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Hurricane Harvey Poised to Hammer Coast of Texas; Key Central Bankers Speak at Jackson Hole Meeting; McGregor and Mayweather Weigh-In Soon; Samsung Chief Gets Five Years for Bribery; Ontario Premier on NAFTA, There Will Be Drama; Future of Fed Chair Janet Yellen Under Scrutiny. Aired 4-5p ET

Aired August 25, 2017 - 16:00:00   ET


[16:00:00] PAULA NEWTON, CNN HOST: And we close the markets for one of the last summer weekends. the Dow ekes out a gain, but the numbers have been

so much higher, again, as we hear more news from the Fed. It's Friday, August 25th.

Hurricane Harvey has strength into category three now. It's barreling towards the Gulf Coast and its crucial oil infrastructure.

With her own job in jeopardy, Fed Chair, Janet Yellen, takes a shot at the Republican's agenda. And the magic behind the magic. We look at how the

"Game of Thrones" dragons came to life. I'm Paula Newton in the world's financial capital and this is QUEST MEANS BUSINESS.

Good evening. Tonight, America's Gulf braces for hurricane Harvey. Now the nation's first category three storm in more than a decade, is about to

wreak havoc on an oil-rich stretch of that Texas coast. Now, it will make landfall in the coming hours and bring with 177-kilometer-an-hour winds and

rainfall measured in meters. Yes, meters. Millions of evacuees urged to flee their homes, are cramming highways, as we've 200,000 homes are at risk

in the storm's path. The damage could total more than $40 billion. Oil rigs are being evacuated, and that means gas prices across the United

States will rise, at least temporarily. The governor of Texas spoke just a short time ago. Greg Abbott explained why this storm is so dangerous.


GREG ABBOTT, GOVERNOR OF TEXAS: It's a hurricane that's going to prove more dangerous than many hurricanes. Not only are we going to be dealing

with the high winds that typically come with what should be a category 3 hurricane, but we are going to be dealing with immense, really record-

setting flooding in multiple regions across the state of Texas.


NEWTON: Rosa Flores is in Houston, Texas. And also, we been here before, where people see those kinds of warnings from the governor, but they do not

heed the warnings. What is going on right now?

ROSA FLORES, CNN CORRESPONDENT: Well, you know, here in Houston, the big worry, like the Governor mentioned, is the flooding. Because this is the

bayou city. There are bayous like the one that you see here, this is Buffalo Bayou, that literally drain to the Gulf of Mexico. The direction

you see in the water here, that drains into the Gulf of Mexico. During big storms, Paula, you will see these bayous run backwards, in essence.

Depending upon the strength of the storm, this water will flow inland, rather than flowing outward into the Gulf. You can see how close we are

here to downtown Houston. You can see the downtown area here behind me.

The big message from leaders, here in Houston, is that they are expecting about 20 inches of rain. Any rain on any given day here in Houston,

usually causes flooding 20 inches is a lot. They're recommending that people shelter in place. That's the latest guidance from the Houston

Office of Emergency Management. No evacuations been ordered here, because again, we are about 60 miles from the coast. So, we're pretty inland. The

worry is the floods. Now, to prepare, a lot of the first responders have gear that they have ready to go. We talked to the Assistant Fire Chief

here in Houston, here's what he had to say.


RUY LOZANO, ASSISTANT CHIEF, HOUSTON FIRE DEPARTMENT: Don't try to judge the depth of some of those waters and try to find a better route. The old

adage of turn around, don't drown really applies to Houston, the bayou city, because our underpasses could have rising water really quick. It

does not take very much water to have your vehicle swept away. And with the electronic components I vehicles today, the right component gets wet,

your vehicle will stall.


FLORES: Now one of the reasons why the Assistant Fire Chief keeps on mentioning vehicles is because take a look here. So, you see this highway

that's running over the bayou, there are some dip and valleys, Paula. So, where those dips and valleys happen, water actually goes over the highway,

over the interstates here in Houston. That's their big worry, because like you mentioned, the big question is, will people heed the warning? Will

they stay home? Will they not go with their vehicles through high water? That's why those first responders are ready to go, and that's why we're

here monitoring the situation, as well.

NEWTON: And unfortunately, we've seen these storms afterwards. The rescue started to happen again, they're warning that look, we're not going to be

able to come out and help you necessarily, as this hurricane barrels through the state. Our Rosa Flores will continue to watch this. She will

be there onshore awaiting that hurricane. Rosa, thank t you very much.

[16:05:00] Harvey is already pushing U.S. gasoline prices higher. One expert says they could climb as much as 25 cents a gallon. It will be

temporary, though, at least 86 oil and gas platforms have been evacuated in the Gulf. Nearly 20 percent of U.S. crude production comes from the Gulf

of Mexico. Texas alone is home to a quarter of U.S. refining capacity. Now, most of the oil comes from these fineries and goes to other markets in

the United States, but the region sends about 1 million barrels of crude a day to overseas markets. Now, Port Corpus Christi is the major shipment

point for these crude exports and the flow of oil there has already been shut down. John Larue, Executive Director of the port is on the phone with

me now. And Mr. Larue, I understand that your port now is completely closed. How long you expect that to last?

JOHN LARUE, EXECUTIVE DIRECTOR, PORT CORPUS CHRISTI: We closed yesterday afternoon, and obviously, the storm has not hit yet. It will hit some time

probably close to midnight. We don't really have a projection, but once the storm passes, we have this other major concern with the rain that could

be almost three feet in our area. So, before we can open the channel and get people back to work, one, the roads would have to be open and no

flooding. And the other thing we have to do is make sure that the channel is clear and that we don't have any obstructions. So, the core of

engineers from the U.S. Army has to come in and do a physical survey of the channel and make sure it's clear. That's going to take a while, if they

can't get into the ship channel because of all the other problems we are experiencing. It could easily be midweek before we're reopen.,

NEWTON: Wow, it's Friday and you're saying you could be closed until midweek. I mean, that goes to the strength of the storm and how it might

stall over the state. What's your greatest concern right now, beyond obviously anyone getting hurt or loss of life, but terms of the business

side of thing there, what's the worst-case scenario?

LARUE: Well, one would be damage to port facilities, to docks, also to our major customers. We have three large refineries here, probably about 6

percent of the U.S. refining capacity. So, any damage to them. We have a lot of mid-ream companies, you had mentioned the crude export, and we have

over 320,000 barrels a day that we usually export. And obviously, right now, we're doing none of that. So, both the storm, the wind damage, and

then the follow-on flooding are both serious concerns from the point of view of the port's infrastructure.

NEWTON: And in terms of that port infrastructure, I'd imagine you're doing what you can. Is there anything you can do at this point when this storm

is so large and it looks to be so severe and again, slow moving.

LARUE: Well, we've done that for the -- beginning on Monday. We started locking down a lot of facilities, removing any equipment that wasn't

necessary for existing operation, making sure there was nothing around that could become a missile or a projectile and do damage. So, we've -- we in

the industry here do that on a regular basis. We train and practice for that. So, we think we've done all of that. It's -- we've brought our

people inside the winds right now are picking up probably close to 60 miles an hour already. So, we just have to wait and see what it will look like

tomorrow when we can get back outside.

NEWTON: Mr. Larue, we know that you're experienced in watching for this big storm -- these big storms. This could be the big storm of the decade.

We'll continue to watch a wait and hope for all the best. Appreciate your time today.

LARUE: Thank you.

NEWTON: Now, meteorologist Chad Myers is at the CNN center. Chad this is not an allusion to your age in any way, shape, or form, but you are a

veteran of these things. I know that you are. When you see that map behind you, what are you telling me about this storm as we continue to

watch it turn and move so slowly?

CHAD MYERS, CNN METEOROLOGIST: So many different problems with this. I mean, we are going to see a meter of rain over an area the size of the U.K.

A meter of rain over the entire area. In some spots more, some spots less. Where does that water go? I know there's an ocean here, it's the Gulf of

Mexico. It tries to run downhill, but there are towns, cities, and people in the way of that one meter. And it doesn't stay one meter. It goes down

into the rivers and then that one meter turns into 40 meters as the rivers go up and try to get back into the ocean here. This is the eye of the

storm right now, 195 kilometers per hour. Now, I know that doesn't sound like, you know, Haiyan and some of the storms that do hit parts of the

eastern side of Asia. But this is a big storm for the Gulf of Mexico, considering how many oil fields are in the area, as you said.

[16:10:00] So, we're also talking about people., we're talking about Corpus Christi and a major city of Houston, Texas. The fourth largest city in

America that could pick up one meter of rain that has to get rid of it somehow. Now, Houston will flood at about 200 millimeters. And flood

badly. So, here we go with a thousand millimeters. How do we get rid of that? It's an exponential problem. This will be a problem for Texas and

maybe even Louisiana, the two states there for months to come. The recovery could take months. Because all of the models have just stopped it

after 24 hours, it sits there, and it rains.

This would be like taking Haiyan an putting it over China and stopping it for five days and just letting it rain. This is where we are now. There

are hills out here, mountain out here, it's called the Hill Country. All of this that catches out here, these are in inches, but you can do the

division. That's about 400 millimeters of rain.

Victoria, Texas, this is a model that blows my mind. This is a meter and a half of rainfall in the next five days. The water is going to go

somewhere. The surge is going to push water on land. People are going to be flooded. This is going to be a storm that if you made a bad decision,

it could| you your life. That's how deadly this storm is. This will be a 10 billion U.S. disaster and maybe even somewhere if it goes really badly,

this could be a 20-billion-euro problem for the U.S. It could be that big of a disaster here if it continues to rain like the model say.

NEWTON: Yes, we are hanging on so much of what you just said, not least of which obviously, is the financial impact and the fact that this storm will

stall for days. But Chad, to make a fine point of it, every time you see this, and every time you say, people, I'm hanging in, I'm going to stay

there, with I'm still going to drive my car from point "a" to point "b," what's your message to people who even have a thought of not heeding

warnings about this storm?

MEYERS: This is a killer storm. And I have covered so many on the ground. As you said, I am a veteran here, pushing 55 years old, thank you very

much. I have spent my time on the ground, and I ask people, after the storm, why did you stay? And they say, I didn't want to lose my stuff. I

wanted to protect my stuff. Well, stuff can be replaced. People's lives, pet's lives are going to be lost in this storm, because they made some bad


NEWTON: Yes, and we will continue, hopefully, to see all of those authorities to tell them to get out of the way. Hopefully they will be

able to. Chad, we'll continue to track this and unfortunately, we're likely to be talking to you again next week about how this storm shakes

out. Appreciate it, Chad. And I didn't mean to insult you at all. You're a veteran.

MEYERS: If I have ten seconds, I wanted to tell you about a tweet that I got, because I don't show up very often here, because we have other things

in the news that we don't cover. And they say, Chad Meyers is like an antique car, every once in a while, you dusted off and you drive him


NEWTON: I don't think that's charitable, but whatever. We'll go with it. Chad, thanks again and have a good weekend. See you next week.

MEYERS: You too.

QUEST: We turn now to the meeting of the world's top central bankers in Jackson Hole, Wyoming, a spot picked for its fly fishing and natural

beauty. Yesterday, we showed you what investors are fishing for, clues about the future of monetary policy and normalization, which is key.

Today, we're adding one more animal to our field guide. This is John Murphy's idea. He's producing this show. The elephant in the room, Janet

Yellen's tenure. Yellen's comments at Jackson Hole lifted the Dow ever-so- briefly, but she gave nothing away about potential rate rises.

ECB President, Mario Draghi, again not wanting to make news today, spoke an hour ago and had a bit more to say. Paul La Monica joins me. It was

interesting, because everybody teed this up as sang, they're not going to s anything, they're not going to say anything. But there are some clues as

to where a monetary policy is going, from both speeches.

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, I think so. I think in the case of Janet Yellen, clearly the elephant in the room is whether or

not she's going to be the Fed chair or is Donald Trump going to appoint someone else, perhaps Gary Cohn, who's in the news for not necessarily for

anything to do with his possible Fed aspirations lately. We'll see what happens there. Yellen didn't really give any hints, but what I did find

that was very interesting was she defended what has happened with regards to bank regulations and how banks seem to be more back on track right now.

And that's a little bit at odds with President Trump. So, maybe it's a not-so-subtle hint that she is on the way out and that she knows that and

feels a little bit more free to speak openly.

NEWTON: You know, is really interesting how you make those comments. Because some people would say it a certain way and say, maybe she just

wants to be on the record before she does renew the tenure. The president has been not very equivocal about this. He says that sometimes you think

he's going to extend her tenure, other times it sounds like he's going to hire someone else. When you get down to the heart of her comments, are the

markets on side with her comments or not on side with her comments?

[16:15:00] Because depending to who you speak to, one person says -- even scholars will say, it's been good. Others, very prominent ones, say, no,

this is all wrong. We do need to get rid of that regulation. It's crippling banks.

LA MONICA: It's very difficult right now to make a definitive answer. Because remember Alan Greenspan was the maestro back in the proverbial day

when he was supposedly saving the economy. His star, I think has lost a bit of its luster in the years that have followed. Now, some people blame

the great recession partly on him because of all the money that we had put into place. We had the dotcom bubble and all of those things. So, central

bankers can look good for a while, and then history has a way, like with politicians, of painting a different picture. So, I think is still too

soon to say.

NEWTON: We have lots of people on this show saying, that look, the bankers can't do it all. The politicians at some point have to pick up the slack.

In terms of how the market is reacting -- you know, we had a lot of news today. We had Secretary Mnuchin just a couple of hours ago there at the

White House saying, look, tax reform is on. I know I said it was going to happen in August, is not. Market's taking all of this in stride. It's

absolutely remarkable.

LA MONICA: Yes, I think at the end of the day, Paula, that investors are still of the belief that you're going to get an agreement on the debt

ceiling first, to have that raised. Particularly because the president and Congress, in theory, they're all in the same party, so you should have it a

little bit of -- you should have an easier time. No one wants another credit downgrade like we had a couple of years ago, or even the hint of

one. Which we've already gotten from Fitch ratings. So, that could spook investors. I think that's why people feel that there's going to be cooler

heads prevailing. But once you get the debt ceiling resolved, it goes right back to tax reform. If you can't get tax reform done, can you get

infrastructure spending? Can you get health care reform? There's a lot of variables at play that still no one knows how it's all going to --

NEWTON: And let's face it, we're all holding our breath until September when volume returns, everybody's back at work, and we'll see how those

markets are. You will be here -- as you'll be here next week.

LA MONICA: Not next week, but I'll be back in September.

NEWTON: OK, I will see you in September then. Have a great weekend.

LA MONICA: Thank you very much.

QUEST: Now, are you ready to rumble? I know I am. Floyd Mayweather and Conor McGregor are about to stare each other down and weigh in. And yes,

they mean business. We go live to Vegas, just ahead.


QUEST: We want to bring you up to date with the latest on hurricane Harvey. It has now strengthened to a category three hurricane. It was

what we were expecting. It is, in fact, the first storm of this category to hit the U.S. coast in 12 years. Forecasters warned some areas could be

uninhabitable for months. And we will have much more on this storm in the hour ahead.

Now, it's possibly the most hyped boxing match the sport has ever seen and it's just a day away. Bookies say more money has Ben wagered on the

Mayweather/McGregor fight than any match in boxing history.

[16:20:04] The two men will strip down and stare down each other at their weigh-in in less than two hours from now in Vegas where Don -- where "WORLD

SPORTS," Don Riddell is doing all of the work for us. Don, we absolutely loved your piece yesterday in terms of setting up the hype. Set up what's

going to happen now. You know, so much has been made of this fight, and now we know that a lot of money is on the line, too.

DON RIDDELL, CNN WORLD SPORT: Well absolutely, Paula. And all the promoters and the people involved are saying it's going to break all kinds

of records with regards to the money that's being gambled, the pay-per-view numbers. It's being broadcast in multiple platforms in more than 200

different countries. As you can probably tell, we're now inside the T- Mobile arena and we're waiting for the weigh-in, which is going to happen in the next couple of hours on this stage behind me.

And already, I say, there's about 2,000 fans inside the arena. They've been giving the tickets away for free today. I think there's good chance

that this place will be close to full in the coming hours. And it certainly will be very, very exciting. You know, this fight is also

controversial, Paula. Some people think it shouldn't be happening at all. Some people think that it's basically just a money grab and that the people

who are buying the fight have been hoodwinked, ultimately. That they've been tricked into believing that Conor McGregor has any kind of a chance to

win this fight.

But it's going ahead and I spoke to the UFC president, Dana White, on the eve of the event and asked him why he thinks we should watch.


DANA WHITE, PRESIDENT, ULTIMATE FIGHTING CHAMPIONSHIP: I'm a bit of a mess, you know. Conor McGregor is a guy that, you know, big star for us,

you know. I care about him personally and professionally. And you know, I want him to win so bad on Saturday. It's weird feeling for me. I don't

know if I've ever felt, like this. But if I have, it's been a long time and I don't remember.

RIDDELL: What do you say to those people who say that this is an illegitimate fight, Conor shouldn't be there, he doesn't have a chance of

winning anyway? Why should we watch?

WHITE: Yes, listen, when you have two people, OK, first of all, Floyd Mayweather, who has gone undefeated his entire career, is now almost 41

years old. Hasn't fought in over two years. Going against Conor McGregor, who is 29-year-old, in his prime. The bigger, stronger man of the two, and

has knockout power in both hands. To say that he doesn't belong in there and he can't win the fight is just -- it's the dumbest thing I've ever

heard. When two people get in there and start throwing punches and you have the power and the size that Conor has, anything is possible.

RIDDELL: So, what's the worst that'll come here? What if it's just a terrible fight and McGregor loses? How bad is that going to be for you


WHITE: Yes, that's not good for anybody. But at the end of the day, what you have to understand is, when you're tuning in to watch a sporting event,

the World Cup, you know, your teams in it. Just because it's the World Cup, it doesn't mean it's the best soccer game you've ever seen, right? If

-- the Super Bowl isn't always the best football game you've ever seen. And you know, a mega fight like this might not be the best fight you've

ever seen. It's all part of live sports, it's a part of professional sports. But I can tell you this, Conor McGregor has never been in a boring

fight, ever, in his entire career. And I don't expect Saturday to be either.


RIDDELL: UFC President, Dana White, Paula, there telling us why we should watch the fight. Of course, there has to be a loser in any fight, but I

think that everybody involved in this event is going to come out on top financially.

NEWTON: Absolutely, well-said, which is why Dana White, it's a coup for him. You know, Don, in terms of your perspective on this is there anything

for sporting fans in this, or is this just spectacle? And that means whether you're a fan of, you know, some of the UFC fighting that's gone on

or pure boxing enthusiasts.

RIDDELL: Well, I mean, we're watching something that hasn't been done before, certainly not at this level and with this much of a spotlight on

it. So, it is certainly intriguing. There's a lot of interest in what's going to happen. How Conor McGregor is going to approach this fight? He's

a man who's never had a professional boxing fight in his career. He says he can do it. We'll see., Floyd Mayweather, of course, he's been in

retirement for two years, but he's bring a 14-0 beaten record to this fight. And he's known and renowned as one of the most technically gift,

boxers of all time. So, it is going to be fascinating to see how this matchup actually play out and whether McGregor can really do anything. And

of course, if he can't, then this whole thing is going to be a huge disappointment. But if you listen to the promoters, they don't think it's

going to go that way. But of course, they would say that.

NEWTON: And of course, they would. We will see, because a lot of it will determine whether or not there is ever again a fight like this. Don

Riddell, thanks so much. Really appreciate you, having you here on this.

RIDDELL: All right.

[16:25:03] NEWTON: Now, "Game of Thrones" became one of the most valuable brands in television with intricate fight scenes and staggering plot

twists. Really, it blows everybody's mind, apparently. But for the better part of a decade, it's been a core cast of characters that's kept those

fans obsessed. Now, three of those characters have never spoken a word of dialogue, but are arguably the show biggest stars. As we count down to the

season 7 finale, Clare Sebastian learned how "Game of Thrones" dragons have come to life.


CLARE SEBASTIAN, CNNMONEY CORRESPONDENT (voice-over): In the fantasy world of "Game of Thrones," fire-breathing dragons are the ultimate weapon of

war. Behind the scenes, it took an army to create them. And the world they inhabit.

THILO KUTHER, CEO, PIXOMONDO: We had a meeting with HBO and they were talking about how the -- how important the dragons will be for the coming

seasons and how much the character's personality will be a major part of the story.

SEBASTIAN: Pixomondo joined "Game of Thrones" in season 2. One of 27 visual effects companies the show has hired to date. Their job to create

dragons that were coming of age.

KUTHER: If this animal getting bigger, than the balance, the muscle structure, the way it actually lifts up in the air is changing. It's

becoming more complicated than if you have something tiny at needs to hop a few feet. And this was an incredibly challenging thing to develop.

SEBASTIAN: To do so, he said the artists had to take something familiar.

KUTHER: They went to supermarket and dissected a chicken to learn how the muscle structure should be.

LUKE DITOMMASO, PROFESSOR, SCHOOL OF VISUAL ARTS, NEW YORK: You know when the dragon comes in and they like shot and the ice starts to like break up.

SEBASTIAN: It's work like this which has made "Game of Thrones" a master class for the next generation.

UNIDENTIFIED MALE: I want to work on characters. So, just seeing dragons when their little babies trying to shoot tiny bits of fire to what they are

now, just these huge beasts, and it resonates with everyone, I think.

SEBASTIAN: For these final year visual arts students, it was part of the inspiration for their thesis film.

(on camera) You learned anything from watching "Game of Thrones"?

UNIDENTIFIED FEMALE: Yes, I think so. Definitely that not everything has to be CG. So, like the wolves. They were real wolves that they like green

screened in. That wasn't CG. And to me, that was really eye opening in a way.

DITOMMASO: I think the original intent was to write a story that was so grand that it was completely unbound by the constraints of regular

production and visual effects has made a show like "Game Thrones" possible.

KUTHER: Visual effects is not the driving force of the show. I think it's the drama that is built around people's relationships. It's not trying to

be a fantasy story. This could be true. This could be a real thing. And I think that's what makes the magic of it.

SEBASTIAN (voice-over): A magic that has taken TV drama to an epic scale. Claire Sebastian, CNNMoney, New York.


NEWTON: We want to bring you up to date on some disturbing news right now out of London. A man been arrested on the mall outside Buckingham Palace

on suspicion of grievous bodily harm and assault on police. That is according to from a tweet from London's Met Police. Obviously, that is

their official account. We will continue to keep you dated on what happened there outside of Buckingham Palace.

And some more updates from Europe. Belgian authorities say a man has been shot in Brussels after attacking two soldiers with a knife. The attacker,

was taken to the hospital in critical condition, while the soldiers were lightly wounded. Now authorities say the attacker was known to them for

petty crimes, but did not, as far as they know, have terror links.

Now, no time for games on the Texas coast. A monster storm bearing down and disrupting lives. The latest on hurricane Harvey, when we come back.


[16:31:20] NEWTON: Hello, I'm Paula Newton and there's more QUEST MEANS BUSINESS in a moment. We'll have the latest on the category three

hurricane barreling towards the U.S. Gulf coast. And from the C suite to a cell, one of South Korea' most powerful businessman gets a five-year prison

term. Before that, though, the headlines this hour.

Hurricane Harvey has intensified as it approaches the U.S. state of Texas. This is what it looks like now from space. Pretty awesome. It's now a

major category three hurricane. And forecasters say it could get even stronger. The Texas governor is urging people to get out of harm's way

before it's too late. The storm is expected to make landfall in the coming hours.

A man has been arrested on the mall outside of Buckingham palace. That is an area looking -- just on the other side of the fountain. Two London

police officers suffered minor injuries to their arms while detaining the man. That's according to an official tweet from London's Met Police.

Now Belgian authorities say a man who's been shot dead in Brussels after attacking two soldiers with a knife. The attacker was taken hospital in

critical condition while the soldiers were lightly wounded. Authorities say the attacker was known to them for petty crimes, but not terror links.

U.S. President Donald Trump has signed an executive order, imposing new sanctions on Venezuela. U.S. citizens and banks are now barred from buying

new bonds from the Venezuelan government or the state-run oil company. These are in addition to the sanctions already in place on President

Nicolas Maduro and his associates after he consolidated power in July.

Former Thai Prime Minister, Yingluck Shinawatra, has fled the country and is now Dubai. That's according to a highly placed source in her political

party. Earlier she failed to show up to hear the verdict in her two-year trial. Yingluck is accused of managing a controversial rice subsidy

program which cost the country billions of dollars.

An attack on a mosque in Afghanistan has killed at least 20 people and wounded 50 others. Kabul officials say a man blew himself up at the gate

of a mosque during Friday prayers. And gunman stormed it and traded fire with officers who killed two other attackers after a four-hour gunfight.

ISIS is claiming responsibility.

Clashes between protesters and police turned deadly in northern India. The violence erupted after a popular spiritual guru was found guilty of raping

two followers. His supporters had gathered expecting an acquittal and were enraged following the verdict.

Returning to our top story, the Gulf island city of Galveston, Texas, is in the path of the hurricane. CNN's Ed Lavandera is also in the path of the

hurricane. Ed, I've been watching you on the satellite. Just watching how hard it is for you to even be able to stand still. What is this corner of

Texas in for, as this storm makes landfall?

ED LAVANDERA, CNN CORRESPONDENT: Well, you know, this storm is really just going to be a threat on not just a wind level, it's many levels. And

that's why many emergency management officials here along the Texas Gulf Coast are very concerned about how this storm will unfold over the coming

days. It's not just the high winds of a category three hurricane, but it's also the incredible amount of rain that is expected to follow here over the

course of, during this storm and the next several days.

[16:35:00] Forecasters here in the United States, predicting that what this storm will do after it makes landfall, is essentially stall out. Not

exactly sure which direction it's going to move. But they do anticipate it just to kind of stall out over this area, dumping rain -- days and days of

rain here on this area. And this is a part of Texas that is already prone to flooding and very serious flooding. Even the most minimal of tropical

storms here, has caused deadly flooding in the past. So, that is one of those things they're very concerned about.

We're told that emergency responders from the state-level down to the local level are deploying their high-water rescue teams and pre-positioning

them ahead of the storm in anticipation of having to carry out a lot of these high-water rescues. But here on Galveston Island, we're going to be

on the eastern edge of this storm. And as you look out into the water, you can just see how high and choppy the surf is. That storm surge slowly

starting to creep its way here north.

We're on a seawall that protects most of this island from the most serious of storm surges. It so seems like in this part of the island, we're going

to be OK from the storm surge. But once you start heading out west towards Corpus Christi, where this -- the eye of the storm is expected to make

landfall, that's where we're -- you know, the mandatory evacuation orders he been put into place. I have spoken with a few emergency officials who

say for the most part, they believe that people are taking these warnings seriously. But they do worry that there are a number of people who aren't.

And those of the ones that are going to cause a problem. It's not just a problem here today, Paula. Over the next couple of hours, as this storm

officially makes landfall. But it is the concern about what will happen over the weekend, as much as almost a meter of rain expected in isolated

areas. And in a lot of areas, it's almost three fourths of a meter expected generally throughout the area. That is causing a great deal of

concern that the flooding is going to be widespread.

And because the storm is expected to stall out over the area, that water to recede might take even longer. That is the concern here, not just the

winds, but it is the flooding. And in some of these areas, we've also been under tornado warnings. So, it just feels like there's little bit of

everything to be concerned about right now, Paula.

NEWTON: And we are certainly getting an indication, Ed, as you continue to get slammed there by wins and water. And I have to say, as you were

talking, as you said, some people not heeding the warnings. There somebody walking into the water right behind you. We will let you go for now, Ed,

and continue to get more updates. Go see what that guys doing, will you? Get him out of that water. Appreciate it. Thanks, Ed.

The federal government says it is prepared for the first natural disaster to hit during the Trump administration. The Federal Emergency Management

agency says it activated the natural response coordination center and has search and rescue teams in San Antonio and has pre-positioned generators.

This is all a relief to many Americans, as President Trump received a briefing before departing for Camp David. His homeland security adviser

talked about Mr. Trump's input on the response.


TOM BOSSERT, U.S. HOMELAND SECURITY ADVISER: The president had three primary concerns. His first concern was the life, safety, and evacuation

timing. Are people getting out of harm's way that need to get out of harm's way. And then his second concern was, do we have the appropriate

resources to bring to bear? That was a question he directed at administrator Long and Elaine Duke. Brock Long reported to him that we

did, in fact, have all of those resources pre-deployed. And really the third concern from the Presidents perspective after hearing the briefing,

was not only that the people in harm's way in Texas be prepared and be evacuated as appropriate, but that the people in Louisiana should the

forecast wobble in any direction, also be prepared.


NEWTON: Now, Donald Trump took off for Camp David last hour. Kaitlan Collins is tracking the administration's response to this hurricane from

Washington. Interesting to hear in the briefing just a few hours ago that the president has already decided that he is going to Texas as soon as this

storm clears.

KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: Yes, that's right, they said he is making plans to go to Texas. Press Secretary, Sarah Huckabee Sanders,

told us today. Now, that of course, depends on the severity of this storm. Because as you know, if an official goes down there too soon, it's quite a

commotion went the President goes anywhere. And it could heed some problems, you know, with emergency situations and their tending to certain

situations in that area.

So, we'll have to stay tuned for when the president is going to go. We saw him depart for Camp David just a little while ago, shortly around 4:00.

And the White House says that the President is receiving constant updates from his homeland security adviser, Tom Bossert, who we just saw there,

this is at the press briefing today. So, we'll likely find out more about that.

We also know that the president is going to stay in touch with the Governor of Texas, Greg Abbott. And that Greg Abbott has asked that the White House

declare this an emergency. And that the White House says they're evaluating that, there considering it. And basically, what that means if

they do approve it, is that they can go ahead and have the flow of federal funds to the areas in Texas and Louisiana that need it the most. So, we'll

be watching to see if the White House does approve that.

[16:40:02] NEWTON: You know, I don't know which way to go on this. Sometimes the President says he's a micromanager on these things, and that

means that it's going to go well. On the other hand, the administration seems to be signaling that they want to give more support to the local

counties and the states that will help deal with things. I mean, in terms o4the administration, obviously, wanting to get this right. Do they -- do

you feel -- are they saying that they have a handle on this before the storm even hits land?

COLLINS: Well, I definitely think they are trying to be proactive. That's why they're saying that the President is already planning to go to Texas

and visit the area. As you know, he famously criticized Barack Obama last August when he was at Martha's Vineyard on vacation with his family. In

the president criticized him for not going to Louisiana when some floods were pounding the area. So, I think Donald Trump will try to learn from

the past mistakes of administrations. Because as you know, these things can be presidency defining. That's what happened with George W. Bush and

Hurricane Katrina 12 summers ago. A lot of people said that his administration botched the response to that. So, they're going to be

looking for the Trump administration to really learn from those mistakes and handle this situation in a different way, because they are expecting

this to be such a massive storm.

NEWTON: Yes, l good points, Kaitlin. Thanks so much as we continue to see how the administration handles the fallout from the storm. Appreciate it.

Now, we know the U.S. and Mexico and Canada are locked in highly contentious talks to rework the North America Free Trade Agreement.

Apparently, we won't learn much more about that though. The three countries signed a nondisclosure agreement, I really hope that doesn't last

too long, to prevent details from leaking out. Some state and provincial governors are taking matters into their own hands. We heard from the

governor of Oregon Kate Brown earlier today. I spoke with the premier of Ontario, Canada Kathleen Wynne told me, it is of course an uncertain time.

KATHLEEN WYNNE, PREMIER, ONTARIO, CANADA: I know that as we go through this process, there will be heated moments, there will be drama, we know


But the work is being done at the negotiating table. The work is being done by people who are hearing from leaders in states and provinces about

how important this deal is for all of us. There are 9 million jobs, Paula, in the United States that are dependent on Canadian companies. I can tell

you that the governors that I've spoken to are giving that message to the negotiators in Washington. So whatever rhetoric, whatever drama we hear in

the public, the discussion is going on at that negotiating table and we have to be very serious about this extremely important document.

NEWTON: Does that mean there is some opportunity to compromise with the Trump administration on some irritants, namely things like the milk

marketing board and things, like the content regulations in those autos going back and forth across the border.

WYNNE: I do think there are opportunities to make this a better deal. I mean you've heard many people talk about the reality that their areas that

weren't even thought of when NAFTA was first negotiated, around technology and cybersecurity. Those kinds of things. So, we have huge opportunities

there. But even in the areas that are more traditional, yes, I think that there are opportunities to make this a better deal regardless, Paula, of

what the public media discussion is, there are serious negotiators dealing with very serious issues, on whom jobs depend. On whom people's lives

depend, on both sides of the border.

NEWTON: But if you had to be frank with Ontarians right now, what would you tell them about this severe minefield, very dangerous minefield that

are these negotiations?

WYNNE: Yes, well, I have said to Ontarians, I have said two things, this is an uncertain time. There is no doubt about it. And some of the

language that has come out of the White House for sure makes it even more uncertain exactly what the future holds, exactly what the end this

negotiation will be. That is a given. But my personal experience in talking to governors who have responsibility for advancing their

constituents' interests, of advancing their economies, my experience has been is that they understand, whether they're Republican or whether they

are Democrats, they understand how important it is that we have a good working relationship, because they know that there are jobs in their states

that are dependent on in this case, on Ontario, but on Canada.

So, I'm -- when I talk to the people of Ontario, I'm saying, look, I know what you're hearing in the press. I understand that you're hearing

particular speeches or you're seeing, you're hearing rhetoric. But what I'm experiencing is very serious leadership at the state level that

understands that we've got to get this right. It's not something that we can be frivolous about. It's not something that we can be flippant or

offhand about. This is about very serious consequences for their constituents' lives. And that's what I have said, frankly, to the people

of Ontario.

NEWTON: When we come back, two serious contenders with great records come face to face. On this show, you know who I'm talking about, right? ECB

President Mario Draghi and Fed Chair Janet Yellen, obviously.

[16:45:00] They've both got strategies to bulk up their respective economies.


NEWTON: OK. So, yes, boxing fans are focused on the upcoming Mayweather- McGregor fight in Las Vegas, but economists and investors are watching a rumble in the Rockies. Yes, the annual meeting of the world's top central

bankers in Jackson Hole, Wyoming. They've all got a strategy to get their economies into fighting shape, the two biggest names, of course, Yellen and


Their strategies. First, Janet Yellen, the fed is tightening monetary policy, bringing rates back to normal. Now, she's also defending

regulation. That's a shot at President Trump and the Republicans, who are calling for deregulation. And she urged her audience to remember the

lessons from the financial crisis. Over to Super-Mario now. He's keeping monetary policy loose for now. He warned openness to trade is under

threat. And he successfully avoided a market panic with his comments. That's a big move for Super-Mario. Now, Janet Yellen's long-term job at

the fed may be in doubt, This may be her last Jackson Hole meeting as fed chair.

Gillian Tett, the managing director of the FT joins me now. Gillian, we build these meetings up and we then have to parse their words. They were

very careful, both of them to say, look, we're not meaning to make news. But did they, turning specifically to Janet Yellen and her comments about

the deregulation?

GILLIAN TETT, U.S. MANAGING EDITOR, FINANCIAL TIMES: Well, there was great anticipation about what Janet Yellen was going to say today, because she'd

indicated this speech would be about financial stability, which is not a topic she's talked a lot before Jackson Hole. In the event though, it

wasn't quite as dramatic as some people had hoped or feared, if you would like. She didn't come out and say the financial system was essentially

overblown, that there was a bubble waiting to burst, as some people think.

Instead, she essentially hit back at the efforts to weaken regulation, saying that much of the regulation that had happened, since 2008 had been

good. There could be some fine tuning, but there was no need to roll back all the reforms.

NEWTON: And you know, that was the heart of it for the markets. Looking further into the crystal ball, did she perhaps talk herself out of her own

job? Or did she already know that perhaps she is not going to get extended through that talk about the deregulation?

TETT: The recent polls of economists have shown that, in fact, a majority of economists now think that she won't survive beyond next year, and that

Donald Trump will, in fact, appoint somebody else. And the person they are certainly favoring in the polls right now is Gary Cohn, the chief economic

adviser to the White House. But, you know, Janet Yellen has been through lots of ups and downs before.

[16:50:00] She knows perfectly well that her politics, her approach, is not liked by some people around Trump, but she also knows that does have some

fans. So frankly, I think it's too early to say exactly what will happen next year. Instead, this time round in Jackson Hole, she will simply try

to make a point that she has been making in private for a long time, which is, the Republicans should not roll back financial regulation too fast.

NEWTON: Interesting. And speaking of Gary Cohn, he's the former Goldman Sachs executive, he's on the far left on the video that we're showing right

here. He has been under scrutiny since the president's press conference last Tuesday. You know, everybody looked at that moment, Gillian, for that

man and thought, here you are as the president is blaming both sides in Charlottesville. He told "The Financial Times," your newspaper, he's

quoted as saying, I will not allow neo-Nazis ranting, Jews will not replace us, to cause this Jew to leave his job. Gillian, I am sure and all the

people that you speak to, and now Gary Cohn, he's saying, look, I'm facing pressure from both sides. Those who told me resign and those who told me,

no, you must say in this administration. In terms of the effect it will have for investors and the markets in general, him leaving would be a big


TETT: Well, I think it's become clear in the last week, that if he had left, after those comments and after the controversy, many big business

leaders and investors would have been disappointed. Because he's regarded as being at the forefront of what I call the sensible squad. The group of

officials inside the White House, who are trying to propose something that looks vaguely familiar in terms of a policy plan. Some people might

dislike the policies, but at least it makes some sense consistent internally.

And in fact, we do have this, interview in tomorrow's "Financial Times" and on the website, which explains that he is now pushing very hard for tax

reform, for other types of reform, but particularly focusing on tax reform. And the fact that he talked both about his feelings in the aftermath of

Charlottesville and fact that he is basically trying to push ahead with tax reform shows that he does not have any intention right now of leaving. He

wants to try and push that pro-business agenda forward.

NEWTON: Gillian, really appreciate it and have a great weekend. See you again.

TETT: Thank you.

NEWTON: Now from the C suite to the cell, one of South Korea's most powerful businessman gets a five-year prison term.


[16:55:00] NEWTON: The de facto chief of Samsung has been slapped with a five-year prison term. Jay Y. Lee was found guilty of bribing the former

South Korean president and several corruption charges. Paula Hancocks has more from Seoul.

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Showing no emotion Samsung's Jay Y. Lee is led away to start a five-year prison term. Guilty

of bribery and corruption charges, his lawyers say they will appeal.

Jay Y. Lee is not the only one behind bars right now. Four former Samsung executives were also on trial with him, two of them were sentenced to four

years in prison. The other two given a suspended sentence.

One of those walking free met by support and jostling from some protesters. A small but passionate group who believe Lee and former President Park

Geun-hye have been unfairly targeted. Park was impeached and detained over the same corruption scandal, her trial is ongoing. She maintains her

innocence. This woman says this trial is the result of lies and propaganda. That is why he was prosecuted. This trial should be invalid.

He's not guilty.

But for many South Koreans, a small number of whom came to court, close ties between big business and government have lasted too long. Up until

now, this man says, the Samsung family has not had to follow the law, matter what kind of crimes they committed, they were never convicted.

Jay Y. Lee's father, Lee Kun-hee was convicted twice, once for bribery and then tax evasion, receiving a presidential pardon twice, never serving a

single day in prison. But these are different times in South Korea, massive protests called for Park's impeachment and end to big business in

their view being above the law.

The presidential office now run by a liberal president who has vowed to stamp out construction said in a statement, I hope that this will be an

opportunity to eradicate the long-standing cozy relations between politics and business, which has been an obstacle to further advancing our society.

Few believe this verdict will actually affect the running of Samsung. Lee's been in detention for six months already with no impact on the

company, but longer term may be different.

TONY MICHELL, KABC LTD.: What it can't do without him is make big decisions, big mergers. And of course, Samsung electronics needs probably

to make those kind of acquisitions and mergers in the future.

HANCOCKS: A problem the Samsung legal team do not seem worried about, saying they're confident a higher court will find Lee and his colleagues

innocent. Paula Hancocks, CNN, Seoul.

NEWTON: And that's QUEST MEANS BUSINESS. Have a great weekend. I'll see you here next week. News continues right here on CNN.