Return to Transcripts main page

CNN NEWSROOM

CNN INTERNATIONAL - U.S. Stocks Slide at Opening Following Historic Day of Gains; Trump Back at White House after Surprise Visit with U.S. Troops in Iraq; Iraqi Lawmaker Slam Visit as Blow to Erect Sovereignty; Russia Unveils New Invulnerable Missile System; Border Protection Asks Congress for Help after Boys Debt; Demonstrations against Sudan's President Continues; At Least 430 Killed in Saturday's Tsunami in Indonesia; U.S. Saw Dangerous Weather Conditions Coast-to- Coast in 2018. Aired 10-11a ET

Aired December 27, 2018 - 10:00   ET

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


[10:00:00] RICHARD QUEST, CNN HOST: The trading day now under way on Wall Street. Investors hoping for a repeat of Wednesday's record- setting performance. They could be in for further let down certainly if you look at the numbers.

Back from Iraq. President Trump has returned after the first trip to U.S. troops in a war zone. His defense policy remains in the spotlight.

And an influx of migrants crossing U.S. Mexico border. We're live in El Paso, in Texas, in just a few minutes. I'm Richard Quest in London. CNN NEWSROOM is right now.

And a warm welcome to you. The U.S. markets have been open for just half an hour and the stock sliding has begun somewhat early. It followed an historic day on Wall Street but now, you can see the Dow is up 1,086 points on Wednesday. Now look at what is happening in the market, and you see a very different story. Yes, down 372, although we are off the lows of the day which had been down more than 420, 430. So, what you're seeing is a stunning rally, and December is still on pace to be the worst since 1931.

So let's talk now, to put this in place. Joining me is at the market, CNN's Alison Kosik at the New York Stock Exchange. It didn't take long, but clearly, the markets decided down is the way to go.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, down is the way to go at the moment. Euphoria kind of on the sidelines at this point. But it shouldn't really be a big surprise to see the red arrows today after such an epic move by the Dow yesterday. Volatility is really the name of the game. It has been that way for several months. So you're just seeing the pendulum swing the other way.

But that epic move by the Dow, that swing higher, of more than 1,000 points, it even baffled a lot of seasoned investors and traders here on the floor of the New York Stock Exchange. They're scratching their heads wondering what happened there. They are still trying to explain it. It could have been one bit of good news that set the ball rolling yesterday, it could have been the President's economic adviser, Kevin Hasset, coming out and saying that Jay Powell, the Fed chair, and Treasury Secretary Steve Mnuchin, their jobs are 100 percent solid. That could have been the spark that led to that massive historic rally yesterday.

But now, you're seeing profits being taken from that rally yesterday. Keep in mind, it is the end of the year, just a handful of days left, in the trading -- in the trading year of 2018, so you're seeing this year end positioning happen so these books are getting squared to wrap up 2018 -- Richard.

QUEST: Alison Kosik at the Exchange. Christine Romans is with me, our chief business correspondent. Well, if we had any doubts that the wheels are coming off the wagon, it is confirmed certainly today. Alan Valdez in the last hour says something interesting. He said, a lot of the pension fund, a lot of the investments yesterday were being done because you had to trade yesterday on a plus three settlement to get it settled before the end of the year. Otherwise, it would go into next year's books.

CHRISTINE ROMANS, CNN BUSINESS CHIEF BUSINESS CORRESPONDENT: Sure. And that should be no surprise to anybody because every year, you have squaring. Every quarter, really, you have squaring. But you don't always see a thousand-point, 5 percent move. So there is obviously a confluence of factors here. Look, you had four down days and a really ugly quarter and a really ugly month for investors heading into the end of the year.

And there was a feeling also, Richard, there was this feeling that heading into yesterday's session, this market had priced in the 100 percent chance of a recession next year. And that is certainly not the going wisdom among economists or market participants. The U.S. economy is strong. We just had the best holiday shopping season in years in the U.S. Oil price -- or gas prices down 20 cents a gallon for consumers, so they have a little bit more money in their pockets. So, there are a lot of good things, 3.7 percent unemployment. So, a lot of good things happening in the economy that don't square with a 2019 recession. And so, that could be one of the reasons why you had investors.

And we heard there are mutual fund players too, who are heading into the end of the year, who are adding on to positions or making sure they were a little more long than they had been before. So there could be a lot of different things going here.

But the bottom line to me -- the bigger picture now, what's up, what is down, this day or that day -- the big picture to me is that this has shift -- we are going to see the shift here. The ten years of easy money is over. The Fed is in a rate normalizing cycle. Rates are still only 2.5 percent.

[10:05:00] The economy is strong but it's not going to be like it was in 2017 and 2018 for investors in 2019. There is also a trade war and every headline that has to do with that is a very, very important development.

QUEST: The interesting thoughts and that, of course, is the trade war, we couldn't have foreseen. And a lot of the Trump administration gyrations we couldn't have foreseen. But the market has yet known that easy money was going away and like a typical addict, it was determined to stick with its drug of choice, i.e., cheap easy money, until it is physically removed.

ROMANS: I am so glad you say that because I was going to say a drunk. But, you know, the interesting thing about it, too, is that why, if you're making money, year after year, quarter after quarter, and you keep hearing well, we should lighten up, we should lighten up, you know, you're going to lose money if you're lightning up. A bell never rings at the top of a at the cycle or the bottom of the cycle quite frankly. And so, for ten years we've been rolling with these great returns.

Look, there were a couple of years in the last ten that were basically blah. I think 2011, and 2013 -- or 2015, with just very small gains, overall gains for the S&P 500. But this year, I mean borrowing something -- barring something crazy over the next three days, this will be the worst year for the stock market investors in a decade.

QUEST: I'm just writing down that, Christine, barring something crazy over the --

ROMANS: Nothing crazy is going to happen.

QUEST: No, no, well, you know, before yesterday, we wouldn't have said a thousand points. But you and I spoke at this time yesterday morning. Let's hope it sort of all remains quiet and peaceful. Good to see you, thank you. Christine Roman's is our business correspondent with us. Thank you.

Now, President Trump is back in Washington. He's at the White House, after his first visit to troops who are serving in a combat zone. And the President and the first lady made an unannounced trip to Iraq and extended holiday greeting. They signed autographs and they posted photos and praising the troop force their service. The President said the days of America acting as the world's policeman are over. He defended his decision to order all U.S. forces from Syria. He says he won't do the same with the troops in Iraq.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Will you pull troops out of Iraq as well?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No plans at all. No. In fact, we could use this as a base if we wanted to do something in Syria.

(END VIDEO CLIP)

QUEST: Iraqi leaders didn't exactly roll out the red carpet. The Prime Minister was supposed to meet with Mr. Trump. In the end ended up speaking on the phone instead. Many Iraqi lawmakers made it clear that the President was not welcome there at all. The leader of one parliamentary block calling for an emergency session. In other words, to discuss his blatant violation of Iraq's sovereignty and to stop the aggressive actions by Trump who should know his limits. The U.S. occupation of Iraq is over.

So, CNN's Ian Lee who's following this story from Jerusalem. Also joined by our military and diplomatic analyst, John Kirby, who's a retired rear admiral in the U.S. Navy. And John -- John Kirby first, these visits always go down rather well with the troops. And the issue is, what the President, and how the President used it.

JOHN KIRBY, CNN MILITARY AND DIPLOMATIC ANALYST: Yes, that's exactly right, Richard. I mean, typically visits by the commander-in-chief, are welcome. The troops are excited to see the boss come out and give them a shot in the arm and let them know what they're doing, their service, their sacrifice, and that of their families particularly at the holidays is important.

The problem -- and I've had this problem every single time this particular President gets in front of military audiences, he treats it as if it was a campaign rally. You see images there of him signing the MAGA -- the Make America Great Again hats. When he got up in front of them and talked to them at Al Asad, he lambasted the Democrats for failing to fund his border wall. He turns everything into a political rally. He turns everything into an about him.

I have been overseas. I've seen other commander in chiefs go and visit the troops on the holidays. They never make it about them and they certainly never make it about domestic politics. So in my mind, it would be just fine with me if he doesn't make another trip to see deployed troop force a very long time.

QUEST: Hold that thought rear admiral. Hold that thought. Whilst Ian Lee tells us how they reacted in the region. All this business about supposedly offending the Iraqi Prime Minister, I mean he wasn't even in Baghdad, when this happened. Is this a storm in a teacup?

IAN LEE, CNN CORRESPONDENT: Well, you obviously have some Iraqi politicians who don't like the U.S. presence in Iraq in the first place. And so they're going to come out with strong rhetoric and strong demands that all Americans pull out. Other Iraqi politicians are more measured. But you do have a range of reactions to this, from frustrated to angry.

[10:10:00] Because Iraqis did want the President to meet with some of their people. Even if it is security officials, to show that this is a partnership, this isn't the United States dictating to Iraq. Also, with the President saying that the United States is going to remain in Iraq, that also microphone off about the cannoli ruffled Iraqi politician's feathers because they said, well, you know, it is our country. We're sovereign and you're here on our invitation. And so, there was a bit of bad blood with the Iraqi politicians and that, and other regional leaders, you know, are looking at this, a bit with a silver lining, Richard, because they say, you know, the United States is pulling out of Syria, but they are assured a bit that the United States is staying in at least Iraq.

QUEST: John Kirby, back to you, if I may. The President is doing nothing more than he said he would do. If you listen to his comments, when he -- the other day. He said he told Mattis, he told the military, many times, he wanted to be out of Syria, and they kept asking for six-month extensions, and he kept giving them. And finally, he said time's up. Nobody should be surprised that the President is doing what he said he was going to do.

KIRBY: No, that's absolutely right this. This guy couldn't play dead in a cowboy movie. I mean he is as genuine and authentic as he possibly could be. And he was very clear even on the campaign trail that he had a real problem with American Middle East entanglements or foreign deployments. That doesn't make it right, though, Richard.

And he needs to understand, he is not being completely honest with the American people. These troops are in Iraq and in Syria and in Afghanistan to prevent another attack on our homeland. He couches these, and he portrays them as sort of America getting taken advantage of by our allies and partners and defending other people's borders. What we're doing over there is trying to keep those places from becoming safe havens again for terrorists that want to attack us on our homeland. And so, he might very well end up really regretting this decision, because I can guarantee you ISIS is already planning ways to re-emerge and to resurge in Syria, which was their logistics resources funding and training base when they first started back in 2014.

QUEST: Thank you, gentlemen, both of you. I could go on much, much longer but I do attend to some other duties, particularly the market.

The market down -- the Dow is once again lower than 400 points. And I'm going to keep reminding you where we stand, 453. So we are now 61. See how it's going, we lost 2 percent, nearly half of yesterday's gains. Keep reminding you where we, are because there is clearly more down than up pressure, more down than up pressure, as you can tell.

And as Mr. Trump landed back in Washington, China praised his outgoing Defense Secretary, James Mattis. Mattis' resignation was triggered by Donald Trump's Syria decision and his planned drawdown of U.S. troops in Afghanistan.

Beijing said it highly appreciated Mattis's attitude, despite heightened trade and military tensions between the two countries during his time in office.

The United Arab Emirates is taking a big step in restoring diplomatic relations with Syria. Is reopening its embassy in Damascus nearly seven years after it was closed. The Arab League expelled Syria in 2011 over the government's brutal repression of protests that escalated into the war. Now, the UAE says the Arab role in Syria has become necessary to counter Iranian and Turkish influences in the region.

President Trump's decision to pull U.S. troops from Syria has been called a Christmas gift to Russia. And now the Russia President is boasting another gift. One that could have incredibly destabilizing effects on the world order. Vladimir Putin says Russia will soon deploy a next generation missile that flies so fast and low, virtually nothing can stop it, even U.S. defense systems. The avant-garde hypersonic missile was tested on Wednesday. There are reports that claim it can fly 20 times faster than the speed of sound. You can get from Moscow to New York in less than half an hour.

CNN's senior international correspondent, Frederik Pleitgen, is in Moscow. This is rather terrifying, if you are in the United States. One assumes they have something similar in the works but if they're expensive anti-missile technology, can be circumvented by this, well, game changer.

FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, yes, you're absolutely right. It could potentially be a game changer. And I think one of the things that many analysts out there fear, is that if these hypersonic missiles, in fact, become commonplace, or as you say, if the U.S. starts developing them as well, or maybe is already developing them as well.

[10:15:00] That we could be on the brink of a new nuclear arms race. Not just between the United States and Russia but of course other countries like for instance China, could get involved as well. And certainly for many people, that would be a really terrifying thought. So on the brink of 2019.

Nevertheless, the Russians claim that their new missiles, first of all, are as capable as they say they are and are also saying they are not meant to threaten anyone as the Russians say. But they do however state the fact that they believe that they can circumvent these missile defense systems that of course the U.S. has, not just Richard, because they're so fast, but also because they can conduct what the Russians say are evasive maneuvers.

Now there's a bit of caution there because there are some experts who cast a bit of doubt on what the Russians are saying. They said they're not sure how combat ready these missiles really are yet. Despite the fact that the Russians say they are on the brink of deploying them in 2019. They say that this program was unveiled, in March of 2018, and they say it seems like an awfully short period of time to get something like this combat ready so fast -- Richard.

QUEST: And the cost involved, of course, the Russian economy is still suffering, even with oil prices on the way back up again. They're still at startling levels of poverty and the health care system is nothing to write home about. So clearly, large number of resources are being circumvented or at least high doff to pay for this.

PLEITGEN: Yes, large amount of resources and the interesting thing about that is, not just obviously the fact that Russia is in a troubling economic situation, but also the overall defense budget that Russia has as well. To what extent does this take away from Russia's conventional forces, developing all of these systems in such a short period of time? The interesting things that we've been observing -- I think the last two years -- is that the Russian defense budget has actually been going down in large part because of the dire economic situation. And nevertheless they do say that they have very important projects.

And, of course, the avant-garde system, Richard, is not the only one the Russians say they're developing. They have some other nuclear projects that they also say are invincible against American missile defense systems. They have one interesting one that they say is an underground -- an underwater drone that they say could also come very close to the United States, or any country that threatens Russia, and then launch a nuclear strike from there.

So they do have these very large projects, at the same time, a very difficult economic situation. And one of the things that we've been talking about, of course, that this economic situation has already forced Vladimir Putin and his government into some unpopular moves like for instance the pension reform which has been a big problem for him here at home -- Richard.

QUEST: Frederik Pleitgen, who is in Moscow. Fred, thank you.

As we continue, you and I, with the U.S. Mexico border where U.S. border patrol agents say they're overwhelmed and need help.

[10:20:00] (COMMERCIAL BREAK)

QUEST: The head of U.S. customs and border protection says Congress needs to step up and help after the death of a second Guatemala child in U.S. custody. An 8-year-old boy died on Christmas Eve in a New Mexico hospital. The cause of Felipe Alonzo Gomez's death has not been made clear. He had been diagnosed with a cold and given basic antibiotics. The U.S. Homeland Security Secretary, Kirstjen Nielsen, now says she will travel to the border to personally review her department's care of migrant kids.

Meanwhile, U.S. government has built around 1,100 kilometers of wall and fencing since 2006, mostly on federal land, and where the terrain does not provide a natural barrier. That has not slowed the influx of people crossing the border. The border protection officials say they need more funding from Congress to handle the current volume of migrants. One border official tells CNN we're not designed to hold all these people.

Hundreds of migrants are being dropped off every day in border cities like El Paso, because protection is not allowed to hold them any longer. Dee Margo spoke to CNN's Jim Sciutto earlier and says something needs to be done.

(BEGIN VIDEOTAPE)

DEE MARGO, EL PASO, TEXAS MAYOR: We need a resolution. We're tired of dealing with these symptomatic problems that are just getting worse. El Paso is the sixth largest city in the state of Texas and the 19th largest city in the United States and we are the largest U.S. city on the Mexican border. So we, you know, we need to deal with this. We could tell you firsthand, I've said before, you want to know about border issues, you want to know about immigration, come to El Paso.

(END VIDEO CLIP)

QUEST: And we will be with El Paso with our correspondent later in the hour. As we continue, the market, well, just before we do, let's have a look

at the market, and we were off over 500 points, so we are now well and truly the lower part of the day and the market seemingly, there you go, 500 plus.

Donald Trump says America will no longer be the world's policeman, and he adds, we are no longer the suckers, folks. More headlines from the surprise trip to Iraq in just a moment. This is CNN.

[10:25:00] (COMMERCIAL BREAK)

QUEST: Now, welcome back, our top news headline. Investors hoping for a repeat of Wednesday's record setting market performance are in for a letdown. The Dow is down sharply. The lowest point of the day being more than 500 points off from the open.

In Indonesia, thousands of people are being evacuated, and planes are being re-routed. Officials there have raised the alert level for the volcano that triggered last week's deadly tsunami. It's rattling the nerves of already shaken residents. Dozens of people are now unaccounted for.

Donald Trump is back home, in Washington, after his first visit to U.S. troops in a combat zone. Mr. Trump thanked the troops for their service, and extended holiday greetings while also putting the world on notice that America will no longer serve as what he calls the global policeman.

And so to El Paso, that's where issues are going on with the border, and the various U.S. authorities, customs and border protection, who say they simply can't cope. CNN's Dan Simon is there. Dan, the reality is, they can't cope, and it's difficult to know what should be done. If these people are still crossing the border illegally, in such large numbers, what is the answer today, tomorrow, and the next day?

DAN SIMON, CNN CORRESPONDENT: Well, Richard, let's look at what's happened in less than a month. You had two children who have died while being in the care of border patrol. And obviously, that's raising some major concerns about whether border patrol is equipped to deal with this situation, raising concerns about the welfare of these children. And of course, it is creating a fresh new crisis for the Homeland Security Secretary, Kirstjen Nielsen, who is calling for enhanced medical screenings for these children and she is going to be going to the border later in the week.

But in terms of this most recent case with this 8-year-old boy, who died. We don't know if he became ill while crossing the border, or if it happened while he was in custody. But one thing is clear, Richard, this gets at your question. You know, you have an unprecedented number of migrants who are coming into the border, Central American migrants. In fact, you had about 25,000 families who were arrested just in the past month, and so what that is forcing ICE to do, they would argue, is that they're just having to essentially drop off these migrants, at places like this. This bus stop in El Paso, Texas. And what created a major fire storm over the last few days, is that these people had nowhere to go. It was freezing cold, and so that created a PR nightmare for ICE, and so that process seems to have stopped.

QUEST: All right, so, we have a truly dreadful situation where legally they can't keep them detained. They dropped them off. I mean, illegal immigrants are still coming over. The wall is considered to be a very unpopular policy and would not be built in many years anyway. So, Don Simon, what -- those who are experts in El Paso, in this issue, what do they say needs to be done, since you clearly can't prevent these people from crossing the border?

SIMON: Well, they need more resources is what folks here are saying. That Congress really needs to step up, have more people who can handle this situation. They need more modern buildings. You know, the buildings that house these children and house these families, they were built, you know, 30 years ago, and really designed for single adult males. And so you have an outdated system.

[10:30:02] And meantime, you continue to have an unprecedented number of Central American migrants pouring across the border because of the horrific conditions that are occurring in those country. And so, the folks here are also saying that more aid from the United States needs to go to those countries. It's a very complex problem, and they're of course, no easy answers.

QUEST: Dan Simon, thank you.

Now, to more on President Trump's trip to Iraq and the political deadlock over a budget bill that was waiting for him back in Washington. CNN's White House correspondent is Boris Sanchez. He joins me now. And earlier, we were hearing that Donald Trump used this trip to make political points. And one of our experts was saying, you may have heard, was questioning the way in which he turned it into a campaign rally. But we shouldn't be surprised by that, should we? That is the modus operandi of this President.

BORIS SANCHEZ, CNN WHITE HOUSE CORRESPONDENT: Yes, the President has often made campaign style statements or sort of postured himself in a political way in venues that don't necessarily merit that sort of attitude or perspective. He also has a tendency, as you know, Richard, to believe that his power as President extends far beyond where it actually does. As you know, the discussions about potentially firing the Fed chair, Jay Powell, came up in recent days, and that's usually not a place where the President would try to exert their authority. We should point out. The President has been criticized for these remarks. But for some of the troops there, they were enthusiastic to see the President though much of what he said raised eyebrows.

(BEGIN VIDEOTAPE)

SANCHEZ (voice-over): President Trump returning to Washington, after visiting U.S. troops in Iraq. The unannounced trip coming days after Mr. Trump's controversial decision to withdraw forces from Afghanistan and Syria.

TRUMP: The United States cannot continue to be the policeman of the world. We're in countries that most people have never even heard about. And frankly, it's ridiculous.

SANCHEZ: The President defending the drawdown.

TRUMP: We're no longer the suckers, folks.

SANCHEZ: And boasting about defeating ISIS after declaring victory against the terror group last week.

TRUMP: We've knocked them out. We've knocked them silly.

SANCHEZ: But the President's military commanders say ISIS is still a threat. And lawmakers on both sides of the aisle are raising concerns about the abrupt withdrawal, which came without consultation with some key U.S. allies.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: This is a stain on the honor of the United States.

SANCHEZ: Defense Secretary James Mattis resigned in protest of the President's decision to pull out of Syria last week. President Trump telling reporters he's in no hurry to find a permanent replacement.

TRUMP: I'm in no rush. Everybody wants that position. Everybody. Everybody -- so many people want to be -- who wouldn't be secretary of defense?

SANCHEZ: The President telling the press, he does not intend to withdraw troops from Iraq.

TRUMP: No plans at all. No. In fact, we could use this as a base if we wanted to do something in Syria.

SANCHEZ: Mr. Trump facing criticism after falsely claiming that he had given the troops a 10 percent pay raise.

TRUMP: If you haven't gotten one or more than ten years, more than ten years, and we got you a big one. I got you a big one.

SANCHEZ: In reality, military pay has increased annually for over three decades and is slated to go up 2.6 percent in 2019.

LT. GEN. MARK HERTLING, CNN MILITARY ANALYST: He's not fooling any of these military members who get that leave and earnings statement every month.

SANCHEZ: The President's trip coming as the partial government shutdown enters a sixth day. And while lawmakers typically avoid getting political when talking to the troops, Mr. Trump's speech sounded a lot like one of his campaign rallies.

TRUMP: I don't know if you folks are aware of what is happening, we want to have strong borders in the United States, the Democrats don't want to let us have strong borders. Only for one reason. You know why? Because I want it.

SANCHEZ: The President blaming the next likely house speaker, Nancy Pelosi, for the shutdown, after she mocked his plan for the wall, telling "USA Today" it had been reduced from cement to a beaded curtain. President Trump insisting that he will not back down when he was asked how long the shutdown could drag on.

TRUMP: Whatever it takes. I mean we're going to have a wall.

(END VIDEOTAPE)

SANCHEZ: And Richard, congressional leaders are due back on Capitol Hill today. No sign that there they are any closer to a deal on this government shutdown. One final point, I know you've been watching the markets, it does not look like we're bound for a repeat of an historic day like yesterday. I am eagerly refreshing my Twitter feed to see what the President has to say about it -- Richard.

QUEST: And I am doing exactly likewise. And I'll buy you a coffee if we get a tweet on the markets before lunch. Good to see you, Boris.

[10:35:03] SANCHEZ: Thank you.

QUEST: U.S. Presidents have visited troops in war zones more than two dozen times since the second world war, a few to remind ourselves. In 1996 Bill Clinton visited the U.S. troops that were deployed in Bosnia. He made a second visit the follow year. George W. Bush visited U.S. troops in Iraq four times during his presidency. He went to Afghanistan twice. And Barack Obama met U.S. troops at Camp Victory just outside of Baghdad in 2009, and he made four trips to Afghanistan.

The markets now, and we are roughly an hour into the trading day, and as you can see -- look at that, the thing to show there, the Nasdaq is off 2 percent. It's giving up a good half of the gains that it made yesterday. So we can put spectacular Wednesday behind us. And the biggest one-day rally since 2008, well, now all of the indices are posting losses of more than 1 percent. And they're holding on to the gains but barely.

In Asia, the close was mixed. Gains in Japan and Australia, Chinese, which had other issue, their markets were lower. And in Europe, the DAX, the FTSE and the CAC are all in the red. The DAX is extending its losses. It was down 2.2 percent. Not surprising, with what it is seeing. Samuel Burke's with me. Not surprising with what it is seeing in New York. The sour markets of Europe are turning even worse.

SAMUEL BURKE, CNNMONEY BUSINESS AND TECHNOLOGY CORRESPONDENT: It is no surprise that the DAX is now down about 3 percent. Given the thesis that you've been talking about all day long, Richard. The fact that you believe that this was more of an anomaly, this so-called Christmas miracle in the United States yesterday, hasn't really extended to Asia. Isn't here in Europe.

At the beginning of the market, there is a little bit of green. People were excited that there is this deal between a French company buying Gatwick Airport in spite the drone incident here in London just last week. But at the end of the day, Richard, I've been talking to analysts, if I can put up on the screen what they're telling me. The fundamentals here in Europe remain the same. Brexit uncertainty. You got the Italian budget that weighed on Europe for so much of the year. You have the French protests and Merkel's future, of course, now has a sunset. None of that has changed. And of course the trade war does weigh on Europe.

QUEST: And, of course, on the Brexit point, in January, virtually the first two weeks of January, we have the meaningful vote in Parliament.

BURKE: We're going to be consumed by this vote in Parliament over the next few weeks here in the U.K. But the real problem is, when you talk to traders, they say how do you price in Brexit, when there are so many different outcomes?

QUEST: Now, we will be consumed by Brexit, but you will be consumed by consumers.

BURKE: Exactly. At the consumer electronics show.

QUEST: Is it worth going?

BURKE: Oh, absolutely. And I think it has become each more relevant as the bigger tech companies have come back. You saw Amazon there last year with the success of their Amazon Echo, a consumer device.

But what's going to be consuming the consumer electronics show will be the trade war. A lot of companies already telling me, oh, I'm going to meet on the sidelines with a company that might be able to help me with Chinese manufacturing, moving Chinese manufacturing. It is all about the trade war. Whether it is tech or pretty much any other big business -- Richard.

QUEST: What gadget? What's the gadget du jour.

BURKE: The electronic scooter. In fact, I'm going to be on an e- scooter for kids, for below 15-year-olds.

QUEST: That is entirely appropriate for you.

BURKE: I'm going to make sure the people my age have helmets on -- Richard. I think that's going to continue to be the big success.

QUEST: They're still banned in places like New York.

BURKE: And we are still riding them in places like Paris. Can you believe that Paris has them but London doesn't? That's when you know that Europe is very confused when the Parisians are ahead of the Londoners.

QUEST: All-consuming with the consumers with consumers and consuming. Good to see you.

BURKE: See you at CES.

QUEST: I need a stout pair of shoes. Saudi Arabia's King is swapping out a number of key jobs in a major

cabinet shuffle. The move touches a number of key posts dealing with the kingdom's security and intelligence service. The King also named a new foreign minister, it comes as the country continues to face international pressure over the killing of the Saudi journalist Jamal Khashoggi.

In Sudan, anti-government protesters and demonstrations are calling for their President Omar al-Bashir to step down, and they no sign of slowing down. That's despite a crackdown with many killed or wounded. Here's Leone Lakhani, with more.

(BEGIN VIDEOTAPE)

LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): As hundreds marched through the Sudanese city of Atbara, the calls grow louder. Freedom, freedom, they chant. Calling for an end to the President Omar Bashir's nearly three decades of rule. Protests that began nearly a week ago erupted over rising food and fuel prices.

[10:40:00] MARWA MAGEED, KHARTOUM RESIDENT (through translator): Everything has become very expensive and we don't know what is happening. It feels like there is a ticking time bomb. And we don't know when it will explode.

LAKHANI: For now, there's no sign the anger will die down. A state of emergency was declared in Atbara, after protesters targeted al- Bashir's party offices. Speaking to his protesters on Tuesday, al- Bashir blamed the discord on external groups.

OMAR AL-BASHIR, SUDANESE PRESIDENT (through translator): Thank you for hosting me. Thank you for your support and enthusiasm, which is in response to every foreign agent, traitor, outlaw and destructive person.

LAKHANI: Protests have now spread across Sudan in the largest demonstrations in several years. In Khartoum police disburse crowds with tear gas. In another mobile phone video a demonstrator appears injured is carried away.

Amnesty international said on Monday at least 37 people have been killed. But the main opposition group is calling for investigations into the government's response. Leone Lakhani, CNN, London.

(END VIDEOTAPE)

QUEST: As we continue on CNN, imagine recovering from this. Whilst knowing it could be about to happen all over again. We look at the volcanic threats facing Indonesia. In a moment.

[10:45:00] (COMMERCIAL BREAK)

QUEST: Right now, thousands of Indonesians are abandoning their homes, terrified that more tsunamis could strike at any time as the volcano that caused last week's deadly tsunami threatens to cause more. And so many of these people are escaping with their lives. They've lost almost everything they had. In the waves that destroyed entire towns. CNN's Alexandra Field with more.

(BEGIN VIDEOTAPE)

ALEXANDRA FIELD, CNN CORRESPONDENT: It's only been a matter of days since a deadly tsunami tore through the area here in Indonesia killing hundreds of people and now mounting fears that it could happen again. Saturday's tsunami was caused by a volcanic eruption at Anak Krakatau which led to a landslide, which then triggered the tsunami. Waves were estimated to reach three meters high.

Now officials say they are seeing increased volcanic activity. So much so that they've raised the warning level around the volcano to the country's second highest level. And they're taking precautions, like setting up a perimeter, no one can get within five kilometers of that volcano. They've also evacuated thousands of people from two different islands in the Sunda Strait, taking them by boat to other islands where they can take shelter further inland in the event of another tsunami.

Ash continues to spew from the volcano, so much so, that airplanes have had to navigate around it, and back on land, people are being advised to wear glasses, goggles, and even masks, to protect themselves.

[10:45:00] Officials say that they've deployed extra sensors around the volcano to detect volcanic activity. The flaws and impairments in Indonesia's tsunami warning system have come under fire since Saturday, and since October, when another tsunami killed some 2,000 people.

Search and rescue efforts continue since Saturday. Crews are still working to reach people who could have been stranded in some of the hardest-hit areas. The death toll already in the hundreds. In Hong Kong, Alexandra Field, CNN.

(END VIDEOTAPE)

QUEST: We need to understand the dangers here, with our CNN meteorologist, Jennifer Gray. And the positioning of the volcano, in relation to the main coastline in the islands that are affected.

JENNIFER GRAY, CNN METEOROLOGIST: That's right, and you know, we're seeing that smoke plume, or that eruption plume, from the satellite image, and we're going to continue to see that. It has been persistent, ever since it happened. And you can see, with the winds flowing from east to west, there it is. The rest of this area of course, that's just cloud cover going by. And that no-fly zone, that five-kilometer zone, is right here, in this region. And so claim planes are forced to go around.

You and you can see these incredible satellite images. The before picture and the after picture, you can see how it just fell right into the ocean. And that's what triggered that tsunami. So people are extremely fearful in the region. And they are going to be that way for the next several, several weeks. As they're continuing to experience those tremors and of course, fearful of another eruption. So here is the rain as well. Not only dealing with the tsunami, but

the rainy season is approaching. A lot of rain in this region. We've seen the flooding. With people just trying to grab what they can and get to higher ground. Now, the forecast does call for rain by the end of the weekend, of course, really going up, and the next few months are expected to stay that way. January and February, we see some of the highest rainfall totals of the year, and so a lot of, a lot of rain. On the other hand, though, we are experiencing extreme heat down under, Richard, we have had incredibly warm temperatures, across portions of Australia.

QUEST: Right. Just how hot are they there?

GRAY: Well, temperatures are climbing. In fact, a high of 46 degrees across some of these area, temperatures are going to stay extremely hot, on through the weekend, at least possibly giving a little bit of a break on Saturday or Sunday.

QUEST: Thank you for that. We will have more. This is CNN.

[10:50:00] (COMMERCIAL BREAK)

QUEST: As 2018 draws to a close there is absolutely no doubt the dramatic year that has been in the weather. And perhaps no more so than in the United States. Here is CNN colleague Chad Myers with a look back at the extreme year that was.

(BEGIN VIDEOTAPE)

[10:50:00] CHAD MYERS, CNN METEOROLOGIST: 2018 brought another year of extreme weather and natural disasters to the U.S. The impacts of man-made climate change evident in every region of the country. Even as the U.S. takes a step backward in fighting this global crisis. Here are the top eight stories for 2018.

Number eight. The Hawaii volcano. Kilauea, the most active volcano in the world lived up to its reputation. In May it came to life once again.

UNIDENTIFIED MALE: This really does look like hell on earth.

UNIDENTIFIED MALE: This is as impressive, as mesmerizing and as terrorizing as it gets.

MYERS: The lava which reached temperatures topping 2100 degrees, destroyed 700 homes.

Number seven. The Alaska earthquake. On November 30, a powerful 7.0 magnitude earthquake struck Alaska. It hit very near Alaska's most populated city of Anchorage causing rose to buckle, knocking out power to 10,000 people.

BROOKE BALDWIN, CNN ANCHOR, NEWSROOM: This was the worst most violent quake they had ever felt.

MYERS: The quake was considered the most significant for Anchorage since 1964. Fortunately, no serious injuries or deaths were reported.

Number six. Florida red tide.

UNIDENTIFIED MALE: This is an epic event of biblical proportion.

UNIDENTIFIED FEMALE: It is the worst toxic algae bloom in recent memory. Wiping out Dalton's, sea turtles, other marine life, by the thousands.

MYERS: While the process that creates Florida's red tide and green slime are natural, many scientists say the increased agricultural runoff and pollution from the early season subtropical storm Alberto made the problem even worse.

Number five, the Maryland flood. On May 27, storms pounded the Baltimore area.

UNIDENTIFIED FEMALE: Flash flooding has turned this Maryland town's main street into a raging river.

Cars have been swept up by the roaring muddy water rushing through Ellicott City, Maryland.

MYERS: Many there were still rebuilding from the flash flood of 2016. It was considered a once in a thousand-year event. Took only two years for history to repeat itself.

Number four. It is a term known to meteorologists but this year, two storms got everyone talking about it.

UNIDENTIFIED FEMALE: Bomb cyclones.

UNIDENTIFIED MALE: Bomb cyclones.

UNIDENTIFIED FEMALE: Bomb cyclone.

MYERS: Bomb cyclone. So what is a bomb cyclone? It is not just a nor'easter. It is a big storm that develops rapidly, there's warm air, over the ocean, there's very cold air over the land, and there's a jet stream in between, and that allows the storm to rapidly intensify, develop into a nor'easter, but a big one. A one that loses 24 millibars of pressure in 24 hours, that's the technical term, so certainly not every nor'easter is a bomb cyclone.

Two of these nor'easters struck this year. The first in early January, it left 19 dead, and caused over $1 billion in damage. As the storm worked its way up the coast, it brought the first snow since 1989 to Tallahassee, Florida, and ice and snow to Charleston, South Carolina. The storm hit the Northeast very hard with nearly nine inches of snow in New York City. And a tide over 15 feet in Boston Harbor. Big enough to break the record from the bench mark blizzard of 1978.

In March, another coastal bomb left nine dead, and did $2.2 billion in damage, knocking out power to over a million at the peak of the storm. Number three, on our list, is hurricane Michael. Michael made

landfall on October 10 as the strongest storm to hit the continental U.S. since hurricane Andrew. The category four hurricane was just one mile per hour short of being a cat five. The storm claimed 46 lives. Most of those killed were in Florida. Where the Florida panhandle was devastated. The small town of Mexico Beach was ground zero.

UNIDENTIFIED FEMALE: We have just now flown over Mexico Beach, and it's gone. It's obliterated. It is awful to look at. I've never seen anything like this.

MYERS: Number two is hurricane Florence. The storm made landfall on September 14, along the North Carolina Coast.

UNIDENTIFIED MALE: We noticed that the inner eye wall, there it goes, there goes the lights.

MYERS: And much like Harvey, in Houston, the year before, the hurricane stalled for days, bringing historic rain. Nearly three feet of rain impacted some areas of North Carolina. The storm dumped as much as 10 trillion gallons of water, as much as eight months' worth of rain fell in just a few days. Many rivers in both North and South Carolina saw their all-time record crest. More than 50 people perished in the storm.

Increasingly, scientists are concerned that hurricanes like Michael and Florence could be the new normal. Increased heat, especially in the oceans, can potentially lead to stronger and wetter storms.

[10:55:00] Perhaps no place in the U.S. has begun to see the consequences of climate change more than California. Years of record drought were replaced suddenly by historic flooding in late 2017. That yo-yo effect laid the perfect foundation for large and destructive wildfires and deadly mud slides.

California is number one on our list with floods and fires.

In January of this year, heavy rains fell over the Thomas fire burn scar bringing a wall of debris and mud to communities below. Areas of Santa Barbara and Ventura Counties were the hardest hit. This year's fires were the most destructive and devastating in California history.

UNIDENTIFIED MALE: They're gone.

MYERS: And they burned in almost every month.

The term we hear, it's new normal. It is not new anymore. This is the normal and it's not a season, is year-round.

The Mendocino complex fire that started in July, became the largest ever recorded for the state. But the worst came in November when strong winds pushed the Campfire into the town of Paradise.

UNIDENTIFIED MALE: The town is on fire.

UNIDENTIFIED FEMALE: This is nothing like what we've had before. MYERS: There was such panic, some drivers abandoned their cars. As

they tried to flee on foot.

Some 40,000 people resided in the path of that fire. In the end, 85 died. And nearly the entire town, of 14,000 homes, burned to the ground.

UNIDENTIFIED MALE: The whole town was wiped off the face of the earth.

MYERS: Chad Myers, CNN, Atlanta.

(END VIDEOTAPE)

QUEST: I'm Richard Quest. Thank you for joining us. CNN's "INTERNATIONAL DESK" is next.