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Dow, S&P Have Worst Christmas Eve Ever; Indonesia Tsunami; U.S. withdrawal from Syria; Kevin Spacey Posts Odd Video on YouTube; Thousands of Pilgrims Gather for Midnight Mass; Deaf Artist Spreads Holiday Cheer. Aired 3-3:30a ET

Aired December 25, 2018 - 03:00   ET




ROSEMARY CHURCH, CNN ANCHOR (voice-over): Hello, everyone, I'm Rosemary Church and you are watching CNN NEWSROOM.

Ahead this hour, the Trump White House tries to calm nose-diving markets but appears to have made the situation even worse.

Plus Indonesia's suffering may not be over. Authorities warn another deadly tsunami could strike the coastline with little or no warning.

And Pope Francis uses the Christmas holiday to caution about the dangers of gluttony and greed.


CHURCH: Thanks for joining us.

There's not much to celebrate this Christmas for traders at Tokyo's stock exchange. The Nikkei took a nose dive, finishing the day down more than 5 percent, its lowest level in more than a year. The Shanghai Composite was also lower, down nearly 1 percent.

U.S. markets won't be open on Christmas Day and that's probably for the best. The Dow fell another 653 points on Monday. The Nasdaq and S&P both dropped more than 2 percent. And U.S. President Trump is looking for someone to blame. CNN's Boris Sanchez reports.


BORIS SANCHEZ, CNN CORRESPONDENT: A source in the administration indicates that the president has grown frustrated at his Treasury Secretary Steven Mnuchin. The president apparently broadly complaining that Mnuchin has not done enough to stabilize markets in a recent downturn lasting through the month of December.

The president has staked so much of his effectiveness, his reputation and branding on the strength of the American economy that seeing these numbers clearly frustrates him. So we saw him in an attempt to compensate and potentially over-correct. According to a source familiar with a phone call that Mnuchin had with

some of the top CEOs for banks across the United States, they were totally baffled by the purpose of Mnuchin's call. He apparently asked them if they were having any sort of liquidity issues.

He was told that they were not. One CEO, according to the source, actually brought up the idea that some of the uncertainty in the stock market is reflecting uncertainty here in the national's capital, the idea that the government shutdown may be prolonged, questions about the president's attempts or potential desire to fire his Fed chief, Jerome Powell, et cetera.

Mnuchin, we were told, was in listening mode and, according to that source, after the call, the CEOs' general belief was that he was trying to make himself felt as a presence during a time of economic uncertainty and at a time where, frankly, he is on vacation in Mexico, as has broadly been reported.

His efforts to try to stabilize markets on Monday clearly underwhelming -- Boris Sanchez, CNN, at the White House.


CHURCH: Joining me now from Tokyo, economist Jesper Koll is the CEO of WisdomTree Japan.

Thanks so much for being with us.

JESPER KOLL, WISDOMTREE JAPAN: Thank you for having me.

CHURCH: As we have just seen Asia markets following in the footsteps of troubled U.S. markets.

How bad could this get, do you think?

KOLL: Look, there's nothing wrong with Japan. This is all about Washington. And the Japanese traders, Japanese investors are shocked by the lack of the leadership team in Washington. That's really the big concern, no leadership team.

CHURCH: On Monday, the president tweeted this, "The only problem 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 what the president said, specifically about the Fed there and to his constant tweets about the economy and the reaction to that?

KOLL: I think it is extremely dangerous. Markets can cope with the Federal Reserve. Markets and the Federal Reserve live together. You know, it's a kind of love-hate relationship all the time. What's new this time and the big shock particularly in Asia, is that

America now does not have a strong head of its military forces. And that's really -- the Federal Reserve blaming on just one thing is simply naive. It's the entire set of things.

And the reality is that the president no longer has a team of credible leaders to manage the American and the global economy.

CHURCH: The set of things that you're talking about there, saying the U.S. Treasurer Steven Mnuchin spooking investors, talking to --


CHURCH: -- bank CEOs, amidst the government shutdown and the president continues to attack the Fed chairman and then we've got this looming trade war with China, casting this huge shadow across all of this.

What is it going to take to calm the markets with all of this going on?

KOLL: What you really need is strong character, strong vision and most importantly a credible leadership team. There's no way -- uncertainty and fear is now so widespread that a simple tweet isn't going to fix it.

You need a team of leaders that can actually instill confidence, whether it's in the military, whether it's in finance, whether it's in markets, whether it's at the Federal Reserve.

CHURCH: Donald Trump, he is a businessman.

Why does he not understand that every time he opens his mouth, either tweeting or making some sort of announcements, some negative words about the Fed or its chairman, why does he not realize that the market will respond negatively to that, to the uncertainty to the lack of leadership, to the confusion and the chaos?

KOLL: This is a bigger discussion but Donald Trump is first and foremost Donald Trump and first and foremost in it for himself rather than for anybody else.

This is what is starting to come to the fore here and it's this erratic behavior that financial markets can't cope. Financial markets don't mind to deal with the daily ups and downs and the daily noise of the battle between the Republicans and the Democrats, et cetera, et cetera.

But what we do need is a strong visionary, where he assembles a team because, you know, whether it's the American financial economy, whether it's the trade economy or the American military, you do need a strong team of experts to actually get things done.

And that seems to have become rattled over the last couple of weeks.

CHURCH: We will watch very closely to see what happens in the next few days and weeks ahead. Jesper Koll, thanks so much for your analysis. Appreciate it.

The Federal Reserve wasn't the president's only target as he turned to Twitter to air his grievances on Christmas Eve.

One tweet said, "I am all alone (poor me) in the White House waiting for the Democrats to come back and make a deal on desperately needed border security. At some point, the Democrats, not wanting to make a deal, will cost their country more money than the border wall we are all talking about. Crazy!"

Well, the first lady returned to Washington from the Trumps' Mar-a- lago resort. The first family had planned to spend the holiday in Florida until the government shut down.

The death toll keeps climbing after Saturday's Indonesia tsunami. Officials say at least 429 people were killed and more than a thousand were injured. All this amid fears a new tsunami could strike without warning. CNN's Ivan Watson has more now on the threat.


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.


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 --


FAJARSYAH (through translator): -- at this time.


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: And we have more sad news from the disaster zone. A manager for the band Seventeen says the lead singer's wife has also been found dead. For the very latest, CNN's Will Ripley is live in Hong Kong. He joins us now.

Will, this is a tragedy for the country and made even worse by the news that there was no warning system in place and there's now a fear of another tsunami hitting the disaster zone.

What more are you learning about the situation on the ground on all of this?

WILL RIPLEY, CNN CORRESPONDENT: It is simply stunning, Rosemary, that a nation that sits right on the Ring of Fire, has had international support to have a viable, functional tsunami warning system in place since that Boxing Day tsunami that killed so many people, more than 200,000 in more than a dozen countries back in 2004, but Indonesia bore the brunt of that, with more than 120,000 killed.

The fact that they, for six years, have had their tsunami warning system nonfunctional because of budget issues, vandalism, technical problems, whatever excuses the government is giving, that is simply not acceptable for the people who have died.

Three months ago, more than 2,000 people died and now we have this new death toll of some 429 people. It keeps going up. You have 16,000 people displaced. So there is a risk for people who are right now searching through the rubble that, perhaps, they could fall victim to a tsunami without warning once again.

You have the Indonesian president Joko Widodo promising that, after the new year and the budget resets, that they will try to get equipment in place. They have lots of different kinds of things. They have seismic broadband systems, they have accelerometer stations, tidal gauges. These are the kinds of things that need to be put in place.

And yes, it is a huge challenge. Indonesia has more than 17,000 islands and a lot of people living along vulnerable coastal areas. But there's no excuse for people to have no warning when waves of up to 5 meters -- 16 feet -- come crashing into shore.

Yes, there was no earthquake which a lot of us assumed would be a precursor to a tsunami like this. But the Anak Krakatau volcano is an active volcano. It has killed many people over the last 200 years.

If an underwater landslide can triggered, a disaster such as this, people need to be warned. They need to have advance notice so they can get to higher ground. And hopefully this will be the wake-up call, if the tsunami three months ago wasn't and if other disasters haven't been, that Indonesia needs to get its act back together.

Not to be gratuitous, but I want to talk about that Indonesian pop band, Seventeen, and this just horrific video of their final concert. The lead singer posting on Instagram about his wife, who was just found, that she the best wife that God gave him. He couldn't ask for more.

To think of what he's going through, that he is the sole survivor, with five other band members dead, when they're on stage, putting on a show at a coastal resort on Saturday night and, all of a sudden, the wave rushes in and wipes everybody away.

It is heartbreaking and it is an outrage for the people of Indonesia and, hopefully, this will be what their government needs to be held accountable and to take action.

CHURCH: Indeed. The circumstances and the images are just simply horrifying when it comes to that band and really gives you exactly the idea of the element of surprise here.

But it still begs the question, how was it even possible that no experts, no one, was aware of this imminent danger, that there were no signs of these waves approaching, no one watching, no one seemed to be aware?

RIPLEY: It is stunning. And I don't have the answer. When you have waves that large, large enough to leave more than 16,000 people displaced, probably homeless in many cases, 800, almost 900 houses damaged or destroyed, 73 hotels, more than 400 boats. And the fact that this happened three months ago on another Indonesian island, the island of Sulawesi, after a 7.5 magnitude quake, CNN was there on the ground, the death toll --

[03:15:00] RIPLEY: -- has continued to climb well over 2,000 dead. And to have something like this happen three days before Christmas, where people were on vacation, were they not watching?

These are the questions that we don't have answers to. Frankly, I wonder where is the outrage here, for the people who, time and time again, have found themselves in harm's way because somebody dropped the ball.

If anything, this hopefully will bring about change in Indonesia, a country that has endured more than its share of tragedy over the last year, because there will be other tsunamis. It is a seismically active area.

And this is a time where you're seeing increasing numbers of natural disasters. Indonesia has been hit so hard. They need to get a system in place to keep people safe. Hopefully this will be the catalyst for that.

CHURCH: It is unacceptable and it is a wake-up call for the Indonesian leadership. Let's hope they heed the warning here. Many thanks to you, Will Ripley, for that report on such a tragedy for that nation.

Plans are in motion. A U.S. military delegation will meet with Turkish counterparts this week. Coming up, the evolving mission in Syria.

Plus charged with indecent assault, a disgraced actor channels a disgraced politician. Why Kevin Spacey says we may not have seen the last of Frank Underwood. That is coming up in just a moment.




CHURCH: Welcome back.

At least 43 people were killed in an all-day attack in Afghanistan Monday. 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 the mission in Syria. Last week the president announced he would withdraw U.S. troops, claiming the defeat of ISIS. Turkey has promised to take up the battle but there are concerns about where that leaves Kurdish fighters. Gul Tuysuz has more now from Istanbul. She joins us now live. Gul, how does Turkey plan to carry out its battle against ISIS?

And what impact will this have on Kurdish fighters?

GUL TUYSUZ, CNN CORRESPONDENT: This will be Turkey's third operation into Northern Syria. The first two made use of the Free Syrian Army. That is Turkey's proxies on the ground. They have been training and equipping them.

When you look at what they have done operationally in the last two fights, it is that the FSA goes in with --


TUYSUZ: -- Turkish support, whether it be air or artillery support and acts as a ground troops or the boots on the ground for Turkey as they back them.

In those two operations, the main target was to try to expel a Kurdish fighting force away from Turkey's borders but, at the same time, they were fighting ISIS, according to Turkey, in one of those operations, Turkey, along with the local militia partners, neutralized some 3,000 ISIS members.

So if this operation by Turkey into Northern Syria goes ahead, you can expect to see more of that. But, of course, that stretch of territory of Syria is a bit more complicated. The ISIS presence, the remnants of ISIS aren't right along Turkey's borders but rather further into Syria.

So what kind of efficiency will Turkey have in trying to combat ISIS?

It is something we don't know at this point. But Turkey has been very vocal and said that they are able and willing and do not need the Kurdish fighting force on the ground that has been the main instrumental partner in the U.S.' fight against ISIS.

So they will be going in with a vision not just to defeat ISIS but to expel the same Kurdish fighters that have been fighting for the anti- ISIS coalition. So nothing is simple in the battlefield in Syria and the fight against ISIS is one that is very difficult.

So Turkey is really going to be taking a very hard and difficult terrain and seeking to expel ISIS from that. We don't know how well they will be able to do it.

CHURCH: Gul Tuysuz, thank you so much for that live report from Istanbul. We appreciate it.

A U.S. federal judge is ordering North Korea to pay half a billion dollars to the parents of Otto Warmbier 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, Warmbier 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.


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.


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.

We will take a quick break here. And then, Pope Francis has a simple Christmas message, give more and take less. The pope's advice on how to live a fulfilling life is next.





CHURCH: Welcome back. Pope Francis has a message for the world's Christians on this Christmas Day. And it's pretty straightforward: give to others, take less for yourself and don't be greedy.

The pope led Christmas Eve mass attended by thousands of people in St. Peter's Basilica in the Vatican. Next hour, he celebrates Christmas mass at St. Peter's Square and later Tuesday will deliver his "To the city and the world" message.

The place where it is believed Jesus was born is where thousands of people have traveled on this Christmas Day. Pilgrims from around the world have come to the West Bank town of Bethlehem for Christmas celebrations. Crowds filled the Church of the Nativity for midnight mass. The site is revered as the birthplace of Jesus. Some of those thousands of visitors may head to a unique workshop in

Bethlehem. There they will find handcrafted nativity scenes and other artworks, many of them made by a deaf artist, who is thrilled to be sharing her talents with the world. CNN's Ian Lee reports.


IAN LEE, CNN CORRESPONDENT (voice-over): 'Tis the season for crafting holiday spirit, holy rolling nativity scenes and Bethlehem skylights. Nermine Beki does it all.

NERMINE BEKI, ARTIST (from captions): When I come here, I feel relaxed and full of energy. I feel happy for people to see my work.

LEE (voice-over): The 30-year old belongs to the Syriac Church, some of the original Christians. She also happens to be deaf. At this workshop in Bethlehem, not only do they give all people opportunities, they're here preserving traditional skills like ceramics and woodworking, following in the steps of the town's most famous carpenter, Jesus, and living by his message of doing unto others.

SAMER BABOON, DIRECTOR, PICCINTO HANDICRAFT CENTER: They helps us to believe that there are still good and positive things in life. They can give good things. But just give them opportunity, give them respect, give them dignity.

LEE (voice-over): Beki's work also helps preserve the town's Christian identity. So when pilgrims visit, they don't just find cold stone churches but a living, thriving community and this special greeting.

BEKI (from captions): I wish you a Happy New Year. I love you, all who are watching me in the world.

LEE (voice-over): Tidings of good cheer to take into next year -- Ian Lee, CNN, Bethlehem.


CHURCH: Great work and a wonderful message.

Thanks for your company here on CNN NEWSROOM. I'm Rosemary Church. I will be back with a check of the headlines in just a moment.