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An uncertain Christmas for many Americans impacted by the government shutdown; Indonesia Is Reeling After A Deadly Tsunami Killing Nearly 400 People; The Major Business Headlines Of 2018. Aired 1:30-2p ET

Aired December 24, 2018 - 13:30   ET


KATE BOLDUAN, ANCHOR, CNN: An uncertain Christmas for many Americans impacted by the government shutdown. The immediate impact is on hundreds of thousands of Federal workers - 380,000 are on leave without pay; 420,000; others have to work but aren't getting a paycheck. And then, get this. If you want to reach the White House about any of this or anything, for that matter, this is what you'll get.


AUTOMATED FEMALE VOICE: We apologize, but due to the lapse in Federal funding, we are unable to take your call. Once funding has been restored, our operations will resume.


BOLDUAN: Two other important numbers to remember today. December 27th, Thursday - that's when the Senate comes back. January 3rd, that's the day the new Congress is seated.

Joining me now to discuss, former Republican Congressman and current CNN political commentator Charlie Dent.

Congressman, it's great to see you. You have seen your fair share of shutdowns. And I'm just talking about this year. Does this shutdown seem different than others?

CHARLIE DENT, FORMER PENNSYLVANIA REPUBLICAN CONGRESSMAN: Yes, this one does because I think there's a - because of the President's erratic behavior, I mean, this shutdown in my view is completely unnecessary. The appropriations process actually had moved pretty well this year.

Five of the 12 bills were already signed into law in September. And of the seven remaining, six are teed up, ready to go, they could pass those today if they wanted to. The fight is over the Homeland Security appropriations bill, and over the wall funding and so all they really need to do is punt that bill into the new year and do the other six now, and problem solved.

But obviously, it's going to be more complicated than that. But the President's position though is unclear. He had a deal last week that they are going to do a continuing resolution into February 8. And then he reversed himself. So if you're a Senate Republican right now, I would think the Senate Republicans must be out of their minds over this.

They're not going to put up another bill on the floor of the House or the Senate until they're certain that the President will actually sign the thing.

BOLDUAN: And that actually is an important point. I mean, being able to trust any deal that the president agrees to is a real question now, because as you point out, there was a deal between Democrats and the White House. It passed the Senate and then Trump changed his mind.

Is there any way - I mean, honestly, if you're still there, if there's any way to trust any deal that the President agrees to at this point when it comes to this? I mean, his track record is - well, it is what it is.

DENT: Well, you know, I think that the challenge that this White House has is that nobody really speaks for the President. There was just a story yesterday, I guess, the Vice President, Mick Mulvaney, and somebody else went down and met with the - some of the Senate leaders, and are they really speaking for the President? I think the short answer is, they are not. So I think that's really the problem.

We had an appropriations bill, you may remember, it was last March, the big Omnibus, which was negotiated. I helped negotiate that bill. And everything was worked out and agreed to. The President got what he wanted. And then in the 11th hour, somebody was screaming about the magnitude of the bill, the size of the bill, and he threatened to veto a bill that he had agreed to.

Now, in the end, he signed it, but that does not inspire any type confidence if the President is so whimsical and does not empower his staff to negotiate or speak on his behalf.

BOLDUAN: So there are a couple of things, right? You've got border wall as a big sticking point. But there's always two parts to the border wall conversation. It's not just build the wall, the second part was of course was that Mexico is going to pay for it.

I want to play for you what the now acting Chief of Staff, Mick Mulvaney said about this just yesterday.


UNIDENTIFIED MALE: But none of that is Mexico paying for the wall. Let's just be clear about this.

MICK MULVANEY, INCOMING CHIEF OF STAFF FOR THE PRESIDENT: Technically, you and I both know that it cannot work exactly like that, I can't spend any money at the Office of Management Budget ...


MULVANEY: ... that the Department of Homeland Security can't actually spend money from Mexico, we have to get it from the Treasury. (END VIDEO CLIP)

BOLDUAN: It doesn't actually work like that, says Mick Mulvaney. So now, they can't spend the money if it would come from Mexico. I watched that thinking, do you think it would change the dynamic of this whole thing if the President would just once and for all admit, acknowledge, say, that he knows that Mexico isn't going to pay for it?

DENT: That would certainly help. It was absurd to state in the first place that Mexico was going to pay for this wall. Nobody who had anything between their ears ever believed that, let's be honest about that. Now he is also - the President has also floated the idea of having the Department of Defense build the wall. Now, I can tell you as the guy who ran military construction projects for the appropriations committee, the Defense Department cannot do that. They don't have the authority.

But for 37 miles on the Gold Water Range in Arizona, where they could build some fencing. That's it. That's the only authority the Defense Department has and they haven't really sent over a request to do so, last I checked.

So I don't know. The President said that Mexicans will pay for it. He said the Defense Department will build it, which they can't. So you know, he says a lot of things that just simply aren't factual and it really makes no sense.

BOLDUAN: Congressman, I am struck by - I remember our conversation when you announced your retirement that frustration with the President was one of the reason, just one, there were many other reasons for you to retire.

As we're sitting here today, are you having any second thoughts?

DENT: Well, you know, I guess I could say, not my problem today. But on a serious note, it is a big problem. We're talking about not just a shutdown here, a crisis in leadership.

With the resignation of Secretary Mattis, with the repudiation frankly of the Trump doctrine. The president threatening to fire the Chairman of the Federal Reserve for doing his job and trying to bring about some kind of monetary normalization with interest rates. You know, we had that crazy week with Flynn and Cohen and of course the precipitous Syria withdrawal.

All of these issues are creating a climate of crisis. And the markets of course are spooked. Mnuchin today making his comments, calling the banks, saying, "Hey, you know, you have nothing to panic about," which of course makes people think immediately, you know, "Should I panic?"

And so we have all of this happening, and I think that's what's discouraging to so many people. I've spoken to people over the last couple of days and this market turmoil is really getting a lot of folks' attention.

BOLDUAN: Yes, and not going away. Thank you so much, great to see you, Congressman.

DENT: Thank you, Kate, great to be with you.

BOLDUAN: Thank you. We'll be right back.


BOLDUAN: Indonesia is reeling after a deadly tsunami killing nearly 400 people. Ivan Watson has the latest.


IVAN WATSON, SENIOR INTERNATIONAL CORRESPONDENT, CNN: The death toll from Indonesia's deadly tsunami Saturday night surged on Monday, even as recovery efforts have been hampered and complicated by warnings from local authorities that they are afraid there could be another deadly tsunami.

This is all because of an active volcano, a volcanic island that is known in Indonesia as Anak Krakatau 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.

Instead we saw scenes like that concert that was tragically cut short Saturday night of the Indonesian pop band, "Seventeen" when the wall of water crashed through the stage and overwhelmed both the band and the audience.

In that tragic story, it turns out that the lead singer of the band says three of his band members were killed and his wife is still believed to be missing.

So the efforts now are focused on trying to bring wounded, injured people to the hospitals and also trying to provide temporary shelter and basic supplies and food to thousands of people made homeless by this tsunami. Ivan Watson, CNN, Hong Kong.


BOLDUAN: Ivan, thanks so much. Just horrible. Coming up for us, it was a short trading day on Wall Street and an ugly one, too. Details on the selloff, next.


BOLDUAN: The continued market turmoil today, just one of the major business headlines of 2018. Christine Romans and Richard Quest take us through.


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


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

CLARE SEBASTIAN, CORRESPONDENT, CNN: The last generation of Toys "R" Us kids have spoken across the U.S. all of it still as we are now closed.


ROMANS: Toys "R" Us and Sears struggled to keep up with retail's digital transformations. Stores like Target, Macy's and Walmart are investing millions on 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.


QUEST: 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.


POPPY HARLOW, ANCHOR, CNN: 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.


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.

I'm 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. Next.


ROMANS: Smoking marijuana during a live broadcast.


JOE ROGAN, PODCAST HOST: It's totally legal.

MUSK: Okay.

ROGAN: 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. 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, ANCHOR, CNN: Happening now, breaking news. Wild ride. Another dizzying day on Wall Street, with stocks nosediving more than a thousand 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, ANCHOR, CNN: Stock market just had its worst month since 2011.

UNIDENTIFIED FEMALE: 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 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 newest economies.


ALISYN CAMEROTA, ANCHOR, CNN: The President announced new tariffs on $200 billion worth of Chinese goods. Well, 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: Three point seven percent unemployment in 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 ...


ROMANS: ... 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. It angered users, advertisers, lawmakers, and investors.

ROMANS: The data crises 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 liked that, investors didn't.


JAKE TAPPER, ANCHOR, CNN: 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.


BOLDUAN: Richard, Christine, thanks so much. "Newsroom" with Dana Bash starts right after this.