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New Day

Tsunami hits Indonesia; Dow Suffers Worst Week; Trump Lashed Out to Acting AG; Roberts Pauses Contempt Order; Weather Outlook for a White Christmas; Saints Beat Steelers. Aired 6:30-7a ET

Aired December 24, 2018 - 06:30   ET

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


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[06:30:49] JOHN AVLON, CNN ANCHOR: Indonesia's president ordering the installation of a new tsunami warning system after a killer wave killed 281 people and injured more than 1,000. We want to warn you that some of these images may be disturbing.

Now, this is video from a concert as the wall of water came ashore between Java and Sumatra. And this morning, residents are being warned that more tsunamis could be on the way.

CNN's Ivan Watson joins us now with the latest.

Ivan.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi there, John.

The work is being complicated in the kind of recovery of wounded people and of victims of this deadly wave by the fact that there are fears that there could be another tsunami. After all, the volcano that erupted on has believed to have caused the initial tsunami on Saturday night is still very active. And it's clear that there is not a warning system in place to protect people still along the shores here in this devastated region.

So you have this very unusual situation where the authorities say that they did have a kind of tsunami warning system, but it is designed to detect waves that could be generated much further out in the ocean. And that much of it has been defunct since 2012. What's striking is that, that is even though there was a deadly tsunami as recently in Indonesia as last September after an earthquake that killed roughly 2,000 people.

So, again, this complicates the recovery effort, the effort of trying to clear roads and debris, and move people, who have been injured, to hospitals from more remote locations. And it raises some real questions about whether the Indonesian authorities will take seriously trying to create some kind of alert systems to help alert the country. This is a very vulnerable country. More than 17,000 islands in Indonesia and more than 120 active volcanos.

Erica. John. ERICA HILL, CNN ANCHOR: Wow. All right, Ivan, thank you.

Let's get a check now of CNN business this morning.

Wall Street is bracing for more volatility after the Dow suffered its worst week since the 2008 financial crisis. And all of this comes as Treasury Secretary Steven Mnuchin called top executives at U.S. banks over the holiday weekend to reassure investors.

CNN chief business correspondent Christine Romans joins us now with more.

It may have had the opposite effect.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I don't think it reassured anybody. People last night trying to figure out what in the world he was talking about.

So he spent Sunday calling bank CEOs from his vacation in Mexico in a bid to reassure investors after the worst week since the financial crisis. First, the damage report here. This is what we're coming off here. The Dow, last week, fell almost 7 percent. Worst weekly drop since October '08. The S&P 500 lost 7 percent last week, worst week since August 2011. Nasdaq, 8.4 percent on the week, the worst week since November '08. And the Nasdaq is officially in a bear market.

Now, Mnuchin's attempt at damage control didn't really inspire confidence. I mean after his calls to the six bank CEOs, the Treasury issued this statement. Quote, the CEOs confirmed that they have ample liquidity available for lending to consumer, business markets and all other market operations. The financial world spent the day puzzled about what he meant. There is no doubt -- there's no question that banks have ample liquidity. So why did he inject that?

Then he added this, we continue to see strong economic growth in the U.S. economy with robust activity from consumers and business. Again, no question, the U.S. economy's had a great year, but, yes, it has been a terrible few months for stock investors. Still, no one's forecasting a financial crisis. A financial crisis is what he's talking about. Far from it. All three major market averages are down more than 12 percent in December. They are on pace for the worst December since the Great Depression. So that's clearly at the forefront here.

The markets are acting as if a recession is right around the corner, which is why the selling might be overdone. The blockbuster growth of 2018 likely to fade. Risks like the escalation of the trade war with China, they still loom. Still, market veterans tell us that a panicky Wall Street is prematurely pricing in a recession that may not hit until 2020.

Now, then there's this. The messaging from the White House is not helping this. The president's attack on the Fed chief raising big concerns. A source said President Trump has been asking advisers if he has the legal authority to fire the Fed chief, Jerome Powell. He picked him. Remember, he picked him. HILL: Yes.

[06:35:01] ROMANS: This weekend, Secretary Mnuchin said he never suggested the president can fire Powell. The president said that. And Chief of Staff Mick Mulvaney said the president realizes he can't fire Powell. But even talking about firing Powell is just so bad for the markets. The president has often attacked him for raising interest rates, blames him for the market plunge. Interest rates have gone up seven times since Trump took office for just this year.

AVLON: So, Christine, what was the Treasury secretary thinking?

ROMANS: I don't know.

AVLON: Because he presumably should know better.

ROMANS: I don't know. It sounds like it was a check-in call with these banks just to say, you know, it was a really terrible week on Wall Street. The banks are like, everything's fine, you know, we've got -- everything's -- everything's fine. It was just a bad week on Wall Street.

But at the forefront, when you see these comparisons to the financial crisis, that must be a real -- a real, you know, bur under the saddle of the administration. Every time you say since the financial crisis, since the depression, they don't like that.

HILL: And, really quickly, how often do those calls normally happen?

ROMANS: They happen from time to times. I mean the Treasury secretary is in contact with the bank chiefs. But this made it sound like it was some --

HILL: Special circumstance.

ROMANS: Extraordinary --

AVLON: Yes.

HILL: I'm calling to make sure.

ROMANS: And specifically about the ample liquidity. I'm telling you, the smartest minds in money all day yesterday were like, why did he say -- no one thought there was a problem with liquidity. Why inject it into the debate.

As one Democratic senator said, it's like being in the health department and saying, don't worry, your water's not poisoned. I heard someone say it's like saying to your spouse, don't worry, honey, I'm not cheating on you. You know, why would you even bring that up?

HILL: Right.

AVLON: These are not best practices.

ROMANS: No. AVLON: No.

ROMANS: Did not inspire confidence.

AVLON: All right.

HILL: Thank you.

AVLON: Up next, CNN learns the president is complaining about a federal case he's named in with his acting attorney general. Will his venting create more legal problems for the president? That's next.

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AVLON: Sources tell CNN, President Trump is angered by federal prosecutors and venting to his acting attorney general, Matt Whitaker, at least twice in the last few weeks. They say the president is frustrated because those prosecutors reference the president's actions in crimes his former attorney, Michael Cohen, plead guilty to. Now, while the acting AG oversees those prosecutors, sources say Trump has not directed Whitaker to stop the investigators.

[06:40:13] Let's bring in former federal prosecutor and CNN legal analyst Elie Honig and former FBI senior intelligence adviser Phil Mudd.

Gentlemen, good morning.

Elie, let's start with you because this news, amid the big news we've got, hasn't got a lot of attention, but a lot of conservatives, for example, were furious that Loretta Lynch met with Bill Clinton. How does this compare with that?

ELIE HONIG, CNN LEGAL ANALYST: This is a huge deal and I think it's been underplayed a bit. Look, this is worse. Think about it. You know the president of the United States telling the acting attorney general, keep the Southern District off my back, right? When Loretta Lynch/Bill Clinton, I think there were problems with that, but Bill Clinton at the time was the spouse of a candidate. He had no say or even indirect say over what Loretta Lynch did.

And I think the president's message to Whitaker was quite clear, right, which is, I'm furious that the Southern District named me in connection with the campaign finance. And saying that is really no different -- when your boss tells you, I'm furious that x happened, it's the same thing as saying, don't let x happen again.

And it gets back to the president's sort of fundamental misunderstanding about the Department of Justice. The U.S. Department of Justice does not exist to serve Donald J. Trump the individual, or even the president of the United States. The Department of Justice serves the American people and Justice. This is what got him in trouble in the first place, right, the meeting with Comey where he said, hey, go easy, lay off on Flynn. This is no different than that.

AVLON: Could this (INAUDIBLE) obstruction? HONIG: I think it's one in the same. I think it's the exact same idea.

You know, the bar for objection of justice is really quite low. I don't know if people fully understand that. I've prosecuted obstruction of justice cases for an individual trying to get a witness to change one element of their story. Here you have somebody in power saying, get these guys away from me. So I don't see -- I don't see an argument against it being obstruction.

HILL: Which is fascinating.

Phil, as you look at this, and I think it's interesting too that, as you point out, Elie, Bill Clinton meeting with Loretta Lynch, well, you know, couldn't really have any influence, a lot of people would take issue with that and say, well, actually, we think there could have been influence. If nothing else, though, the optics of that were bad. It's tough to argue a counterpoint on that one.

Even just from an optics perspective, Phil, even if someone isn't fully agreeing with Elie that this could be obstruction of justice, it doesn't look good for the president.

PHILIP MUDD, CNN COUNTERTERRORISM ANALYST: Yes, but I think he's playing checkers, he's not playing chess.

Let's look at the topics of this. From the outside, on the surface, you'd say, wow, the acting attorney general is in the office with the president, must feel some pressure to intervene in the case. Well, let's take that one step forward and move out of checkers into chess.

Let's say that before last week Whitaker thought he would pick up the phone and talk to the Southern District of New York just because he reviewed some of the elements of the case and said I have a perspective I want to talk about. The president almost limited Whitaker's ability to interfere in the case now because regardless of the facts of the case, if Whitaker says something now, what are the optics going to look like? Well, you did that because the president t'd you up in the Oval Office.

I think the president vented thinking maybe he could pressure Whitaker. I think quite the opposite. Now he limits, he almost ties Whitaker's hands because Whitaker can't do anything without appearing to doing it to acting on the behest of the president's orders.

AVLON: Unintended consequences.

MUDD: Yes.

AVLON: Elie, let me speak to you about one fascinating case, so-called mystery Mueller case. There -- we know there is a company that seems to be under civil indictment that is fighting handing over some records and Justice Roberts weighed in over the weekend to issue a stay so they didn't have to.

What do we know about this case and why is it drawing so much speculation and attention? HONIG: So, this is the mystery case, the mystery subpoena case where

there was all these sealed arguments happening in the D.C. federal courts. On Friday we learned that the recipient of the subpoena was not an individual. Some were speculating maybe it's the president, maybe it's the vice president. Turns out it's a corporation that is in some part owned by a foreign state, right? And so there's plenty of speculation about what that could be.

AVLON: Who could fall into that category?

HONIG: Yes, I mean, look, the most -- to me the most likely category would be a foreign owned and foreign backed bank. We know the president has a long relationship with Deutsch Bank. I'm speculating but if -- making a sort of reasonably educated guess. He's taken hundreds of millions of dollars in loans from them. They were recently raided. So there's -- if I had to guess, that would be my guess, but it would only be a guess.

They -- what we do know also is, this company really, really does not want to turn over this information. It's fairly rare for a corporation to fight a subpoena like this. Usually if you're a corporation, you receive a subpoena, you may argue to limit it in some respect, but just to say, no way, we want nothing to do with this. We're going to fight you in the district court, then we're going to fight you in the appeals court. They lost both of those. And then we're going to take it to the Supreme Court.

HILL: Right. It makes you wonder what it is that they don't want to reveal. It really does.

AVLON: It does.

HILL: Phil, I want to get your take on this. We heard from Adam Schiff over the weekend. Obviously, as everyone is waiting to know what Mueller has learned, there is some question about whether we will ever know. Adam Schiff tackling that. Take a listen.

(BEGIN VIDEO CLIP)

REP. ADAM SCHIFF (D), RANKING MEMBER, INTELLIGENCE COMMITTEE: I'm prepared to make sure we do everything possible so that the public has the advantage of as much of the information as it can.

[06:45:05] Now, there may be parts of the report that have to be redacted because they involve classified information or they involve grand jury material.

This case is just too important to keep from the American people what it's really about.

(END VIDEO CLIP)

HILL: Phil, you think he's putting the cart before the horse here. Why?

MUDD: Yes, slow down here. Look, we have enough news in this town without worrying about what might happen a month down the road, six months down the road. It's appropriate to look at what Mueller is doing and say, we ought to at least privately be concerned about whether this case will continue or whether somebody, including the incoming attorney general, will try to shut it down.

But we don't even have a Mueller report yet. The case hasn't even shut down yet. Can we deal with what we have now and try to stay cool in the midst of a crisis?

One thing you learn in government, the hotter it gets in the kitchen, the cooler the cook gets. Let's not deal with what might happen, let's just deal with today. That's what I'd argue.

HILL: Phil Mudd, Elie Honig, good to see you both. Thank you.

MUDD: Thank you.

HONIG: OK.

HILL: Supreme Court Justice Ruth Bader Ginsburg recovering from cancer surgery. How her fall last month may have really saved her. That's next.

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HILL: The body of Jakelin Caal Maquin has returned to Guatemala. The seven-year-old, who along with her father, was seeking asylum by illegally entering the U.S. died while in custody of the U.S. government. A family attorney believes they were not given water nor proper medical care during the first eight hours of their detainment. Customs and Border Protection agents, however, say migrants did have access to food, water and restrooms. A GoFundMe page has been set up to help the family.

[06:50:17] AVLON: All right, Buckingham Palace releasing previews of Queen Elizabeth's Christmas Message. Her majesty will highlight the importance of treating others with respect, including those with opposing views. Always good advice. It will be broadcast tomorrow and comes at a time of deep division in the U.K. over Brexit. The queen has delivered her annual Christmas Day Address since 1952, when Winston Churchill was prime minister.

HILL: Justice Ruth Bader Ginsburg is already up and working, we're told, from her New York hospital room, just two days after cancer surgery. That's what a Supreme Court spokeswoman tells the Associated Press. It is not clear when the 85-year-old justice will return home. We have learned, however, that it was her fall last month, the one that left her with three cracked ribs, which may have actually been a life safer because that is when doctors found the malignant growth on one of her lungs. Doctors say there is no evidence the cancer is still there.

AVLON: Wow, that's -- talk about a lucky break.

HILL: She is -- she is one tough lady. AVLON: She is. And I know a lot of people gulped when they got --

heard that news, the surprise surgery, but it really does seem that that initial fall may have saved her life.

HILL: Pretty remarkable. That it is.

AVLON: All right, wishing her well.

All right, you may be dreaming of a white Christmas, but will you actually see the piles of white tomorrow.

CNN Meteorologist Alison Chinchar joins us with the forecast.

Alison, what you got?

ALISON CHINCHAR, CNN METEOROLOGIST: The Great Lakes region is really going to be the sweet spot in the next 24 hours. We're already starting to see some snow for places like Traverse City, Michigan, up around Albany and Syracuse and even Hartford actually reporting some snow. The question is going to be New York. At this point in time you may have some rain mixed with that snow, but it's not really likely to stick and hold on until actual Christmas Day.

Here you can see more of that snow continuing to push in throughout the rest of the day. But the question is, how much of this remains for actual Christmas Day? Who is going to get a real white Christmas?

Here is a look at the map. These are the areas that stand the best chance of actually having a white Christmas. You'll notice it's the usual spots, the northeast, the upper Midwest, and especially out west, where we've had numerous systems coming in to push more snow in.

But what about some specific cities. Let's break this down. Let's start in Boston, because, to be honest with you, after the system we get today, they've actually got a really good chance. We've got the snow that's expected today. And given that the overnight temperatures tonight will remain below freezing, it's likely to actually stick around for Christmas.

Next city, here we take a look at New York City, Erica. Again, you may have some snow kind of mixed in with the rain today, but it's really not likely going to stick around for Christmas Day tomorrow.

HILL: Too bad, although that is one fancy train, Alison, I've got to tell you.

AVLON: Yes.

CHINCHAR: Indeed.

HILL: Thank you.

The Saints will be home for the holidays and beyond, securing home field advantage in the NFC by beating the Steelers.

Coy Wire has more in this morning's "Bleacher Report." Good morning, my friend. Nice to see you.

COY WIRE, CNN SPORTS CORRESPONDENT: Good to see you as well, Erica. I remember playing in the NFL, coaches had a saying, it says the games they remember are played in December. Gaining momentum into the playoffs is key and the Saints, they have it. Drew Brees, cool as a breeze with his team down four in the fourth with about 90 seconds to go, a two--yarder to Michael Thomas. It's ruled out at the one, but upon further review, it looks awfully close. The stripes gave Whoo Dat (ph) nation what they like. touchdown. Rev it up. Saints up three. The Steelers drive into field goal range, but Juju Smith-Schuster fighting for yards, fumbles. Saints recover and claim the win 31-28. A devastating loss for Pittsburgh. They need to win their finale and the Ravens to lose to the Browns to make the playoffs.

The Saints were turning it up in the locker room after the win. Head coach Sean Payton doing his best to try to rev it up as well. Don't pull a hammy, coach, they need you. Heading full throttle into the post season.

A QB showdown in prime time in Seattle as the Chiefs fight for home field in the AFC. And despite three Patrick Mahomes TD passes, including this bit of sorcery, a contortionist with a toss to Charcandrick West, up by three late. Seattle's Russell Wilson says, I have some magic touch too. Rolling to his left, he throws this up to Doug Baldwin, makes an incredible one-handed grab at the one yard line. The Seahawks would score, securing the 38-31 win and an NFC wildcard (INAUDIBLE). The Chiefs, they can still clinch home field next week.

John, Erica, I wish you a very, very, Merry Christmas.

AVLON: You too.

HILL: You, too, Coy.

AVLON: That's an unbelievable catch. Wow.

Well, if you thought the fight for yardage was rough on the football field, check out Washington. Chaos gripping our nation's capital. President Trump and Senate Democrats at a stalemate over his border wall and growing concerns about the president's military strategy. Our latest reporting is next.

HILL: But first, our NEW DAY family would like to wish you and yours a very happy holiday on this Christmas Eve.

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[06:59:12] (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We're not going to build this stupid vanity wall.

UNIDENTIFIED MALE: This is all about trying to make sure that Donald Trump does not secure the border.

UNIDENTIFIED MALE: We have a president who has shown no interest in the broader negotiation.

UNIDENTIFIED MALE: When you have differences, you don't hold the American people at harm by doing a government shutdown.

UNIDENTIFIED MALE: General Mattis put his finger on where the president has views that are very distinct from the majority of the Republicans.

SEN. RAND PAUL (R), KENTUCKY: I'm very proud of the president. This is exactly what he promised.

UNIDENTIFIED MALE: Let's be honest, the relationship between these two men had been fraying.

UNIDENTIFIED MALE: It breaks my heart that he's going to step aside. We counted on him to stop this president from his worst impulse.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

AVLON: Good morning and welcome to your NEW DAY. John and Alisyn are off and Erica and I are here on what is normally a quiet Christmas Eve, but not today.

HILL: No.

AVLON: No.

The third government shutdown of the year enters its third day, and there appears to be no negotiation in