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First Trading Day of 2019; New Details on Whelan's Background; An Update on Once-Conjoined Twins; Border Patrol Uses Tear Gas. Aired 9:30-10a ET

Aired January 2, 2019 - 09:30   ET

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


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[09:30:34] POPPY HARLOW, CNN ANCHOR: All right, the start of trading of the new year. Look at the markets. The Dow off 368 point. A rough start to the new year. There is a lot driving this.

With me now our chief business correspondent Christine Romans, as well as our business correspondent Alison Kosik.

Let's start with you, Alison, at the exchange.

Look, I mean this new year, same problems.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, New year, same problem. Although this morning we're seeing the concerning of last year really amplified. I'm talking about concerns about slowing global growth.

We got some new data out of China showing that its manufacturing sector contracted from November to December. Here's the problem, though, this is the second report in a week out of China showing that its huge manufacturing sector is contracting. Ironically, President Trump has lauded the hits that China has taken, both with its economy and with its stock market, as sort of emblematic of his trade policy working, but it's actually backfiring because it's spooking the U.S. markets as we can see, as we see the Dow tumbling 350 points in the first seconds of the trading day.

Look, you're seeing the U.S. worry about China's economy. China is the second biggest economy. A lot of our companies have a huge chunk of business that they do in China. And if China is slowing, that could directly impact U.S. companies.

And this sort of bleeds on to the other issue that is weighing on the market, this unresolved trade situation between the U.S. and China. Those issues continue to be unresolved, which means uncertainty that companies have about moving forward. We are just a few weeks away from the next earnings season. And you're going to see a lot of volatility until then, Poppy, because you're going to -- investors are going to want to hear from those companies, those CEOs. How is this U.S. trade policy affecting business, how is it affecting jobs, and how do they see things moving forward. So as we begin the day, we see the Dow down 355 points. It's expected to be another rocky session. The first session of 2019. Poppy.

HARLOW: All right, Alison Kosik, thank you so much.

So, Christine, to you.

Let's just tackle China first. Yes, you saw the factor sector contracted there for the first time in two and a half years. I mean the flip side of that could be, look, this would make Xi Jinping more open to a sweeter deal for the U.S. on trade.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: And that's what the headline risk is, does this make it look like President Trump and Robert Lighthizer, the U.S. trade negotiator, have more leverage against the Chinese. But, remember, we had such a rocky going in our stock market the end of last year that maybe that takes some of that leverage away.

HARLOW: Right.

ROMANS: So that's what the headline risk will be on the trade issue.

You know, you've got trade, you've got growth, and then you also have the Fed. The Fed is raising interest rates. So those are the three, I think, big drivers for this year, no question.

And for stock market investors, it was the first meaningfully down year in 10 years. The S&P 500 down 6.2 percent last year.

HARLOW: Yes.

ROMANS: That's not something that stock investors since the crisis have seen. That's what's also feeding into this nervousness.

HARLOW: The president, yesterday, was tweeting about oil prices being down, saying this is good. This is like a second tax cut. There's a flipside to that.

ROMANS: Well, one of the reasons why oil prices are down are because of concerns about global growth.

HARLOW: Of course.

ROMANS: You know, you don't always was to root on a crash in the oil market.

HARLOW: Right.

ROMANS: But what the president is tapping into in a very populous way is a real feel economic indicator. Not everyone can fell the stock market. About half of American households have stocks. But just about everyone goes out there and fills up their gas tank every week or every two weeks can fell that gas prices are down. And they're down in, I think 13 states below $2 a gallon. $2.25, I think, is the AAA number. So the president has stopped attaching his personal reputation to the

stock market now that it is faltering and he is now transferring that on to gas prices, which is also risky because gas prices could start to go up as well.

HARLOW: It is.

When you look at the impact that the government shutdown has on the market, I know you can't draw a direct line --

ROMANS: Yes.

HARLOW: But you can draw a confidence line, right, and that affects everything.

ROMANS: I think the government shutdown, the partial government shutdown, adds into the political uncertainty part of this, which is one of the pieces of the puzzle --

HARLOW: Yes.

ROMANS: Or pieces of the pie. And I think as each day, Poppy, goes on, there will be a magnified effect of that shutdown.

For example, farmers who are getting bailouts because of the soybean tariffs from China, right, will they not be able to process those checks. Somebody who needs now for the first time Social Security benefits. I just was on the FTC website about identity fraud, right? Shut down. So there will be these knock-on effects. It will get worse as each day goes on. And real people are going to feel it. Not just tourists, real people, government workers and everyone will feel it.

HARLOW: Yes, yes, 800,000 of the government workers.

ROMANS: Yes.

HARLOW: Thank you, Romans.

ROMANS: You're welcome.

HARLOW: Appreciate it very much. We'll keep a close eye on the market. The Dow off 370 points here at the open.

[09:35:02] Secretary of State Mike Pompeo demanding more information from Russia on the U.S. citizen who has been detained on spy charges. We'll bring you the latest.

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HARLOW: Welcome back.

Moments ago, the Russian foreign ministry said that the U.S. citizen detained on spying charges can now speak to the U.S. consulate on Russia. We're talking about Paul Whelan, the Michigan native.

Also this morning, Secretary of State Mike Pompeo is responding to his arrest. Listen to this.

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MIKE POMPEO, SECRETARY OF STATE: We have made clear to the Russians our expectation that we will learn more about the charges, come to understand what it is he's been accused of and if the detention is not appropriate, we will demand his immediate return.

(END VIDEO CLIP)

HARLOW: We do have a lot more in terms of details this morning, including these. According to military records, Whelan spent 14 years in the U.S. Marines and was discharged for bad conduct. At a special court martial, he was convicted on several charges related to larceny. That's according to records provided by the Marine Corps. We're also learning a lot about his activity on social media.

[09:40:09] Let's go to my colleague Marty Savidge. He joins me again this morning in Novi, Michigan, where Paul Whelan is from.

What can you tell us on those fronts?

MARTIN SAVIDGE, CNN CORRESPONDENT: Poppy, there's some interesting stuff you will find on social media, particularly when it comes to Russian social media and what's referred to as VK. I would say it's kind of a Russian equivalent to FaceBook. And it appears that Paul Whelan has been on that site for almost 13 years, dating all the way back to 2006, which is roughly around the time that VK got started. And he is listed on there with his name.

He's got about 70 friends as you look at the profile, four followers and at least 17 photos that he has posted there, most of them are, of course, of him in various places all around the world. And, remember, with his security job, he has traveled all around the world and he has a number of what appear to be military or law enforcement contacts on there as well. Not surprising, again, because he works in the realm of global security. But you get some kind of look at his life there.

It's very clear that he's what you would refer to as a Russian follower. In other words, a person who has very much been fascinated with Russia for some time. In fact, it was while he was still in the Marine Corps that he made his first visit to Russia. That was in '06 when he got some leave and he went to Moscow. So he's been fascinated. He says even on this website that growing up during the Cold War he always looked at Russia as the enemy. But when he went to that country, it's pretty clear that he was fascinated by the culture, made friends, and he's gone back there numerous times afterwards, knows a bit of the Russian language, can get around. So he does have an interesting past when it comes to that country, Poppy.

HARLOW: And he also, I believe, Marty, at one point praised President Trump on this social media site, is that right?

SAVIDGE: He does. There's a photograph. And there's a statement that reads, it says God bless President Trump. Now, you know, I'm also leery sometimes on social media because of the ability for people to manipulate it.

HARLOW: Sure.

SAVIDGE: But, you know, it does appear that this is a legitimate site. Doesn't appear that it goes back to him.

His family was not fully clear exactly on him being a member of this website. But, you know, his pictures are there and the posts are there, so we will continue to follow that trail.

HARLOW: Yes.

SAVIDGE: It just gives you more insight as to his connection to this country. And whether it plays into the predicament he's in, we don't know as yet.

HARLOW: Yes. Absolutely.

All right, Martin Savidge, thank you very much for all the reporting from Michigan this morning.

Meantime, acting defense -- acting, rather, secretary of defense, Patrick Shanahan, arrived at the Pentagon earlier today.

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QUESTION: What's priority number one?

PATRICK SHANAHAN, ACTING SECRETARY OF DEFENSE: To get the job done.

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HARLOW: Priority number one, he says, get the job done. He replaces General James Mattis. Mattis left the office, resigned in protest to President Trump's withdrawal of U.S. troops from Syria as one of the key factors.

Another member of the president's cabinet on his way out today is Ryan Zinke. His last day as interior secretary. He resigned last month amid allegations that he used his office for personal gain. At the time the interior secretary said he couldn't justify spending thousands of dollars defending himself against, quote, what he calls false allegations. President Trump has not announced his choice to replace Zinke yet.

LaPorsha Washington is out of the hospital this morning after being shot in the head Sunday in Houston. Washington was shot as she used her body to protect her daughters when a man opened fire on their car. Her seven-year-old daughter, Jazmine Barnes, was killed in that shooting and authorities believe the incident was completely unprovoked. Officials say they believe the suspect was driving a red or maroon pickup. They describe him as a bearded white man possibly in his 40s.

More than two years ago doctors took conjoined twins into an immensely complex surgery that lasted 27 hours. Now the boys share a path to separate lives and they're forming their unique own identities. The amazing story continues from our Dr. Sanjay Gupta.

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[09:48:43] HARLOW: All right, wait until you hear this. Twin boys born attached at the head and now the brothers really getting the chance to experience life on their own. Jadon and Anias McDonald were born as conjoined twins and millions of us were captivated as they underwent this 27 hour separation surgery. Well, three years later, their parents continue to celebrate the miracle that they have witnessed.

Here is our chief medical correspondent Dr. Sanjay Gupta with more on this Indiana family's incredible journey.

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NICOLE MCDONALD, MOTHER OF ANIAS AND JADON MCDONALD: What matters in the end is that they love each other.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice over): When we started this story, none of us knew how it was going to end.

N. MCDONALD: When we decided to share our story, I did it with the intention of knowing that everyone would see a miracle. I could almost just keep them like this right now, you know, because they're so -- they're so perfect.

CHRISTIAN MCDONALD, FATHER OF ANIAS AND JADON MCDONALD: They're normal little boys.

N. MCDONALD: They're -- they're beautiful. They are -- they're perfect.

GUPTA: Conjoined twins are exceedingly rare, only happening in one out of every 200,000 live births. Twins joined at the head, or craniopagus twins, are even more uncommon. Eighty percent of twins joined at the head die of medical complications by the age of two if not separated. But separating them is risky and tedious. Jadon and Anias share five to seven centimeters of brain tissue. And for the parents Nicole and Christian McDonald, the decision was obvious and brought them to Dr. James Goodrich.

[09:50:13] From the beginning, the McDonald's invited us and our cameras into every aspect of their lives, including this dramatic 27 hour operation where the boys went from being one to two.

And those moments continued, full of surprise, wonder, joy and, yes, miracles. The boys seeing each other for the first time. Nicole holding her babies for the first time. Jadon biking, and Anias starting to talk.

After two years, Nicole and Christian decided to leave New York, the city they adopted to help care for their boys, and return home to the Midwest, Knox, Indiana. Big changes for everyone. The biggest change of all, though, the boys. This is three-year-old Jadon McDonald. He's starting to read. But as with most stories, along with victories came defeats. You see

for conjoined twins, there's almost always one that is more dominant and one at a greater disadvantage, Anias.

N. MCDONALD: That's where I kind of fell apart this year because the child that had hit so many walls before and you just want him to fly, you know, and he's still stuck on the ground.

C. MCDONALD: In this day and age we're kind of a quantum leap society, you know? We want quick fixes and if it doesn't happen quick, then we almost get discouraged and think that it can't happen. But we -- you know, we really need to understand that amazing things can happen. And Anias can do amazing things and will do amazing things.

N. MCDONALD: He just started holding his head up like this.

GUPTA: But even Anias has made gains. He no longer needs any of the machinery that was used to monitor him. He's starting to be a kid again, playing with his toys. It's hard to believe that just two years ago Anias and Jadon were connected. And, amazingly, Nicole and Christian are now more connected than ever.

GUPTA (on camera): How are you guys doing as a couple? I mean it's been your life. How are you guys doing?

C. MCDONALD: I think we're getting stronger and better every day.

N. MCDONALD: Yes.

C. MCDONALD: I mean I guess they say, you know, sometimes difficult circumstances, you know, you go through the fire, you know, you come out stronger on the other side. And I think that's definitely true for us. It's definitely made us better as a couple.

N. MCDONALD: This forced us into family. I have gained so much respect for him through the process and the dad that he is and then in the way that he's been able to support me.

C. MCDONALD: Here I come!

N. MCDONALD: But we also have to remember that we're not done. You know, our future has a lot more.

GUPTA (voice over): Dr. Sanjay Gupta, CNN, Knox, Indiana.

(END VIDEOTAPE)

HARLOW: Pretty miraculous. Sanjay, thank you for that.

All right, in just a few hours, the president will meet with congressional leaders in the Situation Room there at the White House. Is this a real effort to hash out a deal to stop the shutdown? Next.

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[09:57:54] HARLOW: Agents with the U.S. Border Patrol firing tear gas at the U.S./Mexico border they say to stop dozens of migrants from entering the country illegally. Officials say more than 100 people tried to breach the border right there in Tijuana. Some of those migrants hurled rocks as others lifted children over razor edged wire. Agents responded with tear gas, pepper spray and smoke.

Let's go to my colleague Leyla Santiago. She is in Mexico City this morning.

There's a question about, you know, what's legal here, what's not, if they were coming in as asylum seekers or not. Walk us through that and what we saw happen.

LEYLA SANTIAGO, CNN CORRESPONDENT: All right, so late Monday night into Tuesday morning, according to CBP, more than 100 migrants were trying to cross into the U.S. in the San Diego/Tijuana area. According to the U.S. officials, they were teenagers, they were toddlers. And at some point, the officials say that the migrants started throwing rocks. That's when tear gas, pepper spray, smoke was deployed on the migrants trying to get into the U.S.

I'm told some returned to Mexico. U.S. officials took about 25 into custody, although we don't know exactly where they are right now, in what facilities. But this was a reminder of what happened about a month ago when the caravan approached the U.S./Mexico border trying to -- according to caravan members -- engage and discuss, but clearly caused a lot of controversy when U.S. official deployed tear gas then.

HARLOW: Exactly. And we're looking at these images from this playing out. But the big picture, right, I mean is this a symptom of you have these ports of entry at various locations that are overcrowded, overflowing, if you will, and this is a symptom of that?

[09:59:43] SANTIAGO: That's how immigration advocates are pointing to this morning saying, hey, you're seeing this right now because actually what was an internal report from HHS last year saying that full capacity ports of entries will lead to immigration, more illegal crossings, is what we're now seeing play out. You're seeing these ports of entry with weeks of a wait just to be able to go in and say, I want to seek asylum, and so now you're seeing migrants