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Whitaker Rejects Ethics Official's Advice to Recuse Himself; Death Toll Nears 400 in Indonesia Tsunami; 8 for 2018: Top Business Stories; Christmas Celebrations Underway around the World. Aired 10:30-11a ET

Aired December 24, 2018 - 10:30   ET

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

[10:30:00]

PAUL CALLAN, CNN LEGAL ANALYST: Extensively and what they decided essentially was that there's not technically a conflict of interest in him being involved because he publicly expressed the nine time Mueller opinion that doesn't mean that he will be biased now. That's what the law says. However, there's a section of that law that says if a reasonable person would look at this and say that lawyer is biased and shouldn't handle it, it's called the public perception of conflict of interest, then the best thing to do is step aside. Clearly that applies here.

JIM SCIUTTO, CNN ANCHOR: Gets to the confidence in the institution. Sara Murray, the other thing we learned last week, CNN reported in the last few days, is that the president scolded Matthew Whitaker because he didn't shield the president from what were charges against Michael Cohen that made the president look bad. Explain what happened there and what right the president imagined he had to keep -- to force his attorney general's hand, I suppose, to hold back independent federal prosecutors, pursuing crimes.

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, look, I think this is the exact concern people had when President Trump you know sort of hand plucked Matt Whitaker to be the acting attorney general out of this line of succession, somebody who was not Senate confirmed and President Trump basically made clear to him that he didn't like a number of actions and Mueller's team had taken, a number of you know these reports regarding Michael Cohen that have implicated President Trump. He was livid about that and he shared those frustrations with Matthew Whitaker.

Now it is pretty stunning because we already know that obviously President Trump has come under plenty of fire for appearing to try to interfere in the Mueller investigation. Matthew Whitaker has come under fire for appearing to have some kind of bias potentially in the Mueller investigation. And this is I think another example of President Trump looking at someone who holds the position of attorney general and saying you are in that job to protect me and to serve me and not to serve the country. But one thing we were talking about, the special counsel regulations to remember is the one thing that they do have to inform Congress about is if let's say Bob Mueller decides he wants to do something like bring charges against someone, and the attorney general, in this case, Matthew Whitaker says, nope, that has to go to Congress. Congress has to be informed about that.

SCIUTTO: Sara Murray, Paul Callan, thanks very much.

CALLAN: Thank you.

SCIUTTO: The country Indonesia reeling from a catastrophic tsunami, a surpise one, hundreds dead. The death toll keeps rising there. Look at these pictures of the devastation. Now there are fears that more tsunamis could strike again within days and without warning.

(COMMERCIAL BREAK)

[10:38:03] SCIUTTO: The death toll in Indonesia is soaring this morning from a catastrophic tsunami there. Nearly 400 people now confirmed dead. But search crews are still combing through piles of debris. A 10-foot-high wall of water struck without warning. Now Indonesia's president says that he wants a better detection system. All this happening amid fears that more tsunamis could strike within days. The latest now from CNN's Ivan Watson.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Jim, the death toll from Saturday night's deadly tsunami in Indonesia has surged even as the recovery efforts have been complicated by fears and warnings that a volcano could erupt again and trigger another deadly tsunami. So, the situation that we have was triggered, the Indonesian authorities believe, by Anak Krakatau, that's this volcanic island that is in the middle of the Sunda Strait that erupted on Saturday and sent more than 150 acres, Indonesian authorities say, of mountainside plunging into the sea. They believe that subsequent underwater landslide triggered the deadly wall of water that hit the shores in resort communities in Indonesia that were full of Indonesian tourists on what was supposed to be a Christmas weekend holiday.

Some of the survivors have told us that they got no warning that this tsunami was coming. In fact, they didn't even see the waters receding, which is sometimes a sign of an impending tsunami.

The Indonesian president has toured the area and has urged his agencies to create some kind of a new early warning system. An existing one appeared to have been defunct since 2012, suffering from lack of attention and from robberies and vandalism.

[10:40:00] There was talk of trying to fix it up after another deadly tsunami struck another part of Indonesia in September of this year, killing around 2,000 people after an earthquake. Indonesia is very vulnerable, Jim. It's made up of more than 17,000 islands. It's on the ring of fire, home to more than 125 active volcanoes. So protecting this long coastline will be an immense challenge. Jim.

SCIUTTO: Ivan Watson thanks very much.

We take another look now at stocks. Dismal December already. Market down nearly 200 points. A little off its lows right now. Responding to a lot of news. Coming up, we break down this year's top business headlines.

(COMMERCIAL BREAK)

[10:45:11] SCIUTTO: Wall Street is on track now for one of the worst Decembers since the great depression. But believe it or not, that is not the top business story this year.

CNN's Christine Romans and Richard Quest have our 2018 year in review.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Iconic American industries transformed.

RICHARD QUEST, CNN EDITOR AT LARGE: The stock market, wild ride.

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

QUEST: Scandals shake 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.

JOHN BERMAN, CNN ANCHOR: The dramatic fall from what used to be one of the United States' largest retailers, Sears, filing for bankruptcy.

UNIDENTIFIED REPORTER: Lost generation of Toys "R" Us Kids have spoken across the U.S. All of its stores went out closed.

ROMANS: Toys "R" us and Sears struggled to keep up with retail's digital transformation. Stores like Target, Macy's, and Walmart are investing millions in their websites and 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 work force and announcement that sent shockwaves through America's heartland and Washington.

POPPY HARLOW, CNN ANCHOR: General Motors, the iconic American automaker is cutting staff and closing plants.

ROMANS: President Trump slams GM's decision to shutter five north American factories costing 14,000 jobs, but U.S. automakers say it's evolve or die. They're 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.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: He's strong. He's committed. He's 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.

Not happy with what he's doing.

We have much more of a Fed problem than we have a problem with 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 it's bowing to political pressure, or the president could do exactly the opposite of what he intended. The Fed may feel it has to raise rates to show it's not surrendered.

ROMANS: Number five, Elon Musk's erratic behavior cost Tesla and himself. Many credit Tesla's incredible market value to belief 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.

ROMANS: Smoking marijuana during a live broadcast.

UNIDENTIFIED MALE: OK.

MUSK: It's tobacco and marijuana in 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's stock price as well as scrutiny from Wall Street's top regulator. The SEC concluded Musk misled investors, 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 bang. And then trading turned volatile.

WOLF BLITZER, CNN ANCHOR: 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.

[10:50:00] 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 HOST: 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 USMCA, and trashing America's neighbor in the process.

TRUMP: Canada has treated us very badly. We think they're 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.

HARLOW: The president announced new tariffs on $200 billion worth of Chinese goods. Well, China shot right back saying it would 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 hoped 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 on the month of September, a 49-year low.

ROMANS: The U.S. labor market is strong, adding jobs for the past 98 months in a row. But as the U.S. nears what's 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 sow distrust the big tech. In March, Facebook reveals it exposed 87 million users to a third- party app. It 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 am responsible for what happens here.

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

JAKE TAPPER, CNN ANCHOR: Facebook just 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.

(END VIDEOTAPE)

SCIUTTO: It's quite a year, and it's not quite over yet. Still to come, Christmas festivities underway around the world. We will take you live to Bethlehem where one of the biggest celebrations, it's remarkable, is taking place right now.

(COMMERCIAL BREAK)

[10:58:02] SCIUTTO: Christmas celebrations are underway now around the world, including where it all began, the City of Bethlehem. Thousands of tourists and people on pilgrimage are expected to visit the West Bank town.

Joining me now from Bethlehem, CNN correspondent Ian Lee. I have been there before. Such a remarkable place, but on this night, it must just be breathtaking.

IAN LEE, CNN CORRESPONDENT: It really is. Merry Christmas to you, Jim, and to my family back home who is watching. The festivities today have been nonstop. There was a parade earlier where the Latin patriarch, that's the head of the Catholic Church, came from Jerusalem to the church of the nativity right behind me. That's where it all began. That's where Christians believe that Jesus was born.

I have to tell you, if you're Mary and Joseph, if you didn't have a reservation, there's no room in any inns or hotels tonight as they're fully booked, thousands of pilgrims and tourists coming here, seeing this. You know I talked to one priest. I asked him, what is his Christmas message to his congregation? He said one of love, equality, and justice.

For the Palestinians as well as for the Israelis and this has been a very deadly and bloody year. There have been scores of Palestinian protesters killed in clashes between the Israeli army and Gazans along that border fence that separates Gaza and Israel. Scores of rockets have also been fired by Gaza militants, and if it really weren't for diplomatic efforts by the U.N., by Egypt, there could have been likely a war.

So tonight, they're grateful that that was averted. But also, they're here celebrating peace and love and hoping that peace will prevail. And you can hear the music behind me. They're here to celebrate, Jim.

SCIUTTO: Well, Ian Lee, very Merry Christmas to you as well. And I'm going to take Ian's lead. I'm going to wish my family and friends who are watching a Merry Christmas, and all of you. Thank you so much for joining me today and our whole team here. We wish you the very best for the holidays and the new year. I'm Jim Sciutto. "At This Hour" with my colleague Kate Bolduan starts right now.