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CNN International: Market Turmoil Amid Fears of Bank Instability; New Audio Emerges of trump Pressuring Georgia Official; U.S. Drone Fallout; Torrential Rain Causing Landslides in California; Texas Judge to Rule Soon on Medication Abortion Case. Aired 4-4:30a ET

Aired March 16, 2023 - 04:00   ET

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

[04:00:00]

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.

MAX FOSTER, CNN ANCHOR: I'm Max Foster joining you live from London. Just ahead on CNN NEWSROOM.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Danger with a bank run is that panic can spread to other banks, it is called contagion.

UNIDENTIFIED MALE: The Fed has to tip toe very carefully through what is certainly a mine field at this point.

UNIDENTIFIED MALE: Donald Trump had a very specific strategy and approach for how he was going to go about pressuring these state officials.

UNIDENTIFIED MALE: At the end of the day Donald Trump needs to be held accountable for his dirty deeds.

UNIDENTIFIED MALE: We have absolute evidence of the contact and the interception and it was very aggressive.

UNIDENTIFIED MALE: It's important that great powers be models of transparency and communication.

(END VIDEO CLIP)

ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Bianca Nobilo.

FOSTER: It is Thursday, March 16, 5:00 p.m. in Tokyo, 8:00 a.m. here in London, 4:00 a.m. in New York where all eyes are on global stock markets as they react to turmoil of yet another bank just days after the collapse of Silicon Valley Bank and Signature Bank.

NOBILO: And here is how U.S. futures are looking with markets due to open in about 5 1/2 hours from now. As you can see, everything is ticking up after was what was a very volatile trading session.

FOSTER: Credit Suisse announced it will borrow up to $54 billion from the Swiss Central Bank after a slump in its shares left investors on edge. The lender's biggest shareholder Saudi National Bank rolled out further support after it suffered liquidity losses.

NOBILO: Credit Suisse's shares ended about 24 percent down Wednesday after initially crashing by as much as 30 percent. That had U.S. stock markets jittery on Wednesday amid worries of a broader banking crisis. With the Dow dropping more than 700 points at one point before recovering slightly to the end of the day nearly 300 points lower.

FOSTER: The European markets are just about opening. We'll bring you those numbers when we have them. Markets across Asia also seeing declines amid fears of instability in the banking sector.

CNN's Marc Stewart is joining us live from Tokyo. I mean, it is pretty shocking what we saw with Credit Suisse, but the reaction from the Swiss Central Bank seems to have reassured the markets.

MARC STEWART, CNN CORRESPONDENT: Right, Max. As we have discussed many times before, traders not only like certainty, they want morsels of good news so that they can give back to the market after they've abandoned it during hardship. And that is certainly what the hope will be today especially where you are in Europe. With the Swiss Central Bank agreeing to this loan of tens of billions of dollars to Credit Suisse. Perhaps it will be reassurance to lift Credit Suisse shares as well as markets all across Europe and eventually into the United States.

But I have to also mention about the perspective from where I am in the world. Here in Asia, if we look at the last eight hours or so of the trading day here, we saw declines in all of the major indexes here in Asia including the Nikkei here in Japan where I am as well as the Hang Seng in Hong Kong, KOSPI in South Korea, as well as the Shanghai composite in China.

But again, this jolt of money, if you will, from the Swiss Central Bank could just be what markets in Europe need at least to try to make up those losses. But there are these bigger concerns about contagion. We've talked about that before. Will concerns, financial concerns in one part of the world transcend to other parts of the world. And that is what may be happening here with banking. As the stability of banks in the United States are now raising questions about the stability of banks in other parts of the world.

But it's also important to stress, it's not the only challenge facing the markets these days. We still are dealing with inflation. Inflation certainly hits consumers hard, but it also makes it very difficult for banks to do their jobs, to invest our money, try to bring in returns. Their costs are expensive too. And we also can't underestimate the ongoing stress that we are still seeing from the war in Ukraine.

So when we add all these things up including the concern about bank liquidity and stability, it makes for some very rocky days.

[04:05:00]

Of course, Max and Bianca, everyone is hoping that the storyline in the hours ahead in your part of the world is much more encouraging than we've seen here.

FOSTER: Thank you, Marc. Let's see those latest numbers coming out in the first few minutes of trade here in Europe. You can see hopefully that all the markets are up quite significantly. So that really is off the back of that intervention yesterday.

NOBILO: It is and of course all of this comes right before another crucial decision by the U.S. Federal Reserve. Fed policymakers will sit down in Washington in just a few days time to decide whether or not to hike interest rates amid the banking turmoil.

In the past year the Sed has hiked interest rates to quash inflation. The former Treasury Secretary Larry Summers says, there's no need to panic, your money is safe.

(BEGIN VIDEOTAPE)

LARRY SUMMERS, FORMER U.S. TREASURY SECRETARY: American's money is safe. American's money will be safe if they don't raise rates at all. American's money will be safe if they do raise rates by 25 basis points. Because the government has indicated that it's standing behind bank deposits. And as that message is repeated and becomes clear, as people see that those who deposited money even in the banks that failed, and even the people who were not insured are getting their money back in full.

But we are still also seeing very substantial rates of inflation. And if those substantial rates of inflation continue, they will erode people's purchasing power and their ability to spend. They will be incorporated in yet higher interest rates which will mean further financial strains. So I think the Fed has to tip toe very carefully through what is certainly a mine field at this point.

(END VIDEOTAPE)

NOBILO: Economists say the Fed rate hikes and banking fears are having an effect on American consumers causing some people to curb their spending.

(BEGIN VIDEO CLIP)

VIVIAN TU, FORMER J.P. MORGAN TRADER: With interest rates getting higher and higher, the hope is that inflation comes down. However, I'm sure as you probably noticed at the grocery store, things still feel quite expensive. And on top of that, we're also starting to see this slew of layoffs. So broader market trends I would say there's going to be a continued focus on more staples versus discretionary brands and those that provide those services.

(END VIDEO CLIP)

NOBILO: Retail sales are one area feeling the pinch. U.S. Census Bureau reported a 0.04 percent drop in February from the month before. Consumers are pulling back electronic stores too, gas stations and auto dealers.

FOSTER: Well, there is some good news. A key measure of inflation slowed dramatically in February. The Producer Price Index tracks what American's producers get paid for their goods and services. It increased at a much slower pace last month, about 4.5 percent, that's down from nearly 6 percent in January.

NOBILO: In the U.S. state of Georgia, investigators are looking into former President Donald Trump's behavior after the 2020 election and have another audio recording of him pressuring a state official.

FOSTER: He's now been recorded multiple times trying to get President Joe Biden's victory in Georgia overturned. Katelyn Polantz has the details.

(BEGIN VIDEOTAPE)

KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: CNN has confirmed the existence of a third phone call Donald Trump made to top officials in the state of Georgia after the 2020 election trying to put pressure on them to gum up the results. So, what is happening here, we know already about two phone calls that Trump made, we've even heard some of the audio from them where he was encouraging the Secretary of State's office to find votes after the election that could help him.

This third recording though was to the Georgia House Speaker, a man named David Ralston. After that phone call took place, it was recorded but Ralston had spoke about it before. He said Trump would like a special session of the Georgia General Assembly. He's been clear on that before and he was clear on that in the phone conversation yesterday -- this is in December 2020. You know I shared with him my belief that based on the understanding I have of Georgia law, that it was going to be very much an uphill battle.

So Ralston was pushing back in this Georgia grand jury investigation looking at possible criminality that may have taken place in that state. This came into the evidence there, there were five jurors this week that confirmed the existence of this phone call recording they were able to hear to the "Atlanta Journal Constitution." So that was in news reports. Ralston has been deceased since November of last year, so he was not -- would not be able to testify about this going forward.

But that phone call, the evidence of that, the recording of it, still exists and it was memorable enough for those jurors to remark upon it. We haven't heard it yet. And so, we don't know exactly what Trump said and exactly what Ralston said back to him. But it clearly is another piece in this puzzle of what happened in that state in 2020.

[04:10:00]

Katelyn Polantz, CNN, Washington.

(END VIDEOTAPE)

FOSTER: All right, so what does this new Trump recording mean than for prosecutors in the case? Our legal experts weighed in.

(BEGIN VIDEOTAPE)

ELLIOTT WILLIAMS, CNN LEGAL ANALYST: It appears that it is the former president attempting to influence others in the Georgia sort of in the political hierarchy in Georgia that could speak to his intent. But again, it's all going to come down to what the words are said -- what words were said on this recording.

ELIE HONIG, CNN SENIOR LEGAL ANALYST: What this would show me as a prosecutor is that Donald Trump had a very specific strategy and approach for how he was going to go about pressuring these state officials. He called them separately and tried to lean on them essentially on the assumption, well your Republicans and I'm a Republican, so you're going to use your authority here to swing things my way. So, I think it gives prosecutors a powerful argument that this was done intentionally and strategically.

(END VIDEOTAPE)

FOSTER: Now former trump attorney Michael Cohen is wrapped up for his -- has wrapped up his second day of testimony before a New York grand jury. It's looking into alleged hush money payments to adult film star Stormy Daniels days before the 2016 election.

(BEGIN VIDEO CLIP)

MICHAEL COHEN, FORMER ATTORNEY FOR DONALD TRUMP: This isn't a question of vindication. It's not a question -- as I stated before -- about revenge. This is a -- my position is that at the end of the day Donald Trump needs to be held accountable for his dirty deeds if in fact that is the way that the facts play out.

(END VIDEO CLIP)

NOBILO: Stormy Daniels' attorney says his client met with prosecutors by Zoom on Wednesday, offering to make herself available as a witness if necessary.

FOSTER: Prosecutors say they are nearing a decision on whether to take the unprecedented step of indicting the former president.

NOBILO: We're learning more details about the investigations into the finances of scandal plagued Congressman George Santos too. A law enforcement official says federal and state investigators are now looking into Santos' role in the sale of a $19 million yacht involving two of his wealthy donors.

FOSTER: Controversy swirled around Santos who has lied repeatedly about his resume and his background and questions remain about how he obtained the money to help underwrite his House campaign.

Top U.S. military officials are stepping up their criticism of Russia after they say its warplanes forced an American drone to crash into the Black Sea near Ukraine.

(BEGIN VIDEO CLIP)

GEN. MARK MILLEY, U.S. JOINT CHIEFS CHAIRMAN: We know that the intercept was intentional. We know that the aggressive behavior was intentional. We also know that it was very unprofessional and very unsafe.

(END VIDEO CLIP)

FOSTER: U.S. officials say senior members of the Russian defense ministry approved the jet's harassment of the drone. Others tell CNN the Russians have reached the site in the Black Sea where the MQ-9 drone crashed. But the U.S. managed to remotely erase sensitive software from the drone before it went down. Defense Secretary Lloyd Austin says it won't keep the U.S. military out of international airspace.

(BEGIN VIDEO CLIP)

LLOYD AUSTIN, U.S. DEFENSE SECRETARY: This hazardous episode is a part -- is part of a pattern of aggressive and risky and unsafe actions by Russian pilots in international air space. And the United States will continue to fly and to operate wherever international law allows. And it is incumbent upon Russia to operate its military aircraft in a safe and professional manner.

(END VIDEO CLIP)

NOBILO: CNN's Salma Abdelaziz is following developments and she joins us now. Salma, this now seems like it's a race to retrieve this drone. They don't yet know how big the debris field is. We heard just now that the U.S. claim that they wiped the drone of sensitive information, but it would be a real coup to the Russians if they manage to discover it.

SALMA ABDELAZIZ, CNN CORRESPONDENT: An absolutely mad dash in the Black Sea, you're completely right. Right now, this is of course a sensitive matter, this is intelligence in this drone. The United States absolutely does not want Russia to obtain. But it is complicated. Even the U.S. admits that it is very unlikely that you could reach it.

If you pull up a map. If you look at the Black Sea, you'll understand why this is so difficult. According to U.S. officials this drone crashed some 70 miles southwest of Crimea. Crimea of course, being an area occupied by Russia, illegally annexed by Russia for many years now and that that drone whatever remnants are left of it are a mile deep into the Black Sea.

Again, the Black Sea is a place where there are Russian navy ships stationed, that they've been launching operations, attacks on Ukraine from the Black Sea. And the United States has no physical presence in the Black Sea.

Now we know according to U.S. officials that Moscow has already reached that crash site. It is unclear if they were able to obtain anything. But the United States says don't worry about it, we've erased all the sensitive information on this drone. It's going to be OK. It's not going to be a security concern.

And then you have the diplomatic spat playing out as well. You heard there the Secretary of Defense Lloyd Austin accusing Russia, again, of this provocation. But Russia saying it's the United States that is to blame.

[04:15:00]

It is the U.S. that acted in an area that is known to be a place where Russia is conducting military operations. I want you to take a listen to how Russia's foreign minister explained it.

(BEGIN VIDEO CLIP)

SERGEY LAVROV, RUSSIAN FOREIGN MINISTER (through translator): They completely ignore the fact that after the start of a special military operation, our military declared the relevant areas of the Black Sea adjacent to the coast in certain places, to have a limited status for use by any aircraft. And such defined ignorance of this objective fact suggests that the American side is constantly trying to look for some kind of provocation to escalation its confrontational approaches.

(END VIDEO CLIP)

ABDELAZIZ: Now the United States says these are international waters. We absolutely have the right to be there and the U.S. will continue to operate there. But I think for the Kremlin this is a reflection of the narrative they've been pushing since the start of the conflict. They've accused the United States of being directly involved in the conflict. Whereas the U.S. has tried to stand back and say it's simply partnering with Ukraine.

So, for Russia right now, it's very much going to be about pushing that rhetoric, pushing that narrative, pointing to the U.S. and say, see I told you so, they are the ones on the ground, we're fighting the U.S.

NOBILO: And we've heard that from the secretary of Russian security council as well that this is evidence, the Russians view that the U.S. is actively supporting Ukraine, collecting intelligence and so on.

FOSTER: And trying to escalate -- Lavrov's words.

NOBILO: Well, that tends to be the rhetoric, doesn't it. That everything is viewed in terms of a provocation more or less. Salma, thank you so much for joining us.

And right now, a historic summit is under way in Tokyo between the leaders of Japan and South Korea that would have been unthinkable just a few years ago. South Korean President Yoon Suk-yeol standing shoulder to shoulder with the Japanese Prime Minister Fumio Kishida.

FOSTER: After decades of dispute and distrust, Japan and South Korea are trying to fix frayed ties due to rising security threats in the region -- namely from North Korea and China. The two leaders are in meetings right now and are scheduled to hold a news conference in just over an hour.

Ahead of the summit, North Korea expressed its disapproval by launching another missile. They fired an intercontinental ballistic missile into the waters between the Korean Peninsula and Japan.

NOBILO: The South Korean president released a statement warning the North they'll pay the price for its reckless provocations. The U.S. and Japan also condemned the launch.

And still to come, all eyes on Texas and an important legal dispute involving a widely used abortion pill. The latest on that case just ahead.

FOSTER: Plus, dangerous landslides in California after rain hammered the state. Next, we'll hear from some residents who saw part of their properties disappear.

Plus, the opponents of proposed judicial reforms Israel send a blaring message to Prime Minister Benjamin Netanyahu.

[04:20:00]

(COMMERCIAL BREAK)

NOBILO: Welcome back. In the U.S. the storm system that's hammered California this week is now heading east, but not before dousing the state with more rain and knocking out power with ferocious winds.

FOSTER: California's governor has proclaimed a state of emergency for 43 out of the state's 58 counties to support storm response and relief efforts. Look at that house. The torrential rain has caused landslides in some areas, like this, forcing many residents to flee their apartment buildings.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Almost like an earthquake but not really. And its kind of like shifted the ground a little bit.

UNIDENTIFIED MALE: We had probably between 15 and 20 guests here last night. And everybody is out safe, nobody lost anything. At this moment it is just the backyard.

(END VIDEO CLIP)

FOSTER: Meanwhile severe weather is also expected to hit the Dallas area and extends north over southern Oklahoma. Damaging winds, large hail and possibly tornadoes expected to wallop the region. Heavy snow is forecast across portions of the plains and upper Midwest where winter alerts are already in place. And Minneapolis is expected to pick up another 4 to 8 inches of snow.

NOBILO: A federal judge in Texas is promising to issue an opinion as soon as possible following a high-stake hearing in a medication abortion case.

FOSTER: He now has to decide whether to grant a preliminary injunction. It would require the U.S. Food and Drug Administration to suspend or withdraw approval of an abortion pill that has been available for more than 20 years. CNN's Rosa Flores has the details.

(BEGIN VIDEOTAPE)

ROSA FLORES, CNN'S CORRESPONDENT (voice-over): During the four-hour preliminary injunction hearing, the judge raised one possible scenario where he could keep the approval of the drug Mifepristone intact and instead block the FDA'S more recent moves to make the abortion pills easier to obtain.

JAMI LYON, PROTESTER: It's a 20-year-old drug that's actually used to save women's lives.

FLORES (voice-over): Legal concerns already restricting access. Walgreens announcing it plans to stop the sale of abortion pills in states where abortion remains legal after Republican-led states threatened to sue. In this case, the plaintiffs are arguing the drug is unsafe and the FDA's approval process was flawed.

Mainstream medical groups saying the plaintiffs used misleading information in the filing. And the drug company's attorney says serious side effects occur in less than one percent of patients, with the risk of death non-existent.

The Women's March and other abortion advocacy groups say the plaintiffs went, quote, "judge shopping" to find someone they believe will rule in their favor. By filing the case in Amarillo where there is one Federal Judge, Matthew Kacsmaryk, a President Trump appointee who went from working at a religious liberty law firm on anti-abortion advocacy to the federal bench.

JENNIFER RODGERS, FORMER U.S. FEDERAL PROSECUTOR: It would be unprecedented for a judge, a single judge, to say the FDA got it wrong 23 years ago. There's never been an instance where anyone has overturned the ruling of the FDA against the FDA's wishes.

FLORES (voice-over): Judge Kacsmaryk's handling of today's hearing had been shrouded in secrecy. The judge saying, he didn't want to publicize the proceeding out of security concerns, pointing to unnecessary death threats and voicemails and harassment, sparking outrage over the lack of transparency.

[04:25:00]

LYON: I'm dressed like a clown to show what a circus he's created. It's a joke. He's making the American court system into a circus.

FLORES (voice-over): More than half of all abortions in the U.S. in recent years were medication abortions, most using Mifepristone, and a ruling against this drug would have wide implications.

DR. KATHERINE MCHUGH, FELLOW, AMERICAN COLLEGE OF OBSTETRICIANS AND GYNECOLOGISTS: And Mifepristone is not just used in abortion care. It's also used for miscarriage management.

FLORES (voice-over): The judge didn't rule from the bench today and said, he'd issue an opinion as soon as possible.

FLORES: About that order, look, there is no question that the judge is sympathetic to the plaintiffs here, no question about it. But the nuance is important because practically what the plaintiffs are asking this judge to yank this medication from the shelves. But if you listen to the many questions that the judge asked the plaintiffs, he shows skepticism of being that aggressive in one clear swoop.

Rosa Flores, CNN, Amarillo, Texas.

(END VIDEOTAPE)

FOSTER: We're following developments in Texas where leaders of the Houston Independent School District, the state's largest district, will be replaced by a new board appointed by the state education commissioner. Here's how the Texas governor reacted.

(BEGIN VIDEO CLIP)

GREG ABBOTT (R) TEXAS GOVERNOR: This is really unfortunate in this regard. There has been a long-time failure by HISD and the victims of that failure are the students.

(END VIDEO CLIP)

FOSTER: This takeover move is being made under a Texas law that allows the state to remove the board of districts with schools failing to meet certain state standards. This decision to replace the district's superintendent and Board of Education trustees has sparked anger amongst students and officials.

(BEGIN VIDEO CLIP)

EILEEN REYES, STUDENT: This takeover could be the worst thing that could happen. There is hundreds maybe thousands of students who are at risk of their schools being shut down because of their low score. I'm a human, I'm a student, I'm not a test score.

(END VIDEO CLIP)

FOSTER: Millard House, the current superintendent of the Houston Independent School District says the move doesn't discount the gains made and says that he's confident that educators will continue to do the work to ensure positive student outcomes.

NOBILO: U.S. aviation officials hold a summit to get close to the bottom of these close calls at U.S. airports, what they are saying about the reasons behind the increasing number of incidents.

FOSTER: Here we go again.

(COMMERCIAL BREAK)

[04:30:00]