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Tornadoes, Blizzards Hammer Parts of U.S.; Another Rate Hike Expected From U.S. Federal Reserve; FTX Founder Denied Bail in the Bahamas, Faces Charges in U.S.; Migrant Crossings Increase as COVID- Era Policy Set to End; Argentina Fans Celebrate Spectacular 3-0 Win Over Croatia; Rescue Operation Underway in English Channel. Aired 4- 4:30a ET

Aired December 14, 2022 - 04:00   ET

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

[04:00:00]

MAX FOSTER, CNN ANCHOR:

(BEGIN VIDEO CLIP)

TAMMY SEPULDAEO, RESIDENT: And by the time we got hunkered down here, it was down, the roof was down. You know, they always say that you hear a train coming, well, this was a big train that come through here. But like I said, we're lucky. You know, the house can be replaced. We're alive. You know, it could have been really worse.

(END VIDEO CLIP)

MAX FOSTER, CNN ANCHOR: Well meanwhile, millions of people are under winter weather alerts. A blizzard is raging from Colorado all the way to South Dakota. And officials in Nebraska are calling it a one in five-year storm.

BIANCA NOBILO, CNN ANCHOR: This was the view in Colorado. Whiteout conditions and dangerous blizzard winds making local roadways impassable.

FOSTER: Well, for more on the forecast and what it has in store. We're joined by meteorologist Britley Ritz. Those are incredible images, Britley.

BRITLEY RITZ, CNN METEOROLOGIST: Absolutely. And unfortunately, we are going to watch a lot of these images surface as the sun comes up over America this morning. Notice Blue Ridge, Texas, homes completely wiped off of their foundation and this again, is just going to be a repeat as this whole system crawls across the United States.

Tornado watches still in effects for parts of Texas back into Louisiana and Mississippi this morning. We have already been dealing with tornadoes overnight and early this morning. A lot of lightning with this, strong damaging winds and hail as well.

Still have a few warnings in effect, one being a tornado warning, down parts of Louisiana and Mississippi right there on the river. We've already had 12 reports of tornadoes, 17 wind reports and 6 hail reports. Hail in parts of Texas reaching nearly 2 1/2 inches in diameter. Again, this system slowly crawling across the southeast today. That severe weather threat holds and then back into parts of Florida and on up into the Carolinas as we roll into your Thursday.

So, areas highlighted in orange where we're vulnerable for a few strong tornadoes yet again this morning and again throughout the afternoon and evening. Damaging winds and large hail. But that extends in upwards across all of the southeast although the threats minimalize. As we move into Thursday, we still have that threat for damaging winds and hail across parts of Florida and into the Carolinas.

The flooding threat a concern here. Flood watches in effect. We also have flood warnings in effect. We have to be mindful of that. We've already seen video of all of the roadways covered in water. Remember, turnaround, find a different route. You just don't know how deep the water is.

And over the upcoming next five days that flood threat holds across the southeast and back up into the Tennessee River Valley. These are areas that have been completely inundated over the last week due to a stalled boundary. So, this is just on top of what we've already picked up with an additional 2 to 4 inches of rain. We could see rain rates pushing up over 2 1/2 inches per hour. Max, Bianna.

FOSTER: Britley, unbelievable scenes.

RITZ: Absolutely.

NOBILO: Now to Washington where lawmakers appear closer to reaching a spending deal that would fund the U.S. government through next year. House and Senate negotiators say they've reached a bipartisan framework.

FOSTER: But the top House Republican reportedly opposes the deal and wants a short-term spending bill that will give the Republicans more control of the process when they take control of the House next year.

We are keeping an close watch on the U.S. futures markets as well, ahead of another expected interest rate hike from the Federal Reserve. You can see they're all up, so they're not too nervous. Only about .1 percent. On Tuesday, investor celebrated a positive inflation report, that was the positive momentum. The Dow climbed about a 1/3 of a percent, the Nasdaq finished one percent higher.

NOBILO: The consumer price report showed inflation cooling a bit again in November and that may influence the U.S. Federal Reserve's decision today on interest rates.

CNN's Matt Egan reports from New York.

(BEGIN VIDEOTAPE)

MATT EGAN, CNN REPORTER: Max and Bianca, the Federal Reserve is widely expected to deliver another major rate interest rate hike today. But signs of cooling inflation could give the Fed cover to slow the pace of these rate hikes. There's a growing body of evidence suggesting that the worst of this inflation crisis may be over. Inflation may have finally peaked and is moving something closer to healthy levels.

The latest report shows that consumer prices, they jumped by 7.1 percent year over year in November. That is smaller than expected. It's the fifth straight month of cooling price gains. It's also the lowest rate all year. Month over month core inflation which excludes food and energy is now at a 15-month low.

But it's way too early to declare victory. We don't know if this trend will continue nor how long it's going to take to get back down to the 2 percent inflation that's considered healthy.

[04:05:00]

Inflation is still hot in some parts of the economy, especially food. We've seen rapid price gains for eggs, butter, flour among other things. Rent is another sore spot. You know, it's funny because if you had told me two years ago that Wall Street and the White House would be celebrating 7 percent inflation, I wouldn't have believed it. At any other point in the last 40 years this would be a terrible number. But everything is relative.

Inflation was above 9 percent earlier this year, the trend is going in the right direction. And this of course is good news for families suffering from high inflation. And it's good news for the Federal Reserve which has been pulling out all of the stops to try to get prices under control.

It's a slam dunk that the Fed will raise rates again today. The question though is by how much and there's growing confidence on Wall Street that the Fed will go from 75 basis points the past four meetings to 50 basis points. And if inflation keeps cooling, perhaps the Fed won't have to raise rates as high as people had feared. And that would lower the risk of a recession in 2023 or 2024 -- Max and Bianca.

(END VIDEOTAPE)

FOSTER: Thank you to Matt Egan in New York.

President Biden hailing the inflation report. He says the numbers are where they need to be but things could be back to normal by the end of next year.

(BEGIN VIDEO CLIP)

JOE BIDEN, PRESIDENT OF THE UNITED STATES: Inflation is coming town in America. In fact, this new report is the fifth month in a row where annual inflation has fallen in the United States. I want to be clear, it's going to take time to get inflation back to normal levels as we make the transition to a more stable and steady growth. But could see setbacks along the way as well.

UNIDENTIFIED FEMALE: Can you say when you expect prices to get back to normal, Mr. President?

BIDEN: I hope by the end of next year were much closer, but I can't make that prediction. I just, I'm convinced they're not going to go up.

(END VIDEO CLIP)

FOSTER: Good news. And the U.S. is already seeing some of those setbacks as a result of extreme weather this year. The price of orange juice is set to skyrocket given a lower supply of the fruit thanks to Florida's hurricane season and a citrus disease as well.

NOBILO: U.S. Department of Agriculture says Florida is expected to produce its smallest crop of oranges in nearly 90 years. Orange juice prices in the U.S. are already up more than 40 percent this year and experts say the next price hike is set to hit early next year.

And there's finally some relief from sky high inflation here in the U.K. too. The government says year-over-year inflation is slightly last month down to 10.7 percent. You might remember it was just over 11 percent in October. The central bank is to raise interest rates for the ninth time in a row at its next meeting is on Thursday.

And former FTX CEO Sam Bankman-Fried spent the night in jail in the Bahamas where he will potentially be staying for the next two months.

FOSTER: Yes, a day after the embattled FTX founder was arrested at the request of the U.S. He was denied bail by a judge who said he poses a flight risk. His next court date is set for February 8th.

NOBILO: And Bankman-Fried faces extradition to the U.S. where he's been indicted on charges ranging from conspiracy and fraud to campaign finance violations. He could be sentenced to 115 years in prison. Carlos Suarez has the details from the Bahamas.

(BEGIN VIDEOTAPE)

DAMIAN WILLIAMS, U.S. ATTORNEY FOR SOUTHERN DISTRICT OF NEW YORK: This is one of the biggest financial frauds in American history.

CARLOS SUAREZ, CNN CORRESPONDENT (voice-over): FTX founder and former CEO Samuel Bankman-Fried appeared before a judge in Nassau, Bahamas, Tuesday morning, at his extradition hearing. He was arrested at his home in the Bahamas Monday night at the request of the U.S. government.

WILLIAMS: From 2019 until earlier this year, Bankman-Fried and his co- conspirators stole billions of dollars from FTX customers. He used that money for his personal benefit, including to make personal investments and to cover expenses and debts of his hedge fund, Alameda Research.

SUAREZ (voice-over): He's been indicted on eight criminal charges including wire fraud, multiple counts of conspiracy and campaign finance violations. Prosecutors say he made illegal political donations in the tens of millions of dollars. WILLIAMS: All of this dirty money was used in service of Bankman- Fried's desire to buy bipartisan influence and impact the direction of public policy in Washington.

SUAREZ (voice-over): Prosecutors alleged Bankman-Fried conspired with others on numerous schemes, including diverting billions of dollars in customer assets to his hedge fund Alameda Research. In early 2022, investors valued FTX and its U.S. operations at a combined $40 billion.

GURBIR GREWAL, U.S. SEC DIRECTOR OF ENFORCEMENT: Bankman-Fried's entire bank of cards started to crumble as crypto asset prices plummeted in May of 2022, and as Alameda's lenders demanded repayment on billions of dollars in loans.

[04:10:00]

SUAREZ (voice-over): The 30-year-old son of two Stanford law professors studied physics at MIT and traded at a small firm before launching FTX in 2019. It quickly became one of the leading crypto exchanges with celebrity promoters like Tom Brady, Gisele Bundchen, Steph Curry and Larry David.

UNIDENTIFIED MALE: Not a trade, trade. I'm trading crypto.

SUAREZ (voice-over): Following an industry publication which questioned the inner working of the crypto exchange, users began withdrawing their investments from FTX at a rapid pace in November. Then all came crashing down for Bankman-Fried and he resigned. FTX filed for bankruptcy on November 11.

GEORGE STEPHANOPOULOS, ABC NEWS ANCHOR: A lot of people look at you and see Bernie Madoff.

SAMUEL BANKMAN-FRIED, FTX FOUNDER: Yeah, I mean, I don't think that's who I am at all, but I understand why they're saying that. People lost money, and people lost a lot of money.

SUAREZ (voice-over): Later, he was asked about his criminal liability in the matter.

UNIDENTIFIED MALE: How concerned are you about criminal liability at this point?

BANKMAN-FRIED: I think the real answer is it's not -- it sounds weird to say, but I think the real answer is that's not what I'm focusing on. It's -- there is going to be a time and place for me to sort of think about myself and my own future. But I don't think this is it. Like right now.

SUAREZ (voice-over): On Monday, in a podcast on Twitter Spaces, he said he didn't believe he would be arrested.

INTERVIEWER: Are you worried you might be detained if you stepped foot into the U.S.?

BANKMAN-FRIED: I don't believe I would be, but I haven't done a, like, deep dive into that.

SUAREZ: SBF said he is going to fight extradition to the U.S. and you can understand why. If he's convicted of the charges out of New York, he faces up to 115 years in prison. His next court hearing here in the Bahamas is scheduled for February.

Carlos Suarez, CNN, Nassau, Bahamas.

(END VIDEOTAPE)

FOSTER: Meanwhile, in Washington FTX's new CEO John Ray testified before the House Financial Services Committee. His testimony painted a picture of inexperienced leaders, managing a multi-billion-dollar company with little or no organization or recordkeeping.

(BEGIN VIDEO CLIP)

JOHN J. RAY III, NEW FTX CEO: Even the most failed companies you have a fair roadmap of what happened. We're dealing with literally sort of a paperless bankruptcy in terms of how they created this company. It makes it very difficult to trace and track assets, and particularly as I've said in the crypto world, it's -- it's really unprecedented in terms of the lack of documentation. But we've lost $8 billion, right, of customer money. So, by definition I don't trust a single piece of paper in this organization.

(END VIDEO CLIP)

NOBILO: The Bahamas is asking FTX and its new CEO not to obstruct its own probe into the company's collapse. Bahama's Security Commission took issue with how they characterized emails between Bankman-Fried and the Bahamian officials.

And one of Denmark's largest banks, Danske Bank, will pay $2 billion of penalties for defrauding a U.S. bank. The Danish bank pleaded guilty on Tuesday to one count of conspiracy to commit bank fraud. The SEC also announced a separate settlement over allegations of money laundering in which the bank agreed to pay more than $400 million. U.S. prosecutors say the bank allowed foreign actors to illegally funnel money through their branch in Estonia in order to gain access to the U.S. financial system.

FOSTER: A group of U.S. lawmakers has introduced a bill aiming to ban TikTok from operating in the U.S. The proposed legislation would block social media companies based in China and a handful of other countries. Senator Marco Rubio says action is needed to combat the threat from TikTok which he calls a puppet of China's Communist Party. At least seven states have banned the app from state owned devices and so has the U.S. military and other government agencies.

NOBILO: The U.S. Department of Homeland Security is deploying additional agents at the U.S./Mexico border in El Paso, Texas.

FOSTER: And the move comes as city officials are worried that there will be a huge influx of migrants as the controversial COVID era border policy is set to end. Currently it allows the U.S. to expel migrants. CNN's Ed Lavandera has more.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN NATIONAL CORRESPONDENT (voice over): As the sun fades away over El Paso, a large group of migrants stand on the border's edge waiting to be processed by Border Patrol agents, while a few others tiptoe across a short path through the Rio Grande.

These migrants are part of a major surge of border crossings seen in El Paso in recent days and it is happening as the projected end of a Trump era COVID restriction draws closer. Ending the policy to swiftly expel migrants at U.S. land borders.

U.S. border authorities interacted with more than two million migrants in the last year, up from the previous year.

[04:15:00]

But in recent days, an average of almost 2,500 migrants a day have been moving across this border between Mexico and the U.S. through El Paso.

CLAUDIA RODRIGUEZ, EL PASO CITY COUNCIL MEMBER: Title 42 is only going to make that situation worse where they're going to have more apprehensions. And so, we're going to see a lot more releases into the community and we're not prepared for it.

LAVANDERA (voice over): Just three weeks ago according to Customs and Border Protection the seven day rolling average was fewer than 1,700. Thousands of migrants are now coming from Central and South America as well as Cuba, according to US Immigration officials.

UNIDENTIFIED FEMALE: I am helping them get food and whatever they need. This is not even about politics. It's about humanity. These people are here and they're cold.

LAVANDERA (voice over): Some have been camping out across the border in Ciudad Juarez in Mexico, raising concerns they will cross en masse if Trump era border restrictions end in about a week. Still others have already been boarded on the buses to be processed or turned around under the provisions of Title 42.

JAKE SULLIVAN, NATIONAL SECURITY ADVISER: We are taking steps to be able to manage the expiration of Title 42 and to put in place a process that will be orderly and humane, and we believe that in doing so, we can protect our national security concerns.

LAVANDERA (voice over): Homeland Security Secretary Alejandro Mayorkas arrived in El Paso today and says he is meeting with Customs and Border Protection, local officials, and organizations. For now, the immediate problem is housing and managing a large influx of migrants.

RUBEN GARCIA, DIRECTOR, ANNUNCIATION HOUSE: If the court cases get resolved, and the courts allow Title 42 to be lifted, we're going to see thousands of refugees for whom there isn't shelter. LAVANDERA (voice over): The Director of a local El Paso shelter says Border Patrol recently dropped a busload of migrants at his doorstep and he's worried he'll soon have to turn people away.

UNIDENTIFIED MALE: We're going to have to say no, not because we want to the simply because we don't have space. The reality is there's just too many people.

LAVANDERA: The Biden administration is projecting that anywhere between 9 and 14,000 migrants could attempt to cross the U.S. southern border once Title 42 is lifted next week. Now there are still a number of legal challenges playing out in the court and because of that it is possible Title 42 is kept in place next week. In the meantime, border cities like here in El Paso are bracing for what's to come next week.

Ed Lavandera, CNN, El Paso, Texas.

(COMMERCIAL BREAK)

NOBILO: Ahead on CNN, how the U.S. Justice Department has expanded its investigation into efforts to overturn the 2020 presidential election and who is involved.

FOSTER: Plus, a CNN exclusive. Four weeks now, Ukraine has been calling for highly advanced air defense system and now the U.S. is about to give it to them in what could be a potential game changer on the battlefield.

And Argentina has booked their spot in the World Cup finals. But which team will be joining them? Amanda Davis is live in Qatar with the preview of the next showdown -- Amanda.

FOSTER: You'll be all right, strong. You did really well.

AMANDA DAVIES, CNN WORLD SPORT: Yes, Lionel Messi will be there in Sunday's side. But will it beat defending champions France or the odds defying Morocco on that history making run, standing in his way of getting his hands on that trophy. I'll be here with all the latest from Doha in just a couple of minutes. Stay with us.

[04:20:00]

(COMMERCIAL BREAK)

FOSTER: Bianca is not seeing the positive. She'll get through it.

NOBILO: I'm not looking at it.

FOSTER: But imagine what it must feel like for these guys. They are in the World Cup final losing their minds after Argentina rolled past Croatia who couldn't find the back of the next frankly in the semifinal.

NOBILO: Right, Max --

FOSTER: The final score was 3-0. An emotional moment for sure after Argentina's humiliating loss in the opening match. I was just reading the script and it wasn't written by me.

NOBILO: The Argentinians will face either Morocco or France. Morocco the only Arab and African country to have made it this far, are the sentimental favorite in this first Middle Eastern World Cup. But can they fend off the defending champs in today's semifinal. That is the question. So, let's cross over to CNN's Amanda Davies who's tracking it all from Doha.

DAVIES: Commiserations, Bianca, but I've got to say, we all know what it feels like. The majority of us are there. But the fans of the Croatians actually were pretty philosophical. They were pretty, you know, pleased with this performance. Saying now the aim is to finish third, that wouldn't be bad after finishing one about four years ago.

But I have to say, it was a truly special night last night. To be able to be there at the Lusail Stadium was one of those pinch yourself moments that, you know, I'll remember for years to come. To see those moments of Messi magic stepping up really when it mattered to put himself and his team into that World Cup final and within touching distance of this trophy. That would really complete the set in his career.

It was another record-breaking night for him. He overtook Dominik Livakovic, as Argentina record World Cup goal scorer. Reignited or in many people's minds, answered that goat debate, the greatest of all time. But you got to remember, that is not what he and his teammates came here for. They are here to win this trophy. And you could see at full-time just what it meant to them to have made that final step into the decider.

I was there for the game after that embarrassing, awful defeat to Saudi Arabia against Mexico. The emotion, you can feel it, it was so fraught. There were desperation. But with every game through this tournament, this is an Argentina side who have really grown in confidence. They've grown in belief.

[04:25:00]

They've now played six finals as Messi puts it and they very much have the belief they can take that step further and claim that first World Cup since 1986. Have a listen to what Messi says afterwards.

(BEGIN VIDEO CLIP)

LIONEL MESSI, ARGENTINA CAPTAIN (through translator): We've been enjoying it a lot since we arrived at this World Cup. Even though we had a losing start, as we said at the time, we were confident in this group. We were going to move forward. We asked people to trust because we knew what we are. This group is crazy and, well, we did it. We are going to play one more final. Argentina is in a world final and, well, let's enjoy all of this.

(END VIDEO CLIP)

DAVIES: Yes, and Messi seemed to confirm afterwards that Sunday's final would, indeed, be his final World Cup match in an Argentina shirt. You just have to ask the question now, who it will be standing in the way of what many people see as his World Cup destiny. We're just under 10 hours now from kickoff in the second semifinal between Morocco and France. The atmosphere is very much building already in the souk behind us.

The numbers are unclear but people are talking of 40,000 Moroccans who have descended here on Qatar to be part of their historical record- breaking run. Didier Deschamps, the France manager, says he knows that the weight of the crowd will be against his side. Morocco, the weight of history against them, that's still not stopping their confidence of keeping their fairy tale run going.

FOSTER: They have to have one of the biggest support groups, haven't they? And Morocco. Thank you so much, Amanda.

NOBILO: Thank you.

FOSTER: Switching sports for the sake of Bianca's mental health. We'll go to the National Football League and its Players Association are reviewing an apparent head injury during Monday night's game between New England and Arizona. Patriots wide receiver DeVante Parker a bit shaky on his feet after a blow to the head. A teammate noticed and signaled to officials to stop the game. The spokesman for the NFL tell CNN that medical staff and spotters didn't seem to notice that Parker may have been hurt.

NOBILO: And basketball star Brittney Griner is thankful to be back home. But her agent says that she's heartbroken Paul Whelan is still detained in Russia.

But the Biden administration was unable to secure the veteran Marine's release as part of a prisoner swap for convicted Russian arms dealer Viktor Bout. Griner's agent tells CNN that she's thinking about Whelan and his family.

(BEGIN VIDEO CLIP)

LINDSAY KAGAWA COLAS, BRITTNEY GRINER'S AGENT: You can be both joyous and heartbroken and she's heartbroken that Paul Whelan is not home. She's thinking about his family and talked about her intention of calling them as soon she gets home. And you know, she's really committed to telling her stories and making sure that, you know, this population of wrongfully detained Americans, that people know their names and that they're not forgotten. And she feels committed to the movement.

(END VIDEO CLIP)

FOSTER: This just in to CNN. A rescue operation is underway in the English channel after an incident involving a small bowl off the coast of Kent. The U.K. Coast Guard out of Dover in England is working with France's Maritime Prefecture.

NOBILO: A French Navy Dauphin helicopter and a French vessel have also been deployed. The U.K. government spokesperson says all relevant agencies are supporting a coordinated response and more details will be provided when they're available. This just underscores why the government had been emphasizing this issue and trying to come to more arrangements with French government too.

FOSTER: Freezing temperatures out there as well, reports of everyone involved.

Still ahead, a potential game changer on the battlefield. An exclusive CNN report on the state of the missile defense system the U.S. is planning to give Ukraine.

NOBILO: Plus, what to expect when the House Select Committee investigating the January 6th attack holds its final public meeting next week.