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Dow Plunges; Locked Railroad Switched Caused Accident; Nassar Speaks in Court; FBI Agent Turns in Badge. Aired 9:30-10a
Aired February 5, 2018 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:30:56] ERICA HILL, CNN ANCHOR: Wall Street now open for business and markets seem to be picking up right where they left off after that ugly sell-off on Friday. This as a new chief takes the reigns at the Federal Reserve today.
Christine Romans is here to break it all down for us.
So we saw that it was probably not going to be a great open.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Yes.
HILL: Here we are.
ROMANS: You know, look, and you saw Asia fall sharply. You saw Europe then fall as well. And now futures are down and the stock market expected -- it looks like it is down here, down about 326 points.
Look, selling begetting selling, we had fear of missing out about a week and a half ago. Now it's just plain fear. And it's one of those late in an economic cycle reality that then, at some point, good news starts to become bad news.
What do I mean? We had a really good job report that shows wages rising for the best -- since 2009. But that's bad news because that means the Fed is likely going to have to keep raising interest rates to make sure the economy doesn't overheat. So, in other words, it's not a goldilocks economy, just right, it's now maybe just a little too hot with more stimulus coming in those tax cuts and the Fed's going to have to raise interest rates.
You see the bond market already reacting. The bond market's really where all of the action is. And bond yields have been moving pretty sharply higher. And that's put pressure on the stock market. So watching this.
Now, perspective is really important. You ask me, what does this mean percentage-wise? OK, so it's 1 percent. That's not very much when we've seen stocks go up 4 percent a week in some cases or every other week.
ROMANS: Let me show you what the markets have done since the election because I think this perspective is good. The Dow is up almost 40 percent. Nasdaq up 40 percent. The S&P 500. The stocks that you have in your 401(k) are probably more reflective of what's happening in the S&P 500. That's really good.
And this has been ten years of an economic expansion. At some point, these bulls get a little old and sometimes have to have a correction.
I want to show you this chart because it shows you how far we've come. And you don't even register the last week on a chart that goes back this far because that blip is so small in the long-term. We don't know where it's going from here. Nobody really does. But there's a lot of discussion this morning on Wall Street, Erica, about, is this finally the beginning of the end where we start to see more volatility. We see the stock market go down and up, not just up, and where do we really go from here on that.
Or is this a place for people to get in who have been waiting and waiting for a pullback to buy? There have been very few corrections or pauses in this -- in this recovery, the stock market recovery in the past few years. And, you know, there's an old saying on Wall Street, the pause refreshes the uptrends. So we just don't know exactly.
My advice to people who might be freaking out right now at another 260 point drop is, don't freak out. Make sure you know -- if you're very close to retirement, you should not have all your money in the stock market.
ROMANS: If you are young, you can afford to have a lot of your, you know, capital risk in the stock market. So know what -- know what your plan is and what your asset allocation and risk tolerance are.
HILL: Appreciate it as always, Christine.
ROMANS: You're welcome.
HILL: Thank you. Good to see you.
Investigators overnight pouring over camera recordings from Amtrak Train 91 after Sunday's deadly crash. The train's conductor and engineer both killed when it diverted onto the wrong track and mashed into a parked freight train. NTSB officials say they hope to have more details from the cameras' recording later today.
CNN correspondent Kaylee Hartung joins me now from South Carolina with the very latest.
KAYLEE HARTUNG, CNN CORRESPONDENT: Well, Erica, we have learned that a switch was lined and locked as they say in the railroad industry on the track that diverted that Amtrak train from the main line on to a siding line, squarely into that freight train that was parked. Now that switch locked with a padlock.
Questions now from investigators are why? Why was this fatal mistake made and that's a question that CSX is going to have to help the NTSB answer. CSX, the railroad corporation that owns the track that this crash happened on, that means they're responsible for maintaining and operating that track. Its signals, it's switches and its dispatching.
CSX put out a statement, Erica, offering their condolences to the families of the two victims. The Amtrak's train's conductor and engineer. They said they would be cooperating fully with the NTSB investigation, but they have not acknowledged any wrongdoing.
[09:35:01] HILL: Not acknowledging any of that wrongdoing. We will continue to keep an eye on it. There's also talk really quickly, Kaylee, about some of the technology that could have possibly helped here, maybe prevented this. What more do we know?
HARTUNG: That is -- yes, that's something really troubling to understand, that the technology does exist that could have prevented this from happening, that could have alerted the engineer on the Amtrak train that that switch was locked in the wrong position. It's the Positive Train Control System. A system that the NTSB has been lobbying for. It was initially supposed to be installed nationwide by the end of 2015, but the reality, the NTSB chairman told us, is that it wasn't enough time for the railroad companies to do it. That deadline now the end of 2018. And as the NTSB chairman said, the sooner the better.
HILL: Kaylee Hartung live for us there in South Carolina.
Kaylee, thank you.
I want to get now to some breaking news.
Disgraced former doctor for USA Gymnastics and Michigan State University, Larry Nassar, charged with sexually abusing dozens of girls, just speaking out in court.
Jean Casarez joins us now from Michigan.
JEAN CASAREZ, CNN CORRESPONDENT: Well, Larry Nassar is being sentenced right now at the moment the judge is speaking and the prosecutor is asking for up to 125 years. Larry Nassar was given his chance to speak moments ago in court. He did. Take a listen.
(BEGIN VIDEO CLIP)
LARRY NASSAR: The words expressed by everyone that have spoken, including the parents, have impacted me to the -- to my inner most core. With that being said, I understand and acknowledge that it pales in comparison to the pain, trauma and emotions that you are feeling. It's impossible to convey the depth and breadth of how sorry I am to each and everyone involved. The visions of your testimonies will forever be present in my thoughts.
(END VIDEO CLIP) CASAREZ: The judge had to swear him in before he gave that statement under penalty of perjury and the judge just said in her remarks that in the presentence investigation report, when Nassar was interviewed, he said that, yes, he pleaded guilty, that there was no medical procedure involved, that the intent was sexual, but that was wrong. That it actually was a medical procedure he did and that was his intent and purpose. So the judge is saying, you cannot be reformed and that will fair for a very lengthy sentence in my courtroom,
HILL: All right. And we'll watch that final sentence, as you said, happening right now.
Jean Casarez, thank you.
Attacks on the FBI ramping up and that is why one agent says he stepped down. He wants the agency held accountable, but some of these attacks he says are making it very tough for the FBI to do its job.
[09:41:53] HILL: We are taking you live now to the courtroom where Larry Nassar is being sentenced. Let's listen in.
UNIDENTIFIED FEMALE: I am also required to inform you that should something happen and you would be released, that you must register as required by the Michigan Sex Offenders' Registration Act and comply with all requirements of that act. You must submit to global position system monitoring and comply with all the requirements of the system as directed by your field agent. You must submit to HIV testing and complete counseling regarding HIV and AIDS.
You do owe 204 in state cost, 130 crime victim assessment, 500 in court cost. You will be subject to lifetime electronic monitoring pursuant to Michigan law. And the issue of restitution will remain open to be determined within the next three months.
This sentence is to be served concurrent with in Ingham County Court Docket 17526FC and is consecutive to the federal court case.
Because you entered a plea, you do have the right to seek leave to have your sentence reviewed on appeal. If you cannot afford appellate counsel, one will be appointed for you. If you wish to exercise that right, you must do so in writing within 42 days of today's date.
Mr. Nuberg (ph).
Your honor, these proceedings (INAUDIBLE) rights and providing that to the court today (ph).
UNIDENTIFIED FEMALE: Ladies and gentlemen, this now ends the criminal/legal proceedings involving Larry Nassar. I realize that this does not end the emotional and physical suffering he has caused. I am in awe of each of you and I appreciate your efforts to provide me with your statements, flying in from Europe, all over the country, submitting videos, taking time off work, missing classes. You basically put your lives on hold. You will always be in my thoughts and prayers.
That is all.
UNIDENTIFIED FEMALE: All rise.
HILL: And so we just heard the sentencing of Larry Nassar there, of course, the disgraced former doctor.
Now, this is a sentencing for three charges to which he had pleaded guilty, three counts of felony criminal sexual conduct. And this happened at a gym in Michigan called Twin Stars Twisters, which a number of young gymnasts got their start at and then went on to great careers in many cases.
If this sounds familiar, the sentence of 40 to 125 years, it is very similar to what we heard on seven different accounts also to which he had pled guilty and for which he was sentenced a couple of weeks ago.
Jean Casarez has been covering all of this, both of the sentencings, these horrific charges here.
[09:45:00] Jean, I'll hand it over to you now.
CASAREZ: You know, Erica, the judge, in issuing the sentence, said the reason I am not giving you a life in prison term is under Michigan law you can get paroled well before that. So by giving you 40 to 125 years in prison, you will have to serve that amount of time. Of course, 40 years being the minimum. It's a mandatory minimum. Really, I think, in this case, it is just something in theory. The 125 years obviously will be the sentence. But this is the third sentence because 60 years in federal court, up to 175 courts (ph) in Ingham County and now 125 years.
The assistant attorney general, in her argument this morning, really focused in on the victims that were not believed for so long, that they were not believed by their families, they were not believed by authorities and now for ever more when someone is nice to them, like Larry Nassar was, they will not know if that person is to be believed if they can trust going into all of the lives that have been changed and damaged forever. Larry Nassar also stood up in court and gave a statement.
HILL: What did we hear from him? Just another apology?
CASAREZ: Larry Nassar apologized. Said he was so sorry. He will carry these words with him forever. And then the judge said, you know, in your presentence investigation you were interviewed and you said that it was a medical procedure, that by pleading guilty and saying it was not medical, it was sexual in nature, that you just said that, that it was medical. And so she did that in looking at the sentence by saying, you're not remorseful. You are living in a fantasy. You are not accepting the responsibility truly of what you have done to so many hundreds of young women.
HILL: Jean Casarez, live with us there for the very latest on that sentencing.
Jean, thank you.
When we return, more on one now former FBI agent's decision to step down. Why he said he felt he had to and what others are saying in response?
[09:51:42] HILL: This morning, the release of the GOP memo is causing even more damage to an already frayed relationship between the Trump administration and the FBI. One agent turning in his badge over what he calls the relentless political attacks on the bureau, telling CNN the FBI needs the support of the American people in order to better protect them.
(BEGIN VIDEO CLIP)
JOSH CAMPBELL, FORMER FBI SPECIAL AGENT: Criticism of the FBI is need. We have to have oversight. We cannot police ourselves. But what myself and my colleagues have been concerned about are the political attacks.
(END VIDEO CLIP)
HILL: Joining me now to discuss, CNN law enforcement analyst James Gagliano, also retired FBI supervisory special agent.
So he talked with us this morning on CNN. He also wrote an op-ed over the weekend, "why I'm leaving the FBI," and talked about the attacks undermining not only the nation's security, but creating this long lasting trust issue for the men and the women of the FBI. What are your thoughts?
JAMES GAGLIANO, CNN LAW ENFORCEMENT ANALYST: Well, first of all, we welcome Mr. Campbell to the voices here. We all have divergent voices and that's the whole business of being able to give your opinion.
I don't speak for the FBI. Neither does Mr. Campbell. He certainly is speaking for a segment of the populous. I think I speak for another segment.
And what I want to say is this. Last week it was very unsettling for a lot of us in that a Axios SurveyMonkey survey came out that said that 38 percent of polled Republicans view the FBI favorably. Sixty-four percent of Democrats. Talk about upside down. And only 49 percent of the American public. That hurts me. And I'm sure that hurts Mr. Campbell too.
Now, where we're going to diverge, we're going to have dissenting opinions is on causality. Is part of it the president's punching down and the relentless barrage? Absolutely. People follow the news stream, they follow his Twitter and that's unsettling and causes them to lose some trust and confidence. National security concerns, that's a little overblown hyperbole.
And I also believe, and I know he touched on it in his -- in his -- in his speech this morning, and I listened to it. I watched the entire segment from the green room. He touched on, you know, the fact that, yes, we need to have the FBI be policed from the outside. Well, I read his op-ed and his op-ed was pretty stridently one way. He was driven out of the FBI because of things that the president said.
I served under four different presidents while I was an FBI agent for 25 years. I never agreed with all of them. The ones that I voted for and the ones that I didn't. I disagreed with President George W. Bush when I served in Afghanistan. I didn't agree with everything he did in the prosecution of the global war on terror and I certainly didn't agree with President Barack Obama when I served in Mexico City and his immigration policies were different than what I would have liked, but I served as part of the executive branch. And I took my orders. I put my head down as some agents apparently advised Josh before he left, and I basically waited for the storm to pass, knowing I was not going to agree with everything, but my sworn duty was to the Constitution, and to the American public in doing the right thing.
HILL: So that's -- and that is, again, to your point, that's your take and that's what you see the job as being.
That being said, some of the concerns that he brings up, you talk about the -- the impression that the American public now has of the FBI. How damaging is that to the work that your former colleagues are now doing every day and to the outcome of their investigations or whatever they're working on?
[09:55:05] GAGLIANO; The president of the FBI Agents' Association, Tom O'Conner, good man, I know him from my time on the job. And he come down. He's put out a couple of, you know, unprecedented press releases saying that he believes that it is having a deleterious effect on the rank and file.
I talk to tons of onboard employees that are completely in the opposite corner that say, you can't think that FBI agents aren't savvy enough to know that this is the president punching down and doing some unseemly ways of approaching this, attacking certain senior leadership that Josh didn't mention that made some egregious mistakes.
HILL: We know Christopher Wray has come.
HILL: He has sent messages to the rank and file, to the folks there. Do we need to hear, very quickly, from other intelligence heads to say, stay the course?
GAGLIANO: I think that's fair. Christopher Wray has certainly tried to steady the ship and tried to get the FBI agents to put their heads down and go do what they're supposed to do. I think you've got to wait a little bit before we can say, is this going to have any effect on national security.
GAGLIANO: I don't suspect it will. HILL: Always appreciate your perspective. Nice to see you, my friend.
GAGLIANO: Thanks for having me, Erica. Good to see you too.
HILL: The president and the highest ranking Democrat on the House Intelligence Committee trading insults this morning. The latest fallout from that memo, next.
[10:00:02] HILL: Good morning. I'm Erica Hill, in for John Berman and Poppy Harlow.
Today, the House Intelligence Committee may vote to release the Democratic rebuttal to the so-called Nunes memo alleging partisan bias in the FBI's Russia investigation.