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Early Start with John Berman and Zoraida Sambolin
Retail Sales Up 4 Percent; Senior Military Officials Worries About Upset in Mattis Leaving. Aired 5-5:30a ET
Aired December 24, 2018 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN HOST: For now Americans are buying everything from TVs to toys to clothes. According to the latest data from the commerce department, retail sales increased more than 4 percent last month.
Consumer confidence is high, wages are ticking up. Shoppers are spending; the question is how long will it last. Now the King of Atlantis won the holiday box office by beating out a transformer and a magical nanny.
"Aquaman," the latest DC superhero flick to nab $67.4 million in a three day weekend in North America. Disney's "Mary Poppins Returns," with an amazing Lin-Manuel and Emily Blunt.
That took weekend box office second place, $22.2 million. It was really a good movie. And rounding out the top three, Paramount's "Bumblebee" with $21 million. The big three films this weekend helped keep a strong box -- box office moving along.
Hollywood will end the year at a high note next weekend with the box office up 7.5 percent over last year, Joe.
JOE JOHNS, CNN HOST: Wow. All right then, Early Start continues right now. The outgoing defense secretary force to depart two months early. The president frustrated by the critical resignation letter from Jim Mattis.
UNIDENTIFIED MALE: Well, it's very possible that the shutdown will go beyond the 28th and into the new Congress.
ROMANS: Day three of the Christmas government shutdown size remains far apart on the president's demand to fund a border wall.
JOHNS: A treasury secretary trying to reassure investors after the worst week for stocks in a decade but Steve Mnuchin's falchion (ph) has nothing to do with the actual symptom.
ROMANS: And did the president cross a red line venting to his acting attorney general about revelations that implicate him in the Michael Cohen case. So much going on. Short trading day on Wall Street. Good morning and welcome to Early Start everybody. I'm Christine Romans.
JOHNS: And I'm Joe Johns. It is Monday December 24th, Christmas Eve and the third day of the Federal Government shutdown. 5 AM in the east. Defense secretary James Mattis being forced out of the job January 1st, two months earlier than planned.
Mattis announced his resignation Thursday saying his views were not aligned with Trump's. The departure triggered by the president's decisions to withdraw U.S. troops from Syria. Acting chief of staff, Mick Mulvaney, defended President Trump's decision to pull out of Syria saying it's aimed at pleasing his supporters. But in the next breath, Mulvaney admits supporters don't understand the consequences.
(BEGIN VIDEO)
CHRIS WALLACE, FOX HOST: He went against the recommendations of Mattis, McGurk, Dunford the chairman of the Joint Chiefs, apparently Pompeo, and Bolton. Who is he listening to?
MICK MULVANEY, ACTING CHIEF OF STAFF: Here's -- the president listens to a bunch of different people including the people who ...
WALLACE: But that's his national security (inaudible) ...
MULVANEY: But wait a second. Including the people who live here and the ordinary Americans, the people he promised when he ran for office that he was going to leave. We recognize the fact that this is unpopular within the belt way (ph). We recognize this fact is unpopular within the defense department. It's very popular with ordinary American people.
WALLACE: Do they really know what the stakes are of pulling U.S. troops out and leaving the Syrian defense force to the Turkish -- Turkish slaughter and what the impact is going to be in Iran? I mean really, we're going to make this a (inaudible)?
MULVANEY: Ordinary Americans have no idea about those things. They elect the president so that he does.
(END VIDEO)
ROMANS: One thing the president did not immediately realize was that Mattis was resigning in protest. Once that became clear, aides say the president remarked Mattis was only being painted as the smartest guy in the world because he was leaving the Trump administration.
Now sources tell us senior military officials are becoming worried about the uncertainty the upheaval is causing. They are getting questions from out in the field. With Mattis on the way out, who is in charge for now? Here's Pentagon correspondent Barbara Starr.
(BEGIN VIDEO)
BARBARA STARR, PENTAGON CORRESPONDENT: Deputy secretary of defense Patrick Shanahan, number two at the Pentagon, has been named by the president to become acting secretary of defense. There was a feeling inside the White House officially that they needed to get a new person in. That they didn't want Mattis in a lame duck position. But administration officials will tell you that behind the scenes the president was not happy with the extensive news coverage of Mattis' departure, of his resignation letter saying basically that he was resigning in protest over the president's decision to withdraw troops from Syria.
So Shanahan now has the leading role here at the Pentagon. He has been involved mainly in things like acquisition reform and innovation. Now, with no foreign policy experience, he will take on a national security role on the international stage dealing with America's military allies and America's military adversaries. Barbara Starr, CNN, the Pentagon.
(END VIDEO)
JOHNS: President Trump's decision to pull U.S. forces out of Syria leading to another resignation. Brett McGurk, the special presidential envoy for the global coalition against ISIS has also decided to step down early.
The president's decision has now been turned into a formal military directive. Pentagon officials confirming the execute order for Syria has been signed by outgoing defense secretary James Mattis.
ROMANS: CNN has also learned the days before the president decided to withdraw from Syria; he made a crucial phone call to the Turkish president, Recep Erdogan. A source says President Trump said, OK, it's all yours. We are done. Meaning with Syria, handing it over to Turkey.
A senior White House official said Erdogan gave Trump his word, Turkey would finish off ISIS but no mention of the U.S. alliance with the Syrian Kurds. An alliance with the United States and the Syrian Kurds but Turkey considers the Kurds a terror group.
JOHNS: The third government shutdown of the year now entering its third day. And right now there's no end in sight.
(BEGIN AUDIO)
UNIDENTIFIED FEMALE: 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. Please call back at that time.
(END AUDIO)
JOHNS: So there it is, the recording you'll get if you call the White House. The shutdown forcing about 400,000 government workers to work without pay. Another 400,000 sitting at home unpaid. A number of national parks and monuments shuttered for the long holiday weekend.
ROMANS: One thing that is working, NORAD's a Santa tracker thanks to more than 1500 military personnel and volunteers. In coming acting chief of staff, Mick Mulvaney says it is possible the shutdown will be something the new Congress tackles.
Law makers will be seated in early January. CNN"s Sarah Westwood has the state of play at the White House.
(BEGIN VIDEO)
SARAH WESTWOOD, CNN REPORTER: Well, Christine and Joe, President Trump is bracing for what could be a lengthy shutdown that stretches beyond the holidays as he continues his demand for money for his promised border wall and democrats continue their refusal to fund it and recall that President Trump had initially demanded $5 billion in funding for the border wall.
And he said that it had to be for the construction of a physical barrier along the southern border, it couldn't just be for border security in general. Now sources say Vice President Mike Pence offered support for a border security package worth $2.5 billion if it included funding for the wall.
That offer came during a meeting on Capitol Hill Saturday with Senate minority leader, Chuck Schumer, but those sources say Schumer rejected the offer, so the talks do still appear to be deadlocked.
Now Trump has been all over the map when it comes to this shutdown. He first said he would be proud to accept responsibility for it if it was in pursuit of money for his border wall before shifting to blame Senate democrats.
But it's still unclear just how much less than $5 billion the president would be willing to accept and it's unclear what, if anything, democrats would be willing to approve because democrats have little incentive right now to negotiate on the president's terms, given that they'll be in the majority in the House in just about two weeks, Christine and Joe.
(EN VIDEO)
ROMANS: All right. Sarah Westwood, thank you. All right, the treasury secretary, Steven Mnuchin, he spent the day, Sunday, calling bank CEOs from his holiday in Mexico in a bid to reinsure investors after the worst week since the financial crises.
First, let me give you the damage report. The DOW fell 6.9 percent. The worst weekly drop since October 2008. A very terrible time in the financial crisis. The S&P 500 lost 7 percent on the week.
It's worst week since August 2011. The NASDAQ fell 8 percent, the worst week since November 2008. And the NASDAQ is now officially in a bear market. Now here's Mnuchin's attempt at damage control.
In a statement after that call - those calls with the six CEOS, he said this; "The CEOs confirmed that they have ample liquidity available for lending to consumer, business markets, and all other market operations."
But that was never in question, by the way. He's -- he's saying the CEOs assured him of something that no one even questioned. The banks are liquid and strong. They've had record profits for several years.
Then he went on to add this, "We continue to see strong economic growth in the U.S. economy with robust activity from consumers and business." Also not a question at all. All three major averages are down more than 12 percent though in December and on pace for the worst December since the Great Depression.
The markets are acting s if a recession is right around the corner, which is why the selling just might be a bit overdone. Yes, the blockbuster growth of 2018 is likely to fade and risks like an escalation in the U.S./China trade war loom.
Still, some market veterans argue that a panicky Wall Street is prematurely pricing in a recession that may not happen until, I don't know, 2020. But messaging from this White House is not helping.
The president's attacks on the Fed chief raising big concerns. A source said President Trump has been asking advisors if he has the legal authority to fire Fed Chair, Jerome Powell. He is told he does not. The president has often attacked Powell for raising interest rates and blamed him for the market plunge.
Interest rates have gone up seven times since Trump took office; four of those increases have been under Powell.
JOHNS: CNN has learned that President Trump has vented to acting attorney general Matt Whitaker at least twice in the last few days about the explosive revelations in the Michael Cohen case. Sources say the president is frustrated that prosecutors overseen by Whitaker filed charges that made Trump look bad.
Cohen has (ph) pleaded guilty to crimes he said he committed at the president's direction. None of our sources say the president has ordered Whitaker to stop the Mueller probe.
ROMANS: But the conversations highlight how convinced the president is that the attorney general should serve as his personal protector. Important to note this is not just Mr. Trump venting about looking bad.
This is the president of the United States confronting the nation's top law enforcement officer about a case in which the President himself has been implicated. The president's actual lawyer, Rudy Giuliani, could not confirm the conversations with Whitaker but he said the president does view federal prosecutors in New York as out of control.
All right, President Trump's incoming chief of staff, Mick Mulvaney, downplaying critical comments he made about his future boss during the campaign. In recently uncovered clips Mulvaney is heard calling the candidate -- then candidate Trump a terrible human being, adding Mr. Trump's past actions would disqualify him. Then there's this clip about the border wall from 2015.
(BEGIN AUDIO) MULVANEY: The fence doesn't solve the problem. Is it -- is it -- is it necessary to have one, sure. Would it help, sure. But to just say build the darn fence and have that be the end of an immigration discussion is absurd and almost childish for someone running for president to take that simplistic of view.
(END AUDIO)
ROMAN: Mulvaney now says it's all water under the bridge.
(BEGIN VIDEO)
MULVANEY: We joked about it last night. So look, I think the president -- what's wrong with Washington D.C., people spend a lot more time looking at what people say instead of what they do.
I think my actions for the last two years -- in fact, I know they have because I've asked the president about this, he knows that I've been fighting with him to fight for (inaudible) Americans for the last two years. He likes having my around and I like working for him.
(END VIDEO)
ROMANS: Look, Mulvaney got something he really wanted, those tax cuts. And so he's a champion of those lower taxes for a corporation, something that he really wanted and he got that legislative achievement.
And Mick Mulvaney and a lot of other republicans and quite frankly during this -- this -- this -- Donald Trump was like a hostile takeover of the Republican Party. Now they want to work with him.
JONES: Everybody criticized him but the truth is -- you know if there's anybody but Mick Mulvaney and there's anything but the chief of staff job you'd have to wonder whether this was bad for job security but they're kind of running out of candidates, or so it looks.
Nearly 300 people including some beach side concert goers, wiped away by a tsunami that hit Indonesia without warning. Overnight the government ordered equipment to detect tsunamis earlier. A live report coming up next.
(COMMERCIAL BREAK)
ROMANS: Authorities warning more deadly tsunamis could strike the Indonesian coast line in coming days. The volcano, which triggered the devastating wave is still erupting. At least 281 people dead, 1,000 injured, 11,000 people displaced. The tsunami struck without warning Saturday night.
Caught on camera, a massive wave crashing down on a crowd at a pop concert. Here's the band's lead singer the next day.
(BEGIN VIDEO) RIEFIAN FAJARSYAH, SEVENTEEN LEAD SINGER THROUGH TRANSLATOR: I just wanted to say that our bass player, Bani and our manager, Oki Wijaya passed away.
(END VIDEO)
ROMANS: And his wife is missing. CNN's Ivan Watson, live in Hong Kong with the very latest. Ivan?
IVAN WATSON, CNN REPORTER: Hi there, Christine. The effort is still underway to gather up wounded people, hundreds of them from this deadly tsunami. The death toll, at least 281 dead with local authorities saying they predict that more bodies, more wounded will be brought into hospitals as heavy machinery clears roads of the substantial amount of debris caused by this.
They're also sending out warnings to Indonesians to stay away from the beaches because they're worried there could be another tsunami. After all, there was no warning when this deadly wave blew through the area on the evening of Saturday night said (ph) 9:30, 7 PM local time; in part because they believe it was triggered not by an earthquake but by a volcano.
Also we're learning from the Indonesian authorities that a lot of the tsunami warning systems have fallen into disrepair for more than six years now even though there was another deadly tsunami caused by an earthquake in another part of Indonesia just last September with a death toll of around 2,000 people.
The challenges are daunting though. This is a country of more than 17,000 islands with more than 100 active volcanoes in an earthquake zone. So big challenges to try to protect the coast line from these types of natural disasters. Christine.
ROMANS: All right. Ivan Watson following it for us in Hong Kong. Thanks Ivan.
JONES: Coming up, we're going to talk a little bit of sporting news; of Steelers on the brink of elimination after a loss in New Orleans. Coy Wire's going to have this morning's Bleacher Report coming up next. Coy.
(COMMERCIAL BREAK)
So the Saints are going to be home for the holidays and beyond, securing home field advantage in the NFC by beating the Steelers.
ROMANS: Coy Wire has more on this morning's Bleacher Report. Merry Christmas Eve Coy.
(SPORTS)
ROMANS: Don't hurt each other.
JONES: Right, exactly. COY WIRE, CNN SPORTS CORRESPONDENT: I don't know if I'll be watching that game. I think I'm going to be watching the bottom of my glass of eggnog. I wish both of you a very Merry Christmas.
ROMANS: You too.
JONES: You too.
ROMANS: Thanks so much.
JONES: I love that circus catch. That was incredible.
ROMANS: I know, nice. All right, Coy Wire, Merry Christmas. You can't quit, you're fired. The defense secretary forced out two months early. His critique of the president apparently too much to bear.
JONES: And the United States government is going to remain shutdown till at least Thursday. It could be up to the new Congress to reopen the government next year.
(COMMERCIAL BREAK)
