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Philadelphia Hours-long Standoff Ends with Gunman Surrendering; U.S. Stock Futures Saw Its Worst Day After 800-Point Drop; Interview with Lawrence Summers about U.S. Stock Futures; Jeffrey Epstein's Injury Consistent with Hanging? Aired 7-7:30a ET
Aired August 15, 2019 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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[07:00:00] STEPHEN COLBERT, LATE-NIGHT HOST: -- like a margarita maker because it's just the same noise.
ANDERSON COOPER, CNN ANCHOR: Well -- yes. I -- yes.
COLBERT: You know, it's the big cocktail at the end. He creates his own storm.
COLBERT: He takes a big bucket of seawater, throws it at his own face and goes, I'm a sea captain. We're going to ride it out, boys.
(END VIDEO CLIP)
JOHN BERMAN, CNN ANCHOR: So, when we said no punchlines --
ALISYN CAMEROTA, CNN ANCHOR: I was wrong.
BERMAN: A little bit wrong there. But it's a serious discussion with some punchlines.
CAMEROTA: Well, any time you can work in a pirate joke, I -- you can see Anderson's full interview with Stephen Colbert tonight at 9:00 Eastern only on CNN.
And NEW DAY continues right now.
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COMMISSIONER RICHARD ROSS, PHILADELPHIA POLICE: Six police officers who were struck by gunfire. Fortunately everybody's going to be OK.
VICTOR BLACKWELL, CNN ANCHOR: A nearly eight-hour standoff ending in surrender.
JAMES GAGLIANO, CNN LAW ENFORCEMENT ANALYST: This subject barricaded himself inside. You've got police officers pinned down.
JASON CARROLL, CNN NATIONAL CORRESPONDENT: The suspect returning fire over and over again. MAYOR JIM KENNEY (D), PHILADELPHIA: Our officers need help. They
need help with keeping these weapons out of these people's hands.
UNIDENTIFIED FEMALE: Stocks sinking as the bond market flashes a potential recession warning.
UNIDENTIFIED FEMALE: The president airing his grievances on Twitter directing his ire at the Federal Reserve.
UNIDENTIFIED MALE: He is tweeting us into a recession. This lays at his feet.
UNIDENTIFIED FEMALE: This White House does not have competent personnel in place to develop a plan.
(END VIDEO CLIP)
ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.
CAMEROTA: We want to welcome our viewers in the United States and around the world. This is NEW DAY.
And we do begin with breaking news for you because it was a dramatic and violent standoff, and it ended with six Philadelphia police officers being shot. The gunman surrendered just after midnight, nearly eight hours after police tried to serve this drug warrant to him and were met with a barrage of bullets. So, for hours North Philadelphia looked like a war zone. Philadelphia's police commissioner said the gunfire was so intense that some of his officers had to jump out of windows to avoid being shot.
BERMAN: All right. We also have breaking news on the economic front. U.S. stock futures are down sharply again. All right. Down about 123 points right now after the worst day for the Dow this year. This is a global selloff and it's being fueled by new fears about a recession, a global recession. Also jitters about the strength of the U.S. economy and a new threat, a brand-new threat from China this morning.
We're going to have much more on that in a moment. We begin, though, with CNN's Athena Jones live in Philadelphia with the breaking news. A midnight surrender, Athena.
ATHENA JONES, CNN NATIONAL CORRESPONDENT: Hi, John. It was a dramatic several hours yesterday. And police will tell you the most -- one of the most dangerous aspects of their job is serving a warrant. We saw why yesterday as police officers became the target of a gunman for several hours. And America watched it all play out on live TV.
JONES (voice-over): A tense standoff coming to an end in Philadelphia overnight.
UNIDENTIFIED MALE: Shots fired at police inside the property.
JONES: Six police officers were shot on Wednesday afternoon. It all started around 4:30 p.m. when officers tried to serve a drug warrant.
ROSS: They had already entered the premises and got towards the rear and the kitchen area when gunfire erupted.
UNIDENTIFIED FEMALE: It was like a hundred shots.
JONES: The gunman targeting police officers as more of them arrived at the scene.
UNIDENTIFIED MALE: Multiple gunshots. (EXPLETIVE DELETED). Shots still ringing out. Give me SWAT ASAP. Long guns ASAP.
ROSS: The shooter fired multiple rounds. Officers returned fire, many of whom who had to escape through windows and doors to get from a barrage of bullets.
JONES: Residents looking on as police swarmed the streets, some wearing tactical gear, trying to negotiate with the suspect. Watch police taking cover after bullets ricochet off a building nearby on to the sidewalk. You can see an officer help another from the ground, taking cover from the bullets behind a car. SWAT teams and armored vehicles called in to help the area under siege while two other officers who were serving the warrant were trapped inside the home.
ROSS: SWAT was able to successfully extract the two police officers that were trapped upstairs as well as three prisoners.
UNIDENTIFIED MALE: I've got an officer shot in this location in the leg.
JONES: All of the officers who were shot were treated at local hospitals and released.
ROSS: They were struck throughout their body. One officer sustained a gunshot wound, a graze wound to his head. Thankfully that was all that was.
JONES: Authorities even have to evacuate children at two nearby daycare centers.
KENNY WILLIAMS, DAYCARE PARENT: We know that six officers got shot. You know, it could have been one of the kids. A stray bullet could have went in there. No telling what would have happened. You know? It's a terrible situation.
JONES: Philadelphia's mayor expressing his frustration about gun violence.
KENNEY: Our officers need help. They need help. They need help with gun control. They need help with keeping these weapons out of these people's hands. Our officers deserve to be protected and they don't deserve to be shot at by a guy for hours with an unlimited supply of weapons and an unlimited supply of bullets.
(END VIDEOTAPE) [07:05:10] JONES: And you can hear the emotion in the mayor's voice there, see it on his face. He was visibly upset in that press conference where he also said that once the situation was all resolved, there would be questions about someone, quote, "having all that weaponry and all that fire power" -- John, Alisyn.
CAMEROTA: All right, Athena, thank you very much for the update on that scene that unfolded yesterday.
Meanwhile, U.S. stocks are pointing to another wild day on Wall Street. On Wednesday the Dow suffered its worst day of the year. It had been slashed by 800 points. So recession fears and there's this new threat from China that are fueling the selloffs.
So, joining us now is Bianna Golodryga, CNN contributor, Catherine Rampell, opinion columnist for the "Washington Post" and CNN political commentator, and Johnathan Martin, national political correspondent for the "New York Times" and CNN political analyst.
BERMAN: Why is Johnathan Martin smiling? That's what I want to know.
CAMEROTA: Well, we'll find out.
BERMAN: Apparently he has no 401(k).
JONATHAN MARTIN, CNN POLITICAL ANALYST: I'm high on life, Berman. I'm high on life.
BERMAN: No 401(k) at the "New York Times" this morning. Really.
CAMEROTA: OK, well, one person who was not smiling is Catherine Rampell. We'll see how she feels today. This is what you tweeted. "Real economic risk is if things go wrong. The White House does not have a plan and does not have any competent personnel to come up with one. Trump's economic brain trust consists of a guy who plays an economist on TV, a nut case the entire real economic profession has disowned, and the producer of 'Lego Batman'."
Would you like to put a finer point on any of this?
CATHERINE RAMPELL, CNN POLITICAL COMMENTATOR: I mean, this is --
MARTIN: Tell them how you really feel.
RAMPELL: Yes. Well, this is what I'm really concerned about. Look. Recessions happen, downturns happen. That's the nature of the business cycle. It's a cycle. Sometimes you're up and sometimes you're down. What I'm really concerned about is how badly I fear this administration will bungle the response to this recession if in fact we have one. There are just not that many tools left, first of all. We've already spent $2 trillion on Trump's tax cuts for the wealthy and for corporations. So, we don't have a lot of room for fiscal stimulus at this point or effective fiscal stimulus.
And beyond that, you don't have competent people at the top. Like, who's the person in the room with Trump who, A, has a good idea, and B, Trump will listen to?
CAMEROTA: Who's the nut case that the entire real economic --
RAMPELL: Oh, Peter Navarro. Peter Navarro. Yes. He's been disowned by the rest of the economics profession.
BERMAN: The "Wall Street Journal" today called it the Navarro recession.
RAMPELL: Yes. Yes. And I don't know if you saw but Navarro's response was to compare the "Wall Street Journal" editorial page to a communist newspaper which I'm sure is a first for the "Wall Street Journal." But the only competent economic leadership that we have right now is over at the Federal Reserve. And what is Trump doing? He's doing his darnedest to discredit them, to suggest that they don't know what they're doing, that they're responsible for his own folly, which is, you know, escalating the trade war and making markets nervous, or that they -- or compromising their political independence. So whatever effectiveness they have, whatever limited tools they have are being compromised by Trump's attempts to undermine them.
BIANNA GOLODRYGA, CNN CONTRIBUTOR: And he views the Fed really as his own piggy bank and support system, right? So the Fed's main mandates are to keep inflation in check and focus on unemployment in the country. And this has been a concern from the get-go. Even early on into the Trump administration, I had sources telling me, and this is when the economy was really running on all cylinders, that they were focused on this day and concerned about what happens once the economy starts turning south, specifically because there was this nobody's home fear.
At Treasury, there are a lot of vacancies. Right now we don't have a permanent CA director also. So there's a concern about what happens next because at some point when the economy starts turning south, one presidential tweet is not going to fix it all.
BERMAN: Yes. And it wasn't just one, it was 11 yesterday.
BERMAN: He was live-tweeting the fall of the market yesterday which I think only created more jitters in the financial community. And one of the things that's causing it to drop even more this morning is that China is pouring salt on the wound. You know, the president backed off some of the tariffs that he was going to impose on China, but not all. And China, this morning before a lot of people woke up, said not good enough. Not good enough. If you're going to impose any of these new tariffs, we will retaliate. So to an extent, pouring salt on the wound.
And Jonathan Martin, from your perch.
BERMAN: Covering the presidential election.
BERMAN: Talking to people out in America, people are beginning to notice. This is creating jitters and it shakes the foundation of how the president wanted to run for re-election.
MARTIN: Yes. There's a shorthand when it comes from this president. Even for people who aren't his biggest critics. Even from people who actually kind of would vote for him or already voted for him in 2016. And that is, I don't like the tweets, right? We've heard that so many times. Now, we usually take that as kind of a metaphor, John, for I don't like his conduct and I don't like his behavior. But we're getting to a point on the economy where that's a quite literal reference now. People don't like the tweets when it comes to the impact that they could have on the markets.
[07:10:05] And this is going to be a test if the market is now in this sort of jittery uncertain phase. That what is going to happen when we have a president who is, as you put it, live-tweeting the fall of one day's Dow Jones. I mean, is it going to get worse? Could he be restrained when it comes to sort of tweeting out his comments? Because, my goodness, the market is looking for any kind of reaction. And he's going to be offering it. And that leads to a whole new definition of concern about the tweets.
GOLODRYGA: But this is also why presidents traditionally don't comment on the economy and on the stock market, in particular, on a daily basis because they know that what goes up eventually will go down. And this is a situation that we are seeing right now. The president was constantly touting new records set by the Dow. Now we're seeing the drop-off. And he's trying to focus the blame and shift the blame onto the Fed and all these other outside factors.
It's pretty clear that when the economy was booming, the president thought that he would issue these new tariffs, that a trade dispute with China would be resolved rather quickly and that he would get all of the praise for it. Quickly China, even though they are suffering from this as well, knows that they have a lot more time on their side. President Xi's not facing an election next year. And so, they can withstand some of this pain that the president thought would have been done and over with much sooner.
CAMEROTA: And so that leads us to what the alternative is for voters. So, Jonathan, you're in Iowa. And you've been talking to lots of Elizabeth Warren supporters and people at her rallies.
CAMEROTA: And she certainly knows economic policy or talks about her plan a lot, and is known for that. And yet you say that you've found all of these voters who are jittery about her.
MARTIN: Yes. CAMEROTA: And whether or not she can take the fight to President
Trump. But she doesn't seem like a shrinking violet. So what are their fears?
MARTIN: Well, I spent a lot of time in Iowa and New Hampshire and South Carolina the last couple of months. Talked to dozens of voters at Warren events but also at events for other candidates, multi candidate events. And you hear a recurring refrain that has sort of come up along with her rise in the poll, which is I love Senator Warren, oftentimes references to her plans. It's kind of the shorthand for why they like her. But there's oftentimes a quick touch on uncertainty. I don't know if she can win.
And sometimes it's about the Pocahontas slur that the president throws at her. Sometimes it's about her ideology. I think activists are concerned, at least some of them, that she may be too liberal for the, you know, general election. And in the case of some folks, there's PTSD from 2016. And there is concern amongst some of these voters that she would have a hard time winning the general election because the president would run against her like he did Hillary Clinton.
You hear it time and time again from voters. And again, these are people who are sympathetic to her. They're not big critics. But there's this sort of uncertainty about her candidacy that is cropping up. And by the way, she and her campaign are quite aware of this. And they're taking steps to address this that are becoming more and more explicit. One of them is flavoring more of her speeches and interviews with talk about how she beat Scott Brown in 2012. A not very subtle reference to a campaign where she was doubted and she overcame those doubts against a male incumbent in a state that had only elected men for years and years and years. Pretty clear and unsubtle parallel there to this moment.
BERMAN: Catherine, it is interesting to start thinking about, to tie these two stories together, is to how does this presidential race change if all of a sudden Democrats don't, you know, have to be asked questions, but the economy is booming, but the employment rate is really low? How do you run against a president with those kind of economic numbers?
RAMPELL: So I do think it will change the dynamics given that the economy is really the only thing Trump has going for him. If you look at his approval ratings, it's the only metric on which he's above water, on his handling of the economy. Now, I would argue that's because he's been extremely lucky rather than, you know, extremely skillful in the actual policies he has pursued. In the same way that he likes to take credit for the personal fortune he has inherited, which is more due to luck than to skill.
But, yes, I mean, it will certainly call into question the one talking point that he should be using that he can't seem to discipline himself to use. I will say that what's been troubling to me on the trade stuff, is that Trump also specifically has a major weakness, obviously, in how he has handled these trade wars. Farmers are hurting. Manufacturers, retailers are hurting. But Democrats can't seem to muster up the wherewithal to attack him on that in part because they don't have a leg to stand on either. A lot of the policies that they are promoting including Elizabeth Warren who's arguably more protectionist than Trump, a lot of the policies that they are -- they have historically promoted are very similar to what Trump is doing. So this is a weak spot that they should be exploiting, particularly, you know, on the grander economic picture that they haven't been doing.
[07:15:06] GOLODRYGA: Yes, it's a troubling situation for Democrat, too, because they don't know where they should vis-a-vis China, right? So you don't want to look like you're sympathetic towards China. China clearly is not a U.S. ally in this sense, so coming forward with their own approaches that differ from Trump's but also address some of the concerns that we have with regard to China. It really -- it needs to be the focus for Democrats moving forward.
CAMEROTA: OK, guys, we have to leave it there.
MARTIN: And just real fast --
CAMEROTA: J. Martin, I'm so sorry. We have to leave it there because we do have some breaking news. Thank you, all, very much.
Now we want to get to this "Washington Post" reporting on Jeffrey Epstein's autopsy findings. They report that Jeffrey Epstein had broken bone in his neck that suggests that Epstein hung himself or another more sinister possibility.
CNN's Brynn Gingras joins us now with more. What do they suggest?
BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Yes, right, Alisyn. Epstein sustained multiple breaks in his neck bones. Again, that's according to the "Washington Post" who added among the bones broken was the hyoid bone. That is the bone near the Adam's apple in men. And sort of -- this sort of break really can happen if a person hangs themselves but it still raises a lot of question. The "Post" says they are learning this from sources familiar with the autopsy.
Now remember, the autopsy, the results have not been released. The New York medical examiner says it's pending. But again, lots more questions now about how this death happened and in what circumstances. Of course, the autopsy will be important because it will give the cause and manner of death which will help investigators moving forward who have a lot of questions to answer, particularly a timeline. What happened before his death?
We know that two guards who were supposed to be monitoring him were on overtime shifts. One of the guards was filling in as a corrections officer. And the "New York Times" reports that Epstein wasn't checked on for three hours when guards are supposed to do these checks every 30 minutes. Two staff members are now on leave, though it's not clear if it is those two guards. And the warden of the MCC where Epstein was housed on sex trafficking charges has been reassigned. Of course now there are teams from the Bureau of Prisons, the FBI, they're all investigating this -- John.
BERMAN: All right, Brynn, thank you very much. Please keep us posted as you get more information.
So what exactly is fueling these new recession fears and why there are concerns about the strength of the U.S. economy? Former Treasury secretary Larry Summers gives us his thoughts. That's next.
[07:21:23] BERMAN: All right. Brace yourselves. It looks like it could be a very wild day on Wall Street. The second one in a row. A global selloff continues as recession fears grow and China makes a new threat against the United States.
Joining me now is Larry Summers, former National Economic Council director under President Obama and Treasury secretary under President Clinton.
Secretary, thank you so much for joining us. You have been saying this for days if not weeks. You said it to Fareed right here on CNN on Sunday. You said it to Erin Burnett last night. You see a greater danger of a recession now than you've seen in over 10 years. Why?
LAWRENCE SUMMERS, FORMER WHITE HOUSE NATIONAL ECONOMIC COUNCIL DIRECTOR: Markets are signaling that, just look at the way long-term yields are less than short-term yields. Look at the decline in the stock market. Look at what's happening to the manufacturing sector of our economy. Look at what's happening abroad. Look at what's happening to business intentions. These are the kinds of things that tend to precede recessions.
I don't know whether it's just above or just below 50-50 that a recession will start in the next year, but that's the range we're in. And it's hard for people to have confidence in the resilience of the economy. Hard because interest rates are so low that there's not much room for the Fed to cut them further. Hard because we've already fired the fiscal canon on a misguided tax cut targeted to the highest income people who least need the money. And hard frankly because of doubts about the competence of the economic team in place, and almost total reason to doubt any international cooperative response.
That was the center of the response to the 2009 crisis, international cooperation. The United States led that. Today we've got a United States who's at economic war with most of the rest of the world. Feuding with Europe, feuding with North America, and certainly feuding with China.
BERMAN: While the market was dropping 800 points yesterday, President Trump responded by going on Twitter. About 11 tweets about all of it. We have them up on the screen there. How do the markets perceive that kind of response from the president?
SUMMERS: With somewhere between ignoring and disdain. They recognize that it's all political. That it's all self-serving. That none of it's directed at providing a realistic analysis of the situation. That none of it's likely to have consistency.
Markets are ultimately driven by realities, not by rhetoric, and so, there are limits to how much difference any bit of rhetoric makes. But there surely can't be anything helpful about liking a strong dollar one day and hating a strong dollar the next. Liking capital coming into our country one day, hating it the next. It surely doesn't help.
BERMAN: The news this morning that's precipitated the new drop in the markets is that even after the president retreated on some of the tariffs he was going to impose on China in September, China has responded saying if you're going to impose any, we will retaliate.
[07:25:05] You have described the president's trade war as sadomasochistic. Explain.
SUMMERS: Yes, that's just a way of expressing the fact that it hurts us hard and hurts them hard. And there's a question, I suppose, of who it hurts more. But really what Americans care about is their jobs, their ability to buy goods at low costs, their take-home pay. And there isn't any question that it hurts the standard of living and the opportunities for Americans. And so, arguing about whether it's going to hurt people in China worse of or not seems to be largely beside the point. That's debating whether the sadism is worse than the masochism.
BERMAN: Talk to me about what the U.S. economy has going for it now. What are the forces that might protect us from falling into a recession?
SUMMERS: You've got the deep underlying strengths of people who work very hard, work very skillfully, have a terrific capacity to innovate, have the opportunity to work for great companies. But if we're all feuding with each other and feuding with our customers around the world, and the energy is in feuding rather than building, we're not going to get very far.
We should be thinking about this is a moment to renew an infrastructure where thousands of bridges are in danger of collapsing. Where the water in Flint, Michigan, was putting lead into young children so their IQs went down. We should be thinking about this as a moment to use the unbelievable capacity of American science to lead. We should be investing together with ourselves and with the rest of the world rather than feuding. Then as long as the energy is in division and divisiveness, we're going to be in trouble.
BERMAN: All right. Secretary Larry Summers, thank you for being with us this morning. I appreciate it.
CAMEROTA: All right, John.
SUMMERS: Thank you.
CAMEROTA: One Democratic presidential candidate has a message for President Trump and an interesting delivery system for that message. Julian Castro joins us live next.