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Wall Street Suffered Its Worst Week Since The 2008 Financial Crisis; John Kelly Is Out And Brett McGurk Resigns; Devastation In Indonesia. Aired: 7-8p ET

Aired December 23, 2018 - 19:00   ET


ANA CABRERA, ANCHOR, CNN: It is 7:00 eastern, 4:00 in the afternoon out west. I'm Ana Cabrera in New York. Great to have you with me. You are live in the "CNN Newsroom." And the government is shut down, why? The wall. Mexico won't be paying for it, and if your tax dollars don't go to picking up tab, the government won't opening for business anytime soon.


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CABRERA: Happy holidays. Welcome to the chaos that has taken hold almost two years since President Trump took office. This week wrapped up with one of President Trump's worst nightmares, now a reality. Wall Street suffered its worst week since the 2008 financial crisis and this weekend, we learned the President has begun polling advisers about whether he has the legal authority to fire the Chairman of the Federal Reserve.

In fact, Treasury Secretary Steve Mnuchin is spending today speaking with Chief Executives of large U.S. banks hoping to reassure investors that it will be business as usual when Wall Street opens up tomorrow morning.

Meanwhile, the Chief of Staff who was supposed to help control the latest chaos, John Kelly is out. Trump's original Secretary of State who was seen as an adult in the room, Rex Tillerson, long gone. And the President just recently told the world Tillerson, his pick, was lazy as hell and dumb as a rock.

Now, the Attorney General, President Trump again says Jeff Sessions should be ashamed of himself. The President also lashing out at Sessions' temporary replacement, Matt Whitaker, for not doing enough to protect him from Robert Mueller and other Federal prosecutors. As though that's the Attorney General's job.

But perhaps the President was emboldened in that belief because we also learned, Whitaker rejected the advice of an ethics official who said he should recuse himself as well. Now, the President also declared this week that ISIS has been defeated in Syria. Disagreeing - the Secretary of Defense who quit one day later and forced to leave earlier than planned.

The interim Secretary already named, Patrick Shanahan, he starts on the first. And now we've learned that the man who leads the fight against ISIS, Brett McGurk, he is not celebrating either. He's leaving, too. How did we get here?

In one tweet from the President, once again rocking the globe calling for a full and rapid withdrawal of U.S. military forces in Syria; the news stunning allies, and even those in his own party.


LINDSEY GRAHAM, U.S. SENATOR, SOUTH CAROLINA, REPUBLICAN: If Obama had made this decision, Republicans would be all over him.

BOB CORKER, U.S. SENATOR, TENNESSEE, REPUBLICAN: It's hard to imagine that any President would wake up and make this kind of decision.

MARCO RUBIO, U.S. SENATOR, TEXAS, REPUBLICAN: Colossal in my mind, a mistake, a grave error.


CABRERA: Again, on the heels of Trump's Syria decision, Defense Secretary Jim Mattis heads for the door, and in a clear rebuke of the President, his resignation letter, evidence of a stunning divide, "Because you have the right to have a Secretary of Defense whose views are better aligned with yours on this and other subjects, I believe it is right for me to step down from my position."

A House Republican who supports President Trump says of Mattis' departure, quote, "The wheels may be coming off." A White House in chaos, a volatile stock market, a partial government shutdown over a wall Americans were promised they were never going to have to pay for in the first place. Welcome to Trump's America.

I want to get straight to someone who knows how the White House work or how is it supposed to work, David Gergen. He served four U.S. Presidents, both Democrat and Republican. David, are we witnessing the wheels coming off?

DAVID GERGEN. FORMER PRESIDENTIAL ADVISER: Darn close. It's just hard - at least, a couple of them are gone already. You know, to change the metaphor, they had been running an adult day care center at the White House and they are closing it down, all the adults are leaving the room. There's nobody there left and I'm afraid that is a bad news for a President who already is self-centered and borders on being an ego maniac.

And I think that's what's troublesome. If you look across the landscape of the world, where leadership from America has always been to stabilize the world and help us move forward, things are uncertain everywhere. Nobody knows quite where this is all heading after two years.

And the U.S. government itself is increasingly in shambles. I was really quite struck today by a tweet that Andrea Mitchell of NBC put out.


GERGEN: Noting, if you went on it - just to listen to this for a second, the number of departments and agencies that are now headed by acting secretaries or deputies, DoD is now going to have an acting Secretary, the Defense Department, Justice Department, the EPA - Environmental Protection Agency, and the White House all were going to be run by acting directors. There's no replacement to the top of the Interior Department, and there's no deputy, number two person, in Homeland Security, Housing and Urban Development, the VA and the Small Business Administration.

That is a sign of an administration that is in chaos, an administration that is in shambles.

CABRERA: Have you ever seen an administration in a similar spot mid- way through a President's first term?

GERGEN: No, not mid-way through. This is when things are supposed to be coming together, when you're supposed to get your - when you have enough experience to really run the government and to lead the world effectively. And instead, we're having an increasing amount of incompetence around the President and the President himself who by all reports, is increasingly isolated and seems to like it that he doesn't have people who are questioning him and trying to push him another way. He wants to come from his gut and he's not reading.

Stunning, stunning when you look at the difference between Secretary Mattis who has just left with all this praise from around the world versus this President. The President does not like to read, he does not like to get briefed.

Secretary Mattis often called the warrior monk because he reads voraciously. When he moves around the world, you know how many books he takes with him when he moves from one place to the next? Seven thousand books. It's unbelievable. Seven thousand books.

CABRERA: Wow, that's incredible. We did talk to a Republican, a couple of Republicans this weekend, lawmakers right now in Congress. We know the President had lunch with a group of some of his Republican allies yesterday. One of the lawmakers describing him as exuberant during that lunch; another lawmaker who attended agreed. He told me the President was rather engaging. He seemed like his typical self.

We often hear that Trump thrives on chaos. So do you think this chaos is by design?

GERGEN: Well, I think he enjoys it whether he actually plans out each and every chapter, I don't think so. I think he's simply is not into strategies. He is a tactitioner and he looks for opportunities to stir things up, to keep things people off balance, he enjoys that and he thinks he gets the upper hand on it by doing that, but so far in the two years, I think a experience has shown that does not work in the presidency. It may work in real estate firm, but it does not for in the presidency itself. CABRERA: So, now we have Treasury Secretary Steve Mnuchin announcing

on Twitter that he has reached out to the nation's six largest banks to confirm ample liquidity is available. I mean, that sounds a lot like language from the 2008 financial crisis and it comes on the heels of the worst week on Wall Street since the 2008 meltdown. David, what are we dealing with here?

GERGEN: Yes, I am really glad you're raising this, Ana, because the economic aspects of what we're going through get too little attention. We've had a very strong economy here in the United States, better than in Europe, better than in China - you know, China has been slowing down. Europe is in a mess. And the United States has been sort of at the forefront.

But now we ourselves, the markets have taken this dive. The NASDAQ is in bear market territory. I mean, because they're down by over 20%. And all the other - the NASDAQ and S&P and the Dow all down sharply. And if you look at what's been going on especially with regard to the stories that are now coming out that the President has been asking friends can he fire the head of the Federal Reserve? A man he appointed to the job, Mr. Powell, he's asking "Can I fire him?"

Here to for that question would never have arisen with any President because the Federal Reserve was created under Woodrow Wilson's term to be an independent body. And one of the reasons that it's been one of the most effective institutions in America is people like Paul Volker and Alan Greenspan and Ben Bernanke have run it independently and they've done an extremely good job over time.

CABRERA: And now Jerome Powell, apparently.

GERGEN: And now Jerome Powell, the President wants to dismiss him. That causes a huge uncertainty in the markets. That really is what makes banks tremble because they're not sure what's going to go happen with money. And that you need a steady hand on the tiller to make the Federal Reserve work and you need to keep the White House the hell out of it.

CABRERA: And now, we have a shutdown and it's all over the President's border wall. This is the third shutdown this year which hasn't happened since the 1970s.


CABRERA: By the way, border wall though, this was Trump's signature campaign promise, yet he has not been able to deliver it with the GOP's majority control of government. Why?

GERGEN: Well, you know, I think that the Democrats obviously are against the wall and they see it as a good issue to run on. Some of the seats they picked up in the House have come over there with the stance on how we treat Mexico and how we treat immigrants. So the Democrats have gained from that.

But it's also true that the country is against it. I mean, 56% to 58% in the latest poll says people don't want to build this wall. They think it's a foolish expenditure of money. The money is not that big compared to everything else, but it's the theory that putting up a wall has - this whole conversation, this fighting - what Senator Corker, a Republican said today was "juvenile" because we don't need this wall. There's a lot of evidence to support that.

But the President wants to make an issue, everybody wants to bring it to a head. He thinks that kind of fight helps him with his base, and it does help him with his base, but it doesn't help him with the country at large in trying to govern properly and let's move on. There is a deal to be cut probably if everybody will calm down and say, "Let's get this government reopened." I think they're way too passive in the White House about reopening the government. The deal obviously would be something Mr. President we'll give you this if you will protect the Dreamers. That's for starters.

CABRERA: Now, we've seen them try to offer up that suggestion in the past around these times. Thank you, David Gergen, always good to see you, and Merry Christmas. Happy holidays. Really appreciate you taking the time.

GERGEN: Same to you, Ana, take care.

CABRERA: Thank you, bye-bye. The shutdown, full swing right now. How did we get here? House Freedom Caucus member, Republican congressman Matt Gaetz is here. Plus, he's been called the Twitter in Chief. Why the day Trump learned about Twitter was compared to a moment in "Jurassic Park." We'll explain and Subway Samaritan, a man finds $10,000.00 cash on a train platform. You won't believe what he did next.

You're live in the "CNN Newsroom."


CABRERA: As we speak, a large part of the Federal government is shut down. And the people who staff it are working for free or not working at all. I'm talking about some 800,000 people and it will probably be that way through Christmas Day and beyond. But how did we get here?

Earlier in the week it looked like a shutdown might be avoided even as recently as yesterday morning. A longtime shutdown was not a done deal, but then something happened. The President and a group of Republican lawmakers went behind closed doors for a working lunch, and afterward, their shutdown ship had sailed.

Our next guest is Republican Congressman Matthews Gaetz, he is a member of the House Freedom Caucus, the group that pushed the President to reject the continuing resolution earlier this week that would have kept the government open. He joins us now. He also had lunch with the President yesterday at the White House. Congressman, thanks for joining us.

Let me ask you about this lunch because Senator Richard Shelby who was also at the lunch reportedly described the President as exuberant during that meeting, would you also describe the President as exuberant? MATTHEW GAETZ, U.S. REPRESENTATIVE, FLORIDA, REPUBLICAN: Yes, it was

in stark contrast to "The New York Times" reporting that the President is isolated and alone. He was rather engaging and his typical self, kind of moving about the various issues that are before the Congress and before the country. But he was very clear that he is not going to take a bad deal under the pressure of time before Nancy Pelosi's speakership and it is a little odd to us that Nancy Pelosi does seem to be driving the negotiations over Chuck Schumer. That's dangerous for Schumer because he may have a few Democrats that break away with us.

CABRERA: Sorry, hold on for a second. Again, getting back to his mood, though, I don't want to mischaracterize anything. He was exuberant, do you agree with that? Was he exuberant over the shutdown and the situation we're in?

GAETZ: Well, I would say he was happy and engaging. No, look, we're friends with the President. The President was having lunch with his friends and allies and I think he was he was largely happy to see us.

CABRERA: Okay, because it is you know, the scenario is we are in a partial government shutdown and the Defense Secretary has resigned.

GAETZ: Yes, no, we were there to work.

CABRERA: The guy who is leading the fight against ISIS just resigned as well. We also have the Dow suffering its worst week in the financial crisis since the financial crisis since 2008.

GAETZ: Yes, wages are also rising faster than they ever have in 10 years. I mean, there are a few good things going on, too.

CABRERA: A lot - there are a few good things going on, there's also a lot this week that's been like, "Oh, my, how did we end up here?" But let's move on because I understand there were no Democrats at yesterday's lunch, Senate Majority Leader, Mitch McConnell wasn't there either. And here is what your colleague, Congressman Ryan Costello told me about this meeting.


RYAN COSTELLO, U.S. REPRESENTATIVE, PENNSYLVANIA, REPUBLICAN: Well, look, if everybody's hungry and they want to have lunch, by all means, but I don't know how you solve a problem unless he's telling them to get on board and vote for the clean CR. I mean, I don't know what to tell you. Those are the folks right there that are against the clean CR. Those are the ones that are against funding the government right now.


GAETZ: That's totally false.

CABRERA: How do you see this shutdown ending though if the President isn't only reaching out - is only reaching out to those who helped force this shutdown who are in his perspective on his side? GAETZ: I like Ryan Costello a lot, but I don't think I'm going to

take a lecture on what constitutes productive engagement from a guy who quit and didn't run again. So I mean, I think we were there to support the President and to thank the President. It's no secret that immigration hardliners asked the President not to sign a continuing resolution that was functionally a white flag of surrender on the issue of border security. We want our President to fight.

CABRERA: But is he having to negotiate with you? It doesn't sound like you guys are the people who needs to negotiate with?

GAETZ: No, we're there to support him. We're on the President's team. Look, he wasn't there negotiating with us. We were there engaged in a strategy discussion.

CABRERA: Right, so how do you move the ball forward?

GAETZ: Because we have to - look, we were there to discuss what we need to do to ensure that we protect the American people who want rising wages and safe streets.


GAETZ: That is a very worthy reason to get together. We were building a strategy to try to get border security outcomes that the President ran on. I think that there are some Senate Democrats who are interested in solutions like the Bridge Act, like TPS, who might be willing to come on board with a robust border security package with a physical barrier, with a wall or whatever you want to call it, and I think that's ultimately our path to success. We're never going to get Nancy Pelosi, but I think we can with a few Democrats.

CABRERA: But look, even Mick Mulvaney, who I know was in that room, who in 2015 called the wall childish, he said it was absurd. He said it wouldn't be effective. Listen.


MICK MULVANEY, DIRECTOR OF THE OFFICE OF MANAGEMENT AND BUDGET: And by the way, the bottom line is the fence doesn't stop anybody who really wants to get across. You go under, you go around, you go through and that's what the ranchers tell us is that they don't need a fence. What they need is more manpower and more technology and more willingness to enforce the law as it exists today.


CABRERA: Well, does he have a point?

GAETZ: I think we have all become more informed over time, I didn't hear those sentiments from Mick yesterday and I also know that a recent poll of Border Security agents showed that 95% of them agreed that more physical barriers would assist in the performance of their duties. So this isn't an either or, I think we can have an all of the above strategy to secure the border. But Democrats keep voting against all of the things that we hope will

keep the country safer like e-verify like sanctuary city reform, like ending chain migration.

CABRERA: But that's not true - that's not true. I remember - I've been around here long enough to remember in February when the Democrats came forward and said, "We will give you $25 billion for Border Security in exchange for a pathway to citizenship for DACA."

GAETZ: Yes, I don't think we're ready to have a massive amnesty deal for border security because a lot of conservatives are concerned that it is like amnesty now and then hopefully, Border Security later that never really comes, and so I think there's sort of a time fuse there that is concerning to a lot of us. But you do actually make a point that there have been Democrats in the past who have acknowledged the risks of illegal immigration.

As a matter of fact, Chuck Schumer himself in 2006 said that our local governments were at risk of being overrun by illegal immigration. That seems to be a reason why we ought to invest in border security and we ought to make sure that we have a physical barrier as part of that package. And ultimately, I think we can get there.

And look, if there are things like the Bridge Act that don't include a massive pathway to citizenship amnesty, I would love to see the Democrats put together something and negotiate with us. The President is here. He is negotiating, making offers, and I think that we should continue those productive discussions.

CABRERA: All right, Congressman Matt Gaetz, thank you. Devastation in Indonesia. A tsunami strikes out of nowhere destroying virtually everything in its path. And now officials say the volcano that caused it could trigger another disaster just like it. You're live in the "CNN Newsroom." Don't go anywhere.


CABRERA: As rescuers comb through rubble in Indonesia searching for survivors of Saturday's deadly tsunami, the volcanic activity officials believe caused this disaster still remains a threat. Ash and smoke still spewing into the air. Officials say there is potential for another tsunami. So far at least 222 people are dead, more than 800 injured. Officials say dozens are still missing. CNN's Pauline Chiou has the latest.


PAULINE CHIOU, CORRESPONDENT, CNN: Rescue and recovery efforts are under way on the coast of Sunda Strait where the deadly tsunami flattened buildings, knocked out power and blocked roads. Authorities are starting to identify the victims. Hospitals are treating the injured.

The tsunami struck around 9:30 Saturday evening during a holiday weekend when resorts on the shoreline are full of tourists. The water broke through a stage while the Indonesia pop band, "Seventeen" was performing near the beach. The next morning, the lead singer made this statement on his Instagram account.


RIEFIAN FAJARSYAH, LEAD SINGER, SEVENTEEN: (Through a translator). I just want to say that our bass player, Bani, and our manager, Oki Wijaya passed away. Also my dear wife is still missing. The rest of us have broken bones, minor injuries, including me, but we are fine.


CHIOU: Officials say the tsunami was triggered by volcanic activity arising from Anak Krakatau. That's a volcanic island in the middle of the strait. Officials say a full moon and high tide may have made things worse. Tsunami warning signals did not go off because officials say it was not an earthquake, but rather, a landslide caused by the volcanic eruption that may have triggered the deadly waves. Authorities are closely watching the volcano for any more dangerous eruptions. Pauline Chiou, CNN.


CABRERA: Back here in the U.S., two top officials walked away this week after President Trump's surprise announcement to withdraw troops from Syria. Secretary of Defense James Mattis quit Thursday after unsuccessfully trying to change the President's mind. And then Friday, Brett McGurk, the official in charge of the fight just against ISIS also quit specifically because of Trump's Syria decision. That bring us to the weekend Presidential brief, a segment we air every Sunday night highlighting some of the most pressing national security information the President will need when he wakes up tomorrow.

And joining us now is CNN national security analyst and former National Security Council adviser, Sam Vinograd who helped prepare the Presidential brief for President Obama. So Sam, I know you knew McGurk. What do you make of his resignation?

SAMANTHA VINOGRADD, FORMER NATIONAL SECURITY COUNCIL ADVISER: Well, Ana, these resignations are a security risk. I first met Brett McGurk in Iraq in 2007. We worked together under Bush. And then under Obama on key issues Iran and Iraq.

His resignation means that there is going to be a major knowledge gap. We are not fully staffed on a key issue like countering ISIS. Brett should be the one in the room briefing the President if he will listen, on the actual status in our fight against ISIS overseas and here at home.

And remember, Brett was leading efforts as part of this global coalition to defeat ISIS. It was composed of 79 countries and organizations. With him gone, it is unclear who is going to be there to ask countries to keep deploying resources. This could impact the homeland, the global coalition doesn't just deploy troops overseas, they also do things like counter ISIS propaganda online.

If the coalition crumbles and we lose our ability to fight ISIS' radicalization tools online, we could see more ISIS-inspired attacks here at home.

CABRERA: The President likes to say American first. Do you think we will see more troop announcements?

VINOGRAD: I think so because ask and you shall receive is working pretty well with President Trump. President Erdogan of Turkey asked President Trump to withdraw U.S. troops from Syria. President Trump said yes. The Taliban has asked the United States to withdraw troops from Afghanistan and now reportedly the United States is withdrawing 7,000 troops. So I do think other countries will follow suit.

After reports about our withdrawals from Afghanistan and Syria became public, Vladimir Putin coincidentally said that U.S. troops represent an obstacle to a peace treaty between Russia and Japan. And Kim Jong- Un just happen to reiterate his demand that U.S. troops lead the Peninsula before he denuclearizes. So I do think we may see other troop withdrawals down the road.

CABRERA: Seventeen years later there's still a lot of debate about America's role in Afghanistan. Do you think this is a mistake the President's announcement to bring troops home from Afghanistan?

VINOGRAD: Well, the devil is in the details. It depends how quickly the President does it. But let's keep in mind Trump is Trumping himself here. Just last year he said that hasty withdrawal would create a security vacuum and he transitioned to what he said was a conditions-based approach for removing troops from Afghanistan. Arguably no conditions have really been met that signify that peace is erupting in Afghanistan, yet we are bringing troops out.

And one of the conditions that he had been focused on was a political settlement with the Taliban. As I mentioned earlier, their primary demand was that foreign troops leave Afghanistan. So now President Trump is playing his Trump card for free. It doesn't look like we have gotten anything in return. And that does make me think that this was the wrong decision from a security decision.

CABRERA: Sam Vinograd, good to have you with us. I so appreciate your dedication. You are here every Sunday night. Happy holidays including this weekend. Thank you.

VINOGRAD: I wouldn't miss it.

CABRERA: All right. A Trump tweet can send shock waves, as you know, but long before they were part of national archives, someone had to show him how to tweet.

Next, I will take you back to 2013 and the first time President Trump personally fired off a tweet. Of course, he wasn't President then, but his social media guru are you at the time called this a Jurassic Park moment. We will explain.

You are live in the CNN NEWSROOM.


[19:37:37] CABRERA: The man who introduced President Trump to twitter offering a fierce metaphor for the President's penchant for tweets.

CNN's Jake Tapper has this in this week's "state of the cartoonion."


JAKE TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT (voice-over): President Trump and twitter.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think maybe I wouldn't be here if it wasn't for twitter.

TAPPER: Did you ever wonder how @realDonaldTrump actually came to be?

TRUMP: You know who says don't use twitter? Your enemies.

TAPPER: Trump's former social media manager, Justin McConnie used to tweet for the mogul who then started playing with his new android smartphone. One day a tweet was sent to McConnie had not sent.

Quote "the moment I found out Trump could tweet himself, it was comparable to the moment in Jurassic Park when Dr. Grant (ph) realized that Velozo (ph) raptors could open doors," McConnie told "Politico."

I was like, oh, no.

UNIDENTIFIED MALE: Don't you see the danger?

TAPPER: And quickly Mr. Trump broke free.

TRUMP: When somebody says something about me, I'm able to go bing, bing, bing and I take care of it.

TAPPER: And things started to get out of hand. Some of the President's adviser such as outgoing chief of staff John Kelly have tried and failed to contain the twitter beast.

UNIDENTIFIED MALE: Hold on to your butt.

TAPPER: Others have just tried to explain it.

UNIDENTIFIED FEMALE: These are aggressive living things that have no idea what century they are in and they will defense themselves violently if necessary.

TAPPER: The President has fired tough officials on twitter, made destabilizing foreign policy announcement on twitter, is even potentially obstructed justice on twitter.

UNIDENTIFIED MALE: They are creative son of a (bleep) they did it.

TAPPER: But with this 56 million twitter followers, 40,000 tweets and counting, it seems the creature cannot be stopped.


CABRERA: I spoke to the reporter who interviewed Trump's very first twitter guru and here's part of my conversation with "Politico" reporter Ben Schreckinger. Watch.


CABRERA: Ben, Trump had his account we know since 2009, but you report the shackles really came off in 2013 leading to this so-called Jurassic Park, oh, no moment. What happened?

BEN SCHRECKINGER, POLITICAL REPORTER, POLITICO: So it was a moment many years in the making, as you mentioned, way back in 2009 to promote a book. He opened a twitter account. He tweeted two or three times a week, pretty bland promotional fair, things like happy holidays. Not the sort of Trump that we have come to know on twitter. That really started around 2011 when a 24-year-old kid named Justin McConnie made a promotional video for Trump's golf courses that the future President liked a lot. Had the kid into his office. The kid said you should start a You Tube channel. You should really think about using twitter more and showing your personality more on twitter.

Over those next couple of years, Trump became addicted to that platform, but he still had to phone in his tweets or dictate them to staffers. Finally got an android around late 2012 and in February of 2013 we had his first ever tweet. He was thanking an actress for saying something nice about him on the view. A lot more civil than many of the tweets were to come. But certainly in hindsight, a historic moment.

[19:40:52] CABRERA: And that's what when they realized that he had done that without consulting somebody, without somebody else actually typing it in. And so again, the shackles came off.

Justin McConnie, 24 years old at the time, I understand he worked with the President then for several years but is no longer part of the team anymore? Is that right and why?

SCHRECKINGER: That is right. So he worked at the Trump organization as director of social media from 2011 through 2017. He did help out with some of the political stuff early on in the Presidential campaign. I actually wrote about him in 2015, but he wasn't able to speak to me because he was still working at the Trump organization.

He had never went full time on the campaign, said he was never really interested in politics. Finally left the Trump organization last year and he was able to go On the Record and tell me this full story just a couple of weeks ago when I called him up.


CABRERA: Our thanks to Ben Schreckinger.

Now imagine finding $10,000 cash on a subway platform in a purse with no identification. What would you do? We will tell you what one man did.

You are live in the CNN NEWSROOM.

(COMMERCIAL BREAK) [19:46:34] CABRERA: 2018 was a pivotal year for business. Once dominant brick and mortar retailers shut their doors while Amazon expanded and continues to command e-commerce sales making its founder and CEO the richest man on the planet.

CNN's business editor at large, Richard Quest, and chief business correspondent Christine Romans break down the top eight business stories of 2018.



RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE: The stock market's wild ride.

ROMANS: The U.S. takes on the world.

QUEST: Scandals shape confidence in big tech.

ROMANS: These are the top business stories of 2018.

QUEST: Number eight, retail implodes as Amazon explodes. This year two decades old iconic American retailers closed up shop.

UNIDENTIFIED MALE: A dramatic fall for what used to be one of the United States' largest retailers, sears filing for bankruptcy.

UNIDENTIFIED FEMALE: The last generation of Toys "R" Us kids have spoken across the U.S. All of its stores were now closed.

ROMANS: Toys "R" Us and Sears struggled to keep up with retails digital transformation. Stores like Target, Macy's and Walmart are investing millions in their websites mobile apps. The goal, compete with Amazon. The online behemoth dominates the industry with billion dollar profits and a trillion dollar market value. Granting its CEO a coveted title.

QUEST: Jeff Bezos is now the richest person of all time.

Two new locations will feel Amazon's power, New York City and northern Virginia. They won a year-long competition for its second headquarters.

ROMANS: Number seven, auto companies reckon with the future. Americans are shunning sedans for SUVs and that's changing the industry. Ford will drop all but two passenger cars from its lineup by the year 2020 and General Motors is restructuring its workforce, an announcement that sent shock waves through America's heartland and Washington.

UNIDENTIFIED FEMALE: General Motors, the iconic American automaker is cutting staff and closing plants.

ROMANS: President Trump slammed GM's decision to shutter five North American factories, costing 14,000 jobs. But U.S. automakers say it's evolve or die. They are investing in self-driving and electric cars to compete with each other and their new rivals in Silicon Valley.

QUEST: Number six, Trump versus the Federal Reserve. In 2017 President Trump praised his pick for fed chief.

TRUMP: He is strong, he is committed, he is smart.

QUEST: Well, that didn't last long. The President breaking precedent by repeatedly criticizing Jerome Powell for raising interest rates.

TRUMP: The fed is out of control.

I'm not happy with what he is doing.

We have much more of a fed problem than anyone else.

QUEST: Historically Presidents always avoid confronting the central bank. It's supposed to operate independently from political influence. So President Trump's attacks may have unintended consequences.

If the fed suddenly slows the pace of rate hikes, that could raise concern that it's bowing to political pressure. Or the President could be doing the exactly the opposite of what he intended. The fed may feel it has to raise rates to show it is not surrendered.

[19:50:10] ROMANS: Number five, Elon Musk's erratic behavior cost Tesla and himself. Many credit Tesla's incredible market value to believe in Musk as an innovator. But this year, his actions caused many to question his leadership, like slamming analysts on an investor call.

ELON MUSK, CEO, TESLA: Boring, bonehead questions are not cool. Next.

ROMANS: Smoking marijuana during a live broadcast.

MUSK: Totally.


MUSK: It is tobacco and marijuana there.

ROMANS: Calling a British cave diver involved in the Thai soccer team rescue a pedophile. And, of course, the fiasco over potentially taking Tesla private. Musk stunned investors in August when he tweeted he had secured funding to take the company private, a plan he has since abandoned.

MUSK: This is kind of crazy.

ROMANS: That triggered a jump in tesla stock price as well as scrutiny from Wall Street's top regulator. The S.E.C. concluded Musk misled investigators forcing him to pay a $20 million fine and step down as Tesla's chairman to settle those charges. QUEST: It's number four. Wall Street's wild swings. Now 2018

started with a battle, and then trading turned volatile.

WOLF BLITZER, CNN HOST, SITUATION ROOM: Happening now. Breaking news. Wild ride. Another dizzying day on Wall Street with stocks nose diving more than 1,000 points for the second time this week.

ROMANS: In February. The Dow lost 3,200 points in just two weeks when inflation fears ramped up. Stocks recovered as corporate tax cuts juiced profits. But then came the tech stock meltdown that dragged the whole market lower.

QUEST: Very scary October in the markets.

DON LEMON, CNN ANCHOR: Stock market just had its worst month since 2011.

ERIN BURNETT, CNN ANCHOR: Breaking news, the Dow, plunging more than 500 points yet again.

QUEST: Trade fears. Rising interest rates, Brexit chaos, slowing growth, recession concerns. All of them putting strain on a bull market that's already the longest in history.

ROMANS: Number three. President Trump took on the world turning his tough trade talk into action slapping tariffs on foreign steel and aluminum, ripping up NAFTA for the U.S. MCA and trashing America's neighbor in the process.

TRUMP: Canada has treated us very badly. We think their negotiators have taken advantage of our country for a long time.

ROMANS: But what really unsettled investors, a trade war between the world's two biggest economies.

UNIDENTIFIED FEMALE: The President announced new tariffs on $200 billion worth of Chinese goods. China shot right back saying it will retaliate with countermeasures.

ROMANS: China and the U.S. hit each other with tariffs on billions of dollars of goods. President Trump and Chinese President Xi Jinping agreed to a temporary trade truce in December. Investors hope that could lead to the real deal, but that could be complicated by the recent arrest of the CFO of a Chinese tech giant in Canada.

Number two, unemployment hits historic lows.

BLITZER: 3.7 percent unemployment in the month of September, a 49- year low.

ROMANS: The U.S. labor market is strong, adding jocks for the past 98 months in a row, but as the U.S. nears what is known as full employment, employers will struggle to find workers. Hiring may slow, but for now job gains are solid, and wages finally started to rise. A missing piece of the recovery so far. QUEST: Number one. Facebook scandals which sewed distrust in big

tech. In March, Facebook revealed it exposed 87 million users to a third-party app. That angered users, advertisers, lawmakers and investors,

ROMANS: The data crisis was a hit to Facebook's reputation already tarnished for its role in spreading misinformation and allowing election meddling. It led to an apology tour for CEO Mark Zuckerberg concluding with a grilling on Capitol Hill.

MARK ZUCKERBERG, CEO, FACEBOOK: I started Facebook. I run it, and at the end of the day I'm responsible for what happens here.

QUEST: Facebook promised to spend billions to put privacy first. Users like that that, investors didn't.

TAPPER: Facebook suffered the biggest single day loss for any public company in history.

QUEST: In one day, Facebook lost $119 billion in market value. Tackling its problems will cut into Facebook's profits for years to come, but the company says it's necessary to improve its platform and regain our trust.


CABRERA: You have got to hear this next story. A New York subway rider might have earned himself a spot for life on Santa's nice list. Richard Taverna spotted a blue purse Thursday morning at the Lincoln center train platform in Manhattan. He opened it up to look for some kind of identification, but he found something else.


[19:55:06] RICHARD TAVERNA, TURNED PURSE, $10,000 HE FOUND: There was a big stack of money, you know, and the right thing to do, you know, somebody lost $10,000 and obviously, you know, they are probably going through a lot of duress. I don't think I really did anything that extraordinary.


CABRERA: Did you hear that? $10,000, cash. Taverna took the bag and its contents to the New York police department's 20th precinct. The same place a Manhattan woman went to file a report about the blue bag she had lost as she headed off for a vacation. Taverna telling our affiliate WABC you feel good when you do the right thing.

So here's to doing the right thing and feeling good. Make that a new year's resolution.

I'm Ana Cabrera in New York. That does it for me tonight. Thank you for being with me this holiday weekend. I will see you in the New Year.

Up next tonight, CNN's Fareed Zakaria hosts a CNN Special Report, "Presidents Under Fire, The History Impeachment."

Good night.