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Dow Plunges 799 Points On Trade And Slowdown Fears; Wisconsin GOP Passes Bill To Curb Democratic Governor's Power; Bloomberg Mulls Presidential Run On Iowa Visit; Senators: Saudi Crown Prince Complicit In Khashoggi Murder. Aired 7:30-8a ET

Aired December 05, 2018 - 07:30   ET

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


[07:30:00] PHILIP MUDD, CNN COUNTERTERRORISM ANALYST, FORMER COUNTERTERRORISM OFFICIAL, CIA, FORMER SENIOR INTELLIGENCE ADVISER, FBI: -- cooperators, including Flynn, aren't talking about him. So he can play tough, but if they've got all that evidence in the Mueller team, I've got to believe that Roger Stone is going down.

ALISYN CAMEROTA, CNN ANCHOR: David, your thoughts?

DAVID GREGORY, CNN POLITICAL ANALYST: I just think we also can't forget there's a legal track here which is very important that will play itself out.

But the big piece of this with regard to the president is the political conclusions and what is ultimately in the report.

So if the what is interference with our campaign, attempted and real, the why -- maybe that gets to finances that may track to the president. And then, what the president and those around him did in response to all of this. That becomes the narrative that could be very powerful.

JOHN BERMAN, CNN ANCHOR: All right, friends, stay tuned. This all happens again on Friday, to an extent, with some documents we could get --

CAMEROTA: Oh, absolutely -- other sentencing --

BERMAN: Yes.

CAMEROTA: -- memos -- Cohen and Mueller.

BERMAN: All right.

CAMEROTA: I mean, Manafort. There's a lot of m's.

BERMAN: I knew who were talking about there.

And thank you, Phil -- especially to you, Phil Mudd.

All right. Republicans in two states accused of a power grab after losing governor seats in the midterms. The checks they're trying to put on those states' executive branches -- that's next. (COMMERCIAL BREAK)

[07:35:00] CAMEROTA: Wall Street will be closed today to observe the national day of mourning for President Bush. Global markets, though, taking a hit after the Dow plunged nearly 800 points yesterday.

CNN's Christine Romans joins us now with what's fueling all of these jitters. I see that we're both wearing --

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT, ANCHOR, "EARLY START": Yes.

CAMEROTA: -- our beautiful --

BERMAN: Money.

CAMEROTA: -- money green. Actually, it's, for me, in honor or Laura Bush's green dress yesterday. I think everybody got the memo.

ROMANS: I think you're right, and maybe stock investors will get the memo when trading opens tomorrow. Trading closed today and the respite, frankly, welcome, Alisyn.

Yesterday was the Dow's worst day since October 10th when it lost 832 points. The Nasdaq closed down 3.8 percent. The S&P fell 3.2 percent. Those are big moves.

Now, 799 points sounds really scary, right? In point terms, it was the fourth-worst drop ever. In percentage terms, 3.1 percent certainly a bad day but it ranks as only the 329th worst day ever percentage wise, so perspective there.

Two things took down stocks. First, the realization the trade war with China is not over. There is a mountain of hard work to do and the president's boasts of progress were not matched by the Chinese rhetoric.

The Chinese have not even acknowledged the 90-day framework for negotiations or acknowledged any of the wins the president has already announced -- opening its market and cutting auto tariffs -- nothing. Crickets from the Chinese on that.

The stock market loss was also accelerated yesterday when Trump, himself, called himself "tariff man" in this tweetstorm -- "tariff man."

TEXT: "I am a tariff man. When people or countries come in to raid the great wealth of our nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in billions in tariffs. Make America rich again."

ROMANS: He said tariffs are always the best way to max out our economic power. Investors disagree. They see tariffs as a burden on business and a tax on consumers and families. Second, a technical move in the bond market that in the past has signaled a slowing economy or even recession. It's called an inverted yield curve. Some treasuries began to invert for the first time in a decade and that scared the stock market, too.

Perspective here, you guys. Stocks are still higher for the year. The Dow is up about 3 1/2 percent, the S&P about five -- two percent, three percent. And the Nasdaq up just shy of six percent, John.

So that's the perspective.

BERMAN: Yes.

ROMANS: It has been a wild couple of months.

BERMAN: And nothing scares me more than when Christine Romans talks about the inverted yield curve.

ROMANS: Sorry, had to do it.

BERMAN: It is serious. Thank you so much, Romans -- appreciate it.

Wisconsin's Republican-led House and Assembly -- they just passed a bill that curbs the powers of the state's incoming Democratic governor. Republicans there, and in Michigan, are now being accused of power grabs after losing both governor seats in the midterms.

CNN's Kyung Lah is live in Madison, Wisconsin with the very latest -- Kyung.

KYUNG LAH, CNN CORRESPONDENT: Good morning, John.

The Legislature here never closed. The debate raged throughout the evening. They are still at it this morning. It is expected to go for several more hours this morning, according to people who are watching all of this.

The bottom line for this and the rush for all of this is that they are racing the clock. The Republican governor expected to exit because he is being replaced by an incoming Democratic governor and attorney general. The Republican-controlled Legislature wants to hold onto power, critics say.

I want you to listen to the displeasure from the public as this session opened.

(BEGIN VIDEO CLIP)

PROTESTERS: Shouting.

(END VIDEO CLIP)

LAH: OK, so what sparked all of this? The public was ordered to leave the Senate gallery because mild laughter was heard and then you can hear the eruption of anger. There have been days of outrage here in Madison. Critics calling this

a power grab. Republicans refusing to heed the will of the people -- accept the election results.

Here's what one protester told us.

(BEGIN VIDEO CLIP)

KATHY KENNEDY, PROTESTER: They can only win by cheating and that's what they're doing in there right now. They're a bunch of cowards.

(END VIDEO CLIP)

LAH: Now, the GOP majority though, John, is expected to pass all of this, this morning. The GOP outgoing governor expected to sign it -- John.

BERMAN: This controversy will swirl for some time, I think, as a result.

Kyung Lah for us in Madison. Kyung, thanks very much.

Robert Mueller recommends no jail time for Michael Flynn and raises a lot of new questions. So what do lawmakers think this morning? Senator Marco Rubio joins us next.

(COMMERCIAL BREAK)

[07:42:58] CAMEROTA: Let's talk a little 2020. Former New York City mayor Michael Bloomberg is mulling a presidential run.

CNN's Cristina Alesci traveled to Iowa to catch up with him. She's live in Des Moines.

What did he tell you, Christina?

CRISTINA ALESCI, CNN MONEY AND POLITICS CORRESPONDENT: Well, he said he wasn't here to solicit votes but he certainly was acting like a candidate. He shook a lot of hands, he praised local leaders here for their strides they're making in green energy jobs, and he had very blunt criticism for President Trump.

But he was far more reserved about any questions about his candidacy -- listen.

(BEGIN VIDEOTAPE)

ALESCI: What lessons did you learn from Bush's life and his leadership style?

MICHAEL BLOOMBERG, FORMER MAYOR, NEW YORK CITY: What was unique about George H.W. Bush was his honesty, his morals, his elegance, if you will. And I think, unfortunately, you contrast it with what we have in the White House now where the current president doesn't seem to have any feeling of sacrifice for the good of the country, and maybe that's one of the real differences. ALESCI: You're here in Iowa, a critical state for any potential candidate to gauge whether or not they are viable. Why are you here?

BLOOMBERG: Well, I'm here to preview a movie about climate change. It's called "Paris to Pittsburgh." That's why I'm here, to preview the movie. And it has a segment about people from the great state of Iowa who are very environmentally-friendly.

ALESCI: When I'm in New York and I see you run into people, I see people who -- at least this probably happens to you about a dozen times a day who tell you, you have to run for president.

BLOOMBERG: Well, it's very nice when somebody says that, and somebody does occasionally. And if it didn't put a smile on your face I don't know -- you've got to be pretty sick. But that doesn't mean number one, you should do it or could do it, and what I've said is I'll look at it at the beginning of the year.

[07:45:07] ALESCI: Do you get a similar sense here in Iowa when you meet people?

BLOOMBERG: I want to understand what Iowa is all about. I want to learn. And one of my chief associates says ask a question, make a friend. And so I want to know what makes Iowa tick.

ALESCI: Biden said yesterday that he's the most qualified person for the job. Do you agree?

BLOOMBERG: You would think that anybody that's running for the job would think that they are qualified to be it. Joe Biden's a guy who I've known for a long time. He's a very competent guy.

And there'll be 25 people or 20 people running on the Democratic side, all of whom I think would answer the question the same way if you asked it.

ALESCI: Do you think you're the most qualified?

BLOOMBERG: I can't speak for anybody else.

I do think that after 12 years in City Hall dealing with international problems, and security problems, and economic problems, and creating jobs, the environment, and guns, and women's rights, and tobacco and all these things, that I have a lot of experience which would be useful if I was President of the United States.

That doesn't mean I'm going to run. It's one thing to say something, it's a different thing to have actually done it.

(END VIDEOTAPE)

ALESCI: John, Bloomberg also praised soon-to-be-speaker Nancy Pelosi -- of course, breaking with some more progressive members of the Democrat Party on that particular front. But he also issued a warning to Democrats, saying that they were elected to make change and now is the time to do it -- John. BERMAN: New Democrat Michael Bloomberg. Of course, old Democrat, then Republican, then Independent, now Democrat again. Michael Bloomberg weighing in on the Democratic Party.

Cristina Alesci, fascinating to hear him. Thanks so much.

A group of senators -- they were briefed by the CIA director. All of them left with a clear message -- Saudi Arabia's crown prince is behind the murder of a "Washington Post" journalist.

So how will he be held accountable? We ask Sen. Marco Rubio, next.

(COMMERCIAL BREAK)

[07:51:17] BERMAN: After a week of criticism, CIA Dir. Gina Haspel briefed a select group of senators on the Saudi crown prince's role in the murder of "Washington Post" journalist Jamal Khashoggi. Senators leaving the meeting say the Intelligence Community's assessment is clear.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: There's not a smoking gun, there's a smoking saw. It is zero chance -- zero that this happened in such an organized fashion without the crown prince.

SEN. BOB CORKER (R), TENNESSEE: If he was in front of a jury he would be convicted in 30 minutes -- guilty.

(END VIDEO CLIP)

BERMAN: Joining us now is Republican Sen. Marco Rubio. He was not part of that briefing, which we'll get to in a minute, Senator. But, obviously, you know Sen. Graham and Sen. Corker and the other senators who were in there who all came out with that universal message.

What we heard is that the crown prince is responsible. What's your reaction?

SEN. MARCO RUBIO (R-FL), MEMBER, SENATE INTELLIGENCE COMMITTEE, FOREIGN RELATIONS COMMITTEE: Well, let me say, first of all, I'm on the U.S. Senate Intelligence Committee, so everything they knew -- whatever they learned in that meeting we've known. And I'm not going to discuss classified information other than to tell you that I don't, frankly, think you need to get that far.

Just from what we know about Saudi Arabia, what we know about the crown prince, and what we know about this murder leaves you with no doubt that the crown prince, at a minimum, knew about it, and condoned it, and perhaps, at worst, was actually involved in directing it.

And here's why we know that. He has absolute control in Saudi Arabia. He basically governs the country, at this point, as the crown prince.

The 17 people who flew into Turkey has now been publicly reported who they are. Many have very close ties to him. There is no way -- and I mean no way that 17 people that close to the

crown prince get on a charter airplane, fly into a third country, murder someone in a -- in a diplomatic facility, and fly back to Saudi Arabia and he not at least know about it, much less perhaps being involved in it. And I think you can conclude that without having been in that briefing or without sitting on the Intelligence Committee, the way I do.

BERMAN: It says -- you say it leaves you with no doubt -- no doubt. Then how do you explain what I'm about to play -- the president, the Secretary of State, and the Secretary of Defense? Listen to this.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Maybe he did, maybe he didn't. They did not make that assessment. The CIA has looked at it, they've studied it a lot. They have nothing definitive.

Nobody's concluded -- I don't know of anyone that's going to be able to conclude that the crown prince did it.

JAMES MATTIS, SECRETARY OF DEFENSE: We have no smoking gun that the crown prince was involved.

MIKE POMPEO, SECRETARY OF STATE: There's no direct evidence linking him to the murder of Jamal Khashoggi.

(END VIDEO CLIP)

BERMAN: So, are Sec. Pompeo, Sec. Mattis, and the President of the United States, Senator -- are they being straight with us?

RUBIO: Well, I think they're, frankly, carrying out the policy of the administration and I think that -- let me put it to you this way. We don't need smoking gun evidence. This is not a criminal trial.

This is not an episode of "MATLOCK," OK? This is -- or any of these other shows on television. This is American diplomacy.

I can tell you we know more than enough just from what you know and from what everybody knows regarding what's happening in Saudi Arabia, who these people were, and what happened, to conclude that he had to know about it and he was involved in it.

I mean, Saudi Arabia is not some decentralized government that operates without -- with all sorts of people acting independently. Everything there is very tightly controlled.

As far as the White House and their position is concerned, it is my view that they are trying to preserve, from a realistic perspective, the importance of the Saudi-U.S. alliance, which I agree with. It is a critical one. But all alliances have buffers, all alliances have limits, and the crown prince will continue to test the limits of this alliance until those limits are clearly set.

BERMAN: Are we setting any limits? RUBIO: Well, I think privately, we probably have. I'm pretty confident and I don't know that for sure, but I believe we have based on what I know.

[07:55:00] I do think there needs to be some public actions taken as a result of this. Things cannot continue the way they are.

And I think -- I detailed last week on a floor speech very specific asks and things that we should be asking for. And it ranges from human rights issues, such as freeing those women prisoners -- women that have been taken prisoners for political reasons. Freeing Raif Badawi who has been jailed again for speaking out about the authoritarian nature of the Saudi regime.

And then I think going beyond it, I think there are other things that we should consider. That 123 agreement should be postponed on nuclear energy and enrichment and the like.

There are all sorts of things that we can do to make clear that this can't continue to happen. Otherwise, he's going to continue to get more reckless and continue to push more boundaries. He's going to -- he's going to, frankly, pull us into a war one day with some recklessness.

BERMAN: You did, though, vote against defunding the Saudi effort in Yemen. Why?

RUBIO: Because it had nothing to do with this particular case. It's the wrong way to do the right thing. I can outline to you the reason why we should be involved with the Saudis there.

First and foremost, we've already -- first of all, I don't believe the War Powers Act is constitutional. Second, even if it were I don't believe that it -- what we are doing with Saudi Arabia rises to the limits of triggering the War Powers Act.

Third, I think it's in our national interest to be engaged the way we are. If we stop arming them they're not going to stop the war because they view that as the -- and rightfully so. The Houthis are Iranian agents at this point or surrogates and they're being surrounded by Iran. This would now be a southern blind (ph).

The second thing I would say is if we stop supporting the Saudis you're going to see an increase in the Houthis attacks against Saudi Arabia. And I mean strikes with UAVs and strikes with rockets that could actually kill civilians and even members of the royal family.

And that's only going to trigger a larger response and before you know it there's an all-out shooting war -- I mean, beyond just this proxy war. Not to mention the threat the Houthis pose to the shipping lanes that lead to the Indian Ocean where all this oil and energy for the world goes to every single day. We could get pulled into that, as well.

So there's a lot of reasons why voting for that is a bad idea and I don't think you have to vote for that to do something about what happened with Khashoggi.

BERMAN: All right, I understand your position on the Yemen vote.

If we can, though, I want to go back to something you said before about Sec. Pompeo and Sec. Mattis. You said they're just carrying out the policy of the administration. That feels like you are giving them a pass for saying something you just told me you believe not to be true.

RUBIO: Well, I think if you just read -- again, I'm not going to get into analyzing intelligence or anything of that nature, especially on national television. I'm going to tell you that I think you can argue that from a technical perspective people can be saying things that are accurate, but the reality of the situation is I disagree with what they're saying in terms of the theme of what they're laying out.

Again, they work for the president.

BERMAN: But you also said -- you also --

RUBIO: Yes, look, I --

BERMAN: Yes, but I know. Again, you also just say -- because I've been listening to your words very carefully -- you're worried that the Saudi crown prince could drag us into a war.

RUBIO: Right.

BERMAN: And you also argue that the public words here matter --

RUBIO: Of course, they do.

BERMAN: -- and those public words that they said are very specific.

RUBIO: But again, if -- you know, I would wish that the administration's position was different. And you'll have to ask Sec. Pompeo and Sec. Mattis the questions about why they've used that phraseology and why they've taken the position they've taken.

I'm neither excusing it, I'm making an observation. I disagree with that assessment. I think most people that have seen it -- and I'm telling you this. It's not based on intelligence. We don't --

BERMAN: Right.

RUBIO: I don't need intelligence.

I think you know enough and the American public knows enough about Saudi Arabia and about this murder to conclude that whether or not we have a smoking gun, there is no way that 17 people that close to that crown prince go to -- go to Turkey and murder a guy at a consulate and he not know about it and he not be OK with it, period.

BERMAN: Senator, if I can, I want to get your take on some of the developments over the last 24 hours. We saw the sentencing memo regarding the former National Security adviser Michael Flynn. I just want to read you one part of that that jumped out to me.

It said, "The defendant's extensive government service should have made him particularly aware of the harm caused by providing false information to the government, as well as the rules governing work performed on behalf of a foreign government."

Michael Flynn should have known better.

What do you see there?

RUBIO: Well, I'm on the -- again, I'm on the Intelligence Committee. We continue with our probe. It involves a lot of the same people -- a different take on it -- but we're not a criminal justice entity but -- so I usually refrain from commenting on specifics around the case until our report is ready.

BERMAN: OK.

RUBIO: You know, I don't think we just prejudge one way or the other.

But I will continue to say this. I think it is important and it is in the best interest, quite frankly, of the administration and of the American people that Mr. Mueller be allowed to complete his probe and put out all the evidence out there. If people are criminally charged, as some have been already, they'll have their day in court. There will be the presumption of innocence.

But let's let this thing work itself through. I get it -- I know you guys have to cover the news and we all have to respond to the news every day about what's out in these filings, but let's wait for the complete picture to be out there. I think that's in the best interest of everyone as this -- as Mueller continues his work.

BERMAN: Yes.

RUBIO: Let's wait for him to finish and then we'll look at the whole thing and then we can opine. And obviously, the U.S. Senate Intelligence Committee is going to have a role to play, as well, with our report.

BERMAN: Look, that's fair. We're not jumping the gun here by asking you something that came out publicly in a release overnight. I just wanted to get your take on it.

I do appreciate, though, you are on the Intelligence Committee. You're not going to comment on that.

Also, just today, it is a national day of mourning and there will be a state funeral for former President George H.W. Bush. I just want to get your moment --