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Stocks on Trace for Worst December Since Great Depression; Death Toll Rises to 400-Plus After Tsunami Strikes Without Warning; 8 for 2018: Top Law And Justice Stories. Aired 9:30-10a ET
Aired December 25, 2018 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JIM SCIUTTO, CNN ANCHOR: The markets being closed today may actually be a Christmas gift to investors. Stocks continued their slide yesterday on Wall Street. All three indices ended the short Christmas Eve session down more than 2 percent, keeping stocks on track for the first December since -- you hear this right -- the Great Depression.
[09:30:07] The selloff coming despite an attempt by Treasury Secretary Steve Mnuchin to ease investors' concern. He ended up doing the opposite.
Joining me now, CNN business correspondent Alison Kosik, and Stephen Moore, former economic adviser to President Trump and CNN senior economic analyst.
Stephen, how do you explain this? A couple of news -- first of all, the president talking about firing the Federal Reserve chairman, clearly, the marks didn't like that and then the strange call from the treasury secretary from his vacation in Cabo, trying to get the banks to assure him and the country they have enough money to lend which, of course, got people thinking maybe they have negative information that you and I don't have.
What's happening here?
STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Hi, Jim. Well, first of all, I would say that I do believe that the problem has been what the Fed did, not the president calling them out on this. And in fact, since the Fed made its rate change last week, the Dow has been down several thousand points and the president was quite correct saying don't raise rates. Lower them.
SCIUTTO: The Fed's job is not to keep the stock market up and the Fed's job is to control inflation and it's --
MOORE: Exactly.
SCIUTTO: They've been doing that for the last year.
MOORE: Yes. No, actually, we have deflation rate now. If you look at what's happened with commodity prices and whether it's soybeans and oil, whether it's copper, whether it's lead, whether it's wheat. They're way, way down. We have deflation in the economy, not inflation. I don't like to compare what's happening now with the Great Depression
and we had a great deflation in prices and deflation, Jim, can be as bad as inflation.
SCIUTTO: You and the president have been saying how strong the economy is for months and months. So --
MOORE: So what's going on, Jim, is comparing the financial markets with what I call the real economy. I mean, 2018 was the best year for workers. We had big wage gains for workers and the lowest unemployment rate in 50 years, we have manufacturing, construction did really well. We have 7 million more jobs today than people have built.
So, for workers, it's a good economy and the fed started raising rates back in September and since then, the stock market has gone down and down and down.
SCIUTTO: Alison Kosik, you're in Wall Street. You spend a lot of time on Wall Street. You've been talking to investors and they have a different view of things. Tell us what you're hearing down there.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, they side with Stephen a little bit. I mean, there is a question if the Fed is making a policy mistake by not slowing the rate hikes.
So, putting that aside, though, what I have noticed just in the past couple of weeks and what used to be sort of the ambient noise, I'm talking about President Trump tweeting, is now becoming a part of the trading action. I mean, just look at what happened yesterday, I was watching 10:45, you know, President Trump questioning, you know, the fed, saying the Fed is the only problem with the economy. Guess what? Watching the Dow, the Dow was on an upswing at that time. Well, as soon as he tweeted down went the market and it didn't look back.
Look, I think what you're seeing is the president is undercutting any confidence in the market because now the concern is, OK, if it's being floated that he's asking about his legal authority and whether or not he can hire the head of the Fed, you know, that could really cause a lot of chaos and where there's smoke there's fire, that is becoming a huge worry for Wall Street and then you got this erratic decision making moments of the administration.
You know, why is Treasury Secretary Steve Mnuchin making calls on a Sunday on his vacation days before Christmas, when there's no fire to put out? When there's no liquidity issue? It is creating questions whether or not the Treasury Department knows something that the market may not know. So, you're seeing a lot of missteps in the Trump administration that may be undercutting any confidence that you would see in the market relating to the strong fundamentals that are in the U.S. economy.
SCIUTTO: Stephen, setting aside the markets and they're leading indicators and they look forward and they look to see if there will be a slowdown as opposed to where it is today. But let's get to that phone call because it was unusual for a treasury
secretary to make that call. It's the kind of call and statement you make in the midst of a financial crisis, right? To say, listen, banks are solid, they're not going to fall to pieces. How do you explain -- how do you explain how this happened?
MOORE: Well, look, I know Treasury Secretary Mnuchin very well. I think it's very well intended and he just wanted to calm the markets and make sure -- look, we've had a big decline in stock prices. I mean, a 3,000-point decline is significant. It's closing on a 4,000 points.
SCIUTTO: It's a bear market now.
MOORE: Right. So, he wanted to assure people that there's no problem with the banks. I mean, we saw what happened, obviously, Jim, in 2008 when so many banks failed, and the good news is the banks are financially solid.
[9:35:03] The bad news is that did send a message to investors that they were worried about that, and that we might be facing another 2008. I think his intentions were good and the message he was sending Wall Street might not have worked out so well.
SCIUTTO: Yes, it seems to be in the numbers.
Listen, Alison Kosik and Stephen Moore, appreciate you coming in on this holiday and sharing your wisdom as always.
KOSIK: Merry Christmas.
SCIUTTO: Merry Christmas, happy holidays, happy 2019.
This morning, we're getting a clearer picture after the devastation left after a tsunami struck Indonesia. The death toll now rising as a search for dozens of missing people continues.
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SCIUTTO: This morning sad news overseas. The death toll is climbing after Saturday's devastating tsunami in Indonesia. Officials now say 429 people have died, more than 150 still missing at this hour.
We've now learned that the wife of the lead singer from an Indonesian pop band -- you remember this video as that wave struck -- well, she's now been found dead. She and the band swept away when a giant wave hit their stage in the middle of a performance.
[09:40:00] We've now learned that the wife of the lead singer from an Indonesian pop band, you remember this video as that wave struck, well, she's now been found dead. She and the band swept away when a giant wave hit their stage in the middle of a performance. The lead singer, the only survivor.
For the latest, let's turn to senior international correspondent Ivan Watson. Ivan, recovery efforts, do we know where they stand now?
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I mean, this is hard, grim work that's going on and we're not hearing a lot of bright spots here, Jim.
As you mentioned, the lead singer of the Indonesian pop band Seventeen confirmed, not only were all of the band members in its band that saw the concert tragically cut short by the tsunami, not only were they all killed, but his wife was killed, as well. And when our teams on the ground along West Java, along those devastated coastlines caught up with search and rescue teams working with K-9 sniffer dogs, working through the debris and the rubble. They sadly learned from one of these teams that while combing the area today, they came across the bodies of three adults and one toddler.
So that is kind of an explanation why day after day since Saturday night's deadly tsunami, the death toll does continue to rise and we aren't getting stories of people being miraculously rescued. Instead, we get more grim news on what is supposed to be a Christmas holiday in Indonesia right now.
Tens of thousands of people impacted by this natural disaster. Not only the victims who succumbed to the deadly wave, but more than a thousand people injured and thousands of people made homeless, as well. With the Indonesian authorities trying to rush in assistance to help provide temporary shelter for some of these made homeless during this holiday season -- Jim.
SCIUTTO: So this was caused by a landslide caused by a volcano. That volcano still active, right? So I imagine, still a threat.
WATSON: Yes. And in fact, our teams of journalists on the ground, they say they can actually hear the volcano rumbling today on the beach as they were standing around devastation. Now, from different parts of the coastline of west java, you can't physically see Anak Krakatau, the child of Krakatau, this volcanic island that has been so active and is believed to have caused this massive landslide Saturday night that triggered this deadly tsunami. They can't physically see it from where they were on the beach, but they could hear what sounded like distant thunder, the rumbling of an active volcano that's been active for months, frankly, but the combination of effects led to this deadly tsunami on Saturday night that has claimed so many lives.
And here's just a terrible wrinkle in history, Jim. Anak Krakatau, that's child of Krakatau, this volcanic island emerged from modern history's most notorious volcanoes. Krakatau erupting in 1883 killed more than 36,000 people, something that still sends chills to people's hearts and has once again claimed lives more than a century later -- Jim.
SCIUTTO: Ivan Watson, we know you'll stay on top of this, thanks very much.
Here at home, the actor Kevin Spacey is facing new charges more than a year after being accused of sexual assault. Prosecutors say that Spacey will be charged now with indecent assault and battery, these charges stemming from a 2016 incident in Nantucket, Massachusetts, in which he is accused of groping an 18-year-old man at a bar. Netflix fired Spacey from its hit show "House of Cards" in November last year.
Yesterday, Spacey posted a bizarre video on YouTube reprising his character from that series, unclear if he was referring to these new allegations against him, old allegations. Spacey is scheduled to be arraigned on January 7th.
High-profile indictments such as Michael Cohen and even higher profile departures such as Jeff Sessions. 2018 was no quiet year for the Justice Department.
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SCIUTTO: 2018 was, of course, a big year for the Department of Justice -- indictments, multiple investigations and the departure of the attorney general.
Laura Jarrett looks back at the top eight justice stories of 2018.
(BEGIN VIDEOTAPE)
LAURA JARRETT, CNN JUSTICE CORRESPONDENT: 2018 produced a downpour of news from the Justice Department -- indictments, immigration battles, clashes with Capitol Hill, the departure of an attorney general and an investigation looming over the presidency.
Here are the top eight stories in 2018.
Number eight, the rise of hate.
BROOKE BALDWIN, CNN ANCHOR: Eleven people dead, six people wounded in what one FBI agent calls the most horrific crime he has ever seen. The suspect, 46-year-old Robert Bowers. His social media accounts littered with anti-Semitic and anti-immigrant views.
JARRETT: In October, a massacre of worshippers in a synagogue in Pittsburgh and in Kentucky, the fatal shooting of two black people in a grocery store, together bringing a disturbing uptick in hate crimes into sharp focus.
[09:50:00] UNIDENTIFIED FEMALE: The FBI says in 2017, hate crimes shot up 17 percent. The motivation for nearly 60 percent of those, the government says was race, ethnicity or ancestry.
JARRETT: Number eight: Trump's war on the justice system.
UNIDENTIFIED FEMALE: President Trump making a strong demand on Twitter moments ago.
JARRETT: Trump upped the ante on the Justice Department and the FBI bi in 2018, demanding they investigate whether his campaign was spied on for political reasons.
CHRIS CUOMO, CNN ANCHOR: The president is on a tweet storm this morning to make unproven claims of something he's calling spygate. Just minutes ago, he made this a thing.
JARRETT: While also going after his political rivals.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: There is a lingering stench and we're going to get rid of that too.
JARRETT: In unprecedented ways.
SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: I've decided to revoke the security clearance of John Brennan, former director of the Central Intelligence Agency.
JARRETT: Number six, the Justice Department versus Capitol Hill. Trump's allies on Capitol Hill pressured the Justice Department to turn over highly classified documents about how it all started.
ROD ROSENTEIN, DEPUTY ATTORNEY GENERAL: I think they should understand by now, the Department of Justice is not going to be extorted.
JARRETT: Then with the backing of the White House, Republicans on the House Intelligence Committee produced a highly controversial report, accusing the FBI of misconduct in obtaining a warrant to monitor former Trump campaign adviser Carter Page under the Foreign Intelligence Surveillance Act. Whereas, others on the Hill who actually reviewed the FISA materials concluded the FBI did nothing wrong.
REP. TREY GOWDY (R), SOUTH CAROLINA: I am even more convinced that the FBI did exactly what my fellow citizens would want them to do.
JARRETT: Number five, the immigration battle.
DEMONSTRATORS: We care! We care!
JARRETT: Amid an outcry, a federal judge swiftly blocked the Trump administration from separating parents from their children, and the president backed down.
TRUMP: The Republicans want security and insist on security for our country, and we will have that at the same time we have compassion. We want to keep families together.
JARRETT: Then another judge blocked the administration's efforts to limit asylum, saying the president violated, quote, a clear command from Congress.
Number four, when the courts checked Trump.
TRUMP: You go to the Ninth Circuit and it's a disgrace. I'm going to put in a major complaint because you cannot win if you're us.
JARRETT: While the president often lashes out at the Ninth Circuit Court of Appeals on the West Coast, in reality, the administration faced a losing streak this year in courts across the country. But Trump did score one major victory, a federal judge in Texas struck
down the Affordable Care Act, teeing up a fight set to land in the Supreme Court, a court with a new 5-4 conservative majority. This as the Justice Department is making a practice of regularly asking justices to weigh in on controversial issues, aggressively skipping lower courts.
But Chief Justice Roberts also issued a rare warning against Trump's criticism of judges, saying, quote: We do not have Obama judges or Trump judges, Bush judges or Clinton judges. That independent judiciary is something we should all be thankful for.
Number three, reshaping the federal courts.
MIKE PENCE, VICE PRESIDENT OF THE UNITED STATS: On this vote, the ayes are 50, the nays are 48.
JARRETT: The president secured conservative majorities on the Supreme Court for decades to come. The confirmation of Justice Brett Kavanaugh in October confronted with allegations by Christine Blasey Ford that Kavanaugh tried to rape when they were teenagers, something he fiercely denied but caused a nail-biting until the very end.
BRETT KAVANAUGH, SUPREME COURT JUSTICE: The Senate confirmation process was contentious and emotional. That process is over. I take this office with gratitude and no bitterness.
JARRETT: Meanwhile, Senate Republican leaders made stacking the federal judiciary with young conservative judges a signature priority, a legacy that will far outlast the Trump presidency.
Number two: Justice shake-up.
WOLF BLITZER, CNN ANCHOR: Breaking news right now, the attorney general of the United States, Jeff Sessions, he has now resigned.
JARRETT: The long-expected departure coming after months of blistering attacks, all because Jeff Sessions stepped away from overseeing the Russia investigation.
TRUMP: He took the job and then said I'm going to recuse myself. I said, what kind of a man is this?
JARRETT: Trump tapped Matt Whitaker, Sessions' former chief of staff to take the reins of the department temporarily, unleashing a series of legal challenges because he wasn't confirmed by the Senate. But soon, a man who once served as attorney general under George W. Bush emerged as the president's pick.
TRUMP: Bill Barr, one of the most respected jurists in the country, he will be nominated for United States attorney general.
[09:55:02] JARRETT: Number one, the Russia investigation. The special counsel's investigation into Russian interference in the 2016 election ramped up this year, with multiple subpoenas, flipped witnesses, dozens of indictments, and five guilty pleas, including from some high level members of the Trump campaign. The head-spinning volume of material turned out by Robert Mueller and other federal prosecutors puts Trump's campaign, transition, and inaugural committees now all under active investigation. While Michael Cohen, the president's former attorney and fixer, agreed to cooperate with investigators.
MICHAEL COHEN, FORMER TRUMP ATTORNEY: The man doesn't tell the truth, and it's sad that I should take responsibility for his dirty deeds.
JARRETT: There's no telling what 2019 will bring. But the Justice Department delivered a series of blows to Trump this year in his personal, business, and political life -- all with a blast radius that remains to be seen.
(END VIDEOTAPE)
SCIUTTO: Quite a year there.
Well, the president has just spoken to service members this morning. We're going to bring it to you when we come back.
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