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CNN International: Fallout From Silicon Valley Bank's Sudden Failure; California Bracing for More Rain and Snow; U.S. Coast Guard Suspends Search for Mission Migrants; Michelle Yeoh Makes History with Best Actress Win; Crowds Attempted Mass Entry Into El Paso, Texas. Aired 4-4:30a ET
Aired March 13, 2023 - 04:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BIANCA NOBILO, CNN ANCHOR: Hello and a warm welcome to our viewers joining us in the United States and all around the world. I'm Bianca Nobilo.
I'm Max Foster joining you live from London. Just ahead on CNN NEWSROOM.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: What we're living in today is a very traditional bank run.
UNIDENTIFIED FEMALE: One of the main concerns as well is that making sure people can make payroll. Making sure that depositors are taken care of.
UNIDENTIFIED FEMALE: This is about jobs and families being able to put food on the table for their kids.
UNIDENTIFIED MALE: CNN meteorologists monitoring yet another atmospheric river event for the state of California, unleashing a tort of heavy rain and snow once again.
(END VIDEO CLIP)
ANNOUNCER: Live from London, this is CNN NEWSROOM, with Max Foster and Bianca Nobilo.
FOSTER: It is Monday, March the 13th, 8:00 a.m. here in London, 4:00 a.m. in Washington, D.C., 1:00 a.m. in California, where the Biden administration is scrambling to contain the fallout from the sudden collapse of Silicon Valley Bank, promising that all customers will have access to their money starting today.
NOBILO: Mr. Biden also promised to hold those responsible for the bank's failure, fully accountable. He'll speak about the issue in the coming hours.
Here in the U.K., HSBC has announced plans to buy the British subsidiary of Silicon Valley Bank. Meanwhile, U.S. Treasury Secretary Janet Yellen assured Americans that they'll do everything to make sure this doesn't happen to another bank.
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JANET YELLEN, U.S. TREASURY SECRETARY: We want to make sure that the troubles that exist at one bank don't create contagion to others that are sound. And the goal always of supervision and regulation is to make sure that contagion can't -- can't occur.
(END VIDEO CLIP)
NOBILO: But just hours after Secretary Yellen's comments authorities shut down another regional institution, Signature Bank, fearing that it was on the brink of collapse.
FOSTER: Secretary Yellen also said that Washington will not bail out the Silicon Valley Bank. CNN's Arlette Saenz has been tracking this rapidly developing story and has the latest details from the White House.
ARLETTE SAENZ, CNN WHITE HOUSE CORRESPONDENT: The Biden administration took extraordinary steps Sunday to ensure that all depositors working with Silicon Valley Bank would be made whole. Guaranteeing they would have access to their money starting on Monday. The announcement came in a joint statement between the Treasury Department FDIC and federal reserve. Where they also revealed the closure of a second bank, Signature Bank which is based in New York.
Officials said that the same protections being offered to depositors with Silicon Valley Bank would be extended to that bank as well. It came at a time when there were many questions for depositors about whether they would have access to their money. The FDIC's only previously insured up to $250,000 being held at the bank. And the majority of customers had more money than that in their accounts.
Ultimately, this move will ensure that all depositors will be able to access their money at a time when there are questions about how people would run their businesses and also how they would meet payroll heading into this week.
Now federal officials worked around the clock over the weekend trying to find Some resolution to the sudden collapse of Silicon Valley bank. One avenue that was also being pursued was trying to find a private buyer to purchase the assets of Silicon Valley Bank. Treasury officials said that they were evaluating those bids but ultimately decided to move quickly as they were watching the situation quickly unfold. And they wanted to offer assurances to those customers who had been working with Silicon Valley Bank.
Now Treasury Secretary Janet Yellen said earlier on Sunday that there would not be a widescale, large bailout of the bank similar to what was seen during the 2008 financial crisis. Treasury officials push back on the idea that this was a bailout, saying the burden would not be borne by the taxpayers. And also noting that shareholders and senior management would not be protected by these new rules. Now ultimately, the White House and the Biden administration has tried
to stress that they believe that the banking system in this country is resilient in part due to those reforms put in place after the 2008 financial crisis.
President Biden told reporters as he was traveling back from Delaware on Sunday that he would talk about this issue Monday morning.
As his White House is trying to ensure that there are no more stresses but on the U.S. baking system in the U.S. economy writ large.
Arlette Saenz, CNN, the White House.
NOBILO: And earlier CNN spoke to a small business owner who used the Silicon Valley Bank to run her company. She was tweeting about the potential impact of the collapse on her staff of 15 employees. And she talked about her worst fears before Washington then announced that depositors would not lose any of their money.
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LINDSEY MICHAELIDES, YOU SILICON VALLEY BANK FOR HER SMALL BUSINESS: So, fortunately, for us, I do have -- maintain one account or Strongsuit that sits outside of Silicon Valley Bank. And so, between the payday that we had on Friday and some of the funds that are in that other account, we're good for probably for the next month. But beyond that, all of our working capital is tied up in the Silicon Valley Bank.
My team is a small team of 15, but no one is in Silicon Valley as you mentioned. We're in Ohio, Tennessee, Minnesota, Utah. And the impact of SVB's collapse is that families all over the country are not going to be getting their paychecks and the impact is going to be far- reaching and far beyond the Silicon Valley itself.
(END VIDEO CLIP)
FOSTER: The former president of Goldman Sachs also talked about the potential danger that what Washington scrambled over the weekend to head off.
GARY COHN, VICE CHAIRMAN, IBM: When money goes in the bank it gets relent into the economy to consumers. Yes, this was a bank where the vast majority of the deposits were not ensured. But if you look at what this bank also did, this bank ran massive payrolls for many companies. So companies would put their money in the bank, you know, and then during the course of the week or the course of the month, that money would be paid out to hard-working Americans as payroll money. If the bank goes under and that money is not there, those companies don't have money for payroll. I don't think that's the situation that we want to put hard-working Americans in. If they can't get their payroll because their company put the money into a bank that that just happened to have a run on it in that window while their payroll dollars were sitting there.
So, I do think we as a country have some obligation to make sure our banking system is safe. Remember, we do regulate banks at a federal level and these banks do come under massive scrutiny. So to run away from these financial institutions when they go through a difficult time is not the right answer.
The last time we really went through a situation like this was 2008. In 2008, the regulators did not have nearly as a robust toolbox as they have today. Today the regulators have enormous tools at their disposal. They have enormous discretion to go through and really do whatever they want in this situation. So, I'm cautiously optimistic that they will use their tools, they will use their discretion, and we will hear something later in the day, what they have done with the Silicon Valley Bank.
NOBILO: Meanwhile, some Goldman Sachs analysts say that that no longer expect the U.S. Federal Reserve to hike interest rates later this month. And lawmakers said that Congress will have to ensure that a collapse like this doesn't happen again.
REP. JOHN HARDER (D-CA): There absolutely needs to be accountability for the bank managers that got us into this situation. They paid themselves millions of dollars in bonuses the day before this bank collapse. Many of them sold stock just a few days before Silicon Valley Bank went under.
I think we should look at potentially clawing some of that money back especially if depositors are not in a position to be made whole tomorrow. And we need a look at the regulators who should have been better able to stress-test this bank and anticipate crisis moments like this well before. We're going to need some banking reform. But our number one and number two goals going in to tonight and tomorrow, have to be protecting workers who did absolutely nothing wrong and need to be in a position to get paid. And second, stopping this contagion from spreading.
REP. ADAM SCHIFF (D-CA): I think we in Congress need to ask the question, were they considering the impact on banks like this one in the Silicon Valley by such rapid rate increases. You know, clearly, they were doing this to try to tamp down inflation, but did they consider the possibility that some institutions might not be able to handle such a rapid increase in rates.
Now I think a large part of that responsibility goes to the management of that bank but nonetheless, was the Fed on top of this, did they see the risks? And going forward there are other institutions that will be in jeopardy if they continue such rapid increases in interest rates. They're going to have to study that and we're going to have to find out in Congress exactly how to prevent this kind of thing from happening again.
FOSTER: Andy worrying weekend for investors then, but they do seem to be assured by what they been hearing from all of those politicians. You can see the futures are up more than 1 percent for the S&P and the Nasdaq.
NOBILO: The U.S. state of California is set for another major storm today and floodwaters are expected to continue to move through communities near the central coast Pajaro River after a levee breach late last week.
FOSTER: CNN meteorologist Derek Van Dam has the latest forecast which will also bring some good news to the state but first, here's CNN's Mike Valerio.
MIKE VALERIO, CNN CORRESPONDENT: Well, you know, for hours we've still seen first responders go up and down the main drag here of Pajaro, just trying to make sure that everybody is reasonably safe. But not everybody has left. Just over my right-hand shoulder, you can still see people who have decided to stay in this apartment building.
And you know, conditions, of course, still remain pretty treacherous. The water level here has not gone down, in fact, it's gone up in recent hours. We also have Humvees coming towards us as we're going to keep reporting here.
But you know, over the past couple of hours, we've waded through some of these streets and you can just see dreams that have been washed away. The water levels coming up pretty high to these cars. And in neighborhoods when you have small narrow streets the water begins to channelize and the intensity of the water flow begins to drive up as well.
So, of course, we have the situation here in Pajaro. We also have a remarkable aerial rescue in Salinas, California. A driver stuck in the middle of the river. His car washed out into the river. Watch this rescue unfold from high above the Salinas River courtesy of California Highway Patrol.
UNIDENTIFIED MALE: (INAUDIBLE)
UNIDENTIFIED MALE: Confirm (INAUDIBLE).
UNIDENTIFIED MALE: All right. I'm coming down. There you go, just keep this line.
VALERIO: And so as more and more emergency vehicles make their way out of here, just gives you a sense that this is a very active scene as we go into Monday and then Tuesday. That is going to be the height of what will be the 11th atmospheric river. The concern, again, this levee still has not been patched up which could mean even more water into this small Monterey County community.
Mike Valerio, CNN, Pajaro, California.
DEREK VAN DAM, CNN METEOROLOGIST: Max and Bianca, what you're seeing behind me is actually a beautiful sight for residents of California. This is the first time the Oroville spillway has released water since 2019, really signifying to the millions of residents in California that relief is on the way. Remember, this water spills down into other reservoirs and lakes, helped beef up, the availability of water heading to the drier summer months.
Now the latest atmospheric river event produced impressive rainfalls totals. Over a foot in some of the highest elevations of the state of California. This is adding water to so many reservoirs. We need it. Orville Dam, currently at 115 percent of its historical average. Keep in mind, this is 200 feet above the historic low that was set back in 2021. Much needed rain.
Of course, it comes with its problems, too, right. We've seen localized flash flooding, some scary scenes coming out of this but for the most part here, we need this water. Look what it's doing to the snowpack as well. Into the southern Sierras, 244 percent of average across the state where over 200 percent where we should be for this time of year. We've all seen the scenes coming out of Mammoth Mountain, other areas as well. Homes completely buried by the impressive snowfall totals and guess what, we have yet another atmospheric river event that will take shape over the next 48 hours.
So Monday into Tuesday, this is when we're anticipating that fire hose of water to oscillate from north to south, once again. We'll start measuring snowfall in feet across the mountains with several inches of rain for the coast and the central valley. 17 million Americans under flood watches including Sacramento, San Francisco and just outside of L.A.
Here's a look at the forecast, rain and snow. You can see some of those rainfall totals could top a half a foot across the Sierra Nevada foothills with 2 to 4 inches locally across the coast.
Weather Prediction Center calling for a moderate risk of flash flooding from north to south on Tuesday, including San Luis Obispo and just outside of LA. But look what it's done to the drought. We have completely eradicated exceptional in extreme drought from two months ago, look at that, compared to what it has now transformed to with all of these rain. Max, Bianca, back to you.
FOSTER: Cyclone Freddie making landfall in Mozambique for the second time in weeks on Sunday. The storm battered the southern African nation with torrential rains. Breaking records for its duration and its strength. Freddie first developed back in early February off of northwest Australian. It's since tracked thousands of miles across the southern Indian Ocean. Last month the storm killed at least 27 people in Mozambique and Madagascar and impacted more than 170,000 people. This time experts say more than half a million people are at risk. [04:15:00]
NOBILO: U.S. Coast Guard has suspended the search for migrants missing from a boat that capsized off the shore of San Diego and are presumed dead. Officials believe that they were part of a human trafficking operation. CNN's Camila Bernal has the details.
CAMILA BERNAL, CNN CORRESPONDENT: Authorities are calling this a tragedy and believe that an organization is responsible for this. They received a 911 call at around 11:30 Saturday night. So, they say between 11:30 and midnight, officers responded to Black's Beach in San Diego. And by the time they arrived, they did not find the caller. They did not find any survivors in the water, but they were searching.
For the first hour or so, they were trying to find survivors, but they say afterwards, they decided to call it a recovery operation. They searched for about five hours and were not able to find any survivors. They recovered eight bodies and that's even after they continued searching on Sunday.
Officials saying that the search was extremely difficult because it was pitch black on Saturday night. They say there are these sandbars in the area. And so, you may think that you're able to walk out of the water but there are also these holes. And once you step into these holes you get essentially carried away by these very strong currents that pull you back into the ocean.
Officials saying they tried to search by air but even night vision goggles were not strong enough. They weren't able to see anything. They also announced that they found some life jackets in the area. But these life jackets were essentially washed up on shore and say that the bodies that they recovered did not have any life jackets on. But what they're also saying is that the people responsible for all of this are not thinking about safety. Here's what authorities said.
CAPT. JAMES SPITLER, U.S. COAST GUARD: This is not necessarily people trying to find a better life. This is part of a transnational criminal organization effort to smuggle people into the United States. These people are often labor trafficked and sex trafficked when they arrive.
JAMES GARTLAND, CHIEF OF LIFEGUARD DIVISION, SAN DIEGO FIRE RESCUE DEPARTMENT: This is one of the worst maritime smuggling tragedies that I can think of in California, certainly here in the city of San Diego.
BERNAL: And customs and border protection also looking into this. They say they work with Mexican officials and they are always trying to identify the criminal organizations that are responsible for all of this.
Camila Bernal, CNN, Los Angeles.
(END VIDEOTAPE) Police in the U.S. state of Vermont responded to an emergency at the Burlington International Airport on Sunday after a bomb scare on board an inbound flight. The airports aviation director says a threat to the aircraft was reported by the crew of the United Airlines flight after a passenger found a note in the bathroom saying there was a bomb on board.
NOBILO: Law enforcement officials searched the aircraft after landing but didn't find anything unusual or suspicious and no injuries were reported. Authorities later gave the aircraft the all-clear.
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NIC LONGO, AVIATION DIRECTOR, BURLINGTON INTERNATIONAL AIRPORT: At this time, there's no reason to believe that this is anything but an isolated incident.
ACTING CHIEF JON MURAD, BURLINGTON POLICE DEPARTMENT: We have a safe plane, we have a safe airport. We have procedures that were followed. And we have a successful outcome.
(END VIDEO CLIP)
FOSTER: Thank goodness. There's a mixed environmental messaging from the White House meanwhile. On Monday, President Joe Biden is expected to put much of the federal land in the U.S. Arctic off limits to new oil and gas leasing.
NOBILO: The ban comes as the Biden administration is expected to approve the Willow Project. A massive Conoco oil drilling venture planned for Alaska's north slope. A Congressional source told CNN that the project was getting the green light even though the White House Press Secretary said on Friday that no final decision has been made on Willow.
"Everything Everywhere All at Once" dominated the 95th academy awards on Sunday night winning in seven categories out of 11 total nominations that it had. The sci-fi venture film won best picture and best director. Its star Michelle Yeoh made history by becoming the first Asian woman to win best actress. Her costar took best supporting actor and supporting actress too.
FOSTER: What a year for them. The only major category that "Everything Everywhere" didn't dominate was best actor. That award went to Brendan Fraser for his role in "The Whale." Navalny," one best documentary feature. The film explores the plot to kill Russian opposition leader Alexei Navalny. CNN spoke with the director before the ceremony.
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UNIDENTIFIED FEMALE: Daniel, I have to ask you, as you directed this, at what point did you realize that you were on to something that could be even more massive than you thought it was going into it.
DANIEL ROHER, DIRECTOR, "NAVALNY": You know, honestly, from the very first moment in "Navalny" I found the most extraordinary, charisma documentary subject you could dream of. Every single day we were handed down little golden nuggets from the documentary gods and it feels like this movie is just the manifestation of so many miracles. But I never could have dreamed that we would end up here, being at the Oscars is extraordinary. And I'm not losing sight of the fact that we are here, because Alexei Navalny right now is languishing in a gulag 6 1/2 hours outside of Moscow. And I'm thinking about him tonight.
(END VIDEO CLIP)
FOSTER: Ruth Carter best costume design for "Black Panther: Wakanda Forever". Carter is the first Black woman to win multiple Oscars.
NOBILO: And the song "Naatu Naatu" from the movie "RRR," won best original song. The first ever Oscar win by an Indian movie and the first Telugu song -- which is a southern Indian language ever nominated. The song was performed at the ceremony on Sunday night. On Twitter, filmmakers dedicated the award to their fans.
FOSTER: Kristie Lu Stout joining us now live from Hong Kong with more from the night's winners. It's extraordinary to see how many firsts there were. It did feel pretty historic.
KRISTIE LU STOUT, CNN CORRESPONDENT: Yes, very historic and widely watched across the Asian Pacific region, with viewers here tuning in to see the Oscars. See major wins for top talent including Michelle Yeoh. Michelle Yeoh became the first Asian woman, the first Malaysian born performer to win best actress at the Academy Awards. And this year's Academy Awards saw the highest number of Asian nominations.
Leading the pack was the sci-fi surreal epic "Everything Everywhere All at Once," starring Michelle Yeoh. It walked in with about 11 nominations. It walked out with seven Oscar statues. Let's bring up the Oscar list for you. Including best picture, best directing, the list goes on and on. Now after the award ceremony, Michelle Yeoh spoke to the press and she addressed the historic nature of her win. I want you to listen to this.
(BEGIN VIDEO CLIP)
MICHELLE YEOH, ACTRESS, "EVERYTHING EVERYWHERE ALL AT ONCE": I really have to thank the Academy for acknowledging and embracing diversity and true representation. I think this is something that we have been working so hard towards for a very long time. And tonight, we freaking broke that glass ceiling.
(END VIDEO CLIP)
STOUT: Michelle Yeoh has a career that has spanned four decades. She was born in Malaysia. She spent many years here in Hong Kong, where she honed her skills as both an actor and martial artist doing her own dangerous stunt work before heading over to Hollywood.
And we also want to shine the spotlight on Michelle Yeoh's costar Ke Huy Quan, who won the Oscar for best supporting actor. He has a very compelling back story. He of course is known as the beloved child star play Short Round in the "Indiana Jones" movie. But when he grew up he basically was in the background just doing parts like as a stunt coordinator for decades until this role came around.
He is also a refugee. He was born in Saigon. He and his family moved to Los Angeles in 1979. And after they fled Vietnam, he spent time in a refugee camp here in Hong Kong and he cited that personal experience in his very, very moving Oscar acceptance speech. And we have part of it for you.
He said this, quote: My journey started on a boat. I spent a year in a refugee camp. They say stories like this only happen in the movies. I cannot believe this is happening to me. This is the American dream.
So, Bianca and Max, really an incredible achievement for Quan, for Yeoh, for the cast and crew of "Everything Everywhere All at Once." And also, just a momentous time for Asian representation in Hollywood, of course, back to you.
FOSTER: Thank you so much, Kristie. Definitely the time for us to actually watch the film where you are.
NOBILO: Top of the list of things to do.
Still ahead, calls for concern at the U.S. southern border, where authorities say that large amounts of migrants were ready to attempt mass entry into El Paso, Texas.
FOSTER: Plus, Xi Jinping is vowing to modernize China's military as the National People's Congress wraps up. What the Chinese leader said about Beijing's plans for Taiwan coming up.
NOBILO: And it's that time of year, March madness is upon us once again as dozens of schools prepare to compete for college basketball's ultimate prize.
NOBILO: A tense situation at a border crossing in El Paso, Texas, appears to be over for now. After officials say that a large group of people attempted to make a mass entry into the United States.
FOSTER: Officers used barriers and halted traffic on a bridge on Sunday to control the situation but a city official says the crowds had eased by Sunday evening. He says there was no breach. And the area is still being monitored.
NOBILO: We're getting new details about the fate of three missing Americans in Mexico. According to a local commission on missing people in Mexico, they disappeared in the Mexican town of China back in February. A missing poster from the commission says that the women were driving a green 1996 Chevy Silverado. Here's Polo Sandoval with an update.
POLO SANDOVAL, CNN CORRESPONDENT: Well, the three American women are believed to have crossed the U.S. Mexican border just over two weeks ago and they haven't been seen or heard from since. And now authorities on both sides of the border are working to track them down. The three are identified as Marina Perez Rios, her sister Maritza Trinidad Perez Rios and a friend of theirs Dora Alicia Cervantes according to the police chief in the south Texas town of Penitas.
He tells me that they drove across the border just south of Mission, Texas back on February 24, which is a Friday.
Now the husband of one of the sisters telling investigators he was in contact with his wife after they crossed the border. But it wasn't until he lost contact with them that he turned to investigators. And it was on Monday, February 27th, that then they brought in the Federal Bureau of Investigation, who is saying at this point, they cannot comment on any particulars regarding this ongoing investigation.
But we do know though is that these three were headed down the a Mexican state of Nuevo Leon to sell clothing at a flea market. And by many accounts, they never made it there. Here's what the police chief in south Texas told the CNN affiliate KRGV TV.
CHIEF ROEL BERMEA, PENITAS, TEXAS POLICE DEPARTMENT: We're just concerned. If anybody has information, I mean, they can contact us or contact the FBI and see what information they can provide for us. This is the first time something like this is reported to us.