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Biden Blasts Oil Companies for Record Profits as Prices Surge; EU Inflation Hits Record High as Energy and Food Prices Soar; California Drought Brings Shortages, Skyrocketing Prices; At Least 156 People Dead After Crowd Surge in South Korea; Changes Happening at Twitter After Musk Deal Closed. Aired 4:30-5a ET

Aired November 01, 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 bring you up to date with our top stories this hour.

The U.S. midterm elections are just one week away. The vote will decide which party controls Congress. And right now, Republicans are confident that they'll win.

The man accused of breaking in to the home of U.S. House Speaker Nancy Pelosi and attacking her husband now faces a long list of charges including attempted murder and attempted kidnapping. More on these stories in "EARLY START."

BIANCA NOBILO, CNN ANCHOR: Now let's take a look at U.S. futures ahead of the next big announcement from the Federal Reserve. Right now, as you can see, they're kind of in the red, not doing so well this morning. The Fed meets on Wednesday and is expected to hike interest rates again ahead of the October jobs report. U.S. markets dipped on Monday but actually they had a very good month. The Dow ended up in October with up 14 percent. Its best monthly gain in more than 45 years and the Nasdaq rose 4percent and the S&P rose 8 percent.

Oil companies like Exxon have seen their stocks suddenly climb all year. In recent days several global energy giants have posted massive corporate profits and in just the last hour BP joined the list reporting that its third quarter profit more than doubled from a year earlier.

Now U.S. President Joe Biden is calling out major gas companies for racking up record profits from a surge in prices at the pump. This coming just days ahead of midterm elections as the economy and inflation remains key issues for voters. And CNN's MJ Lee has more from the White House.

(BEGIN VIDEOTAPE)

MJ LEE, CNN WHITE HOUSE CORRESPONDENT: As the White House has continued to grapple with the issue of high gas prices, we've seen President Biden continuously return to the issue of oil companies and their profits. And we saw him do this again in a speech on Monday from the White House where he said, one, these companies that are making these record profits, they need to do something to help lower gas prices, and two, boost production. And you saw a bit of exasperation in his remarks where he said give me a break. Enough is enough. Take a listen.

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Rather than increasing our investments in America or giving consumers a break, their excess profits are going back to their shareholders and their buying back their stocks and the executive pay are going to skyrocket. Give me a break. Enough is enough. Look, I'm a capitalist. You've heard me say this before. I have no problem with corporations turning a fair profit and getting a return on their investment and innovation. But this is not remotely what's happening.

LEE: In the speech on Monday the president also suggested that he wanted to work with Congress to figure out some ideas and ways to potentially punish some of these oil and energy companies if they don't pay it forward and try to help bring down consumer prices. Some of the ideas that have been discussed include windfall corporate taxes, also other restrictions to, again, go after some of these companies. But it is important to note that these ideas would require Congressional approval. That's something that is just simply not going to happen given the makeup of Congress right now. But all of this really does go to show that a week out from election day the issue of inflation and especially high gas prices, they remain top of mind for this president and Democrats.

MJ Lee, CNN, the White House.

(END VIDEOTAPE)

FOSTER: Inflation here in Europe has accelerated to a record high as energy and food prices continue to skyrocket. The 19 countries that use the euro saw prices jump an annual rate of more than 10 percent in October.

NOBILO: Energy prices jumped by nearly 42 percent year over year while the cost of food, alcohol and tobacco increased by more than 13 percent. Inflation in Germany, Europe's biggest economy, shot up to more than 11 percent.

FOSTER: And much of the economic worry is fueled by the war in Ukraine, of course, impacting energy and food supplies. The European Union is condemning Russia's decision to suspend its participation in the UN brokered grain export deal with Ukraine.

NOBILO: And for more on this now we're joined by CNN's Clare Sebastian. So, Clare, the euro zone inflation up from 9.9 to 10.7 well ahead of expectations and forecasts. What are the key factors that are driving this?

CLARE SEBASTIAN, CNN CORRESPONDENT: So, is the same as what we've been seeing for the last few months, Bianca, it's food and energy. Energy prices rose more than 41 percent year on year. That was an acceleration from previous months. As you noted, their food prices were up some 13 percent.

All of this is compounding these events that we've been seeing over the last few months. And now this grain deal potentially has the suspension of it by Russia has the power to make things worse.

But I think it's also worth noting that this was not happening in a vacuum. Yes, this war has made inflation worse. Before even before it started, in February of this year inflation in both the U.K. and EU was close to 6 percent. In the U.S. it was close to 8 percent. This is because of the supply bottleneck as the result of the pandemic, the fact that demand was outpacing supply in a lot of areas.

That probably would have started to abate over the summer and growth would have accelerated with services. Obviously, the war and the acceleration of inflation as a result of that have put pay to those sort of silver linings we might have seen. And now this is persisting even in the U.S. which is less exposed to this war. Inflation is proving very persistent at over 8 percent.

NOBILO: What efforts are being made to bring Russia back to the deal and what's the impact of the suspension beyond Europe?

SEBASTIAN We're seeing a lot of diplomatic overtures now to Russia. The Turkish side is doing it, the UN. In fact, UN officials have been in Moscow trying to, you know, secure an extension to the deal and deal with Russia's grievances about this even before they pulled out of the deal. The news that they were unhappy with this.

I think Russia is leaving the door open. They're clearly trying to hang on to this leverage that they have. They're allowing these overtures to take place. But meanwhile, is worth noting that this grain deal, this was not a solution to the problem. This was an emergency sort of band aid. Even the insurance companies have sort of banned together to provide emergency coverage and now one of them, has of course said, that they can't do this. They're taking a pause. So, this is very serious for the situation when it comes to hunger in the world.

NOBILO: Clare Sebastian, thanks so much.

The climate crisis is being felt across much of the United States and out West they're seeing droughts and receding water levels.

FOSTER: A U.S. government map shows how much of the country is experiencing these extreme conditions. Dark red you see the areas most impacted there.

NOBILO: And if that weren't difficult enough, the rising cost of water has the potential to make a bad situation even worse. Rene Marsh has the story.

(BEGIN VIDEOTAPE)

RENE MARSH, CNN NATIONAL CORRESPONDENT (voice-over):Miles of brittle uprooted almond trees lay flat across dry farmland in Coalinga, California. Drought tightening water restrictions and now skyrocketing water prices have forced farmers to sacrifice their crops. This is what a thirsty city on the verge of running out of water looks like.

ADAM ADKISSON, COALINGA CITY COUNCIL: We can't continue this. It's not sustainable for our community.

MARSH (voice-over): City councilman Adam Adkisson says Coalinga was set to run out of water by mid to late November and had to turn to the open market to buy water to make up the short fall. The city was short about 600 acre feet of water. That's the equivalent of about 300 Olympic size pools. Last week Coalinga finalized the water purchase from a California public irrigation district. The price tag for one of life's most basic necessities, roughly $1.1 million. Adkisson says the same amount of water used to cost the city $114,000.

ADKISSON: I was just floored. I could not believe that they could sell water at that price but that was actually a cheap rate. That's the cheapest rate we found.

MARSH (voice-over): The index that tracks water transactions in California shows the price of water has gone from just over $200 in 2019 to more than $1,000 today for the amount of water it would take to fill half of an Olympic size pool.

MELISSA HURTADO, CALIFORNIA STATE SENATE DEMOCRAT: People are making money off of less water availability and that's hurting real people, real farmers and real communities.

Hi, everybody.

MARSH: California State Senator Melissa Hurtado and a bipartisan group of California legislators, in a letter sent this August urged the U.S. Justice Department to investigate, quote, potential drought profiteering. Hurtado suspects there could be water price gouging in drought stricken Western states.

HURTADO: I'm not a farmer and this keeps me up at night.

MARSH (voice-over): CNN was there as Hurtado met with a living room full of farmers raising alarm by high water prices.

DEEDEE GRUBER, GRUBER FARMS: How can we work out a plan to where it's not going to bankrupt us?

MARSH (voice-over): Deedee Gruber and her husband Tom grow 11 different crops. They estimate the water needed to grow one of their crops, walnuts, will cost $40,000.

GRUBER: It would have cost us more in water than what we're going to get for our walnuts.

MARSH (voice-over): The Justice Department in an email to Hurtado this month said her complaint was forwarded to the appropriate legal staff for further review. The agency declined comment to CNN on what if any investigative actions it might take as this dwindling resource becomes more expensive to come by.

ADKISSON: We're a very poor community. These people out here cannot afford a thousand percent increase in their water bills.

MARSH: The city of Coalinga announced recently that California approved a grant to help offset its million dollar water bill which is good news for the people in the city but the larger problem prevails. And that's the $1 million price tag for a relatively small amount of water. So, can California afford to keep compensating drought stricken cities like Coalinga as the climate crisis intensifies? We should also note that this grant will not cover the costs for farmers and the water that they pay for. And CNN spoke to farmers who are warning that the current high water prices in the state will drive food prices nationwide even higher.

Rene Marsh, CNN, Washington.

(END VIDEOTAPE)

NOBILO: Still to come in this hour, calls for safety reforms in South Korea after Saturday's deadly crowd surge. The changes that the president wants to see ahead.

FOSTER: Plus, the death toll rises in a deadly bridge collapse in India. Who police are holding accountable for the accident when NEWSROOM returns.

(COMMERCIAL BREAK)

NOBILO: At least 156 people have died from Saturday's tragedy in Seoul, South Korea. And to honor the victims South Koreans have been laying flowers at makeshift memorials in Seoul.

[04:45:02]

FOSTER: The nation's president paid his respects at this site and he also called for new safety measures to prevent further disasters. CNN's Ivan Watson joins us from Seoul. I think the reality here is that we're learning there weren't any safety measures in place for this particular event.

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: No, and Korean authorities are kind of evolving how they're describing preparations or lack thereof for Saturday night, what turned out into this deadly disaster. We hear that the Prime Minister has said that there was a, quote, lack of institutional knowledge and consideration for crowd management.

Meanwhile, the head of the South Korean police have said that there were many emergency calls prior to the ultimate crowd surge that led to all of the loss of life and that there had not been an adequate response from the police to that.

According to statistics published by the subway system, more than 130,000 people came through this subway station on Saturday night. There are estimates that there may have been 100,000 people partying in the surrounding alleyways and streets here. And the police have said that there were only about 136 police officers deployed to deal with this gathering and most of them were assigned to try to be on the lookout for illegal narcotics or to make sure that they were there to stop sexual assault. They were not there for the mission of crowd management. Take a listen to what else the police chief had to say.

(BEGIN VIDEO CLIP)

YOON HEE-HEUN, KOREAN NATIONAL POLICE AGENCY COMMISSIONER GENERAL (through translator): The calls were about the emergency telling the danger and urgency of the situation that a large crowd had gathered before the accident occurred. However, we think the police response to the 112 calls was inadequate.

(END VIDEO CLIP)

WATSON: So, this is just a terrible price to pay for a lesson in how to have to manage large crowds. The police have said normally they're ready for things like protests or sports events that have an organizer. There was not one organizer for what was essentially a giant disorganized street party. Again, 156 people dying and as you can see, it is still a very sad scene here just steps away from where all of these young people lost their lives.

FOSTER: It's a really striking scene. Ivan, thank you so much for bringing us that. They're really trying to just make sense of it at this point, aren't they, and comprehend what happened.

Now meanwhile, this is all that's left after a tragic bridge collapse in India that killed at least 135 people. Police have arrested nine individuals in connection with that accident which happened after the bridge recently reopened from scheduled maintenance.

NOBILO: Those in custody are all linked to the company that worked on the bridge during that time. The Indian government has agreed to compensate families of the victims.

FOSTER: U.S. President Joe Biden sent his condolences saying his heart is with India.

NOBILO: And Iran says its indicted 1,000 people in Tehran for their alleged roles in the country's nationwide antigovernment protests -- this according to state media

FOSTER: The trials will reportedly be held in public later this week as part of a massive effort by authorities to end weeks long protests demanding basic women's rights and an end to government brutality.

Now the Elon Musk era of Twitter has begun and changes are happening at the social media giant. We're going to get you the details just ahead.

[04:50:00]

(COMMERCIAL BREAK)

NOBILO: Taylor Swift keeps setting records and this one is pretty impressive. On Monday she became the first artist to claim the top ten spots on the billboard's top 100 chart at the same time. And to put that bad achievement into perspective, the Beatles only got the 5. She also breaks of record held by Drake only got 9 of the top 10 positions.

FOSTER: Only 9. That's a harsh judgment.

NOBILO: Yes, that's suppose the way that music is consumed a strange title since the Beatles, so maybe have if they had streaming it would be different.

FOSTER: Yes, we were working on that over time.

NOBILO: Yes, yes, do you remember?

FOSTER: Meanwhile, Elon Musk and Twitter, that era is only a few days old and change is already very much coming.

NOBILO: At least four top executives have been terminated including the CEO and the company's previous board of directors is dissolved as part of the merger agreement. Donie O'Sullivan has more on this story.

(BEGIN VIDEOTAPE)

DONIE O'SULLIVAN, CNN CORRESPONDENT: Hey, Max and Bianca. Congratulations on the new show. Of course, you're not the only people with a new job. Elon Musk as we know has taken over Twitter and seemingly making a lot of changes there.

We saw Musk tweet a conspiracy theory over the weekend about House Speaker Nancy Pelosi's husband who was attacked here. That even as there are people in Twitter who are trying to tackle misinformation and disinformation on the platform. Amid all of these concerns, Musk we heard on Monday reportedly told the European Commission that his company, that his version of Twitter would fully comply with all regulations, laws and rules in the European Union.

One interesting and radical change at least for Twitter users that Musk is reportedly working on, is giving the ability for anybody to get verified on the platform. Get one of those blue badges that verifies that you are who it says you are. That has traditionally been reserved for NGOs, journalists, celebrities, sports themes and things like that. But Musk is reportedly going to role that out for any users, at least users in the U.S., Canada, Australia and New Zealand to start as soon as next week.

[04:55:00]

But it does come at a price tag of 20 U.S. dollars and which might not go down too well with people who already with blue badges. And what we're hearing is that people who have those blueticks already will have to play that $20 a month or else lose their verification. So, a lot of change happening for users of the platform. Obviously, a lot of concerns particularly when the new boss is tweeting conspiracy theories. It is going to continue to be a roller coaster for staff and users of the platform.

(END VIDEOTAPE) FOSTER: Never under estimate Elon Musk. He always sort of proves himself right in many cases, doesn't he, but would you pay for verification?

NOBILO: No and it's interesting. Because this poll that I saw which Elon Musk replied to, that people would pay and 82 percent said no. And certainly, people are not willing to pay $20 a month and he commented on it and said, interesting.

FOSTER: It's useful for the platform to know who's real and who isn't real?

NOBILO: Yes, because otherwise I think you're going to a surge of people who just want a tick and then it's going to remove people who aren't obsessed with having ticks and things like that.

FOSTER: But we have people replicating our accounts.

NOBILO: Yes.

FOSTER: And that won't be clear who the real person is. That's why I don't quite understand.

NOBILO: Yes, for now are trademarks, a sense of humor.

FOSTER: On to baseball. Fans didn't get the treat they wanted on Halloween night. Game 3 of the World Series was rained out.

NOBILO: The game is scheduled to be made up for tonight. Game 4 and 5 will be Wednesday and Thursday in Philly. And one is off to Houston to play on Saturday and Sunday if needed.

And Halloween was unlucky for players in Monday's Powerball drawing. And that's because there were no winners in the 1 billion lottery draw.

FOSTER: Listen to this, the jackpot now climbing to $1.2 billion with the next drawing on Wednesday. If there's a winner on Wednesday, it will be the second biggest jackpot in Powerball history. What's higher than that? What was it before?

NOBILO: I don't know.

FOSTER: OK, we should have that for our viewers.

NOBILO: Yes.

FOSTER: I am Max Foster on CNN NEWSROOM. Thank you for joining us. And welcome, Bianca.

NOBILO: Thank you so much. Thank you for being so welcoming.

"EARLY START" with Christine Romans is next right here on CNN. We'll see you tomorrow.

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