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Prime Minister Liz Truss Apologizes for Mistakes, Vows to Carry On; China Delays Release of Economic Data as Party Elite Meet; Ordinary Workers in China Express Frustration as Economy Falters; Stockton Police: Suspect's Arrest Stopped Another Killing. Aired 4:30- 5a ET

Aired October 18, 2022 - 04:30   ET

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

[04:30:00]

MAX FOSTER, CNN ANCHOR: Welcome back to CNN NEWSROOM. I'm Max Foster. If you are just joining us, let me get you up to date on the latest stories.

With just three weeks to go until election day, U.S. midterm races are heating up. Debates held across -- or were held across Monday night in two key Senate contests in Ohio and Utah. Both races could help determine the balance of power in the U.S. Congress this fall.

In Ukraine officials are reporting more Russian strikes across the country this morning including three strikes on an energy facility in the capital of Kyiv as well as explosions in Kharkiv and Mykolaiv.

We are just hours away from the opening bell on Wall Street. And here's a look at where U.S. stock futures stand right now. They're all up. As you can see, on Monday investors saw stocks rally and the Dow saw soared about 30,000. So, they're hoping for another good day there.

Trading is already underway across Europe and also very positive news up more than 1 percent, as you can see, across the main indices.

Markets have also been loving the major U-turn by Britain's new finance minister, Jeremy Hunt. Nixed most of the previous fiscal plan including those tax cuts that rattled investors and sent the pound plunging. He says the U.K. must show it can and always will pay its way in the world. The move has dealt a serious blow to the Prime Minister's credibility. During an interview with the BBC Liz Truss apologized for going too far too fast with the rollout of the economic reforms. Despite a possible revolt from within her own party, she's vowing to stick around and lead Conservatives into the next general election.

(BEGIN VIDEO CLIP)

LIZ TRUSS, BRITISH PRIME MINISTER: Now I recognize we have made mistakes. I'm sorry for those mistakes, but I fixed the mistakes. I've appointed a new chancellor. We have restored economic stability and fiscal discipline. And what I now want to do is go on and deliver for the public.

(END VIDEO CLIP)

FOSTER: Scott McLean following all of this extraordinary historic political process in the United Kingdom. And a lot of backbenchers in her own party will be looking at that interview thinking she's totally delusional.

SCOTT MCLEAN, CNN CORRESPONDENT: I mean, yesterday was a weird day. I mean, here you have Liz Truss trying to look like she's in control of her party. But I don't think she did anything to really show people that she was in control of her party. You had this question come from the opposition, urgent question from the House of Commons. Liz truss wasn't there for it. You had her deputized Penny Mordaunt, the leader of the Commons but also her leadership rival. She assured everyone to some laughter, to some jeers, that she, Liz Truss was, you know, gone for a good reason. That she wasn't hiding under a new desk.

And then you have the new chancellor on the job for only a few days, proceed to completely -- almost completely scrap her economic plans which now includes -- I'll give you the list.

[04:35:00]

The plan basic income tax cut, plan cut to dividends tax, the planned income tax cut for high earners, a plan to cancel corporate tax hike. There's a few other things as well. All told this saves $36 million of money that the government didn't have to spend in the first place.

As you showed there earlier, the markets obviously responded positively, the pound rebounded as well. And then you have Liz Truss apologizing later in the day as well for the damage that has been done. But now the primary question that seems to be asked in British politics and, in this country, more broadly, is what is the point of Liz Truss as Prime Minister? Because you have all of these signature plans that she planned and she promised to roll out, all of these tax cuts, which she did, but then now she's rolled them back and the plans that she's having to implement look a lot like those of Rishi Sunak.

His whole point during the leadership campaign is, look, I believe in lower taxes and higher growth, that kind of thing. Of course, I'm a conservative, but now is not the time given all the debt we've taken on during the pandemic. Now is not the time given the war, given energy costs, you know, the list goes on. And so, you have some, just a handful of conservative backbench MPs calling for her resignation. But I mean, given that her polls are really in the tank at the moment, you have you to wonder how long her time as current Prime Minister will actually last.

FOSTER: The question always is as well -- and Boris Johnson had this -- you know, you can say you want the Prime Minister to go. We've got to have an alternative lined up. Rishi Sunak is suggested but he only represents part of the party, doesn't he. So that's where this idea of bringing Penny Mordaunt in on a joint ticket comes from.

MCLEAN: Yes, you have this party that is pretty divided. Of course, Liz Truss got into office in the first place because she really appealed to the base of her party, people who wanted all of these conservative things. They wanted tax cuts. They wanted more growth. She was sort of reading from that song book. Rishi Sunak obviously tried to be a lot more realistic about the situation and he knew what the situation was given the fact that he was the Chancellor. He represents, obviously, a different section of the party. Penny Mordaunt is probably more aligned with Rishi Sunak on a lot of these but perhaps more of an unifier. But obviously it was Rishi Sunak who gathered the most votes amongst his parliamentary colleagues.

So, it's not like there's a definite obvious answer to who would step in if Liz Truss were to be forced out. Of course, remember she has one year under the party's own rules before she can face any kind of leadership challenge. Though course, the same thing happened to Boris Johnson, is the committee that makes the rules, would just threatened to change them and then that would force her out anyway.

FOSTER: Scott, thank you.

China delaying the release of highly anticipated economic data including its third quarter GDP. The delay comes as China's Communist Party Congress is underway in Beijing this week. Senior party leaders and the political elite met with delegates for panel discussions on Monday. Analysts suspect China's third quarter growth to remain weak due to the government's zero-COVID policies.

Inside the Party Congress, China's leaders have boasted about the country's economic progress over the past decade. But outside the gathering on the streets of Beijing, ordinary people say they feel frustrated and hopeless as China's economy falters. CNN's Selina Wang reports.

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SELINA WANG, CNN CORRESPONDENT (voice over): Migrant workers like Mr. Hu moved from Chinese villages to Beijing in search for better job prospects. On a lucky day, he can make the equivalent of a few dozen U.S. dollars from construction work. Anything leftover, he sends home to his kids in the village.

He says the pandemic has made it harder to find work and China's economy is in bad shape because of all the COVID restrictions.

The world's growth engine is sputtering. After decades of unstoppable growth, China's economy is cracking. Constant COVID lockdowns, wrecking businesses and lives. He shows us his rental home in Beijing, just four square meters. It's really small, he says.

Since Chinese leader Xi Jinping took power in 2012, he's pledged to reduce income inequality. But workers like Hu aren't seeing the benefits. He says I don't think it's a good idea for him to continue to serve.

SUSAN SHIRK, CHAIR, 21ST CENTURY CHINA CENTER: I think there are a lot of people in China who have lost confidence in the pragmatic judgment of their leader, it could become a big challenge to Xi Jinping. WANG (voice-over): Unemployment is skyrocketing, not just because of the pandemic. China's once vibrant private sector, suffocating under Xi Jinping's crackdown to bring companies under tighter Communist Party control. Beijing insists the moves protect consumers and reduce economic inequality. But instead, mass layoffs are sending youth unemployment to a record high of nearly 20 percent.

Protests also erupted this summer in central China, thousands of depositors lost access to their savings at several banks in the region.

[04:40:00]

As police violently quashed the protesters, Beijing arrested hundreds of suspects allegedly involved in the scandal and promised that depositors would start to get their money back. But many still have not.

This is my family's hard earned money over the last 20 years, he says. Our lives depend on it.

WANG: How has this whole experience changed your perception of your country of China's leaders?

WANG (voice-over): I'm like an ant that they can trample on. I have no hope, he says.

Another crisis is unfolding in China's all important property sector. Giant developers have defaulted. Home sales are dropping. Homebuyers across the country are boycotting mortgage payments on unfinished homes, fearful that their properties will never get built. These protesters chant, evil developer, give back my property.

KERRY BROWN, LAU CHINA INSTITUTE DIRECTOR, KING'S COLLEGE LONDON: The Chinese property market is probably the world's greatest economic asset, single economic asset. If it does collapse, then we have a full blown recession, maybe even depression.

WANG (voice-over): Xi Jinping is preparing to be ruler for life, claiming that his brand of authoritarianism will realize the China dream of strength and prosperity.

But for people like Hu, all he wants is to make ends meet, and even that is a dream out of reach.

Selina Wang, CNN, Hong Kong.

(END VIDEOTAPE)

FOSTER: Relief could be on the way for millions of Americans. The White House has now officially launched the online application for federal student loan forgiveness. Under the plan borrowers making less than $125,000 a year could get 10,000 in student debt wiped away, 20,000 if they receive Pell grants. U.S. President Joe Biden touted the release on Monday and hit back at critics.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: The Republican members of Congress, Republican governors are trying to do everything they can to deny this relief even to their own constituent. As soon as I announced my administration's Student Debt Plan, they started attacking it saying all kinds of things. Their outrage is wrong and it's hypocritical. I will never apologize for helping working Americans and middle class people as they recover from the pandemic, especially not the same Republicans who voted for a $2 trillion tax cut in the last administration mainly benefited the wealthiest Americans and the largest corporations.

(END VIDEO CLIP)

FOSTER: The Biden administration says more than 8 million Americans signed up over the weekend after the a version of the beta version of the application went live.

Still to come, California police say they've taken a dangerous killer off the streets. How tips from the public helped them make the arrest.

[04:45:00]

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FOSTER: Police in California say they prevented another killing after the capture of a shooting suspect over the weekend. Wesley Brownlee was arrested in the city of Stockton early on Saturday morning and police believe he is responsible for killing at least six people. CNN's Nick Watt has the latest on the arrest.

(BEGIN VIDEOTAPE)

CHIEF STANLEY MCFADDEN, STOCKTON POLICE: Our surveillance team followed this person while he was driving.

NICK WATT, CNN NATIONAL CORRESPONDENT (voice-over): Wesley Brownlee, 43 years old, lives in Stockton, now in custody, a suspected serial killer.

MCFADDEN: We watched his patterns and determined early this morning, he was on a mission to kill. He was out hunting.

WATT (voice-over): Five Stockton men were slain between early July and late September, all shot while walking alone late at night or in the early morning. Lorenzo Lopez was the last. In the neighborhood where he was killed, his little brother Jerry paid tribute.

JERRY LOPEZ, VICTIM'S BROTHER: He was there for me. He was watching out for me. I wish I could have watched out for him.

WATT (voice-over): Police now believe Brownlee's spree began in nearby Oakland in April of last year, with the early morning murder of a lone man. They say days later, Brownlee shot a woman in Stockton but she survived. Nothing was stolen from any of the victims and police say they found no gang connections. UNIDENTIFIED MALE: Can you speak to any possible motive?

MCFADDEN: That I don't know.

WATT (voice-over): Early October, police released this video of a person of interest, offered a $125,000 reward -- asked the public for help. And tips, police say, did help lead them to Brownlee.

For weeks, this city has been --

UNIDENTIFIED FEMALE: On edge and scared.

WATT (voice-over): Now, some relief.

RON FREITAS, INCOMING SAN JOAQUIN COUNTY DISTRICT ATTORNEY: The suspect's reign of terror in our community has come to an end.

WATT (voice-over): Relief particularly near where Brownlee was arrested around 2:00 a.m. Saturday.

UNIDENTIFIED FEMALE: it's a very scary feeling, you know, to know that he was close to us. I'm so thankful to God that he was caught.

MCFADDEN: He was wearing dark clothing and had a mask around his neck, was also armed with a firearm when he was taken into custody. We are sure we stopped another killing.

WATT: Police say this killer liked to strike in areas that were dark with very few security cameras, quiet areas, whether that's been accident or design remains unclear. It's also reported that a number of his victims were homeless people. The suspect, Brownlee, will make his first appearance in court Tuesday. He will be arraigned and we will undoubtedly find out something about charges and perhaps something more about motive.

Nick Watt, CNN, Los Angeles.

(END VIDEOTAPE)

FOSTER: A new study finds more than a million Americans with diabetes rationed insulin over the past year. The main reason was cost. Some groups said they did so more frequently, just as those with type I diabetes and those without health insurance.

A new study finds women who use hair straightening chemicals are more likely to develop uterine cancer. That's according to the U.S. national institutes of health. Which says African American women may be at higher risk due to more frequent use which they defined as more than four times a year. The same study found no association between uterine cancer and the use of other hair products like dyes, bleach, highlights or perm.

From musical tours to tours of duty. One of the world's most popular K-pop bands is going silent, at least for now, to serve in their country's military. That's just ahead.

[04:50:00]

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FOSTER: Members of South Korea's pop sensation BTS are pressing the pause button on their music to take up mandatory military service. The oldest member, Jin, plans to start the process later this month, as soon as his schedule for his solo release. The others will follow based on their own individual plans. BTS is expected to reunite around 2025 but South Korea's defense minister says the band might still be able to perform overseas during their military service.

Nearly 40 years since the original "Christmas story," the holiday classic is getting a sequel titled a "Christmas Story Christmas." The new film follows the now adult Ralphie Parker played by actor Peter Billingsley. The movie premieres on HBO Max on November 17 -- CNN and HBO Max are part of the same pair company Warner Bros. Discovery.

After another postponement to the American League Division Series is set to finally wrap up later today. Monday night's game between the New York Yankees and Cleveland Guardians was rescheduled because of rain. The forecast looks promising though for today's winner takes all game five, with clear skies predicted. The winners will head to Texas to play the Houston Astros tomorrow in game one of the American League Championship Series.

[04:55:00]

In the NFL it wasn't pretty but the LA Chargers were able to grind out in overtime victory over their division rivals the Denver Broncos on Monday night's football. Both teams struggled to get their offense going for much of the game though. So, it came down to the kickers with Dustin Hopkins hitting the game-winning field goal for l LA. The final score 19-1 three 6.

After years of being passed forward Real Madrid's forward Karim Benzema won this year's men's Ballon d'Or. The annual award honoring the best players in world football. The 34-year-old was key to Real winning a record 14 UEFA Champions League, as well as the Spanish LaLiga. He was the top score in both competitions. And

Barcelona's Alexia Ptellas picked up her second women's Ballon d'Or. The Spanish midfielder was the first woman to win the prize two years straight despite still recovering from a torn ligament. She helped Barcelona to a perfect past season with the club winning all of the league matches and also making it to the final of the UEFA Women's Champions League.

Now before we go, millions of people visit India's Taj Mahal every year. But very few get to see it like this. That's a trio of wind seek flyers getting a stunning bird's eye view of one of the most famous sites in the world. The team of dare devils flew more than 500 meters high reaching speeds of up to 150 kilometers per hour. Amazing.

Thank you for joining us on CNN NEWSROOM. I'm Max Foster in London. "EARLY START" with Christine is next.

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