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What Caused the Crisis in Ukraine; Grabbing Hollywood Gold

Aired March 03, 2014 - 09:30   ET

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

LAURIE PETERS, CNN FORENSIC ANALYST: But it shouldn't sway the material evidence, it shouldn't sway what they say at all. They are all there for a reason. They know something or they saw something. All they have to do is tell truth and there should be absolutely no problem for any of the witnesses on the stand.

PHILLIPS: Well, we'll be following this murder trial closely.

Laurie Peters, thanks so much.

Let's go ahead and turn it back over now to Wolf Blitzer in Washington with the latest on the crisis in the Ukraine -- Wolf.

BLITZER: And that crisis, Kyra, clearly escalating. We're only moments away, in fact, we're ready right now for the Opening Bell. Take a look at this. Investors bracing for the worst possible day today. At least right now going down right away. The Dow futures were looking grimly as the Ukraine crisis sends shockwaves through the global market.

This morning European and Asian markets both took a dive. U.S. stocks expected to open sharply lower and they are right now.

So why is this crisis in Ukraine, this crisis with Russia, having such a huge impact potentially on the global market?

I'm joined by our chief business correspondent Christine Romans.

What's the short answer, Christine?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: The short answer is because tensions between Russia and Europe and Russia and the United States very dangerous for global sentiment. That is the bottom line here.

And, Wolf, when you look at the region, when you look at Ukraine it is a powerful pipeline for natural gas and energy from Russia to Europe. When you look at the region you can see that half of Russian exports are to the European Union. This is all incredibly important. Those are the major pipelines we're looking at there.

Now in terms of stocks you're not seeing the big dramatic impact in the first Opening Bell here that we thought. At worse this morning you had Dow futures down about 160 points now down about 100. Here's sort of the funny Wall Street conventional wisdom this morning, right? Russian stock market got slammed. The Russian currency slammed. Russian businessmen outraged, very concerned about what's going to happen to their economy. And so now you hear people saying that maybe, just maybe those Russian markets are going to be a very powerful diplomat and temper some of the saber rattling that we've been seeing.

But actually that big reaction in Russian markets means that perhaps the worst is behind us because why in the world would anybody try to do anything that would make markets continue to be unstable there. So that's at least the thinking right now.

The Dow is down about 100 points -- Wolf.

BLITZER: Yes. Only two minutes in and down more than 100 points already.

Let's bring in our global economics analyst, Rana Faroohar. She's joining us as well.

What's your take? Why this quick collapse right now, at least a steep downturn on world markets and on the Dow Jones?

RANA FAROOHAR, CNN GLOBAL ECONOMICS ANALYST: Well, you know, equity stocks are very vulnerable to political turmoil. People get very worried about any kind of political turmoil and that tends to affect stocks more sharply than bonds or gold or other safe-haven assets.

Christine is absolutely right. What's happening right now is worries over petrol politics, you know, Russia has the opportunity to really squeeze both the Ukraine and the EU which gets a lot of its natural gas either from Russia or through those pipelines. So this is something that's really rattling markets.

And, you know, emerging markets were already unsettled before any of this started happening. So I think you're going to continue to see jitters in stock markets globally and you're going to see a flight to safe havens, bonds, gold, the yen, and potentially the dollar.

BLITZER: I think there's a lot of nervousness, Christine, also. There's talk now of suspending the G-8, not having the meeting in June in Sochi, Russia. They've already suspended preparatory talks for the G-8. These are the world's supposed great economic powers. They're supposed to get together to talk about world economic issues and there might not even be a meeting now.

ROMANS: And that's -- this highlights how dangerous it is. When we have such big global financial powers and you have to suspend the preparation for the G-8. That's exactly shows you it underscores the risk here.

You know, and there's a risk for everyone. When you look at Ukraine, it's a powerful exporter of grains, right? You've got wheat prices at 5 percent today, Wolf. Corn prices up as well. because the farmers in Ukraine are feeding Europe and they're exporting some of those goods. So it's small economy, 45 million people, but it really matters in this sort of patch work that is a global economy. Every one of these little ripples is dangerous. You know, there's a Russian businessman who apparently tweeted this, "Money doesn't love war." And I think that's the bottom line here. Money doesn't love war. They want certainty. They want to know how -- how business is going to go. They want to know that you can export, that you can import. They want to know that currencies are stable. And right now all of that is in question.

BLITZER: And if the U.S. and the EU, Rana, they start imposing economic sanctions against Russia, forget about Ukraine -- against Russia that would presumably have a negative impact on the global economy as well.

FAROOHAR: Absolutely. You know, these are -- these are major trade flows that we're talking about and the EU and the U.S. are actually in trade negotiations right now. The U.S. and Russia were already having problems over Syria saying with Russia and the EU.

So, you know, as Christine says the Ukraine seems small, and it is small as an economy, but it is the nexus of some major political and economic stories in the world right now.

BLITZER: Those Russian trade representatives, they were supposed to have U.S.-Russian trade talks this week.

They've cancelled those talks, Christine, at least for now.

ROMANS: They have. And another reason why the markets may be a powerful diplomat here. How much -- how much more can the stock market fall in Russia? Down 11 percent today. The ruble down hard. The Russian Central Bank raised interest rates, a surprise move. Raised interest rates to try to contain the damage to the Russian economy.

Russian business members very concerned about this. So you have trade diplomacy. You have diplomacy ahead of the G-8 and then you have this market, the market sending these messages as well.

One thing, Wolf, you know, how powerful a negotiator will Angela Merkel be in Germany. You know, Germany and Russia have very close ties, very close economic ties. You know, who is going to be player who turns this around or at least stops, at least stops the progression of uncertainty that we're seeing right now.

BLITZER: Yes. And I'll wrap it up, Rana. But very quickly, do you see potentially a little bit of a split developing between President Obama's tough stance against Russia and the German Chancellor Angela Merkel? Might she take a little bit less tough stance and could there be a bit of a rift between the U.S. and Germany?

FAROOHAR: Well, it'll be very interesting to see because, as Christine was saying, Germany and Russia have very close trade ties but, you know, the last time Russia tried to strong-arm European over energy politics, Merkel actually took a hard line and most European leaders did take a hard line.

So I think that it's going to be a tossup really to see what happens and I think that Merkel probably will take the lead going forward.

Germany is the strongest economic power in Europe. They're very dependent on Russia and she will be in the hot seat.

BLITZER: I suspect she has more influence with Putin than President Obama does but that's -- we'll see what happens on that front.

Rana, thanks very much. Christine, of course, thanks to you.

Still to come a closer look at the U.S. military options. Are there any military options as Russian troops move in, appear to be digging in for a long-term occupation of Ukraine?

(COMMERCIAL BREAK)

BLITZER: This morning in Ukraine the biggest challenge of east-west relations since the end of the Cold War. Washington says some 6,000 Russian troops have now mobilized across Crimea, that's part of Ukraine, surrounding Ukrainian military bases there and effectively seizing control of the entire peninsula.

Our senior -- one senior administration official says that Russian forces appear to be digging in right now. They were actually calling up reinforcements.

So what about any U.S. military strategy? Is there a realistic U.S.- NATO military strategy.

Let's go to the Pentagon, our correspondent Barbara Starr is standing by.

What are you hearing, Barbara?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Wolf, officials are telling us across the board no U.S. military, no NATO military action in this crisis. That is not to say, however, that NATO and the Pentagon are not involved in this.

First up, U.S. officials say the Navy will stick to its plan to send a war ship on a regularly scheduled rotation into the Black Sea in the coming days. That was planned, long planned, they are not going to pull back from that, they say. Part of regular U.S. Navy business.

What they are focused on is trying to figure out exactly what you were just talking about. What is the Russian military up to. They are looking at the movement of Russian troops, armored vehicles, helicopters. Looking at the speed and direction in which they are moving and trying to come to some assessments for the president about what this may say about Russian military intentions.

Very difficult because the Russians can move very quickly. They can move in real-time and leave the U.S. struggling to catch up to figure out what they are up to.

The other thing, Wolf, that we're beginning to hear, there is a lot of concern about Russian deception and disinformation. The stories appearing that Russia is doing all of this to protect its citizens. Russian people living in Crimea that there may be a need for massive Russian humanitarian relief.

The concern the U.S. has, they have no evidence that any of this motivation is actually true. They don't believe that it's happening, we're told, and as the Russians continue to put out what the U.S. believes is deception, this complicates the situation, it makes it a potential hair trigger for some further kind of violence for all of this erupting into outright conflict.

It is a major concern right now, trying to figure out what Vladimir Putin, the classic Soviet style cold warrior, may be up to next -- Wolf.

BLITZER: Barbara Starr at the Pentagon. Thanks very much.

Still to come, tensions escalating by the minute as this crisis in Ukraine plays out on the world stage.

Up next we'll take a closer look at why the crisis began, what a political stalemate could mean for the U.S. and the rest of the world.

(COMMERCIAL BREAK)

BLITZER: This country about the size of Texas but the global implications of a political stalemate in the Ukraine are enormous -- so what caused the country's political and economic crisis? CNN's chief national security correspondent Jim Sciutto explains.

(BEGIN VIDEO CLIP)

JIM SCIUTTO, CNN'S CHIEF NATIONAL SECURITY CORRESPONDENT: There have been a lot of questions about Russia's interest in the Ukraine as well as the West interest. So we could look at the map and we'll get a much better sense.

First of all: a reminder here. Ukraine is in Europe it's not a million miles away, the capital is just a few hundred miles from cities that Americans travel through all the time -- Rome, Paris, London. And look here on its Western border four key American allies, Poland, Slovakia, Hungary and Romania all members of NATO. And under NATO the U.S. has an obligation, a treaty obligation to defend them if they come under threat. Now Ukraine not a member of NATO but in recent years there's been a lot of talk about bringing them in to a closer relationship.

Let's get a better sense now of Russia's interest there. You look at Crimea on the tip of that peninsula, the Sevastopol military naval base this is the headquarters of Russia's Black Sea fleet. It's their only warm water port. All the ports up north are frozen in winter. Access to the Black Sea, to the Mediterranean, the Atlantic essential for Russia and that's the first place that many of those 6,000 and even more Russian troops went when they crossed the border from Russia into Crimea; a reminder -- sovereign Ukrainian territory.

But let's look inside the country as well because there's a real split between east and west there. Western part of the country here leans towards Europe only five percent of the population in these parts speak Russian, ethnic Russian. Eastern part of the country 75 percent here they speak Russian, they're ethnic they feel the pull towards Russia. This part of the country feels the pull towards the West and Europe.

Jim Sciutto, CNN, New York.

(END VIDEO CLIP)

BLITZER: Jim thanks very much. We'll take a quick break. Much more news right after this.

(COMMERCIAL BREAK)

BLITZER: Good morning. I'm Wolf Blitzer in Washington. We're watching all the developments in Ukraine with our correspondents spread out throughout the region. We'll have more live reports in just a few moments.

Throughout the day the by the way all new developments coming out of Ukraine will come up on the left side of your screen but first we want to check some other stories making news this morning.

Let's go back to Kyra over at the CNN Worldwide Headquarters in Atlanta -- Kyra.

KYRA PHILLIPS, CNN ANCHOR: Wolf thanks so much.

Well history was made at the Oscars not on the big screen but the smartphone screen. Host Ellen DeGeneres's selfie with stars set a social media record. It's pretty funny. That was then re-tweeted more than 2.5 million times more than any Twitter pic ever.

Oh yes and there were some awards too. Let me get to that "12 Years a Slave" the best picture; Matthew McConaughey, Cate Blanchett half acting honors; and "Gravity" wins the most Oscars.

CNN entertainment correspondent Nischelle Turner in Los Angeles for us -- Nischelle you called all of this you knew exactly what was going to win.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: Yes.

PHILLIPS: When we -- when we talk about it in the show.

TURNER: Yes again and I know why Carol Costello isn't there this morning because she owes me $20. We bet on who would win best picture she said "American Hustle", I said "12 Years a Slave." And lo and behold she's not here on Monday, sounds peculiar.

Anyway I did catch up with one of the big winners of the night someone who has stolen the hearts of everyone that have seen the movie "12 Years a Slave". And that's Lupita Nyong'o who won for best supporting actress. I caught up with her right after the win at the Governor's Ball and we had a little girl chat. Take a look.

(BEGIN VIDEO CLIP)

TURNER: Congratulations.

LUPITA NYONG'O, ACTRESS: Thank you so much.

TURNER: You've got the biggest grin on your face right now from ear to ear.

NYONG'O: I know.

TURNER: You're hugging that thing as like you'll never let not go.

NYONG'O: Yes this is my main squeeze.

TURNER: What is it like that moment right before you hear your name being called? You're sitting there and they say "And the Oscar goes to" --

NYONG'O: It is agony. Nothing but agony because one way or another you're going to have to do something very scary, you know yes. It's awful. I wouldn't wish it on my worst enemy.

TURNER: Were you prepared to hear your name. Because they read it and you -- I mean you look like you kind of lost your breath for a second. Did they just say Lupita?

NYONG'O: Yes. I mean you know it's like no matter how many times people predicted and wish me to win, it doesn't prepare you for actually hearing your name because it could have gone five different ways.

(END VIDEO CLIP)

TURNER: You know what? It was a good 48 hours for her. Because the day before the Oscars, Kyra, was her birthday so then she got to go the Oscars on Sunday and she wins.

That's pretty cool. And you know, the guy that was with her -- that's her brother, Junior. Junior, how did you jump in that A-list selfie with Ellen and everybody else because you kind of photobombed it and he said, "Look, I knew I might not have another chance at something like that so I just had to take the chance while I had it." And he did so Junior is forever immortalized in the A-list selfie with all the rest of those big stars.

PHILLIPS: Yes, he's -- look at him. There he is right there. Hold on just a second.

TURNER: He jumped right in.

PHILLIPS: Let me get right next to Brad Pitt. Let get right behind Ellen's shoulders.

TURNER: In front of Angelina Jolie. My hi-top (inaudible) is blocking Angelina Jolie but I'm there.

It was the best.

PHILLIPS: You know, we have to talk about the clothes right. I mean all right. You can look it up and see who won what and we kind of knew how it was all going to unfold. There were some amazing films this year but should we talk about dress.

I mean I know how you're a fashion diva. So.

TURNER: Can we talk?

PHILLIPS: Can we talk? Besides how you beautiful you look.

(CROSSTALK)

TURNER: You know I had some favorites of the night. I definitely did and those favorites were three. And it was Charlize Theron in that black Dior. She looked like a dream. It was perfection. Kate Hudson in that white Versace with the cape and plunging neckline -- hello. And Lupita Nyong'o in that powder blue Prada. You know she looked like a princess. She was the belle of the ball. It was her night. And I think she was just appropriately beautiful with that Fred Leighton headpiece she had on.

PHILLIPS: Yes. Classy, classy. Nischelle Turner, great to see you.

TURNER: Absolutely.

PHILLIPS: Next hour of CNN NEWSROOM begins right after a break.

(COMMERCIAL BREAK)