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Coronavirus Outbreak; Stocks Plunge in Worst Week Since 2008; War in Syria. Aired 3-3:30a ET

Aired February 29, 2020 - 03:00   ET

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


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MICHAEL HOLMES, CNN ANCHOR (voice-over): Hello and welcome to our viewers joining us from around the world, I'm Michael Holmes. And on CNN NEWSROOM, with the coronavirus spreading into new countries, the World Health Organization now calls a global threat level very high.

Plus a historic slide, fears of a pandemic caused world markets to suffer their worst week since the 2008 financial crisis.

And President Donald Trump saying the coronavirus is the Democrats' new hoax as new community spread cases pop up in the U.S.

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HOLMES: Welcome, everyone.

Surging coronavirus cases are prompting a new warning from the World Health Organization. It says the global outbreak has reached the, quote, "highest level of risk." Fears of the infection are rippling across the global economy, causing the worst week to U.S. stocks since the 2008 financial crisis.

There are fresh concerns over how the disease might be spreading in the U.S. There are now believed to be at least three cases in the U.S. where the patient had not traveled to an infected area nor had contact with a person known to be infected.

Turning now to Japan, one of the worst hit places outside of Mainland China, Blake Essig joining us there in Tokyo with more.

What efforts are being made to try and contain things, Blake?

BLAKE ESSIG, CNN CORRESPONDENT: Michael, the concern over the spread of the coronavirus here in Japan is very real, to, in fact, just overnight the governor of Hokkaido declared a state of emergency for Japan's largest prefecture, telling residents they're not to leave their homes.

We have also just learned that the cherry blossom festivals in Tokyo and Osaka have been canceled for this year. Cherry blossoms attract millions of people from all over the world annually. And while only two of the festivals have been canceled so far, it is likely that more cities will follow Tokyo and Osaka's lead.

All of this coming at a time when Japan is facing scrutiny for the way they've been handling the coronavirus outbreak here in Japan. And with that comes questions about how they will handle the Olympic Games with the coronavirus hanging over their head.

(BEGIN VIDEOTAPE)

ESSIG (voice-over): In Japan's very first attempt at taking on the novel coronavirus, government advisors admit, they got it wrong. The quarantine on board the Diamond Princess cruise ship was flawed from the very beginning.

ESSIG (on-camera): Should the crew members have continued to work? Is it fair to have continued to expose them to potentially contract this virus?

DR. NORIO OHMAGARI, GOVERNMENT ADVISER: Strictly, scientifically speaking, you know, what needed was stricter isolation for the crew members, all the members.

ESSIG: But the crew continued to work and the infections kept climbing. Now as they disembark, the attention turns to prevention on dry land.

Sunday's Tokyo marathon will only allow elite runners. Normally crowded baseball games will be played in empty stadiums. Rugby, soccer matches all postponed. Schools nationwide asked to close on Monday to contain the spread.

But Japan seeks to reassure the world their Olympic teams continue to practice.

GAKU HASHIMOTO, JAPANESE VICE HEALTH MINISTER (through translator): It's important for us to have visitors feel safe and enjoy Japan while here, the vice minister of health says, so this is a top priority for us.

ESSIG: Well, Japanese officials say the idea of canceling or delaying the games is just speculation. IOC member, Dick Pound, says all options are being considered.

DICK POUND, IOC MEMBER: If the games are canceled and then that's a big gift at this point, it's got to be a complicated decision. My guess is it would take more than simply a decision by the IOC and the Tokyo authorities, who would be governments and international agencies saying it is not safe to hold the games. And we're a long way from that.

ESSIG: Amid fears, the outbreak will turn into a global pandemic. There's only so much Japan can control.

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[03:05:00] ESSIG: In addition to the possibility of canceling the games, IOC member Dick Pound also said earlier this week that the IOC is considering the idea of postponing them, to 2021, although organizers on the ground say they're moving forward with everything as scheduled for the games to be held in five months -- Michael.

HOLMES: That postponement would be a massive deal, wouldn't it?

Blake Essig in Tokyo, thank you.

Meanwhile, Nigeria on edge after becoming the first sub-Saharan country to confirm a coronavirus case and, so are many other African nations. Farai Sevenzo is following that part of the story and joins us.

A lot of people very nervous in that part of the world?

FARAI SEVENZO, CNN CORRESPONDENT: Absolutely, Michael, good to talk to you again, look, this is Africa, it is a place of great touchy-feely people, hugs, handshakes, huge public transport. It's probable the fear of this coronavirus.

A couple of days back China's southern airlines plane landed in Nairobi's International Airport to the dismay of many people, they're worried that how can the travel keep going when China is the epicenter?

I'll give you a hint of that. This was yesterday's headline, "Enemies of the People," everyone blasted the government for actually letting this plane land. And Kenyans had this to say.

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UNIDENTIFIED MALE: The plane which landed here, first of all, the epicenter of everything that the disease itself, when they're coming with the coronavirus thing, started from -- that plane come from China. That means, we must protect ourselves. This is something even China is not able to control.

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SEVENZO: And there you go, Michael, everybody is feeling this way, they are angry with the government. And one of the people that -- one of the bodies angry with the government is the Law Society of Kenya. They went to the high court and demanded that the judges do something about this.

And as a result, as of yesterday, all nonessential flights from China have been stopped. And, of course, we fear now that if the first cases should arriving in Kenya, the government preparedness for such a crisis, given poor health facilities, non-quarantines, all of that is going to worry people.

So we are watching the story for you, Michael, and hopefully, fingers crossed, nothing as bad as that will ever happen in this part of the world. HOLMES: A lot of concern over infrastructure. Farai, good to have you

there on the spot. Thank you.

We're joined by Ryan Patel, senior fellow at Claremont Graduate University's Drucker School of Management.

We meet again because it is that kind of, week. You know, the virus contagion, also the financial contagion, I think $6 trillion wiped off global market values. Slightly slower drop on Friday, but what is your read on the direction of this?

RYAN PATEL, GLOBAL BUSINESS EXECUTIVE: This is deja vu all over again and let me be very clear, this is not normal. When people come on and talk about what they are going predict, what are companies looking to do, let me tell you this.

Companies don't know. They don't know how bad it is going to be. They are trying to wait until April to see how the revenues take a hit and then potentially do a readjustment in earnings.

You know, what we saw today, what we saw yesterday, you talk about PayPal coming out and MasterCard coming out, saying we are going to have an effect, these are strong leadership teams that don't want to signal a panic but also needs to provide cautious caution to people and investors.

I feel like this is the time to be cautious. This is the time to ask those questions, fundamentals are still relevant. But because we have never seen anything like this, this is not normal when it comes to the spread and acceleration, it definitely does provide uncertainty that is not something that any economy, not just in the U.S., would need. HOLMES: I want to ask you, is there an argument that the markets have

been looking for, not an excuse but a reason to correct anyway?

There have been people before all of this who were concerned that there was a little -- it was a bit bubbly and the correction was needed.

Do you think this might have just been the impetus for that?

PATEL: I prefer not to be this is the cause. I don't mind it correcting on its own. But is there is some kind of correction here?

Sure. But with things like, this again, this is not normal, you are supposed to act cautiously, you are supposed to act in long term interest, so when you see these dips and maybe some people say, this is the time to buy, the question really becomes -- this is my public service announcement anyone looking to invest long-term -- have your fundamentals in certain companies change.

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PATEL: Do you see Warren Buffett going in and buying everything right now?

No, you don't. He is not saying that it is not time to buy, he is saying that if you liked a stock that was down 15 percent and you did your homework, you did your research and it is not affected behind this, then, it is OK potentially to look at it.

But to say jump in at market correction, short term it is a complete gamble because, like I mentioned, the CEOs of these companies don't know the depth of the actual impact. So they don't know, I'm sorry, being from the inside, of the business world, no one else is going to tell me otherwise.

HOLMES: It was interesting hearing Larry Kudlow, the chief economic advisor to the president saying jump in and buy low. It doesn't seem to be his job, given how political he is but that is what he did.

Ryan Patel, thanks so much as always. I'm sure will be speaking sooner than you'd like to be.

PATEL: Thanks, Michael.

HOLMES: Meanwhile, Microsoft founder and philanthropist Bill Gates is calling for a united effort to combat the spreading coronavirus. In recent news, he's used his charitable foundation to fund efforts to fight future pandemics.

In an op-ed for "The New England Journal of Medicine," he warns the new virus is severe threat, writing this, quote, "In the past week, COVID-19 has started behaving a lot like the once-in-a-century pathogen we've been worried about."

Gates is calling for a global response to create a new vaccine to fight the virus.

We'll take a short break, when we come back, the first community based transmissions of the coronavirus are emerging in the U.S. Just ahead how the Trump administration is working to reassure Americans and investors while, at the same time, calling it a Democratic hoax.

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Welcome back, in the U.S. president Trump trying to reassure Americans that his administration has a handle on the coronavirus outbreak, on Friday discussing a number of measures he is considering to help calm jittery markets. All of this of course, Wall Street has suffered its worst week since the financial crisis of 2008. Jim Acosta with more on the White House response.

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JIM ACOSTA, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice-over): With Americans growing more anxious by the day and the stock market plummeting over the coronavirus, President Trump is straining to contain an outbreak of fear? TRUMP: I'm spending a lot of time on it, just in coordination. Mike Pence is doing a great job. Dr. Fauci is great. They're all doing really a fantastic -- Alex Azar is right on top of it. We're all watching it very closely.

ACOSTA: Leading the administration's coronavirus response, Vice President Mike Pence discussed new measures for the health emergency with Florida Governor Ron DeSantis. That was after Pence attended a fund-raiser in the 2020 battleground state.

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MIKE PENCE, VICE PRESIDENT OF THE UNITED STATES: We're going to make sure that not only does HHS, CDC, Homeland Security and other agencies have the resources they need for whatever may come. We're going to make sure that states like Florida and your local health officials have the resources to be able to be prepared for any eventuality.

ACOSTA: The vice president's office is now coordinating the administration's coronavirus message, raising up concerns among Democrats that the White House will try to muzzle government scientists who might be too candid about the outbreak.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: I do think that if it is true -- and I don't know if it is -- that they're saying, unless you have an approval of the value office, no scientist can make any statements about this, is not encouraging.

ACOSTA: The White House has jumped into damage control mode with acting Chief of Staff Mick Mulvaney accusing the media of exaggerating the threat posed by the virus to hurt the president.

MICK MULVANEY, ACTING WHITE HOUSE CHIEF OF STAFF: The press was covering their hoax of the day, because they thought it would bring down the president.

I get a note today from a reporter saying, what are you going to do today to calm the markets?

I'm like, really, what I might do today to calm the markets is to tell people to turn their televisions off for 24 hours.

ACOSTA: After a week of steep losses on Wall Street, one big concern for the administration is the economy.

Federal Reserve Chairman Jerome Powell released a statement saying new stimulus measures may be necessary if the virus seriously damages the economy, adding, "The coronavirus poses evolving risk to economic activity.

"The Federal Reserve is closely monitoring developments and their implications for the economic outlook. We will use our tools and act as appropriate to support the economy."

The White House economic adviser, Larry Kudlow, is urging investors to start buying stocks. LARRY KUDLOW, DIRECTOR, NATIONAL ECONOMIC COUNCIL: I would say, so far, the numbers coming in on the economy have actually been quite good, including today. You might think about buying the dip.

ACOSTA: The president had his eye on the 2020 campaign, tweeting about polls he liked and didn't like, at one point remarking, "Worst polls just like in 2016, when they were so far off the mark, are the FOX News polls. Why doesn't FOX finally get a competent polling company?"

And while the White House is considering measures a response to the coronavirus, a new round of tax cuts is on the table -- Jim Acosta, CNN, the White House.

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HOLMES: It is primary Election Day in the U.S. state of South Carolina and critical for Democratic candidates looking to unseat President Trump in November. It could be do or die for former Vice President Joe Biden.

Going into primary season, he was expected to be the front-runner but struggled in the first three contests. Still, he is optimistic about his chances in South Carolina.

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JOE BIDEN (D), PRESIDENTIAL CANDIDATE: I am confident about South Carolina because I've worked so hard over 30 or more years here in South Carolina, not to run for president but to have a relationship with a community, It's been the launching pad for Barack and I believe it would be a launching pad for me.

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HOLMES: The foil for Biden, though Bernie Sanders who has wins and momentum. Biden is leading in the polls in South Carolina but an upset victory for Sanders could go a long way to seal the deal as the nation heads into Super Tuesday next week. Sanders has a lead in a lot of those states as well.

Let's talk about all of this with Michael Genovese, president of the Global Policy Institute at Loyola Marymount University.

Good to see you sir, I want to get you to speak to the political risk of the administration downplaying the coronavirus first of all, so let's have a listen to the president for just a moment.

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TRUMP: They're in good shape, most of them have really good shape, one of the people I wouldn't say not doing well that is she's very sick but she is hopefully getting better. But we're at the same number, essentially we've only had 15.

A lot of that is because I called it early, we made it decision very early to close our borders to certain areas of the world. (END VIDEO CLIP)

HOLMES: For a start, that's very rambling doesn't make a lot of sense in many ways. Also the U.S. has more than 60 cases, not 15. Blaming the Democrats, the media, he says everyone is getting better, uses the word "hoax."

What do you make of how he is in addressing it publicly?

MICHAEL GENOVESE, POLITICAL ANALYST: All presidents need to develop a reservoir of trust, that trust needs to be put into play and used as your political capital in a crisis such as this.

What you find is President Trump has made a career in his three years of office of governing only for his base and not for the nation as a whole and so in this case you are supposed to unify the nation bring us together. Instead he still is dividing us.

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GENOVESE: Instead of saying this is our country, this is our, people this is our, problem we're going to solve it together, I know we can do it. He is saying, blame them, look at the Democrats they did, it or in the case of Mulvaney, the media did, it, turn off your TV, everything will be fine.

Everything will not be fine. This is a genuine legitimate crisis in the making and since the president has not developed that level of trust with the American people, he is not able to convert what was normally political capital into kind of a calming or reassuring message that the American people would buy into.

HOLMES: Yes, it is really one of the first crises he's had to deal with and he's still trying to imagine if Obama said the Ebola crisis was a hoax and the Republicans faltered, how that would've gone down?

There's a long way until November and anything could happen.

But what's the potential electoral fallout over his handling of the virus combined with how he's handling the drops in the market?

This is a president who has pinned his reputation to the economy, specifically the markets, what are the electoral risks?

GENOVESE: When you ride the wave of a good economy, you must be prepared for possibly crashing on the shore. That is what we are seeing in this early stage of the Dow Jones collapse and the potential for a global recession.

So the president has had one big positive thing to rely on since one day one, it's a strong economy and he's been riding that for three years. I think what he has going into the election, now if it is undermined, what does he have?

He has a divided nation, he has the one big issue, the economy, pulled out from under him and so what that means is you are all strengthening whomever the Democrats put up against him in the same way that president -- candidate Obama was strengthened when the news of the recession hit 2008.

McCain's campaign collapsed, Obama's rose.

HOLMES: Speaking of competition, the primary on Saturday, a big day for former Vice President Joe Biden in South Carolina, perhaps he might think of as a stronghold of sorts.

He really needs to win here.

George He is expected, to and he needs, to. He got off to a very sluggish start. Part of the problem is as the front-runner he was overconfident, he never really got his voice and his message.

What is he passionate about?

What is the big issue?

You know what Bernie's for and what most of the candidates are for. With Biden it was always, you know me, you like, me I'm a I'm Obama's guy, vote for me.

And when he was the front-runner he could basically just coast, then when he's took hits early, he had to recalibrate the campaign. He's not been able to do, it. South Carolina is his firewall, as everyone says. He's expected to win.

The problem is, he's down on money; just two days from now, March 3rd, Super Tuesday. And there will be campaigns all over the country and he's not prepared to be invested in all of those different campaigns throughout the country.

HOLMES: Good points on Joe. You mentioned Super Tuesday. Briefly, Bernie Sanders is well ahead in many polls for many of those states, yet there is still that push within the party to stop Bernie, despite a massive grassroots movement.

Whether you agree with him or not, there are risks in alienating that enthusiastic base and it's also important to note that many second choice -- he is second choice for a lot of supporters of other candidates as well -- there is a risk in alienating that, isn't there?

GENOVESE: It's a rough and tumble, woolly world of presidential primaries. And a lot happens. It may not be the most distinguished way to elect the most powerful person in the world, may not be the most functional. It's kind of a Wild West show and people get shot at.

So people get hit. And Bernie is one of the people they will be shooting at because he is the front-runner. There is a risk, as you say, of something happening in 2020 that happened in 2016, which is the Bernie folks either sat it out, some of them even voted for Trump.

If the Bernie folks sit it out, that will be devastating for the Democrats. They need enthusiasm of African Americans and they need the enthusiasm of the young voters, who are Bernie folks. HOLMES: Good points as always. Michael Genovese, thank you so much,

appreciate it.

GENOVESE: Thank you, Michael.

HOLMES: A deadly week for Turkish soldiers in Syria as migrants flock to Turkey's border with Greece. More on the growing humanitarian crisis coming up.

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HOLMES: Hundreds of Syrian refugees desperately try to enter Greece in hopes of getting into the European Union, these are actually live pictures coming to you now.

At the border, Turkey says -- and it has said for a while -- that it can't handle more migrants. And it has been warning over many months but also in the last couple of days that it could reopen its border with Greece, basically, let those refugees travel into Europe.

But Athens says illegal entries are not going to be tolerated and this, of course, as hundreds of thousands of people continue to try and escape intense fighting in Idlib, hundreds of thousands of them.

Turkish defense officials say another one of its soldiers was killed Friday in an attack by Syrian forces and that, of course, the day after airstrikes by Russian-backed Syrian forces killed at least 33 Turkish folders in Idlib province.

After a weeklong reduction in violence, the United States and the Taliban are expected to sign an historic agreement, aiming to end America's longest war. President Donald Trump says the secretary of state, Mike Pompeo, will witness the signing in Doha, Qatar.

He added Defense Secretary Mark Esper will issue a joint declaration with the government of Afghanistan. Under that agreement the U.S. will draw back thousands of its troops in Afghanistan if the Taliban upholds the commitment to go after ISIS and Al Qaeda fighters.

An awful lot of ifs in that agreement.

That's all the time we have. Thanks for watching CNN NEWSROOM. I'm Michael Holmes I'll have your CNN headlines in just a moment.