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Aired August 15, 2019 - 01:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[01:00:00] JOHN VAUSE, CNN INTERNATIONAL ANCHOR: Hello, everybody wherever you are around the world, thanks for joining us. I'm John Vause. Ahead this hour on CNN NEWSROOM. It's the longest economic expansion in U.S. history about to end? Recession fears on Wall Street said the Dow plummeting and it seems the President's erratic trade policies are a big part of the growing concerns.
Chinese paramilitary force marching on the border near Hong Kong, a clear message to the pro-democracy demonstrators we're apologizing for the unrest and chaos caused by their five days of protests at Hong Kong airport.
And later, the British T.V. ads so offensive they were banned, but they were banned for all the wrong reasons. We'll explain later this hour.
It was the worst day of the year for Wall Street and for many it seemed to come out of nowhere. The U.S. economy has been bullish for years, the Stock Market has continually hit record highs. Unemployment at historic lows, consumer confidence remains strong. So what changed?
In a nutshell, a small but ominous shift in the bond market which sparked real fears the U.S. is heading for recession, and the global economy could follow. It's called an inverted yield curve and we'll have more on that in a moment, but when it happened briefly on Wednesday the Dow plunged 800 points.
And right now the markets in Asia also in the red but only barely. Nikkei down by almost one-and-a-half percent, Hong Kong's Hang Seng barely down by almost a quarter of one percent and the Shanghai Composite down by just over half of one percent.
CNN's Andrew Stevens is live in this hour in Hong Kong. So Andrew, yes, the market is down but not to the extent you would expect if there was a global recession in the offing. And this is important because what happens in Asia tends to impact European markets which then feeds back into the U.S.
ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Yes. Everything sort of rolls around. It's all interconnected now. But the truth remains, John, that the Wall Street actions usually are followed by a pretty big reaction in Asia. And to see Asia deal with the big fall on Wall Street the way it has does tend to suggest that there's not a panic selling -- well, there's certainly no panic selling going on here.
I'd caveat that by saying that the Asian markets have been taking a bit of a battering anyway over the trade war, collateral damage in the trade war if you like. So they have been going down while the U.S. markers have been showing this extraordinary resilience based on the fact that U.S. consumers continue to buy and to buy in droves.
But investors are saying that the recession is now on the horizon. Whether it actually comes, that remains to be seen. But that inverted yield curve you talked about, basically what it's saying is that interest rates the long end of the yield curve the ten-year bonds even out of the 30-year bonds, the interest rates there are much lower, or not much but lower than the short term rates, of two year rates which means that investors are saying that in the future interest rates are going to be lower.
When you have lower interest rates, it's a sign that the economy needs extra support because of slowing or heading into recession. So that is the -- that's the outlook at the moment. It hasn't happened yet. And that inversion of the yield curve only happened briefly. It didn't stay like that. If it stays like that for a length of time, the signs are ever stronger that there is a recession.
So at the moment, we can't say that one other way, but certainly, the red flags have been raised and that's the reaction.
VAUSE: Although it wasn't the first time we had this inverted yield curve. This well has happened a couple of times in the last few weeks and you know, it also caused a sell-off. But this is certainly the biggest we've seen so far this year. Andrew, thank you. Andrew Stevens live for us in Hong Kong.
STEVENS: Thanks, John.
VAUSE: Inverted yield curve, chances are you'll hear those words a lot in the coming weeks and months. During a normal economic cycle, short term bonds pay a lower return or yield compared to long term bonds. But right now in the U.S. the opposite is true. A sign that investors are worried about the near-term future and so are piling into safer long-term investments.
Not only that, it's also an indication of long-term pessimism over economic growth and an expectation that interest rates will remain low for an extended period. Here's CNN's Julia Chatterley explain what's driving those concerns.
(BEGIN VIDEO CLIP)
JULIA CHATTERLEY, CNN ANCHOR: Now, investors are nervous about the state of the economy for a whole host of reasons. We've got the trade war between the United States and China that keeps escalating. Germany's economy now, Europe's largest is shrinking, and there are worries that China's slowdown could also get worse here. Now, throughout the year, investors have been putting money into
government bonds as a flight to safety mechanism because unlike stocks, the returns are pretty much guaranteed for bonds. The problem is the more they buy, the lower the yield goes. And investors are now seeking safety in bonds even though they're getting a miniscule rate of return.
(END VIDEO CLIP)
VAUSE: So add on to that, an inverted yield curve has happened before every single recession over the past 50 years without generating a single false alarm. If this all sounds confusing and way too hard to follow, don't worry you're not alone. That's why we have Mark Zandi the Chief Economist at Moody's Analytics with us try and make sense of what's happening and why. Mark, thank you for being with us.
[01:05:10] MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Thanks, John.
VAUSE: OK, it's important to know that while recessions are always preceded by a yield curve inversion, inversions do not always lead to recessions. So speak to me in terms like a 12-year-old would understand. What does all of this mean and what are you expecting in the short term?
ZANDI: Well, the bottom line is that recession risks are uncomfortably high in their rising. And the yield curve and bond investors, stock investors, the sell-off of the stock market all suggest that investors are very nervous about recession. And you know, you can connect the dots right back to the president's -- President Trump's trade war, it's starting to do a lot of economic damage here in the U.S. but also all over the globe.
We've seen you're pretty close to recession, the Chinese economy is struggling, and the rest of Asia is having problems, and again, the U.S. economy is struggling. So the signal here is that recession risks are very high. And even if we don't suffer a recession, you know, suppose the signal here isn't quite as strong as it's been historically, it is signaling very strongly slower growth dead ahead.
VAUSE: The CEO of Goldman Sachs is among those who are optimistic at least for now that the economy in the U.S. will continue to grow. That comes with a but. Here he is.
(BEGIN VIDEO CLIP)
DAVID SOLOMON, CEO GOLDMAN SACHS: The underlying economy as we discussed is still doing OK. I think the chance of a recession in the near term is still relatively low. But we have to watch what's going on with tariffs. We have to watch the U.S.-China relationship. We have to watch some of the other geopolitical noise that's going on.
(END VIDEO CLIP)
VAUSE: Yes, that's your political noise which is causing concern. It seems a lot more bank, because as you mentioned, the German economy shrank last quarter. There's also Brexit which will likely lead the U.K. in recession. And if you look at the economies of Italy, Brazil, Mexico, they're also flirting with two quarters of negative growth. That's a lot more than just geopolitical noise.
ZANDI: Yes, I totally agree with you. I think that the fellow from Goldman is overly optimistic that the damage here is accumulating. Now, it is -- it is important to recognize that the consumer, the American consumer is still OK. They're still out there spending.
And as long as the American consumer spends the world economy will be -- will be able to navigate through. It will be tough but it will navigate through because American consumers by everything that we produced here in the U.S. and everything, a lot of what everyone produces overseas.
But the link back to the trade war will be if businesses who are now more and more panicked by the trade war and have already pulled back on their investment decide to pull back on their hiring, if they do that and unemployment starts to rise, then American consumers will start to pack it in, that's a recession. So we are much closer to recession than I think the CEO of Goldman thinks.
VAUSE: OK. Well, the Trump administration seems pretty much intent on blaming the Fed Chairman for the current economic troubles. The President tweeting on Wednesday, "Our problem is with the Fed raised too much its interest rates and too fast, now, too slow to cut. Spread its way too much as other countries say thank you to clueless Jay Powell and the Federal Reserve."
And now listen to the White House trade advisor Peter Navarro. Here he is.
(BEGIN VIDEO CLIP)
PETER NAVARRO, TRADE ADVISOR, WHITE HOUSE: The biggest problem we're fighting right now at the White House is the Federal Reserve's interest rate policy. We lost almost a point of growth in Q2 simply because the Fed had raised the interest rates too far too fast.
(END VIDEO CLIP)
VAUSE: And the big picture here, how much blame if any do you put on the Fed Chairman and that decision to raise interest rates?
ZANDI: None, none. I mean, the president and his advisers have this completely backwards. I mean, the Fed is in the position of having to react to the trade war. I mean, the President is going back and forth on tariffs and he's pushing the economy back and forth undermining business confidence and sentiment causing the economy to slow and then asking the Fed Reserve to bail him out.
Well, the Fed is trying to figure out exactly what he has in mind. And that's the problem. No one knows, right. I mean, is it a ten percent tariff, is it a 25 percent tariff? On what products? Which countries? When is this going to end? And so the -- until the president can kind of figure that out, until the administration can figure out, the Fed is going to have a lot of difficulty navigating through this.
And that's why recession risks are so high because the Fed is going to have a lot of difficulty calibrating what it does to what the president is doing because it's all over the map.
VAUSE: Well, there's also seven major European governments out there as well as Japan which is selling bonds with a negative yield. In other words, they started charging investors a fee for holding their cash. There's a Danish bank as well offering a ten-year mortgage and an interest rate of -0.5 percent. In other words, you pay them back less than you borrow.
This is not how economics is meant a fundamental work, right? It's like bizarro world. You know, there's something fundamentally wrong going on.
ZANDI: Well, it shows you how fragile the global economy is and how much of a risk going if the U.S. goes into recession, this will be for the entire global economy because there really is very little room for policy response.
I mean, the ECB, the European Central Bank is negative rates as you point out -- here's a factoid for you. In the typical recession in the U.S. since World War II, the Fed has cut interest rates five percentage points, while the funds rate, the interest rate that control is currently two percentage points.
So that would say if we have a typical recession, we're going to go right back to zero interest rates that have to start quantitative easing and it just highlights the lack of room for policymakers. Now, on the fiscal side, on government side, it's hard to imagine that the Trump administration is going to come to terms with the Democratic House and come up with a fiscal stimulus package at least not anytime in the near future, certainly not before the election.
And then go in other parts of the world, they don't -- they don't have room to do it. I mean, in Europe, there is no fiscal space except in Germany, but the Germans are in all likelihood won't use it. So this highlights how important it is for the U.S. economy not to go in recession, because if we do, it's going to be pretty tough to go out and -- get out and we're going to take everyone else with us.
VAUSE: And it's a point which has not been lost on the former Treasury Secretary Larry Summers. He was talking on CNN just a few hours ago. Here we is.
(BEGIN VIDEO CLIP)
LARRY SUMMERS, FORMER SECRETARY OF TREASURY, UNITED STATES: That there's a much greater chance of recession than we would want to have and that we're very much without tools if a recession were to come. Without tools because interest rates are so low, because frankly the federal government is so disorganized, and because the fiscal stimulus is less than it's been at most moments in the past.
(END VIDEO CLIP) VAUSE: We've had 121 months of economic expansion in the United States, longest on record. Is it inevitable there will be in a recession?
ZANDI: It doesn't have to be inevitable but it -- with these kinds of -- with this kind of policy with this really backward wrongheaded economic policy, the odds of recession are very, very high. Now, look, President Trump could tweet tomorrow and say oh, look, you know, I struck a deal with President Xi. It'll be some kind of face-saving arrangement, nothing substantive but at least that would reduce some of the tensions here and hopefully the economy would gain traction.
So you know it's not like all hope is lost but the longer it takes the President to actually put out that tweet, the more likely we are going into recession.
VAUSE: Mark, we're out of time, but it's interesting. We now have an economy which response to tweets and turns all the time. We'll see what happens. Thank you.
ZANDI: There you go.
ZANDI: Thank you.
VAUSE: Chinese paramilitary unit seen gathering at the border with Hong Kong as the U.S. National Security Adviser wants Beijing to avoid Tiananmen Square like crackdown. And with a powerful storm bearing down on Japan, hundreds of thousands are told to get to safer ground. The latest on where the storm will strike as well as when and how bad it will be. All of that when we come back.
[01:15:00] VAUSE: And there is breaking news from Philadelphia where an hours-long standoff is now over. Police say they've taken the suspect who is barricaded inside the house into custody, but not before six officers was shot during a confrontation.
None of the injuries were life-threatening. Police came under fire when they tried to serve a narcotics warrant. I will keep you in close eye on the story. We'll update you all the new developments as soon as we get them.
China has deployed paramilitary units close to the border with Hong Kong and what some say is a clear message to protesters. There's no indication of an imminent military operation but these troops are with the People's Armed Police. They're responsible for internal security, crowd control and civil unrest which is why they're carrying batons and shields.
Clashes broke out again Wednesday in one Hong Kong neighborhood. Protesters pointed lasers at a police station and police responded with tear gas. After weeks of protest, many believe that this has not reached the point that China is ready for armed intervention, just not yet.
The paramilitary forces which are camped out at a sports stadium, an officer tells CNN they're only there for temporary assignment. CNN's Matt Rivers saw them as they arrived and has this report.
MATT RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, as protests continue to rock the city of Hong Kong which lies just across the border there behind me, on this side of the border, the mainland China side of the border in the city of Shenzhen, we are beginning to see how Beijing might be preparing to deal with these protests as they go on.
It was Wednesday even that CNN cameras were actually able to capture for the first time since they were deployed here paramilitary forces that are under the leadership of China's government. We saw several dozen members of China's People's Armed Police force, that's a paramilitary unit 1.5 million members strong that answers to China's Central Military Commission, and they have been sent, a large number of them have been sent here to Shenzhen.
We saw it firsthand for ourselves. We saw several dozen at least personnel carriers, troop carriers. We saw armored personnel carriers, and we saw paramilitary members themselves. Some of whom were carrying riot shields, they were carrying helmets, and in some cases that were carrying batons.
Now, we asked an officer now what they were doing there specifically, and he said, well, they had been reassigned there temporarily but he would not say specifically what they were doing there and then he forced us to stop filming. But I think the answer as to why they're here is quite clear especially if you look for the context clues that have been floated not only by the Chinese government but by Chinese state media over the past several weeks to be specific.
What we have seen from the government and state media is the constant coalescing around the fact that China has the right under its own law and under Hong Kong basic law to send in members of its military to quell social unrest, the kind of which we have seen in Hong Kong for more than the past two months.
Now, to be clear, the People's Armed Police are members of China's military and would fall under that -- under that Chinese law should Beijing decide to do that. Now, we need to be clear here. We did not see any sign amongst the people that we saw today that there was a deployment imminent, that they'd be going across that bridge behind me into Hong Kong and there's good reasons for that.
If you look at what Beijing would be up against sending troops into Hong Kong would have massive political, economic, military, diplomatic considerations, many if not all of which could be negative for Beijing. And so clearly Beijing has not made the calculation that's sending some of the paramilitary forces or even active military forces in other parts of the country into Hong Kong is a good idea at the moment. But the fact that we saw them here firsthand, the fact that they have temporarily requisitioned a sports stadium which is where we filmed them just a few miles away from the border, that shows you how seriously Beijing is taking the situation here in the Hong Kong area which going on across that border behind me, and they are giving themselves the opportunity the option if they want it to send forces into Hong Kong by stationing them, some of them very, very close to the border. That much is clear. Matt Rivers, CNN on the mainland China-Hong Kong border.
VAUSE: And joining us now from Hong Kong is Chandran Nair, the Founder and CEO of the think tank the Global Institute for Tomorrow. Thanks for being with us.
VAUSE: OK. So some protesters have even apologized to the police, the same place who they're accused of using excessive force and sparking the confrontation at the airport in the first place. Here's part of one message. "After an entire night's reflection, we decided to bravely face our own shortcomings, and sincerely apologize to city residents that always supported us. To the police who were affected last night, we will deeply reflect and confront our problems."
How do you see these apologies? Do you think they're genuine contrition, is it a smart P.R. move to invite support or a little of all three?
CHANDRAN NAIR, FOUNDER AND CEO, GLOBAL INSTITUTE FOR TOMORROW: Well, who knows? But I think generally it's been welcomed in Hong Kong. I think Hong Kong needs a moment where everyone is a bit contrite and looks to solve the problems. And if it's a bit of a P.R., who can blame them? But I think -- I think generally, I think it's a very, very good move and it has a kind of lifted bit of the spirits in Hong Kong frankly this morning.
VAUSE: Yes. Everyone needs to sort of apologize and gets a bit of contrition but there has been no apologies -- correct me if I'm wrong, coming from the authorities, coming from the police at this point. Is it?
NAIR: No, there hasn't been a response. I mean, I would say venture to suggest that in many ways the Hong Kong police have behaved with incredible restraint or whether there has been excessive use of force as has been made you know, clear in some instances, then the rule of law must supply as it must apply to some of the incidences we've seen particularly on Tuesday night at the airport.
And that's why I think Hong Kong needs to essentially understand that if Hong Kong is to move forward, we can't be pointing fingers. The community has to come together. If there were wrong and excessive forces being expected by the side, then the authorities have to work fairly and take action. But reflection now is a very important thing and the community leaders need to step up. VAUSE: One point the lawmaker there in Hong Kong has strongly suggested without any proof, I should add, the escalation in violence at the airport in recent days could have been caused by infiltrators sent on the orders of Beijing.
Regardless of the cause there, has the violence at the airport caused not only on rift between the protesters and the people of Hong Kong, but also within the protest movement itself?
NAIR: It's hard to tell whether there has been you know, rift within the protest movement because as you well know, the protest movement is a whole group of different organizations have come together for different reasons.
I think it's also fair to say whether they agree with some of the actions being taken, that there are in all movements everywhere in the world, there are extreme positions and they can be infiltrated. We all know that part of the security forces of any countries to infiltrate what they see as the other side and the other side to try and infiltrate as well.
I think those accusations or those observations are probably a bit -- a bit of this and bit of that, but more importantly, at least I can tell for most people to Hong Kong is the thankfulness that none of this has got really ugly. And I think we need to get back things, start talking. I'm suggesting we should start a movement in Hong Kong called let's talk Hong Kong. That's what's lacking at the moment.
And all over the territory we should use this moment now to have a serious discussion about the future of Hong Kong. All of us have different reasons for what this is had happened, but I think we can you know, in my view, identify three areas and one is in my view is the democracy issue has to be resolved.
'Leaders of Hong Kong have to puts it together something that brings together the people in the streets, etcetera, and something that is workable. And I don't see the Chinese government throwing it out of hand.
The second one is essentially we have to look at the education system here which equips Hong Kong, the next generation with the skills to essentially fit into a very different world from which their parents are brought in.
And lastly, the big elephant in the room is Hong Kong is land use -- land use and planning which is essentially made it impossible for anyone except the most privileged to have a quality of life that the Feds being arrested into one of the richest cities in the world. Those three things have to be addressed and that cannot be addressed by protest only.
VAUSE: All those issues -- and that's why -- I mean, all those issues are very complicated, very difficult, and very -- and also very pressing, but at the moment Beijing is marching troops near the border. There is a reporter a senior commander has warn these troops could be in downtown Hong Kong within ten minutes. Right now that's seen as an attempt to intimidate, but is there a
concern that once these forces are actually out there and they're deployed and they're ready, it increases the likelihood that they'll actually be used in earnest?
NAIR: I think you know, most people I know in Hong Kong including in the media think it's very unlikely that Beijing will essentially send troops in. That would be the extreme last resort and it's very unlikely in my view. And most people I know including media think so.
Having said that, I think Beijing has been categorically saying for a few weeks this is Hong Kong's problem, please sort it out. The fact that there are movements etcetera, well, we all know that you know these can be interpreted in different ways. And maybe it's just a show of strength, maybe it's just a worry could spread into China, though most Chinese people bit sort of bemused by what is happening in Hong Kong.
So I would suggest that we don't read -- try and read the tea leaves but look at the facts. I think it's in China's interest to see Hong Kong thrive, and they will do everything to see it thrive. I would also suggest that the Chinese government knows to send the PLA into Hong Kong would be a very, very --
VAUSE: A nuclear option in a way, really. It's just a sort of --
NAIR: It's a nuclear option, yes.
VAUSE: You know, there's --
NAIR: It would be a very bad idea.
VAUSE: There was a tweet put out by the U.S. President few hours ago, suggesting a meeting with Xi Jinping. And on Tuesday, he offered up what seem to be the foreign policy equivalent of thoughts and prayers for the pro-democracy demonstrators in Hong Kong. When he was asked if China should exercise restraint, this was his answer.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The Hong Kong thing is a very tough situation, very tough. We'll see what happens. But I'm sure it'll work out. I hope it works out for everybody including China, the way. I hope it works out for everybody.
(END VIDEO CLIP)
VAUSE: Hoping it works out for everybody. They're not the kind of words or the response we used to from a U.S. president. There are people in these demonstrations carrying U.S. flags, they're singing the American anthem, that kind of stuff. Would the Chinese leadership see Trump's words essentially you know, privately as a green light to act freely?
NAIR: No, I think -- I mean, you know, the President obviously as you know, talking to an American audience, trying to tell him -- them what his view is. And this instance, I happen to, you know, agree with him. That is a Chinese problem, which is also basically a Hong Kong problem and it's to be worked out.
I don't think the Chinese looked for guidance or green lights from the Americans or anywhere else -- from anywhere else. I think the Chinese know that they -- that any attempt to intervene in Hong Kong, as we discussed a few minutes earlier, would be the last option. And I think we're far from that.
If anything, I think we are moving towards hopefully, a period now of you know, more rational debate and discussions. And what Hong Kong need is many platforms in which we can all sit down and talk.
But what has happened in the last 10 weeks is a game-changer. And the Hong Kong establishment and without pointing fingers, we all need to step up, work very hard. But we really need to redesign Hong Kong for the reasons I pointed out.
VAUSE: Yes, and it does seem --
NAIR: We need to completely redesign it.
VAUSE: It does seem like that moment has arrived where you know, there's one or two directions, you know, they can sit down and they can work this out. There can be compromise, there can be discussions or it goes off the rails, I guess. But --
NAIR: And fundamentally, we --
VAUSE: Yes, finish your thought.
NAIR: Fundamentally we agree that the Hong Kong business model is broken and Hong Kong is sort of a you know, Hong Kong Inc. and that business model is broken because this has disenfranchised the next generation.
I think we're smart enough, the government has got the tools if he wants to redesign Hong Kong and Hong Kong will be good again.
VAUSE: And the crisis is also a myriad of opportunity. I think the expression -- we'll see if they run with it.
VAUSE: Chandran Nair, thank you so much. I appreciate you being with me.
NAIR: Thank you for having me. Cheers. Bye, bye.
VAUSE: As India celebrates its 23rd Independence Day, Prime Minister Narendra Modi talks of his with pride taking direct control over the disputed Kashmir region revoking its special status. The views from New Delhi as well as Islamabad and Pakistan just ahead.
[01:30:54] VAUSE: Welcome back, everybody. You're watching CNN NEWSROOM. I'm John Vause with the headlines this hour.
Fears the U.S. economy could slip into recession sent stocks tumbling on Wednesday. The DOW's 800-point drop was the biggest one-day sell- off this year. The apparent trigger was a shift in bond markets which historically precedes a recession.
Protests continue in Hong Kong. Beijing has sent paramilitary units at the border with Hong Kong though there is no sign that deployment will happen at any time.
Protesters and police clashed again on Wednesday. Police fired tear gas into a crowd which had pointed lasers at the windows of a nearby police station.
As India celebrates its independence day, Prime Minister Narendra Modi told the nation the spirit of the One Nation, One Constitution has now become reality. And that reality is the special status of Jammu and Kashmir has been revoked and with it the region's limited autonomy.
For more Sophia Saifi is standing by live in the Pakistani capital and in New Delhi CNN's bureau chief Nikhil Kumar. So Nikhil -- we'll begin with you.
The prime minister there, Narendra Modi talked about his pride he had for revoking Article 370. That's the provision in the Indian constitution which gave Jammu and Kashmir special status, its autonomy. He asked if it was so special, why is it more of a temporary measure, not permanent.
It's been in place for 70 years. That question seems disingenuous at best.
NIKHIL KUMAR, CNN INDIA BUREAU CHIEF: Well, John -- that's what a lot of critics here say, you know. This article was meant to be, when it was initially framed, you know, it included the word that it was supposed to be a temporary provision.
But people have pointed out that look, it's been there for 70 years, that the process under which -- on its own terms it was meant to be removed that the government, its critics say that the government sort of went around it in this sort of almost backhanded way, according to his critics. Rushing it through parliament, making this announcement the other week.
Doing it all while Kashmir was locked down under a massive security cover. Communications were cut off. And insisting all the while that we're doing this because we want things to be better for the people who live in Indian-controlled Kashmir, ordinary Kashmiris.
And yet so many days on from that decision we still haven't got a full picture of what those very people think. And that's because they've been cut off effectively from everybody on the outside. Communications are still down. Security is still very, very tight.
The government keeps insisting as Mr. Modi did today that all of this is to integrate Kashmir, Indian-controlled Kashmir with the rest of the country to bring development to it. He made an address to the nation a few days ago where he put this message out and this is something that his ministers have been saying ever since that this was announced.
But everybody's wanting (ph) -- well hold on a second. If this is so good for Kashmiris, then why weren't they consulted? Why haven't we heard their voices? Why are the local names and political leaders in Indian-controlled Kashmir currently under detention including two former chief ministers of the state of Jammu and Kashmir.
And of course, in addition to taking away Article 370, the government also modified how that region is classified in the Indian systems. It used to be a state. It has now been turned into a union territory, too, in fact because another bet (ph) the mountainous region of Ladakh has been carved off into a separate union territory and that means, John, that the government will have more power to direct the affairs of that region than it did before.
And all of this without consultation with the people who actually live there -- John.
VAUSE: It is a good point. But also Sophia there in Islamabad, Imran Khan, the prime minister was in Washington a few weeks ago. And that's when the U.S. President Donald Trump made an off-the-cuff remark about maybe negotiating or mediating between India and Pakistan over the issue of Kashmir.
For the Pakistanis, that was music to their ears because it would elevate this whole issue into the international status. New Delhi wants to keep it local. That's the last thing that they wanted.
Could that have played a role here in when India decided to move and actually taking this approach now, sending in thousand of troops to take over, you know, Jammu and Kashmir and basically revoking its special status. Is there any indication that that may have played a role in all of this?
[01:34:58] SOPHIA SAIFI, CNN PRODUCER: Well John -- I don't know. I mean we don't really know what decisions were made out of Delhi, considering what Modi -- what President Trump's statement was when he said that he would intervene.
Pakistan and -- India has always said that it doesn't really want a unilateral debate or conversation on this issue of Kashmir. However Pakistan has always pushed for outsider intervention.
Now we have to take into consideration that Pakistan is also involved in really fragile peace talks with the Afghan Taliban on its western border. And Pakistan is also facilitating those peace talks for the United States.
And Pakistan again, when all of this was rising up last week, Pakistan's foreign minister did say in a statement that he -- that the peace talks with Taliban in Afghanistan could be affected by Pakistan having to deal with what's happening on its eastern front. And it has pulled out their trump card and said that this is going to be something that could get affected that could put that into jeopardy. Now keeping that in mind Pakistan does want to make this an international issue. It's been wanting to make this an international issue for many, many, many years.
Pakistan always talks about the Kashmiri people. It is part of the Pakistani psyche. It has been talking about in February that it has always been a black day for Kashmir. So this is something that Pakistan has been fighting for, for quite some time.
And it's almost as if -- and this is what Prime Minister Khan also said when he was addressing Kashmiris yesterday in Wazirabad (ph) in Pakistan administrative Kashmir when he said that this is in fact a spectacular blunder by Modi because some people here -- a lot of politicians here and diplomats in Islamabad feel that this is something that's been handed to them on a silver platter in which this is something that has become internationalized and Pakistan is going to attempt to push it along and it is doing so -- John.
VAUSE: Sophia Saifi, thank you very much. And Nikhil as well there in New Delhi. We appreciate you both being with us -- perspective there from both sides of the border.
Tropical storm Krosa bearing down on Japan and causing chaos for travelers. The intense system has forced the cancelation of hundreds of flights as well as delays to train service. More than 400,000 people had been advised to evacuate. The island of Shikoku was slammed with high winds and heavy rain.
Derek Van Dam following all of this from the CNN International Weather Center. What's the latest -- Derek?
DEREK VAN DAM, AMS METEOROLOGIST: Yes. John -- this storm made landfall about three and a half hours ago in the Kochi Prefecture. Strongest wind gusts we could find, 151 kilometers an hour -- that's the wind gust, not sustained winds but that is well while over typhoon strength. And rainfall totals had been seriously impressive, over 500 millimeters in some locations.
This is the radar from the Japan Meteorological Agency. There's Kochi, there's Osaka. Notice the shades of orange and yellow there. That is rainfall rates, of 50 to 70 millimeters per hour. And that is really starting to pile up and unfortunately that is a mountainous part of the southwestern Japan. That means landslides and mudslides are a very good likelihood going forward here for the next 12 to 24 hours.
So there it is. The Kochi Prefecture just after 10:00 p.m. Eastern standard, 11:00 a.m. Japan standard time, wind speed at landfall, 100 kilometers per hour according to the Joint Typhoon Warning Center. But we did a little digging and we found these wind gusts over 150 kilometers per hour in the Moroka region, I mean that is some seriously strong winds, equivalent to a category 1 hurricane. Again this is gusts, not sustained but nonetheless, that' enough to bring down some trees, perhaps some minor structural damages as well.
New look at the latest information from JTWC. It is moving quite quickly to the north. That is going to bring the system out north of the mainland Japan here within the next 24 hours. It will continue to weaken the storm.
But it is going to rain for the next 12 to 24 hours as the satellite clearly indicates the cloud cover just drifting across the region. Kawashima to Kochi -- those are the rainfall totals nearly 500 millimeters in several locations across the mountains.
That means the potential for landslides does exist there. And we are we are really caught up with our western Pacific typhoon tracks in terms of the season. We don't really get to the peak of the season until later this month and into early September as well.
So it's been a busy past couple of weeks across Japan and into China to say the least -- John.
VAUSE: What they call the new normal -- Derek. Thank you.
VAN DAM: Yes.
VAUSE: Next up on CNN NEWSROOM remembering the victims of the Genoa Bridge collapse one year on and why there are still so many unanswered questions right now.
[01:39:31] (COMMERCIAL BREAK)
VAUSE: Britain's opposition Labour Party is planning no confidence vote in the new Prime Minister Boris Johnson, the latest move to try and stop a no deal Brexit. In a letter to opposition minority party Labour's Jeremy Corbyn wrote "This government has no mandate for No Deal and the 2016 E.U. referendum provided no mandate for No Deal.
Corbyn said he created a strictly -- he would create a strictly time limited caretaker government to replace Boris Johnson's delayed Brexit and hold a the second referendum on leaving the E.U.
On Twitter Boris Johnson accused Corbyn of trying to circumvent the results of the 2016 vote. He reiterated his commitment to leave the E.U. by the October 31st deadline.
The Italian city of Genoa is pausing to remember a deadly bridge collapse that killed 43 people one year ago. CNN's Nic Robertson was moments away from crossing that bridge before the disaster. As he reports, there are still no answers for what caused the collapse.
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: At the foundations of Genoa's now infamous Morandi Bridge, commemoration for the 43 lives lost when it collapsed a year ago.
Victims came for a salve from their suffering. Politicians too, Italy's president, prime minister, the local mayor but none with answers on why it collapsed.
MARCO BUCCI, MAYOR OF GENOA, ITALY: I'm not supposed to make any comment about that. I'm here also to promise to the relatives of the people that died and that passed away, that Genoa will become a great city and we will remember forever that we will never forget that.
ROBERTSON: Prosecutors are still investigating why the half-century old steel and concrete suspension bridge suddenly snapped without warning, sending 200 meters of roadway crashing down, cars and truck cascading to the ground below.
I was here that day close to crossing it myself. The rain was torrential, the thunder echoed all around. Who lived, who died was not in the hands of any driver, but somebody, some people are culpable for the calamity. And until now, that's a problem, because nobody has been held to account.
At the commemoration, representatives of Auto Strada Del Italia (ph) charged with the upkeep and inspection of the bridge left before the service began at the requests of families of victims, some families even stayed away all together.
[01:44:50] The collapse has become a symbol of corrupt business practices. The operator who's in charge of safety inspections and of endemic political infighting, in this case, over infrastructure investment, a lightning rod that today threatens to split Italy's fragile coalition government apart.
The populist right wing nationalist leader, Matteo Salvini, who threatens to bring down the government unlike the other politicians here pausing to pose for photos with construction workers, riding high in the polls, choosing his words carefully.
MATTEO SALVINI, ITALIAN INTERIOR MINISTER & DEPUTY PRIME MINISTER (through translator): I know this will never bring back to life the young people who died. But this is the symbol of Italy looking to the future.
ROBERTSON: And within hours of the commemoration, construction of the new bridge pours for the service restarted, opening as planned for April next year.
Nic Robertson, CNN -- Genoa, Italy.
VAUSE: There are new details about the cause of the January's plane crash which killed Argentine soccer player Emiliano Sala. Investigators have discovered Sala and the pilot were exposed to high levels of poisonous carbon monoxide.
CNN's World Sport's Don Riddell has details.
DON RIDDELL, CNN WORLD SPORT ANCHOR: One of the saddest stories I can remember covering at CNN was the death of Emiliano Sala in January. And today we have learned more about how he died.
And it's pretty shocking. A toxicology report has revealed that he'd been exposed to high levels of carbon monoxide. You may recall he was being transferred from Nonnes (ph) in France to Cardiff in the Premier League and was flying to join up with his new club when the plane in which he was traveling crashed into the channel where he and the pilot David Ibbotson were killed.
Sala never got to play in the Premier League. And for everybody involved it was just devastating.
NEIL WARMOCK, CARDIFF CITY MANAGER: I've been in football management now, 40 years I think now. And it's by far the most difficult week in my career, by an absolute mile.
It's the trauma, you know, I can't -- even now I can't get my head around the situation.
RIDDELL: Well, on Wednesday we learned more about the circumstances of his death and the carbon monoxide was an unexpected twist. The levels actually were so high that could have caused a seizure, unconsciousness or a heart attack.
And it is assumed that the pilot would also have similar levels of carbon monoxide. But we don't know because his body has never been found.
At the time of the accident there was fevered speculation about the condition of the plane particularly since Sala made a phone call to one of his friends where he expressed some anxiety about it.
SALA: So guys, I'm on the plane and it looks like it's going to fall down in pieces. If in an hour and a half you don't have news from me, I don't know if they would send someone to look for me because they won't find me but you will know.
Dude, I'm so scared.
RIDDELL: Air accident investigators are working to establish how carbon monoxide could have entered the plane's cabin. His family back home in Argentina is now demanding a detailed examination of the aircraft. Cardiff City says that those who booked the flight should be held accountable for this tragedy.
Back to you.
VAUSE: Don Riddell -- thank you. We'll take a short break.
When we come back two television commercials banned in the U.K. for featuring what regulators say is powerful gender stereotypes. Really? We'll look at that controversy in a moment.
[01:48:37] (COMMERCIAL BREAK) VAUSE: Well, there were new regulations in the United Kingdom for advertising and the intentions were noble but reality perhaps well, you be the judge.
This commercial for VW has been banned in the U.K. because regulators say it perpetuated our whole gender stereotypes. There you go -- a man doing long jumps with a fake limb. A woman sitting next to a (INAUDIBLE). The other offensive commercial is from Philadelphia Cream Cheese. It's crime it seems -- training men incapable of carrying for a child.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: New dad too?
UNIDENTIFIED MALE: Wow, look at this lunch.
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: That's the Philadelphia.
UNIDENTIFIED MALE: Yes.
(END VIDEO CLIP)
VAUSE: To New York now and Peter Shankman, a branding and social media consultant which is a bit like saying Jimi Hendrix played guitar. Peter -- thanks for coming in.
PETER SHANKMAN, BRANDING AND SOCIAL MEDIA CONSULTANT: My pleasure. Good to be here
Ok. Let's begin with that VW commercial. This is the one with the men in space, there's the disabled male athlete, and a mom on park bench with a stroller. Images when juxtaposed in this manner, they convey a message so offensive and harmful CNN reports it prompted three complaints from viewers and the U.K. Advertising Standards Agency found it showed a woman engaged in a stereotypical caregiving role. And that was enough to have it banned.
I'm going out on a limb here, Just maybe, is it possible that the regulators in the U.K. were a little overzealous?
SHANKMAN: I can only imagine it must have been a really slow day for them, you know. That they needed something to close out at 5:00 and ok we'll get this.
You know, there have been complaints in -- especially in America and all over the world for years that we were doing those kind of ads and they were too trite and they're too basic and they would've worked in the fifties and sixties and their "Madmen" type of advertisements.
But you know, at the end of the day there was nothing there that couldn't be cured with a little less lazy riding and lazy creative. You know, this isn't something where the government needs to step in and say, you know, you're going to get fined for this. This is -- I'd rather see the agencies fire some people and bring in some better writers and better dated.
VAUSE: You have a bit imagination or --
SHANKMAN: Exactly. I mean this is a lazy ad. There's no question about it.
VAUSE: And the other one, the other offending commercial which showed two dads. They're on baby duty. They get so distracted by the delicious creamy goodness of Philadelphia cream cheese, they forget where they left the kids.
That offensive stereotyping brought in a total of 125 complaints. What most people are doing complaining about this ad, no one ever knows but it was banned because "In a combination with the opening scene in which one of the babies was handed over by the mother to the father and the final scene in which one of the fathers said 'let's not tell mom'. They consider the ad relied on the stereotype that men were unable to care for children as well as women and implied that the fathers had failed to look after the children properly because of their gender.
Again, going out on a limb, I'm a dad, I know a lot of other dads and for the most part using the words of the ASA, men were unable to care for children as well as women. I mean that's just what happens.
So you know, maybe, you know -- the hard fact here it seems to be that this is a dull and boring cliched ad.
SHANKMAN: It's not only a dumb boring cliche but I sat in the same chair 10 years ago, discussing I believe it was Ragoo (ph) doing the same type of commercial, literally the exact same commercial that had the bumbling dad, and the kid was falling over and getting covered in spaghetti sauce.
You know, I took the fed's then. Now, I'm a single dad of a six-and- a-half year old kid who still has all his fingers, still has all her toes. I've yet to lose here.
Come on , this is -- you know, there are two points here. The first point again, lazy creative. And the second point is I don't necessarily need, the government however telling you this is lazy creative.
I just feel like at this moment in time in the world' political stage, in the world economic stage, there's got to be more stuff that they could do that they can do to be better off for society then complain about commercials that are lazy and that should have gone out in the 1970s.
VAUSE: Yes. And here's part of an interview that the chief executive of the U.K. Advertising Standards Agency do it on Wednesday. He said we're increasingly taking pro-active action so that we can have the biggest impact in sectors and on issues were there is consumer detriment or the potential for real public harm.
It sounds Batman and the Super Friends were out there but what Batman doesn't actually explain is this definition of harm. What is the real public harm here of which he speaks?
[01:55:00] SHANKMAN: And I'll take it a step further. Not only is there any public harm but if consumers are going to vote that these commercials are offensive, let them do it with their wallets, right. We have seen tremendous blow back for companies in America. I believe it was a social media moms group.
And you know, you offend the social media moms, forget it. Then that you really started something and they went out and they were very offended because motion didn't -- an advertisement about Motrin (ph) and Moms and how you have to carry your baby and that gives you joint pain so you should use Motrin. And moms went ballistic, right.
And what happened, Motrin pulled the ad and they took a hit.
So let the consumers use their wallets and say that this is not working and this is -- this doesn't need to be regulated.
VAUSE: Yes. And if you want to see a real example of offensive stereotyping in commercials head over to China. Take a look at this.
VAUSE: That ad is so racist and so offensive even the folks at Dove would be appalled. But you know, here's the point. Sometimes commercials are blatantly offensive and regulators should intervene. Sometimes they're just stupid and not especially clever but that doesn't mean they should be censored because that's what we're talking about here.
And censorship that is -- when you head down that road the bar should be incredibly high because that is a journey which can end in a very bad place.
SHANKMAN: Exactly. I mean there's absolutely no need for a government to intervene in essentially what is bad taste, right. You know, if the government can start there, the question becomes where does it end?
Right. Do you end on something because you don't like the ad or do you end something because it's offensive? You know, 90 percent of "The Sopranos" would've been banned, you know, ten years ago if that was the case.
So the question really becomes why is the government intervening in a situation where again, consumers really have the final word. Consumers are the ones spending the money and they choose to do it whether they like the products or not.
Yes. Peter -- we'll leave it at that. Great to speak with you. Thank you so much.
SHANKMAN: My pleasure, always.
And thank you for watching CNN NEWSROOM. I'm John Vause.
Please stay with us. The news continues here on CNN after a short break.
[02:00:03] ROSEMARY CHURCH, CNN ANCHOR: Hello and welcome to our viewers joining us from all around the world.
I'm Rosemary Church and this is CNN NEWSROOM.