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Fed Meeting Discusses Taper; Ben Bernake's Tenure as Fed Chairman Comes to Close; Shooting in Reno; Mayor Ford "Sorry" for Corruption Claims; "The Wolf of Wall Street"; Investors Eyeing Fed Decision on Stimulus
Aired December 18, 2013 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Good morning. I'm Carol Costello. Thank you so much for joining me.
Stock markets are poised for a flat open this morning. Investors are waiting to hear what the Federal Reserve plans to do with this massive stimulus program. You heard the bell just rang on Wall Street. The folks from AMC got to ring the bell today.
Let's head to New York and check in with Alison Kosik. So, stock market activity will be a little slow until that important 2:00 p.m. Eastern meeting, right?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Exactly. It's all about will they or won't they, taper that is. So let the speculating begin. The Federal Reserve's two-day meeting is wrapping up today. We'll get the decision at 2:00 with the news conference at 2:30, so it's all about taper talk today and with the economy showing some stronger signs of improvement, the talk has really moved from if to when and by how much that the Fed will taper on its stimulus.
The market may be okay with it because the economy seems to be getting back on its feet. The jobs picture is getting better, economic growth has picked up, the housing market is moving along as well. So the thinking is hey, maybe it is okay to start taking those training wheels off the economy, let's see how the economy does on its own without being juiced by the Fed's stimulus program. Carol?
COSTELLO: So far so good. Alison Kosik, thanks.
After the Fed announces its decision on interest rates today we'll hear from Ben Bernanke, the man who pulled the nation's banks from the brink of collapse. It will be Bernake's final press briefing as Fed chair. While his focus will be on the future, his stamp on history is indelible. CNN's Maggie Lake walks us through the mine field of Bernanke's tenure.
(BEGIN VIDEOTAPE)
MAGGIE LAKE, CNN CORRESPONDENT: It's been a long, perilous eight year ride for Ben Bernanke, filled with virtually every economic challenge imaginable. It all began in 2006 when Bernanke was sworn in as the 14th Federal Reserve chairman taking the raeins from the man once called the maestro, Alan Greenspan. At first it was smooth sailing; U.S. economy was expanding.
Storm clouds seemed far away, but all that changed in 2007.
BEN BERNAKE, FEDERAL RESERVE CHAIRMAN: The economic outlook has been importantly affected by recent developments in financial markets, which have come under significant pressure over the past few months.
LAKE: The slump in housing gathered speed, foreclosures surged. Publicly, Bernanke remained upbeat.
BERNAKE: Our forecast is for moderate, but positive growth going forward for the next few quarters.
LAKE: In the great recession was just beginning. Bear Stearns collapsed in 2008 and was gobbled up by JPMorgan Chase. Lehman brothers collapsed, stocks tanked, and credit markets seized up.
BERNAKE: This plan is an emergency plan to put out a fire.
LAKE: Bernanke stepped on the gas and revved up the engines.
BRIAN BELSKI, BMO CAPITAL MARKETS: Mr. Bernanke was aggressive at a time when our country needed him to be aggressive, and quite frankly needed for him to be decisive. I think a lot of people don't realize how close this country was with respect to having a run on the banks.
LAKE: Bernanke helped craft the controversial bank rescue plan, T.A.R.P. He cut interest rates to near zero and launched the massive Fed stimulus programs quantitative easing one, two, and three. The Fed's promise to try anything to ease the crisis, no matter how unorthodox, was key.
ETHAN HARRIS, BANK OF AMERICA MERRILL LYNCH GLOBAL RESEARCH: They said we're going to do whatever it takes. That message, I think, that the psychological effect of that message was to make the policy changes more powerful.
LAKE: By 2009 the markets recovered. "Time" magazine named Bernanke its person of the year. Years after the worst of the financial crisis, the fed is still pumping billions in stimulus, earning Bernake the nickname Helicopter Ben (ph). Critics say the easy money is fueling risky investments, but unwinding stimulus will not be easy and could upset world markets.
BELSKI: We have now reared an entire generation of investors that have become dependent on QE to buy stocks.
LAKE: The jury is still out on Bernanke's tenure at the Fed, but after such an eventful economic journey, he's earned the right to do something a little less stimulating.
Maggie Lake, CNN, New York.
(END VIDEOTAPE)
COSTELLO: That last image looked nice, didn't it? Look at the Federal Reserve right now, we'll have complete coverage on the Fed meeting today starting at 2:00 p.m. eastern. CNN MONEY will take a closer look at market reaction and what it all means for you and the economy.
Still to come in the NEWSROOM, police are now saying the shooting at a medical center in Reno was not random. CNN's Miguel Marquez is there. Hi, Miguel.
MIGUEL MARQUEZ, CNN CORRESPONDENT: Hello there, Carol. I am at the scene of America's latest rampage shooting, I'll update you on the investigation and how this shooting went down, coming right up.
(COMMERCIAL BREAK)
COSTELLO: This morning, two people are dead and two others are in critical condition after a shooting at a medical center in Reno, Nevada. The suspected gunman is among the dead. Police are saying this was not a random act of violence. CNN's Miguel Marquez is covering the story live from Reno this morning. Hi, Miguel.
MARQUEZ: Hello there, Carol. Here we go again. Just after 2:00 p.m. yesterday that gunman walked into a crowded waiting room in one of the facilities in the hospital here, he told everybody to get out. They did very quickly. He then walked into a surgery area, where two people were shot and injured, another one killed, among them a doctor.
(BEGIN VIDEOTAPE)
MARQUEZ: Yet another shooting, this time a state-of-the-art medical center targeted, one person killed, two more injured, before the shooter took his own life.
OFFICER TOM ROBINSON, DEPUTY CHIEF, RENO POLICE: We had a lone suspect enter the medical facility here with at least one firearm.
MARQUEZ: The shooting contained to the third floor of Reno's renowned medical center, a male gunman opened fire, killing one person. The shooting in a building next to the main hospital campus. Inside this walkway between the two workers told to stay put, the entire complex on lockdown. An all too familiar scenario.
This video shot while S.W.A.T. teams secured the building room by room.
UNIDENTIFIED MALE: Stay in this room that way you're all accounted for.
MARQUEZ: A systematic search by police.
ROBINSON: On the third floor of the building, they located two people down and they located a couple of injuries.
MARQUEZ: Amazingly, operations at the medical center resumed within an hour of police clearing it.
(END VIDEOTAPE) MARQUEZ: Now, it should be noted that this is a very large hospital complex, and despite the fact this was on the third floor of one of those buildings, the police response was pretty amazing, about five minutes apparently to get there. By the time they got there, though, the damage was done, the shooter himself dead. Apparently self inflicted. We expect more information from a police press conference going to be about 10:00 local, 1:00 eastern. We'll bring that to you live. Back to you.
COSTELLO: All right. Miguel Marquez reporting live from Reno, Nevada this morning.
Dennis Rodman is headed to North Korea this week for the third time. And as you know the country is in extreme political turmoil. Rodman says the trip is all about basketball but the world will be waiting to see if he raises the issue of American Kenneth Bae, who was sentenced to 15 years hard labor in North Korea.
New at 10, I'll speak with Bae's sister about her brother's condition, and what she thinks about Rodman's visit. That's just ahead in the next hour of NEWSROOM.
(COMMERCIAL BREAK)
COSTELLO: Checking our top stories at 44 minutes past the hour. Hundreds of fire fighters battling an unusual late-season wildfire in Big Sur, California. Authorities say 22 buildings have been destroyed including 14 homes, and the blaze is only about 20 percent contained. Wildfire season normally peaks in the summer, but the area has gotten only a fraction of its normal rainfall this year.
Toronto's crack-smoking mayor tried and then tried again to apologize to the city council after accusing some of its members of corruption. Here's Rob Ford's tortured attempt to say he's so very, very sorry.
(BEGIN VIDEO CLIP)
MAYOR ROB FORD, TORONTO: I said I withdraw the comments that I made to say if there were any corrupt counselors to say if that's the word. I'm not quite sure what I said but something like that so I withdraw that. I don't understand --
UNIDENTIFIED FEMALE: Just a sec. Just a sec. What the word is that is you need to say I apologize.
FORD: How about I'm so sorry. Is that as good as "I apologize," or so sorry. Which one do you want, madam speaker? Super, super, super, super, super, super sorry?
UNIDENTIFIED FEMALE: Mayor Ford, please.
(END VIDEO CLIP)
COSTELLO: I'm sure he was very sincere. Ford also apologized for comments that a local newspaper report says he suggested he was a pedophile, that reporter has moved to sue Ford for defamation. NASA astronauts will make three emergency space walks to fix a broken cooling line at the International Space Station, the first is set for Saturday with another on Monday and the third may come on Christmas Day. The cooling system failure has forced the crew to turn off all nonessential equipment on board including some science experiments.
If today is your birthday, you share it with Brad Pitt and guess what? He turns 50 years old today. To put that into perspective his Hollywood career took off more than 20 years ago when he landed small roles in films like 1991's "Thelma and Louise."
(BEGIN VIDEO CLIP)
BRAD PITT, ACTOR: I just kind of waltz on in and I say ladies, gentlemen, let's see who wins perhaps keeping their cool. Simon says everybody down on the floor. Now nobody lose their head and nobody loses their head. You, sir, yes, you do the honors. Take that cash and put it in that bag right there. You got amazing story to tell your friends.
(END VIDEO CLIP)
COSTELLO: I think he's just as hot now. There he is with his lovely wife Angelina Jolie and, of course, as you know they have a million children but maybe a little known fact, Brad Pitt has never won an Oscar but there's still time.
No matter what you may have thought about the debauched lifestyles of Wall Street traders during the go-go 80s and 90s your imagination has probably got nothing on the truth. "The Wolf of Wall Street" is a new film by Martin Scorsese and we've got an exclusive behind the scenes look.
(BEGIN VIDEO CLIP)
LEONARDO DICAPRIO, ACTOR: My name is Jordan Belfort the year I turned 26 I made $49 million and what's really pissed me off because it was three shy of a million a week.
UNIDENTIFIED MALE: Four months ago I said that we will reach new levels of productivity. When you look back and say the numbers four and five months ago I make one more guarantee, six months from now, what you're doing right now is going to be nothing again.
This is the greatest company in the world.
UNIDENTIFIED MALE: When I made my first $600,000 in one trade, I went out and bought a white Ferrari Testa Rosa, not a yellow one, not a black one, not white one. You know why? Because it was the car that Don Johnson drove on "Miami Vice".
UNIDENTIFIED FEMALE: What a great life, huh?
UNIDENTIFIED MALE: A lot of guys cold calling right now and in a few months you could be making a lot of money.
DICAPRIO: Was all this legal?
UNIDENTIFIED MALE: Ha.
DICAPRIO: Absolutely not.
UNIDENTIFIED MALE: Oh yes I was greedy. The thousand dollar suits and the gold watches and the drinking at lunch and the cocaine at the end of the day and all of this, it was like, it was almost like adult Disneyland for dysfunctional people basically.
Back then I had a thousand best friends, everyone was my best friend, because everyone wanted something from me, everyone who can benefit from -- from what I was doing. I was really generous with my money. I mean yes sure, it didn't have any meaning to me. It was like monopoly money.
UNIDENTIFIED FEMALE: I'll do anything you want. Can you make us enough money?
UNIDENTIFIED MALE: Oh my God.
UNIDENTIFIED MALE: Get on the phone.
UNIDENTIFIED MALE: It's part of everybody here, not me, not Kenny, not a couple of partners, it's everybody here. You guys are part of it. You built it. And without you, it doesn't run. If we all stick together, next year at this time, it will be double the size and we already are the most powerful firm one but (inaudible) those Wall Street guys and that's our goal all right?
(END VIDEO CLIP)
COSTELLO: Of course his story ended that way. I don't know, watching that just makes me a little nauseated in light of what happened in 2008 although that came much earlier.
NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Yes.
COSTELLO: But Nischelle Turner, I understand you were on the Red Carpet last night for the movie's premiere. What was that like?
TURNER: Well I wasn't on the Red Carpet for the movie's premiere but I did sit down with the stars of the movie just a couple of days ago and talk to them. Leonardo DiCaprio is one person that I spoke to. He portrays Jordan Belfort in this movie. He's also a producer on the film. And you know one of the things he said is that he's been trying to get this film made for six years.
That he kind of became obsessed with the story because he says that he feels like it portrays everything and sense of everything that is wrong with society so he wanted to bring that to the screen.
This movie is three hours long, Carol, but you wouldn't even know it because it definitely takes you on a wild ride. Its Quaaludes, cocaine, cars and corruption that's what I say and it's Martin Scorcese doing it satirical style as well. It's very funny but it definitely tells a cautionary tale of greed and obsession on Wall Street.
COSTELLO: And from what I understand, the character in this movie makes Gordon Gecko look like a choir boy.
TURNER: You are absolutely right. You know I was sitting here saying to Leonardo DiCaprio, this blows my mind how could this be. And he said all of this is true as crazy and outlandish as it seems, it's all true because this is based on Jordan Belfort's book that he wrote about his life in those days when he was called "The Wolf of Wall Street".
Some of the scenes that you see, some of the -- even the sex scenes, some of the debauchery that he -- that he does there it's very kind of hard to look at and you think this can't be true but Leonardo DiCaprio says it is. He calls it a modern day Caligula because he says that's exactly what was going on there, Carol.
COSTELLO: You know that the sad part is as I hope it somehow touches on this guy's victims. Because now he's written a book and there's a big movie out about him and he's in the limelight and that kind of makes me nauseated, too, frankly.
TURNER: Well you know it's very interesting he actually makes a cameo, the real Jordan Belfort makes a cameo in the film as well but it's interesting that you say that because one of the lines in the movie, one of the themes is they call him, one of the "Forbes" articles they did on him in the 80s, was they called him the modern day Robin Hood but he robbed from the rich and gave to himself, not robbed from the rich and gave to the poor.
And out of all of this, out of all that he did, bilked $250 million from people he did only serve less than two years in federal prison. He had gone straight before he went to federal prison but he ultimately did have to pay a price for the things that he did.
COSTELLO: Isn't America grand? Nischelle Turner -- thanks so much.
TURNER: Absolutely.
COSTELLO: So what do you think was the biggest story of 2013? Tell us, because we want to know. Voting is now under way at CNN.com. If you go to the page you'll see a list of 20 stories -- the ones that really had us talking this year. From that list, choose 10. On December 30th at 9:00 a.m. Eastern, online and on TV, we will reveal the top ten stories of 2013 as voted upon by you. So check it out.
Still to come in the NEWSROOM, a high school JD player hits from downtown with just a second left -- isn't this amazing? So the game goes into overtime, right, Andy Scholes?
ANDY SCHOLES, BLEACHER REPORT: Not so fast Carol. It's one of the craziest innings you'll ever see in a high school basketball game. We'll show it to you next in your "Bleacher Report".
(COMMERCIAL BREAK) COSTELLO: We can see MMA history Friday night in Brazil. A man is going to fight a woman. Andy Scholes is here. This sport is so brutal I don't know why anyone would want to partake anyway.
SCHOLES: Yes, and you know, the promoters are always going for that shock value. Well, mission accomplished in this case -- right. A man versus a woman -- I've never seen this before. It's going to make MMA history in Brazil.
A promotion poster is getting a ton of buzz on BleacherReport.com right and really all over social media. It features Emerson Falcao on the left and his opponent Juliana Velasquez on the right. Check it out right here.
Now Velasquez says he trains with men every day and she's ready for the challenge of getting into the ring with one of them. Now no word yet on whether there's going to be any special rules for this contest but it really seems like a bad idea and it's got to be a lose-lose situation for Falcao, right? Either he beats up a girl or he loses to a girl.
COSTELLO: Right. You grew up. Your parents will say never, never, never strike a girl and this is going against the grain, right?
SCHOLES: Exactly.
COSTELLO: I just wouldn't want to be hit in the face.
SCHOLES: Like I said -- lose-lose situation.
COSTELLO: Right.
SCHOLES: All right Carol. What is better than one buzzer beater? How about two buzzer beaters. That's exactly what happened in a junior varsity high school game in Indiana.
Check it out, Harrison High hits is a crazy three-pointer with one second left on the clock. They think they've won the game. There was time- is called and there is one second left and with that one second -- Avon got an even crazier shot right here from half court to win the game. Awesome.
COSTELLO: This is unbelievable.
SCHOLES: Another example Carol, of, it isn't over until it's over.
COSTELLO: Until it's over.
SCHOLES: All right. Patriots tight end Rob Gronkowski is still recovering from knee surgery but he isn't too hurt to spread some holiday cheer, the all pro dressed up like an elf and wheeled his around the children's hospital in Boston visiting with all the patients. Gronk handed out the gifts while teammate Steven Ridley played there. He was also -- he played the role of Santa Claus.
You've seen the video, Gronkowski is actually going to be the one holding the ball, not Ridley because Ridley has had all kind of fumbling problems right now. That was a joke the patriot fans were making about the whole thing.
COSTELLO: Thanks so much -- Andy.
SCHOLES: Right.
COSTELLO: The next hour of CNN NEWSROOM" starts now. Good morning, I'm Carol Costello. Thank you so much for joining me.
We start this hour on Wall Street where investors are getting ready for what would be a wild ride. At 2:00 p.m. Eastern today, the Fed will announce whether it will begin pulling back on its massive stimulus program. This is the same program that's lifted stocks to record highs after record highs this year and giving your 401(k) a healthy boost.
Alison Kosik is following the story from New York for us. Good morning.
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Good morning, carol. Despite seeing your 401(k) doing really well, you know, there have been concerns about what will happen if the fed does start to pull back on this stimulus. We are going to know later this afternoon. But there are questions, how is this going to affect the economy? How is this going to affect the markets?
You look so far with the stimulus program, the fed pumps $3.8 trillion into bond market. Most economist though, they actually don't expect to see a change today but there's also a school of thought that a mini taper could be in the offing. Deutsche Bank says that Bernanke could wind up announcing a $10 billion reduction today in $85 billion a month that he's been pumping into bonds.
And the Fed actually may be more willing to pull back because you look at the economy, it's actually bouncing back. You know, jobs have still got a ways to go but we're seeing a lot of recovery there. GDP is doing better than expectations. The housing market is really continuing its rebound. Auto sales are running hot as well.
