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Dow, S&P 500 Have Worst Christmas Eve Ever; Indonesian Tsunami Death Toll Climbs to 373; At Least 43 Killed in Government Building Attack in Kabul. Aired 12-1a ET
Aired December 25, 2018 - 00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ROSEMARY CHURCH, CNN ANCHOR (voice-over): Hello, everyone. I'm Rosemary Church and You're watching CNN NEWSROOM.
Ahead this hour, Donald Trump's Treasury Secretary tries to calm down shaky markets. But he seems to have only made things worse.
Plus, Indonesia in mourning and on edge as the country tries to recover from a deadly tsunami. There are fears another one could strike with little notice.
And Pope Francis takes on Christmas consumerism, warning to not let the holiday be overwhelmed by gluttony and greed.
CHURCH: Thanks for being with us.
This dismal December just keeps getting worse for financial markets around the world. Tokyo's Nikkei is taking a big hit, down more than four and a half percent in Christmas Day trading. The Shanghai Composite is down about 2 and a half percent. Those losses come on the heels of Wall Street's worst ever Christmas Eve.
The Dow fell 653 points, the Nasdaq and S&P both dropped more than 2 percent. CNN's Alison Kosik explains why.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hey, there, the Trump administration's attempt to calm the stock market backfired making a holiday shortened trading day anything but sweet.
A tweet from President Trump during the trading session blaming the market meltdown on the Federal Reserve, accelerated the selloff during a four-hour trading session. The Dow plunge comes after a weekend report that Trump questioned if he has legal authority to fire Fed chief Jay Powell.
Trump's Treasury Secretary Steve Mnuchin later tweeted his boss wasn't planning to fire Powell. But it was Mnuchin's calls to six of the country's biggest bank CEOs that unnerved investors. The CEOs later said the calls came out of left field and were puzzling and largely unnecessary.
Out of those calls came a Treasury Department statement, saying banks have ample liquidity for lending for American households and businesses. Investors were left trying to wrap their heads around why at this time the liquidity announcement was made.
And while it is normal for the head of the Treasury to exchange ideas and talk with bank executives, the timing of the calls, days before Christmas, during a government shutdown and while Mnuchin was on vacation in Mexico, the timing is not sitting well with investors and raising the question of whether the Treasury Department sees something brewing in the U.S. economy that the market is missing -- back to you.
CHURCH: Thanks so much for that.
Joining me now from Claremont, California, is global business executive Ryan Patel.
Good to have you with us.
RYAN PATEL, GLOBAL BUSINESS EXECUTIVE: Thanks for having me.
CHURCH: So we are seeing markets across Asia following in the footsteps of the U.S. market meltdown.
What's your sense?
Is this a temporary move into negative territory?
Or does this signal something else, something perhaps we should be very concerned about?
PATEL: We should definitely be concerned. We are entering into the bear market. But really the question becomes how long will this go? We're been talking about the recession potentially happening in 2020.
But what I'm concerned about is this news now. The fundamentals are kind of being thrown out. In the history of bear markets, good news tends not to move the market up but bad news tends to push, like you saw today, having Christmas Eve, the worst Christmas Eve ever in December, tends to be a month for most stock markets for the past years and years to be one of the up, ample, positive times.
The S&P 500 being down almost 15 percent this month is something that is concerning. When Japan and some of the other markets are not even open yet having this effect, it is a concern on what we'll see for the future because it's about clarity and about what's the next steps.
CHURCH: Right and let's look at that tweet that President Trump sent out Monday, that spooked so many people at the stock market.
"The only problem," he said, "our economy has is the Fed. They don't have a feel for the market. They don't understand necessary trade wars or strong dollars or even Democrat shutdowns over borders. The Fed is like a powerful golfer who can't score because he has no touch. He can't putt."
What's your reaction to that tweet from the president, sending that out at a very delicate time for the markets already?
PATEL: I would tell the president please don't tweet on this. Leave the markets alone. You see what happened last week, when the Fed way going to hike the interest rate. The market didn't like it. They wanted some reassurance and it didn't happen.
In these kinds of courses, you want to let it naturally go on. You let the bumps and upcoming obstacles happen.
PATEL: I think -- I don't know if it was miscalculated but both with the Treasury and with President Trump's tweet, it actually pushed the market to go further down because what it did with investors was to create more confusion that, hey, is there really something wrong?
By pushing it and making these kinds of questions, it makes the investors question, is there something else we're not seeing? And then be more or less risk averse. Again, it was a backfire.
I'm sure they were talking about that, who was troying to put blame or trying to create some calmness to the situation by talking to the bank CEOs but I thought that was not the greatest move, either.
CHURCH: Right, and, of course, with that and in the midst of that with the government shudown, President Trump's comments about the Fed chairman, of course, the trade war with China, what advice would you give Mr. Trump right now?
What would you tell him if you had had an opportunity to advise him?
PATEL: Believe in the economy. You know, I think he said this, that the U.S. economy is fairly strong. Then believe in it, let the Fed be independent because you do not want to get into the middle of that. I think that causes worry.
I don't think you need to prove how strong the market is. Let it play out. If it's going to have a correction, let it have a correction versus being in a bear market. And you don't want to have these swings and sways.
Obviously my focus to the administration is get a trade deal down with China and make sure these trade wars don't happen and get the best deals for both sides. That will cause this calmness to happen with both small businesses and professionals, employees, investors here in the U.S. as well as the global markets.
CHURCH: Do you think there's a plan here on the part of the president to create all of this chaos around Christmas time and then suddenly put it right in the new year?
Is there a plan?
PATEL: If it is, you can tell me because I think he was fairly -- for him, he was fairly quiet after the Fed increase and then the government shut down. This for me came kind of out of nowhere because I thought we weren't going to be talking about the markets. We were talking about the government shutdown, focus on getting that back on board because Wall Street really didn't be affected by it until today.
And I think now the plan now in the short term for the administration has to get this government shutdown out because it does have a play. Obviously what we're not talking about is this trade war. It's still sitting there. Even though it's not on the top of the news, because we have this kind of truce right now with children, this deal needs to happen in the first quarter next year.
CHURCH: We've all looked at our 401(k)s, we're all terrified, let's hope that 2019 brings some sort of stability. We'll be watching very closely. Ryan Patel, thank you very much for your analysis.
PATEL: Happy holidays, everybody.
CHURCH: Same to you.
The Federal Reserve was far from President Trump's only target as he turned to Twitter to air his grievances on Christmas Eve. He lashed out at Democrats, the media, Iran, Defense Secretary James Mattis, Republican senator Bob corker and special enjoy Brett McGurk. And that was all before noon. CNN's Abby Phillip reports.
TRUMP: We're going to have a shutdown, there's nothing we can do about that.
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT (voice-over): With the government shut down around him, President Trump has spent most of Christmas Eve on his phone and alone at the White House, the first president to spend the holidays in Washington since Bill and Hillary Clinton 18 years ago.
The president hasn't been seen anywhere for three days except on Twitter, where he has been making grievance the reason for the season.
Tweeting, "I'm all alone, poor me in the White House. Waiting for Democrats to come back and make a deal on desperately needed border security."
That message coming minutes before first lady Melania Trump was seen departing Florida to return to the White House early because of the shutdown. Trump's demand for border wall funding has even prompted some Republicans to question whether the fight is all for show.
(BEGIN VIDEO CLIP)
SEN. BOB CORKER (R), TENNESSEE: This is a made up fight so the president can look like he's fighting. But even if he wins, our borders are going to be insecure. It's a spectacle and, candidly, it's juvenile. The whole thing is juvenile.
(END VIDEO CLIP)
PHILLIP (voice-over): Amid a government shut down, the stock market crumbling and turnover in his administration, the president is growing increasingly angry and isolated, according to "The New York Times," taking little pleasure in his job as leader of the free world, spending less time with old friends and telling the ones he does speak to that he feels "totally and complete abandoned," the paper reports.
With Congress gone until Thursday, hope seems slim that a compromise will be reached soon to reopen the government.
MICK MULVANEY, ACTING WHITE HOUSE CHIEF OF STAFF: I think that it's very possible that the shutdown will go beyond the 28th and into the new Congress.
PHILLIP (voice-over): Even as the incoming acting chief of staff acknowledged, Trump's fight for a taxpayer funded wall isn't exactly what he campaigned on.
UNIDENTIFIED MALE: None of that is Mexico paying for the wall. Let's just be --
MULVANEY: -- we both know that it cannot work exactly like that. I can't spend any money at the Office of Management and Budget, the Department of Homeland Security can't actually spend money from Mexico. We have to get it from Treasury.
PHILLIP: For the last several days, President Trump has had virtually nothing on his schedule since the government shut down on Friday night. But today the White House added a meeting with the Department of Homeland Security secretary Kirstjen Nielsen, who met with President Trump for over an hour about the border security and the wall
Meanwhile, Melania Trump has returnEd to Washington so President Trump is home alone no more -- Abby Phillip, CNN, the White House.
CHURCH: A Mexican governor and her husband were killed in a helicopter crash Monday. The chopper carrying martha alonso went down near the capital, the central state of Puebla.
The pilot, co-pilot and a fifth passenger were also killed. Alonso was a senior opposition figure who had become the first female governor of puebla just 10 days earlier. Her husband was a senator and former governor of the same state.
Mexico's president expressed his condolences online and ordered an investigation into the crash. The death toll keeps climbing after Saturday's Indonesia tsunami. Officials say at least 373 people were killed and they are searching for more than 100 still missing. All this amid fears a new tsunami could strike without warning. CNN's Ivan Watson has more on the threat from Hong Kong.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Child of Krakatoa, that's the name of the volcanic island that erupted on Saturday, triggering a tsunami that killed hundreds, the death toll still climbing.
Indonesian authorities say more than 150 acres of mountainside tumbled into the sea, creating this deadly tsunami. It slammed into a coastline packed with tourists on Christmas vacation. And days later rescue workers are still picking up the pieces, their search for survivors complicated by fears the volcano could trigger a second tsunami.
ANDIKA HAZRUMY, DEPUTY GOVERNOR OF BANTEN PROVINCE (through translator): This is an unexpected natural phenomenon. I've encouraged the public to remain vigilant and refrain from going to the beach.
WATSON (voice-over): In a hospital packed with injured survivors, our team finds this fishermen, whose boat was capsized by the wave. He say he and his son were later rescued at sea. But three crew members are still missing.
This woman, Rudyana (ph), says there was no advance warning, not even receding waters, which can signal an approaching tsunami. Her husband, who's still missing, was the organizer of this pop concert tragically cut short.
Hours later the singer of the Indonesian pop band, Seventeen, posts this heartbreaking message.
(BEGIN VIDEO CLIP)
RIEFIAN FAJARSYAH, SINGER, SEVENTEEN (through translator): I just wanted to they that our bass player, Bani, and our manager, Oki Wijaya, passed away. I also ask for prayers for my friends, Andi, Herman and Ujang, who is still missing at this time. Also my dear wife is still missing. The rest of us have broken bones, minor injuries, including me. But we are fine. Please pray that we can find Andi, Herman and Ujang and my wife.
(END VIDEO CLIP)
WATSON (voice-over): Then today he announces more tragic news, all of his band members are dead and his wife still missing.
On a tour of the disaster zone, Indonesia's president orders government agencies to install a new tsunami early warning system. After hundreds of thousands of people across Southeast Asia were
killed by a tsunami in 2004, Indonesia put in a network of deepwater buoys designed to detect unusual wave activity.
But officials say it fell into disrepair and did little to save some 2,000 Indonesians killed by an earthquake and tsunami that hit another part of Indonesia just three months ago.
WATSON: Protecting this archipelago nation will not be easy. Indonesia is made up of more than 17,000 islands. It's also on the Ring of Fire and home to more than 125 active volcanoes, a long vulnerable coastline that can go from tropical paradise to natural disaster without any warning -- Ivan Watson, CNN, Hong Kong.
CHURCH: We will continue to follow that heartbreaking story.
We'll take a short break here. Still to come, a brazen attack in Afghanistan, gunmen hold hostages for hours in Kabul. How it all ended, we'll take a look.
Plus, charged with indecent assault, a disgraced actor channels a disgraced politician. Why Kevin Spacey says --
CHURCH: -- we may not have seen the last of Frank Underwood. That's coming up in just a moment.
CHURCH: Welcome back, everyone.
At least 43 people were killed in an all-day attack in Afghanistan. Authorities say the attack began with a suicide car bomb at the gates of a government building in Kabul. Three gunmen then stormed the building and took hostages; 25 people were wounded before Afghan security forces shot and killed the attackers.
So far, no militant group has claimed responsibility. The assault comes as the U.S. is planning to withdraw half of its troops from Afghanistan.
A U.S. military delegation will head to Turkey this week to discuss Syria. Last week President Trump ordered the full and rapid withdrawal of the U.S. military from Syria, claiming the defeat of ISIS. That prompted the resignation of Defense Secretary Jim Mattis and raised questions about Turkey's push against Kurdish militias.
President Recep Tayyip Erdogan promised any operation in Syria would be to fight terrorism. Gul Tuysuz has the latest now from Istanbul.
(BEGIN VIDEOTAPE) GUL TUYSUZ, CNN CORRESPONDENT: There has been a lot of phone traffic between Washington and Ankara over the last couple of days. About 10 days ago, U.S. president Donald Trump and Turkish president Recep Tayyip Erdogan had a phone call in which the U.S. president apparently asked, "What about ISIS? Can you handle ISIS?"
At which point the Turkish president said, yes, we can, as long as we have support from you. And that is how the decision to pull U.S. troops out of Syria apparently came about.
But this really is a tough position for the U.S.' main allies on the ground in Syria in the fight against ISIS to be left in because Turkey has been threatening to carry out a cross-border operation into Syria in an effort to push away or to expel those Kurdish fighters away from Turkish borders.
Turkey views that Kurdish fighting force as an extension of what they view to be a terrorist group here at home.
So the Kurds really are now in a very difficult position. U.S. troops are in fact going to be going home very soon. But with Turkey, picking up the mantle for the fight against ISIS now and very clearly having different priorities on the ground in Syria, how effectively will they actually be in the fight against ISIS, is something we just don't know at this point -- Gul Tuysuz, CNN, Istanbul.
CHURCH: Israel will hold early elections on April 9th. Prime minister Benjamin Netanyahu's ruling coalition agreed Monday to dissolve the parliament. He's holding power with a razor-thin majority and is facing several corruption probes. He's also dealing with criticism over his handling of security, following a botched --
CHURCH: -- military operation that killed an Israeli soldier. More now from CNN's Leone Lakhani.
LEONE LAKHANI, CNN CORRESPONDENT: Prime minister Netanyahu says the security concerns he had last month have now been resolved. So now the time to call for early elections. But the reality is it was becoming increasingly evident that it's very hard to do business or get anything done in this parliament with such a small majority.
In particular, he was struggling to pass a new bill that would extend the military draft to ultra orthodox Jewish students. They've so far been exempt from military service, unlike the rest of the population. And it's been a long running point of contention in Israeli society.
But this year, Israel's high court set a deadlean of January 15th to pass the guidelines for enlisting ultra orthodox students. On Monday it became clear that Netanyahu's government didn't have the votes needed to meet the deadline. So now elections are set for April 9th. Netanyahu is in his fourth term as prime minister. If he stays in
office for a fifth term, he will become Israel's longest serving leader. There is one issue, a cloud hanging over him, however. Allegations of corruption that may cast a shadow over him during the elections.
But for now Netanyahu and the Likud Party still enjoy much support despite these allegations -- Leone Lakhani, CNN, London.
CHURCH: A U.S. federal judge is ordering North Korea to pay half a billion dollars to the parents of owarm in their wrongful death lawsuit against the regime. The American college student died last year after suffering a severe brain injury while he was detained in North Korea.
In what many saw as a coerced confession, warmb said he had destroyed a propaganda poster. He was convicted in 2016 and sentenced to 15 years of hard labor. In 2017, when North Korea returned him to the U.S., he was blind, deaf and could not speak.
Actor Kevin Spacey is back in the spotlight and facing sexual misconduct allegations in Massachusetts. Authorities say he's being charged with indecent assault and battery. He's set to be arraigned on January 7th for an incident at a restaurant in 2016.
The news comes as Spacey has posted a bizarre YouTube video. It's titled, "Let Me Be Frank," and he appears to be playing his "House of Cards" character, Frank underwood.
(BEGIN VIDEO CLIP)
KEVIN SPACEY, ACTOR, "FRANK UNDERWOOD": I know what you want. Oh, sure, they may have tried to separate us but what we have is too strong, it's too powerful. And after all, we shared everything, you and I.
I told you my deepest, darkest secrets. I showed you exactly what people are capable of. I shocked you with my honesty but mostly I challenged you and made you think. And you trusted me, even though you knew you shouldn't.
(END VIDEO CLIP)
CHURCH: Netflix fired Spacey in 2017 and his "House of Cards" character was killed off. The move came amid the #MeToo movement and a number of sexual misconduct allegations against the actor.
The pope has a message for Christians around the world on this Christmas Day. What he says they should be doing to truly reflect their faith. We'll have the details -- next.
(COMMERCIAL BREAK) [00:25:00]
CHURCH: Christians around the world are celebrating Christmas, the birth of Jesus. In the coming hours Pope Francis will celebrate Christmas mass in St. Peter's Square and deliver his "To the city and the world" message.
At Christmas Eve mass in the Vatican, the pope said too many people have turned away from helping others to focus on their own selfish desires.
(BEGIN VIDEO CLIP)
POPE FRANCIS, PONTIFF, ROMAN CATHOLIC CHURCH (through translator): Mankind became greedy and voracious. In our day, for many people, life's meaning is found in possessing and having an excess of material objects.
An insatiable greed marks all human history, even today, when, paradoxically, a few die luxuriantly, while all too many go without the daily bread needed to survive.
(END VIDEO CLIP)
CHURCH: Pope Francis has made helping the poor a big part of his mission. The Vatican says the pope gave a Christmas gift to homeless people in Rome. A free medical clinic is now open in St. Peter's Square.
Thousands of pilgrims from all around the world have gathered in the West Bank town of Bethlehem, where it's believed Jesus was born. Crowds filled the Church of the Nativity for the midnight mass.
Many said this is a day of celebration and they are hopeful the coming year will bring a respite to violence. More now from CNN's Ian Lee in Bethlehem's Manger Square.
IAN LEE, CNN CORRESPONDENT: Festivities have been going on since the early morning hour. There was this grand parade, processions as the land patriarch, that's the head of the Catholic Church of Jerusalem, made his way to the Church of the Nativity right behind me. There were bagpipes, there were trumpets leading the way.
I've been told if Mary and Joseph were to come here, they would have had to book in advance because all the inns and all the hotels have been fully booked for a while. Thousands of tourists are coming here. Of course, the hot ticket is midnight mass.
I asked a priest what is his Christmas message to his congregation. He said it is one of love, of peace, of justice and equality.
And it has been a very difficult year here. Scores of Palestinians have been killed in Gaza during violent clashes along that border fence between Gaza and Israel. Scores of rockets have also been fired by Gaza militants inside of Israel.
And at times, it looked like we were on the verge of a war. But strong diplomatic efforts by the United Nations, by Egypt really helped prevent something that could have escalated further.
But for people here, they're hoping that there is peace going into 2019, that things will calm down. That has really been the message. We've been hearing Christmas carols here and a really joyous atmosphere as people celebrate Christmas -- Ian Lee, CNN, in Bethlehem's Manger Square.
CHURCH: Thanks for that, Ian.
And thank you for watching CNN NEWSROOM. I'm Rosemary Church. I'll be back in just a moment with all of your global headlines. Stick around.
[00:30:00] ROSEMARY CHURCH, CNN INTERNATIONAL ANCHOR: Hello again. I'm Rosemary Church and this is CNN NEWS NOW.
Financial markets in Asia are following Wall Street's lead with especially sharp losses in Tokyo. You see there, the Nikkei down more than 4-1/2 percent, and the Shanghai Composite lost more than 2 percent.
In New York, the Dow plunged 653 points on Monday, the NASDAQ and S&P both fell more than 2 percent. The losses are the biggest ever on Christmas Eve for the Dow and the S&P.
The death toll from Saturday's Indonesia tsunami stands at 373 people killed. Thousands have been displaced, and more than 100 people are still missing. Rescue workers kept up their search for survivors, Monday. This, amid fears the Anak Krakatoa Volcano could trigger more deadly waves.
At least 43 people were killed in an assault on a government building, in the capital of Afghanistan. Authorities say the seven-hour attack in Kabul began with a suicide car bomb at the gates of the building. Gunmen then stormed the building and took hostages. Afghan security forces shot and killed the attackers.
And that's your CNN NEWS NOW. Stay with us for "TRUE TOKYO" coming up next.