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No Deal Yet on Border Wall Funding; Apple Sales Drops; Uncertainty in Brexit; Another Accomplishment for China. Aired 3-4a ET

Aired January 3, 2019 - 03:00   ET



[03:00:00] PAULA NEWTON, CNN ANCHOR: A rotten start to 2019. A warning from Apple rattles investors and raises questions about global trade.

No deal in sight, on day 13 of the U.S. government shutdown. This on the day the Democrats take control of the House of Representatives stand by for the new reality in Trump world.

And an historic first in space exploration, China lands a spacecraft on the far side of the moon.

Hello and welcome to our viewers joining us from around the world. I'm Paula Newton. And this is CNN Newsroom.

All right, I don't have to remind you that 2019 is already shaping up to be a volatile year for the stock market.

Apple announced it would miss its sales targets for the fall quarter, and of course, that rattled U.S. investors. Stock futures are pointing to a lower open Thursday morning. The Dow and S&P as you can see there are down just over 1 percent.

But take a look at that NASDAQ. The futures there are closing in on, you know, 2.5 percent drop. Apple blames lower revenue on a slide and iPhone sales, specifically in China. CEO Tim Cook says Apple didn't foresee the magnitude of China's economic slowdown and points in part to rising trade tensions with the United States.

For global reaction to markets, Matt Rivers joins us now from Beijing and Anna Stewart is with us from London. Matt, to you first. You know, the Asian markets kind of took it quite calmly. They obviously weren't thrilled, but you know a lot of the slowdown in the Chinese economy has already been telegraphed, and yet, quite a dramatic announcement from Apple.

Could we call this patriot games as if the trade relationship is really perhaps barking some patriotism among Chinese to really steer away from what is an iconic American brand.

MATT RIVERS, CNN CORRESPONDENT: Yes, Paula. There's no doubt the Chinese consumers are choosing to buy smartphones from Chinese cell phone makers. Specifically, Huawei more than Apple. It was Huawei that overtook Apple earlier this year. It's the number two smartphone maker in the world.

And Huawei's year to year sales are actually up in the third quarter while Apples are declining. And so, clearly Chinese consumers are making the choice. Huawei over Apple, at least for now.

Why is that? Well, you could point to the fact that Huawei's phone are generally heck a lot cheaper than iPhones, maybe Chinese people don't feel the need to have the status symbol of the fancy $1,000 iPhone can give you.

But the other thing that I think we would be remiss in not mentioning that you bring up is this ongoing case with Huawei and the United States. What we have is the United States accusing the Huawei CFO, Meng Wanzhou and her company of evading sanctions that the United States put in place against Iran.

The United States actually requested that Canadian authorities detained Meng Wanzhou for an extradition hearing to the U.S. which is exactly what the Canadians did. Chinese state media has gone off about that and is basically said that Chinese people should be patriots and should buy Huawei phones instead of iPhone.

Now whether they are doing that or not we have a lot of anecdotal examples to point to that and said yes, they are in some ways, but quantitatively, we can't give you a substantive analysis. But clearly, Chinese consumers are making the choice. For now, Huawei over iPhones and there's probably a number of different reasons why they're doing that.

NEWTON: Yes. And you can only imagine that it's a complicated picture, especially as you have that slowdown in the economy now. As I was saying the Asian markets just close, they were down, but really, it was quite calm selling as you could see there. Those European markets though have now just opened.

And Anna Stewart, you know, understatement of the year so far to say the markets did not need this news. They really didn't.

ANNA STEWART, CNN REPORTER: No, they didn't. And if you look at the European markets which have just opened as you said. They are all pointing down. The FTSE 100 down half a percent. The Xetra DAX is down nearly 1 percent.

So, this news from Apple has certainly spread into the European session. And we actually already had a wobbly start to the year. Yesterday, both the European equities and U.S. equities had sharp declines on the open although they did make some recovery through the session, but both sides of the pond had very, very choppy trading, indeed.

And this volatility that we saw frankly throughout the last year, but particularly in December set to continue. All the big unknowns are there. First of all, you got the issue of China's slowing economy, U.S.-China trade tensions. We also have of course, have political questions in Europe here it's Brexit. It's French reforms, it's the Italian populist government. There is plenty of uncertainty on the table and is set to continue. So, I think we'll see some choppy sessions going forward. U.S. futures also expected to open lower again today, Paula.

NEWTON: Yes, I don't know about you guys, but 2018 hangovers really killing us. Matt Rivers in Beijing, thank you. Anna Stewart there as the markets open in Europe, she will continue to keep an eye on it for us. I appreciate it.

[03:05:05] Now in a matter of hours it'll be all whole new world in Washington for President Donald Trump. Democrats will take control of the House and topping their agenda a vote on a plan and the government shutdown now on day 13. But there will be no funding from the Democrats for President Trump's border wall.

Our Jessica Dean reports from the White House.

JESSICA DEAN, CNN CORRESPONDENT: In his first appearance in nearly a week, President Trump coming out swinging standing by his $5 billion demand for border wall funding.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The five billion, 5.6 approved by the House is such a small amount compared to the level of the problem.


DEAN: And refusing to say if he'd accept anything less.


UNIDENTIFIED MALE: Is there a number below five billion that you might be willing to accept in order to reopen the government and get this thing to be unfold?

TRUMP: Well, I'd rather not say it.


DEAN: As we near the two-week mark of the government shutdown, the president vowing to keep it closed if needed.


TRUMP: As long as it takes. I mean, look, I'm prepared. I think the people of the country think I'm right.


DEAN: This as Democratic congressional leaders head to the White House for the first meeting with Trump since he made this promise last month.

(BEGIN VIDEO CLIP) TRUMP: And I'll tell you what.



TRUMP: I am proud to shut down the government for border security, Chuck. So, I will take the mantle. I will be the one to shut it down. I'm not going to blame you for it.


DEAN: The White House calling today's meeting in the situation room, a border security briefing, but a Capitol Hill source calling it more of a stunt than a serious attempt to have a discussion over the shutdown.


TRUMP: Our southern border, our southern border is like a sieve.


DEAN: Border security topping the agenda at a cabinet meeting earlier in the day.


UNIDENTIFIED MALE: Congress has to act. They have to fund the wall.


DEAN: Every cabinet member sticking to the White House message talking about their agency's response to the border and they spoke as a large "Game of Thrones" inspired posters set on the table emblazoned with Trump's photo and the seemingly unrelated words sanctions are coming."

Meantime, Utah Senator-elect Mitt Romney fired his own shot at the president in a Washington Post op-ed published today. Writing in part, quote, "On balance, his conduct over the past two years, particularly his actions last month is evidence that the president has not risen to the mantle of the office."

Trump tweeting back, "would much prefer that Mitt focus on border security and so many other things where he can be helpful. I won big and he didn't. Be a team player and win."

Then adding today.


TRUMP: If he fought really hard against President Obama like he does against me, he would've won the election.

(END VIDEO CLIP) DEAN: Romney and Trump have a storied history that's included previous criticisms from Romney.


SEN.-ELECT MITT ROMNEY, (R) MASSACHUSETTS: Here's what I know. Donald Trump is a phony, a fraud.


DEAN: And kinder words when Romney was in the running to become Trump's secretary of state.


ROMENY: These (Inaudible) I had for him have been enlightening and interesting and engaging. I've enjoyed it very, very much.


DEAN: Also, here at the White House this afternoon, President Trump hosting congressional leadership for what was being billed as a border security briefing in the situation room here.

All the players were present for a compromise. Maybe get further along in these talks. Perhaps reopen the government. But by the time everybody came out of that roughly hour-long meeting, both sides saying they were no more closer to any sort of compromise of reopening of the government than they were when they went in.

Jessica Dean, CNN, the White House.

NEWTON: CNN political analyst Brian Karem joins me now from Washington. Good to see you and a happy new year. And what a new year it is especially in Congress. We're going to deal with the lack of progress on the shutdown right now.

You know, CNN has sources saying that Donald Trump basically told them in the room today. Look, I'm going to look foolish if I try and you know, even fund part of the government today and try and solve this problem.

Brian, from what you're hearing is he going to wear this politically? Because right now the president is making the calculation, that look, I'm still going to have at least my base on my side about the shutdown.

BRIAN KAREM, CNN POLITICAL ANALYST: Well, if you remember 12 days ago, he was ready to compromise. Then Ann Coulter came out, shut her mouth off first heart hardened and he couldn't compromise. Now 12 days into it this shutdown will effectively hurt some of his base, a lot of his base as a matter of fact that voted for him.

So, he's going to have to find a way to back down gracefully. I think we are going to end up back where we were at the beginning, was maybe two or three parts of DACA in it as well. And he is saying come back by Friday.

So, what's going to happen is Pelosi said, Nancy Pelosi said today at the White House that the Senate and the House are going to pass a continuing resolution to fund the government for 30 days while they sort out their differences and they are going to present that to Donald Trump.

[03:09:56] And the president is going to have to decide whether to sign that piece of legislation or veto it. And then they'll have to be able to figure out if they can override the veto.

But at the end of the day, I think they are going to be back to basically where they've been all along. The president is not going to get $5 billion for wall. He is not going to get 2.5 billion. He is going to end up getting border security enhancement which everyone, the Republicans and the Democrats support.

It's just a nasty show that was all there, it's -- this is a political game that the president decided to play so he could play to his base.

NEWTON: But let me stop you there. We have seen --

KAREM: Sure.

NEWTON: -- for more than two years now that when the president decides to play as you call the political game, he wins a lot of time.

KAREM: Well, that was before he had the Congress that was made of Democrats. And here's the, you know, I got to tell you, here's the thing. You're taking a look at the president winning. He's had a shutdown of government, while his party controls both the Senate and the House.

So, if he can't win, if he can't assert his will over two sides of the House that he controls how is he going to do when Congress is controlled -- or the House is controlled by Democrats.

NEWTON: And I'm going to put you on the spot here.

KAREM: Sure.

NEWTON: Your podcast is called just ask the questions.


NEWTON: So, we're just going to ask the question.

KAREM: I love you for that.

NEWTON: But we're just going to ask you the question. Already in terms of when we're looking at that Democratic field and you know that people like Nancy Pelosi even going into these two years, whoever that Democratic candidate is going to be they want to make sure they've got some wind at their back with this new Congress going in there.

Is someone -- is there any candidate right now that you think is going to do it. Because Brian, I can tell you from what you hear even from Democratic circles they're saying no, that you know, the really strong candidate still has not emerge in the wide field that we've been seeing so far.

KAREM: OK. First, I will tell you that just as the question comes from Helen Thomas who told me when I first walk into the press office, she said it's not important that you get your question answered, but just ask the question, then they can't deny that it's out there.


NEWTON: And she's a -- she's a veteran White House, so was a veteran White House correspondent --


KAREM: She was the dean of the White House correspondents.

NEWTON: Absolutely, she was. Sorry. Go ahead.

KAREM: So, you did ask the question and to put on the spot I'll tell you that I don't see anyone right now that has the hubris, the personality, the funding all the little things that are going to be needed to defeat Donald Trump.


NEWTON: So, no Joe Biden, no Elizabeth Warren --

KAREM: Or to even catch --

NEWTON: No Beto O'Rourke, no one right now.

KAREM: I don't see -- you know, and I could -- you know, look. I've been covering presidential races since Reagan and I'm horrible at handicapping these races. But I'll tell you that what came out of the woodwork with Clinton and with Obama when they emerge onto the national spotlight.

It was nothing that was readily predictable. I think that the rigor of the campaign will find out who can actually hold the mantle, who can do it and then the Democrats then once they find someone to run, they are going to have to deal with that Donald Trump personality that they didn't deal with in 2016.

And to deal with and to take seriously some of the issues that his supporters have. At the same time, the Democrats also have to do, first of all, we need to reform elections in this country, but besides that what we also need is to get more people involved in the elections.

And I think the Democrats do that better than the Republicans because they appeal to a broader base a larger tent. So, if they do that then that will help them be successful in 2020.

NEWTON: Yes. And you know, maybe you make a point in terms of appealing to more people. It might be the candidate that appeals to those independents, right, Brian, which as you said still hasn't emerged.

KAREM: Yes. You know, honestly, I think both parties court the extremes and there's a huge group of people in the middle that have similar views on many things, and that doesn't garner the money, it doesn't garner the support. Those people are not nearly as active voting.

I mean, there are people that just want to go out there, you know, they're taking their kids to school soccer practice, got to get to the doctors, yes, I'll go vote. But what happened in 2016 happens then I think it alarms them and alerts them and hopefully they'll wake up and they'll vote in 2020.

NEWTON: Yes. And Brian, if our viewers already don't know it, yes, you're on notice. It's about 2020 from here. Brian, thanks so much. I really appreciate your insights there.

KAREM: Thank you. Happy, happy, happy New Year.

NEWTON: OK. U.S. diplomats are demanding answers, but Russia is saying very little about an American man arrested for spying. We're live in Moscow.

Still ahead this hour, crucial vote in British parliament on Brexit is coming right down of the wire. We'll discuss what's at stake especially if the House of Commons rejects the prime minister's deal.

Plus, a major milestone for China's space program. Chinese media reports it has landed the very first spacecraft on the far side of the moon. And the pictures you there are just coming in.


NEWTON: The make or break votes in the U.K. parliament on Brexit it could be just days away, and the outcome right now, yes, it's anyone's guess.

Prime Minister Theresa May postponed the vote in December rather than face defeat. Since then she's been talking to E.U. leaders hoping for new assurances that if Britain must remain in the E.U. customs union it will only be temporary.

Now Britain foreign secretary speaking in Singapore sounded optimistic that parliament would accept Mrs. May's Brexit agreement.


JEREMY HUNT, BRITISH FOREIGN SECRETARY: When Theresa May comes back with those reassurances that she's been seeking from the E.U. that the deal that is on the table is not going to lead to us being permanently trapped in the customs union against the will of the British people. I think that she will find a way to get this deal through parliament. And I know that's what the British people would want.


NEWTON: Now parliament takes up the Brexit debate next week as much as people aren't looking forward to. M.P.'s are returning from their holiday break. I want to remind everyone, we've got a deadline, right? March 29, the U.K. scheduled to formally leave the E.U.

We want to talk more about this. Matthew Doyle is a communications consultant and former political director for Tony Blair when of course he was prime minister, he joins us now from Cumbria, England. I've got to do it. I got to put you right back in that Downing Street office right now and understand what's going on there.

Look, I don't know whether you voted to remain or leave or whatever. At this point in time, certainly a confidence exit from E.U. would have been better than what seems to be a very elaborate game of chicken right now.

MATTHEW DOYLE, COMMUNICATIONS CONSULTANT: Yes. And that's part of the problem that the government is in it at the moment. Look, it hasn't been a season of goodwill for Theresa May from her conservative members of parliament. There is evidence that this vote is shifting ahead of the parliamentary debate starting again next Wednesday.

And she's running out of time. If I was to make a prediction now, I would say that her vote will go down by about 50 votes. The question is what happens then after that.

[03:19:58] And for me, I think the only way that this deadlock is going to be broken is by taking the issue back to the people through another referendum.

NEWTON: Right. But even the Labour Party seems incredibly confused about what to do with all that. It doesn't matter where you turn in British politics right now. There is very solace, very little solace because no one seems to have a plan.

So, Matthew, I'm kind of surprised to hear you say that because it seems that when I hear from people and we're hearing from people in Britain even this morning as everyone is, you know, coming back from the holiday that actually a no deal Brexit. It was what, is looking likely not a new referendum.

DOYLE: I just don't think the parliament will allow a no deal Brexit to happen. There are various ways in which it can be stopped. I also frankly think it would be reckless for any government to actually allow a no deal Brexit to happen.

So, I think the talk of a no deal Brexit being prepared for by this government with a pinch of salt, the economic damage that it would do to this country is simply too great for any prime minister or any party to allow it to happen. And there are options available. Whether that is to choose to extend the article 50 process, or and push back that March the 29th deadline. I just think that that is a far more realistic situation than parliament or even the prime minister allowing Britain to go off the cliff of a no deal Brexit. NEWTON: But when you see Downing Street strategy go right now and as I said you've been in this shoe before but obviously not on the circumstances. What do you do? I mean, Theresa May apparently has been on the phone with E.U. leaders that she wants to make that so-called backstop look more appealing somehow. So, what do you do? What is, you know, the magic bullet that is going to reassure everyone, especially business, which continues to be incredibly concerned about what's going to happen over the next few weeks?

DOYLE: Right. And part of the problem that Theresa May has got, is that this has -- with some of her M.P.'s stop being a logical debate about specific policy where you can get people in, you can explain it to them, you can give them reassurances, and so on.

For many, particularly the hard-right European reform group who are the -- led by Jacob Rees-Mogg. They're just are convinced that this deal is the wrong deal. And since there's nothing that she can do to placate them.

So, we hear that there are going to be more drink receptions, there's going to be more charm offensive, there's going to be more work that's done to win people around. And in a sense, that's all number 10 can do. It's just going to keep trying right up until the last minute. But as I say from where I'm sitting it certainly looks like this deal is going down.

NEWTON: Interesting. I don't know if you have any good Brexit jokes to people told each other over the holidays that you want to share with. What does not seem funny at this point to anyone in Britain I think is the political expediency not just being played with the Tory party, but obviously with Labour as well.

Do you see a shift there, Matthew, do you see where at some point the adults in the room are going to take over and really do what's best for Britain going forward?

DOYLE: I think this is a serious concern. And there is undoubtedly a split within the Labour Party at the moment. If you look at the position that the leadership has taken, all of the evidence including the decision that was made at the Labour Party's conference last September, is that the vast majority of Labour Party members, the vast majority of Labour supporters think that Jeremy Corbyn, the leader of the Labour Party should be supporting a second referendum.

Now, for whatever reason he is refusing to swing in line with that majority view of the Labour Party. My personal view is that it is going to become inevitable that he has to do so. And maybe this is just a question of tactics that he's waiting for the deal to be voted down before changing his position.

But I agree with you. I think that this is a time that calls for leadership. This is why I think a no deal Brexit won't happen because it would just be grossly irresponsible for parliament or the prime minister to allow it to happen.

And given that there isn't a majority for any faction, for any potential deal within parliament at the moment, the only way this can be resolved is by ultimately going back to the people and saying Ok, sure, we get you voted for Brexit in 216, but can we just check given everything that you know now, given what you've seen at the potential reality, this is something you want to go ahead with that? I don't think the public will resent being asked their opinion again.

NEWTON: You make a point certainly. And we continue -- people in Britain continue to wait for that leadership and I'm still waiting for that great Brexit joke we could use some humor at this point in time as it comes down to the wire.


DOYLE: Yes, and we just talk about it over Christmas.

NEWTON: That was a better option likely but we've got to talk about it now. Thanks so much, Matthew. I really appreciate it.

DOYLE: Thank you.

[03:24:56] NEWTON: Now we are following a major achievement for China's space program. Chinese television reports it has landed a spacecraft on the far side of the moon. Someone is going to tell me exactly what that means in a moment. The Rover sent back these new images of the moon a short time ago. They are miraculous pictures we have to say.

The mission is to conduct a number of experiments including attempts to find water and other resources and to see if plants can actually grow in low gravity.

Joining me now via Skype is Jim Bell. He is a planetary scientist at Arizona State University. Can anyone say in Mandarin one small step for man, one giant leap for mankind because I can't. But it seems like the Chinese would want to at this point.

JIM BELL, PLANETARY SCIENTIST, ARIZONA STATE UNIVERSITY: Absolutely, versus robotics. These are not human explorations. These are robotic landers and rovers the kind of missions that NASA had sent back going back to the 60's and since then. But still, a great accomplishment. No one whether robotic or human has landed anything on the far side of the moon.

Of course, you know, the near side of the moon, the side of the moon we see all the time, it's a beautiful full moon hat faces the earth. And on the other side there's all kinds of interesting geology and different kinds of rocks and minerals. And orbiters have measured those materials from orbit. But no one has ever landed there. So, it's a real big, big achievement for all of the world space enterprises.

NEWTON: You know, you're certainly quite an expert it in the lunar landing itself. In terms of trying to let us know what the significance of this is and whether it will lead to specifically China than being able to take this great leap forward, to use the term, and marry that with as you say landing a human on the moon. I mean, do you think China is close to that or could be close to that? BELL: Well, certainly, Paula, there is a small number of countries in the world that are among the leaders in space bearing nations that U.S. and NASA of course the biggest player traditionally, but of course the Europeans are heavily involved in space exploration. The Japanese, the Russians for many decades, and now the Chinese.

So, it's a, you know, they've joined a very exclusive high-tech club of international nations space agencies that are exploring the cosmos. And these kinds of steps are the kinds of steps that you would want to take before sending astronauts to places like the moon or Mars and other places.

It's what NASA did. NASA sent orbiters, robotic orbiters and robotic landers to the moon before the Apollo astronauts landed on the moon some 50 years ago. So, it's a logical progression, it represents a major achievement for their technology.

NEWTON: And when we talk about this major achievement, I'm curious. We certainly applaud these steps. We applaud it from China and as you said from other countries involved, countries like European countries. Some people are used to that, quote, you know, the space race. Is the race still good in the sense that that competitive nature that we look at what China is doing, and we applaud them. And of course, we applaud, you know, the mission that we just saw the other day in 2019 --

BELL: Right.

NEWTON: -- of Ultima Thule going out to really parts unknown.

BELL: Right.

NEWTON: So, do you think that that kind of race is a healthy thing.

BELL: Absolutely. I mean, we had a spectacular start of 2019 with the Ultima Thule flyby, the NASA's OSIRIS-REx mission went into orbit around a small near an asteroid. Now the Chinese landing on the far side of the moon.

And part of what we're seeing, Paula, I think is that, you know, space is now a part of the economy and the competitiveness and the technological advancement of leading nations around the world. And so, the ability to do a space mission or robotic human space mission to do complicated things like NASA landing on Mars or Chinese landing on the moon or flying by an object billions of kilometers from the earth. I mean, this represents that the pinnacle of technological advancement.

And as we know economic leadership and technological advancement go hand in hand in the world today. So, absolutely space is a really important part of a leading nation's economy.

NEWTON: Jim, we really appreciate your perspective. It's always great to have the enthusiasm from someone like you because it really helps to bring the story and give us some meaning at those spectacular pictures that we're looking at. I appreciate it, Jim.

BELL: Thanks for having me on, Paula.

NEWTON: Now an American man arrested in Moscow gets a visit from the U.S. ambassador to Russia. What U.S. officials are demanding from the Kremlin. That's next on CNN Newsroom.

Plus, French President Emmanuel Macron is starting off the new year with another political crisis.


PAULA NEWTON, CNN ANCHOR: And welcome back, I'm Paula Newton. I want to update you on the top stories this hour. Apple is warning investors that fourth quarter sales are lower than expected mainly because of the dropped in iPhone sales in China. CEO Tim Cook says Apple didn't perceived a magnitude of China's economic slowdown and points in part to the rising trade tensions with United States.

U.S. government shutdown is now in its 13th day with no end in sight. President Trump says it will last as long as it takes to get money for his border wall. House Democrats meantime says, they will vote on the plan Thursday to reopen the government without that funding for the wall. But the Senate Republican leader says he won't bring it to a vote because the president won't sign it.

Senior U.S. diplomats are demanding answers from the crime on both the arrest of an American man on espionage charges. Paul Whelan met with U.S. ambassador -- U.S. ambassador to Russia, Jon Huntsman, at the Moscow jail on Wednesday. Whelan's family insists he is not a spy.

Now, Paul Whelan's brother tells CNN, his family is working to hire a lawyer in Moscow. He says his brother traveled to Russia many times and has quite a few friends there.


DAVID WHELAN, BRITHER OF AMERICAN DETAINED IN RUSSIA: He was visiting Moscow for a wedding for a friend and helping his friend because Paula had been to Russia before and could navigate Moscow and the sights and so he is helping his choir, some of the American tourist around who are part of the wedding party.

Because we don't really know why he was picked up by the Russians, why he is being charged with espionage, so, I'm not sure that -- we are worried about anything other than getting him out of Russia.


NEWTON: Now, you heard the brother there, he was obviously happy to hear that his brother had been visited in Moscow. We want to bring in CNN's Moscow Bureau Chief, Nathan Hodge.

Quite significant though that in fact it was the ambassador himself that went. Nathan, why is that significant? And do you think it shows or perhaps is starting to dawn on the Trump administration that this could be a tit-for-tat situation? NATHAN HODGE, CNN MOSCOW BUREAU CHIEF: Paula, that does seemed to show Ambassador Huntsman's visit to Paul Whelan in Lefortovo prison a pretty remarkable developments showing how seriously the State Department appears to be taking this now. But the information that we're having from the Russian side, well, we are looking at something of a black box here.

The U.S. government has said that they are going to try to find out, and of course, Ambassador Huntsman had spoken with the family of Paul Whelan. But all we really have to go on from the Russian side was the announcement by the FSP, that's the successor agency to the Soviet era, KGB, earlier this week saying that they have detained Whelan last Friday on suspicion of espionage, and that's a really serious charge.

And that raises a lot of eyebrows and that creates a lot of speculation in Washington about whether or not Russia is really angling for something possibly a tit-for-tat exchange and many people have pointed the case of Maria Butina.

[03:35:03] Let's look at the timing here. Just about two weeks before the arrest of Whelan in Moscow, Maria Butina, the alleged Russian spy pleaded guilty in the Federal Courts to -- over her -- over the allegations of something to infiltrate Republican political circles in United States. And that raise a lot of questions about whether or not the Russians are looking for somebody to exchange with Butina, Paula.

NEWTON: Yes. And in fact, Russia calling Maria Butina, who you see there, a political prisoner did, you know, basically give a clue to many that Russia would continue to press that case. I don't think many guessed that would be pressed this particular way though. In terms of hearing more from the Russian government about exactly what they alleged Mr. Whelan did, did you expect anything more?

HODGE: Paula, at this stage, we haven't heard much more and very often in these cases what they will do is they may release some video, dramatic footage taken by the FSB of arrest that they make, very often is given to Russian state TV, we've seen nothing over that sort yet in this case. So, really we only have basic bare outlines of the details that they gave us earlier this week in this case.

But certainly, this is something that's been really close now -- closely watched now in Washington and certainly we are trying to find more about what Paul Whelan was exactly doing during his stay here in Moscow. He's family has said that his visited here several times. He even maintained the social media accounts in a popular Russian language social media site equivalent of Facebook, something called Contacte.

So, certainly, that has given us sort of the clues about, you know, his past experience here in Russia, what kind of friends in connections he may have, but really very little on what the FSB is actually charging him with or what they are actually saying is the case against him, a quite serious case for which he could face up to 20 years here in Russian prison based on Russian law, Paula. So, it's a serious case. NEWTON: Yes, especially disquieting courses family that now know what he is up against. Nathan, thanks so much. I know you will continue to update us on this story.

Now France's Yellow Vest Movement has inspired the leader of a left- wing grassroots group to organize protests against Germany's government in the coming year. The media reports say the German Get Up Movement has 170,000 followers and was formed by Sahra Wagenknecht.

She told the Foreign Press Association in Berlin that growing inequality in Germany and frustration over the government's failure to adequately tackle it has motivated her to take her movement to the streets. She also says the French protesters showed it's possible to affect change without the (inaudible).

Now, France's Yellow Vest Movement is not the only crisis facing Emmanuel Macron's administration. One of the President's former security aides is accused of illegally using the diplomatic passport after being fired last year. Our Melissa Bell joins us from Paris with the details.

And Melissa, I know as you follow these stories that once again 2019 is shaping up to already be a very tough year for the French President and this scandal obviously will add to, you know, what is a lot of disquiet in France.

MELISSA BELL, CNN CORRESPONDENT: That's right, Paula, I mean, this scandal linked to this particular man, Alexandre Benalla (ph) has really been sort of cloud hanging over Emmanuel Macron for much of the last six months, and this, of course, as he looks ahead to a new year with many questions surrounding the precise nature of their relationship.

Even as the Yellow Vest that you were just talking about there, Paula, trend to continue their movement. I mean I don't think anyone expected that given the concessions the government made, given how long this is going on, because it began at the end of November, that we would be looking ahead in 2019 to more Yellow Vest protest and that is exactly what's happening. It's been a remarkable movement by its longevity (ph) really since on Saturday, they are once again calling, Paula, for another big gathering here in Paris.


BENNETT: 2019 began with a bang in Paris with 300,000 people out on Champs Elysees to see in the New Year. But amongst the revelers, a high visibility reminder that the troubles of 2018 may not be over. Gilets Jaunes protesters had cooled for a festive and nonviolent gathering. There ain't since the protesters were hiking the fuel tax begun in November and a reminder also that they do not intend to stop. On New Year's Eve, the French President addressed them directly.

PRES. EMMANUEL MACRON, PRESIDENT OF FRANCE (TRANSLATOR): To me the sign means one thing, was ever at successes. We didn't resign ourselves. Our country wants to build a better future base on our ability to invent new ways doing things and if being together to me hurts 2018 lesson.

[03:40:02] BELL: But even as Emmanuel Macron tends to look ahead, the past is casting a shadow in the shape of this man, Alexandre Benalla, the former senior aid and Security Adviser who hasn't stride far from the headlines.

Ever since the video emerged of him beating up a protesters on May the 1st, the Elysees (ph) initially suspended him then later fired him under pressure from the media's storm. Benalla says that he was just trying to help out and that he made a mistake. President Macron has denied any cover up.

A parliamentary commission was set up to investigate Benalla's role at the Elysees. In September, he appeared and told the commission that he had lost any privileges including official passports that he might have had.

ALEXANDRE BENALLA, FORMER MACRON AIDE (through translator): As they being return, they are at the office that I occupied at the Elysees. So I think that the Elysees must have taken care of it.

BELL: Three months later, that was found to be a lie when it emerge in the French press that Benalla had travel to Chad on the diplomatic passport meeting the Chadian President early weeks before Emmanuel Macron paid a Christmas visit to French troops there.

Macron's Chief of Staff told the press that Benalla was neither a formal nor an informal envoy of the government and that if he claim to be, that would be false. Benalla's lawyers could not be reached, but he told the investigative journalism website, Mediapart, that he had been in touch with the President and that that would be difficult for the Elysees to deny given his regular exchanges that are still on his mobile phone.

The Elysees has now confirmed to CNN that Emmanuel Michael did send two text messages to Benalla since his resignation. Messages that many are now very good to see.


BELL: The problem, Paula, for Emmanuel Macron that this whole row over Alexandre Benalla and the special privileges that he appears to have benefited from really speaks to one of the weaknesses of Emmanuel Macron in French public opinion and that is that he is disconnected, that those around him have too much power and that he is not in touch enough with ordinary people, their ordinary lives, and that the laws of the Republic simply don't apply to him and to his entourage.

And this, of course, Paula, in the context of a Yellow Vest Movement that has become highly personalized in its anger since after all given the concessions want the yellow vest are now calling forth is nothing short of the resignation of Emmanuel Macron.

NEWTON: And that is what so fascinating here, Melissa, I mean, you pointed out in the last several weeks that the President has in fact tried to conceded to protesters and say, I hear you, and yet, it has not been enough. Are there any factions politically, socially or otherwise, that that feel that short of a resignation that this protests won't continue far into 2019, especially with that kind of an ultimatum on the table.

BELL: I think -- you put your finger in it. I think it is the question of what could possibly put an end to this movement apart from his resignation. They seem absolutely determined. Again, they are going to come out into the street and it is really all about him.

And you're right, when he made those concessions back in December, which were pretty remarkable given that this was a president after all who come in to say, I'm going to reform France, his entire candidacy was built on it, it was all about the fact that he would not back down unlike former French President in the face of street protest.

And yet, in December, he announced a number of fairly major concessions that went in a direction opposite to the one on which he built his candidacy, which was all about reform and to liberalizing reform. He really took a massive step in their direction, but that proved not to be enough.

What then will it take? I think it is why there is so much more focused and perhaps it might be otherwise on this scandal surrounding Alexandre Benalla. It is the chink in his armor. It is -- was the first scandal of his presidency, and for now Paula, we have more questions than we have answers. Hence, the interests of the press. Hence, the focus on that particular person.

NEWTON: Yes, in one way or the other, as you point out his very presidency on the line. Melissa Bell there in Paris, we really appreciate it. Thank you.

Next on CNN Newsroom, heated protests over women entering the renewed temple in India have now turned deadly.


NEWTON: A man protesting the entry of women at the revered temple India has died. Police say he was supporter of India's ruling political party, which wants the temple access banned to remain in place. The man was at a march organized by the party when he was killed. Several other people including a police officer were injured.

Nikhil Kumar joins us now from the New Delhi bureau with the latest and this is unfortunately a very sad development as we had one death, and yet, this seems to continue to be quite a flashpoint, both socially and politically.

NIKHIL KUMAR, CNN NEW DELHI'S BUSINESS CHIEF: It is, Paula. A flashpoint that has been there ever since this judgement was handed down in September by the Supreme Court and is likely to continue being a flashpoint, particularly after these two women enter the sacred shrine early on Wednesday that by making history.

(BEGIN VIDEO CLIP) KUMAR: A historic moment for gender equality in India. When two

women enter one of Hinduism's holiest sites, the Sabarimala temple in Kerala, which has been banned to women of menstruating age for centuries. And yet, Supreme Court overturned the banned back in September, calling it unconstitutional.

The women both in their 40's walked into the temple under police guard before dawn on Wednesday morning, avoiding the daylight hours, because of intense opposition. Afterwards, the temple was closed for an hour for purification rituals. The women's bold move follows months of religious protest by orthodox Hindus who want to keep the women out of the temple saying that the court should stay away from what they see as a religious issue.

Prime Minister Narendra Moddi's ruling BJP party supported the protesters and Moddi himself weigh in, saying this is a matter of tradition. But on Tuesday, millions of women in Kerala formed a giant human chains stretching 620 kilometers to demand the Supreme Court ruling be implemented, arguing that this type of discrimination against women be consigned one central role to history.

UNIDENTIFIED FEMALE: God is everywhere, but if I am drawn towards a particular place to have a rendezvous with a God, who is going to prevent me? That should be the attitude. This is for boldening the women folk. This is for showing women folk -- this is your right.

UNIDENTIFIED FEMALE: We don't want to walk back. We want to walk ahead and we want gender equality and gender justice.

KUMAR: The communist politicians who govern the state orchestrated the human chain protest as a political move against the BJP ahead of upcoming national elections. And on Wednesday, rival political groups protested outside government offices in Kerala's capital with teargas and water canon deployed to prevent the two sides clash. Despite accusations of political motivation, for many men and women in India, the issue boils down to gender equality.

[03:50:00] Later this month, the Supreme Court will hear petition to reverse its decision. And the women who made a stand on Wednesday have now gone into hiding.


KUMAR: You see, Paula, a flashpoint behind was the whole cocktail of vicious questions about the rule of law, questions about religion, tradition and above all this question about gender equality which continues to divide people in Kerala and beyond. Paula?

NEWTON: Yes, absolutely, a very complicated and contentious issue and as we said, already one life lost and those women are in hiding. Now, you continue to follow this, I appreciate it.

Now, an ambitious system designed to clean up plastic from the Pacific Ocean is not working as planned. It sets sail from San Francisco in September, you remember much fanfare about this with the goal of cleaning half of the great Pacific garbage patch over the next five years.

The organizers say the 600 meter long device may not be moving fast enough to catch the plastic. It has also creating waves that's keeping the plastic from entering the mouth of the device. Let's hope it's just a matter of trial and error, and that some of that actually works.

Now, still to come. Not even vacations are safe from U.S. government shutdown. Why now is not the time to visit some of America's most popular and I'll say beautiful tourist spots?


NEWTON: Thousands of travelers are getting a late Christmas president -- present -- pardon me -- from Cathay Pacific Airlines. The Hong Kong-based carrier is promising to honor super cheap -- and I'm talking super cheap tickets sold out on its website Tuesday -- get this -- the Vietnam to New York flight in first class and business class normally run all of those 16 grand, yes that is possible, but for a few hours they were going for $675. The airline recently spent more than $100 million to upgrade security after a huge data breach last year and let's all hope they have their technical issues under control.

Now, many of America's popular tourist spots are the latest casualties of the ongoing government shutdown. All 19 of the Smithsonian museums in Washington are now closed, and that's a shame, as is the National Zoo. National Parks, meantime, like Yellowstone and Mount Rushmore, are open but severely under staff with many services unavailable.

Now on Wednesday, California's Joshua Tree National Park was forced to close its camp grounds because the toilets are overflowing -- good times -- and there aren't enough workers to help clean them. Nick Watt has a look at just how ugly the impact of the shutdown is getting.


UNIDENTIFIED MALE: And here's some trash bag that we can have. You guys need gloves?

NICK WATT, CNN NATIONAL CORRESPONDENT: A small army of volunteers keeping Joshua Tree as clean as they can.

UNIDENTIFIED MALE: We're operating now, but I'm working 11 to 13 hours a day running what I do for living, running rock climbing trips and maintain the park. And yes, what we are doing right now is not sustainable.

WATT: The toll booths are closed. No one's collecting 30 bucks a car, the park service right now limping along with absolutely essential staff only. This park is still open, but the deadlock in D.C. does mean the camp grounds are now closing in California.

All camp grounds here Joshua Tree closing down in the issue those toilet blocks. Now, the volunteers can keep the toilets clean, but not to be too gross about it, but those small (ph) toilets are reaching capacity.

[03:55:06] Other parks of this more than 1,200 square mile park also closing because of quote, "illegal activity." People apparently off- roading, damaging the environment, bringing in dogs, other remote parts also now officially off-limits because of safety. Get into trouble out here and there might not be anyone around to save you.

Over in Texas, Josh Snider, broke his leg Christmas Eve when he fell at Big Ben. His buddy and another family had to carry him out.

JOSH SNIDER, INJURED NATIONAL PARK VISITOR: When I'm around the phone in the park, they told us that because of the government shutdown there is limit in the rescue services available and that there is in one park ranger, you know, you think they had come with a stretchers or something.

WATT: Nope. No riding (ph) there. Meanwhile, in Washington D.C., the Smithsonian Institution kept its 19 museums and the National Zoo open over the holidays. But today, they finally shuttered up, all now closed.

The Yosemite, the nation's third busiest National Park, they are also having huge problems with garbage and toilets filled to capacity. The Nosbit (ph) family from Texas was planning this vacation to Joshua Tree for months. Now, they are cutting it short.

UNIDENTIFIED FEMALE: It's impacted ours for fun, but it has impacted people's livelihood and people's jobs.

WATT: Now, it used to be when the U.S. federal government shutdown the National Parks shutdown too. But last year, the National Park Service cooked up a new contingency plan B, basically furlough about 85 percent of their staff and try to keep the parks open with just a skeleton staff, but they rely heavily on those local volunteers, and they tell us they don't know how much longer they can continue doing their day jobs and cleaning toilets here at the parks.

So, if this government shutdown last much longer. There is a chance that Joshua Tree and other parks will have the close down completely. Nick Watt, Joshua Tree, California.


NEWTON: And here's something you might not know, about Pope Francis, he does have apparently some circus skill. Yes, I said circus. During his weekly audience at the Vatican, the Pope welcomed performers from Circo Cuba. They did some dancing, and some acrobatics moves, very impressive there.

And here's what got more impressive, they got the Pope involve in a little ball twirling, there you go. That lasted a few seconds and certainly a few scenes of an enthusiastic audience there. Well, that's incredible, something you do not see at the Vatican every day.

I want to thank you for joining us. I'm Paula Newton, remember to connect with me anytime on Twitter. The news continues with Max Foster in London. You are watching CNN, the world's news leader.