A lot of this is also driven by emotions.

(CROSSTALK)

SCHIFFER: Absolutely. Absolutely.

WALKER: Eric Schiffer, CEO, Patriarch Equity. Thanks for your perspective.

SCHIFFER: My pleasure.

WALKER: Thanks for coming in.

All right. We're going to take a short break here.

When we come back, we'll check in some of the other news stories that we are following, including a major victory for the Iraqi army and the fight against ISIS, but the war from the terror group is far from over.

What's next for troops in Iraq? After the break. (COMMERCIAL BREAK)

WALKER: Welcome back, everyone. A senior Iraqi general says the battle for Fallujah is over and that government troops captured that ISIS stronghold on Sunday.

He says more than 1800 ISIS fighters were killed in the month long operation. But the situation remains extremely dangerous. Iraqi forces are now dismantling land mines and booby traps that's still litter many neighborhoods.

The Iraqi military now turning its sights to the even bigger challenge of retaking Mosul.

CNN senior international correspondent Ben Wedeman has the very latest.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Somewhere in that scram, messy rocks, Defense Minister Khaled al- Obeidi flew from Baghdad flew from Baghdad to here to claim south of Mosul with a gaggle of the Iraqi media in tow.

ISIS, they say, is just a 15 or 20-minute drive away from here. The black smoke on the horizon, officer say, is an attempt by the extremist to obscure the vision of Iraqi and coalition aircraft. Iraq has been very publicly gearing up for the liberation of Mosul. The mother of all battles in the country's war against the group. The plan sounds simple enough.

(on-camera): What they're going to do is work on driving ISIS out of towns and villages like this that surround Mosul before finally going into the city.

(voice-over): And they'll be doing it with a little help from their friends like this American and British advisers in the operation center nearby.

As preparations mount for Mosul, there are American boots on the ground and perhaps more to come supplementing the well-over 3000 already here.

And when will this much-anticipated offensive take place, I asked the defense minister, "the prime minister and the military leadership," he replied, "have said that 2016 will be the year of the liberation of Mosul and the rest of Iraq."

That leaves just over six months and the clock is ticking.

Ben Wedeman, CNN, South of Mosul.

(END VIDEOTAPE)

WALKER: Pope Francis says the Catholic Church should apologize to gay people and seek forgiveness for how they've been treated. He made the comments on his flight home from Armenia. The Pope also said the church should apologize to other groups it's offended. Pope Francis also gave his thoughts on the Brexit. And we'll have those comments for you later on in our shows.

And that's our time. Thank you so much for watching. I'm Amara Walker in Los Angeles. We will have more on the UK's decision to leave the EU in about 15 minutes with John Vause.

But, first, it's "World Sport" after a short break.

(COMMERCIAL BREAK)

(CNN WORLD SPORT)