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Regional Bank Stocks Rebound Again On Yellen, Chase News; Home Prices Fell In February; Colorado Dentist Arrested For Allegedly Poisoning His Wife; No Class For Over 500K Students As L.A. School Workers Strike; Japan Wins Baseball World Classic, Cuban Player Defects. Aired 1:30-2p ET

Aired March 21, 2023 - 13:30   ET

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

[13:30:00]

BRIANNA KEILAR, CNN HOST: So, Matt, Yellen keeps trying to reassure everyone that the banks are fine and that the government and bigger banks will stamp out any fires. Has that calmed things here?

MATT EGAN, CNN REPORTER: Well, Brianna, it does look like things have calmed down significantly.

You know, Janet Yellen, she's insisting that this is a confidence problem, it's not a solvency one. And so she is doing her best to try to reassure everyone that the banking system is strong, it's been made stronger by the 2010 Dodd-Frank reforms.

And Yellen did say that Washington is willing to come to the rescue if that's what it takes to put out these fires.

Janet Yellen also sought to draw a contrast between what's going on now and what happened during the Great Financial Crisis, saying that this is not 2008, this is very different. She notes that there's no toxic assets right now.

And so we look at what's going on in regional banks, they're up across the board. Look at First Republic, up 53 percent today. That is a big rebound after plunging to record lows just yesterday.

And we did have the 11 biggest banks in the country come to the rescue with that $30 billion lifeline provided last week.

And now a person familiar with the matter telling CNN that First Republic is being advised by JPMorgan Chase, trying to figure out what kind of options they have to try to restore confidence in this bank.

And one of those options includes potentially raising additional capital. Right now, the mood on Wall Street has certainly improved from recent days - Brianna?

KEILAR: So the Fed is watching all of this.

Today, we actually learned that home prices dipped last month. Is this a sign that the medicine the Fed is divvying out is actually working? EGAN: Yes, Brianna. I mean, housing is ground zero for the Fed's war

on inflation. Mortgage rates have gone sharply higher since the Fed started even talking about raising interest rates. So that has slowed down the housing market.

New numbers out today show that existing home sales, they did increase month over month between January and February. But look at that. Still down 23 percent almost from the pace of a year ago.

And this is having an impact on prices. Home prices, year over year, they dipped by less than 1 percent. That breaks this decade-long streak of increasing home prices. So that is significant.

And again, it really is all about what the Fed is doing to try to get inflation under control.

KEILAR: That is some graph right there.

Matt Egan, thank you.

I want to bring in CNN economics and political commentator, Catherine Rampell, of "The Washington Post."

So, Catherine, I wonder, should we be encouraged that Secretary Yellen said that things appear to be stabilizing? Can we sort of take that and be comforted by it?

CATHERINE RAMPELL, CNN ECONOMICS & POLITICAL COMMENTATOR: Well, I think Secretary Yellen, among others, had been hoping that they would not need to keep saying over and over again that things are safe, your deposits are secure, please don't worry.

They had been hoping that when there were these extraordinary interventions over a week ago to rescue the depositors for Silicon Valley Bank and Signature Bank that would be sufficient.

Then they were hoping that this infusion from the bigger banks into - cash infusion from the bigger banks into First Republic would itself be sufficient. And obviously, there are still some market jitters out there.

I think the real question that people have that is continuing to fuel the anxiety is, what happens to my deposit if it is above the level of the FDIC insurance cap, $250,000? So for most people that would not apply to them. But for some people it does.

For legal reasons, among others, the administration has been reluctant to explicitly say, don't worry, everyone will be made whole even if there's a run on your bank, even if you're above that cap. Again, for legal reasons they're restricted from saying that.

They're inching closer and closer to saying that. And that's what you heard Janet Yellen say today, essentially, that if it comes down to it, the federal government will swoop in and make sure that your deposits are safe if there's a risk of a broader run on the banking system. So to answer your question, I hope that allays people's concerns. But

what they've done so far apparently has not gotten us to that point.

KEILAR: She's telling us it's OK because some people, a lot of people are worried that it's not OK. Right? So that makes sense.

How do her remarks today and how the markets have responded affect the Fed's decision-making about whether they're going to keep hiking interest rates?

RAMPELL: Well, if you look at what's happened to the regional banking stocks, including First Republic Bank, which is presumably one of the ones that Yellen was referring to, if not explicitly as, you know, if there's a run on the bank, the federal government would come in.

If you look at First Republic Bank's stock, it has gone up today. It has been doing better. Lots of other banking stocks also doing better today, presumably in light of that greater reassurance from the federal government.

[13:35:07]

What all of this means for the Federal Reserve, I think we still don't know. There had been calls a week ago for the Fed to potentially pause its rate hikes.

You know, not too long ago, before all this turmoil, the expectation was that we would see a 50 basis point or half a percentage point rate hike tomorrow. Then it was maybe it's 25 basis points. Maybe it's nothing. I think we still don't know.

The Fed, I think, is going to try to communicate, even if they are pausing the fight against inflation is not over, this is a temporary pause, not an end to the battle against inflation and not an end to the increase in interest rates.

But we don't know. I think they'll be digesting how markets react today and tomorrow morning and then evaluating based on all of that as well as all of the inflation and other, you know, real economy data that are coming in.

KEILAR: So when you look at his role here, Jerome Powell, the Fed chair's, on a continuum between scalpel and, say, Whack-a-Mole, where would you put him?

RAMPELL: Where would I put him?

KEILAR: His approach.

RAMPELL: I think his job's secure - oh, his approach.

KEILAR: His approach.

RAMPELL: I thought you meant is he going to get pushed out, which -

KEILAR: No. RAMPELL: - Donald Trump threatened to do.

Look, I think he has a really difficult job, and I do not envy him that difficult job. Almost anything that the Federal Reserve does to try to deal with one problem, it's going to make its other problems worse. Right?

If they act more aggressively when it comes to inflation by raising interest rates, that in turn could destabilize the financial markets again. And if they do what's best for financial markets that could aggravate inflation and make it become more entrenched.

So unfortunately, they only have this one blunt instrument, which is raising rates. They can raise them or not raise them or they can cut them. I don't think anybody's really expecting that tomorrow.

But they have that one tool and that's about it. And they don't really have a scalpel, unfortunately. So again, almost whatever choice they make will in some respect be the wrong choice.

But I think they're going to try to finesse it with how they communicate their decision. Again, even if they pause rates - pause rate hikes, rather, tomorrow. Maybe they will communicate hey, guys, hey, world, this doesn't mean that we're done.

And getting that message exactly right is important. Because there are other people who worry, including a number of former Fed officials, who have said explicitly on the record, well, if the Fed pauses, does that signal more worry than they intend, right?

Is the Fed saying - if the Fed pauses but not actually calm markets that might that freak them out even more because the markets will say, hey, even if the Fed is freaked out, maybe I should be, too.

I don't know that that's the right interpretation of events. There are a lot of ways this could go sideways.

KEILAR: We'll be listening so carefully to see what they say tomorrow with you.

Catherine Rampell, as always, thank you so much.

And coming up, a Colorado dentist arrested and accused of poisoning his wife. And investigators say his Internet searches were quite revealing.

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[13:42:43]

KEILAR: A Colorado dentist is in jail without bond, accused of killing his wife by putting arsenic in her protein shakes. Police say James Craig ordered the arsenic online and made suspicious Internet searches like how to make poison and how many grams of pure arsenic will kill a human.

CNN law enforcement correspondent, Whitney Wilde, is joining us now on this story.

What more can you tell us here, Whitney?

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, Brianna, the timeline from basically when this investigation launched to his arrest is really short, and that's because police say that they have found volumes of evidence to support this idea that he both planned and carried out his wife's murder.

The chilling timeline begins on March 4th when police say arsenic was delivered to the Craigs' home. By March 6th, Angela, his wife, a mother of six, was in the hospital. She was complaining of dizziness. She was saying that she couldn't focus her eyes.

Here is a screen grab of text messages between the two of them from around that time. She tells her husband, James Craig, "I feel drugged."

He responded, "Given our history, that might be triggering. Just for the record, I didn't drug you. I am super worried, though. You looked really pale before I left like in your lips."

Brianna, fast forward to around March 9th through the 14th, she was hospitalized again and again. That's around the same time that police say Craig ordered potassium cyanide to his dental office.

There, a staff member opened it, boxed it back up, alerted another member of the staff later on.

The staff was so concerned about what they saw coupled with what they knew about Angela's symptoms, they took this information right to the hospital staff that was treating Angela for the last time.

Again, when she was complaining of dizziness and severe headaches and sluggishness and an inability to focus her eyes.

Because the symptoms were so consistent with poisoning they took that right to the nurse at the hospital. The nurse took that right to police. He was arrested a matter of days later.

And, Brianna, perhaps one of the most piercing details in this police affidavit, police say that, as Angela lay dying in the hospital, James Craig flew another woman to Denver because he planned to start a new life with her.

He will be formally charged on Thursday. Simply a chilling case and we will keep you updated on the latest details - Bri?

[13:45:01]

KEILAR: So, Whitney, when she says, "I feel drugged," and he says, "Given our history I know that must be triggering," do we know what that history is? Do we have any idea?

WILD: We do. Within the affidavit, it is clear that Angela once told her sister, Toni (ph), that James Craig had drugged her about five or six years ago.

And in that incident, Angela told her sister he had drugged her because he didn't want her to find him as he was attempting a suicide, so he wanted to drug her so she wasn't able to stop his suicide attempt. Again, that was five or six years ago.

The police make clear in the affidavit that that's the incident that they think she's referring - that he is referring to there. Certainly, a lot of detail in this affidavit.

People who are associated with them, friends, family, said they had a very tumultuous relationship, something police mentioned in that police affidavit - Bri?

KEILAR: How sad.

Whitney Wild, thank you for that update. We appreciate it.

Half a million students in Los Angeles have the day off today, and it is not related to the latest atmospheric river. The union representing cafeteria workers, bus drivers, custodians and teacher's aides is on strike.

A powerful teachers union is backing the work stoppage, which is planned to shut down the nation's second-largest school district for three days.

CNN's Nick Watt is there for us.

So, Nick, this was a long-running dispute. Tell us about this and what you're hearing now.

NICK WATT, CNN NATIONAL CORRESPONDENT: Yes, listen, they have been negotiating for almost a year now, the union that represents these workers, the bus drivers, custodians, and the school district.

Now, where I am today, this is a campus with six schools. Normally, 4,000-plus kids on this campus. Not today. The gate is locked.

Now, the union is asking for respect, they say. They're asking for about their working conditions, longer hours.

But of course, this is all about money. The union is asking for 30 percent pay hikes for their workers. The district right now is on about 23 percent. So there's still a gap there.

And the union makes this point. Our members, the average wage for them here in Los Angeles, is $25,000 a year, which put them - puts them, says the union, below the poverty line. So the union wants them to get more pay.

Now, we spoke to a teacher here who's out on strike in sympathy, and you know, he said, listen, it's a difficult decision to make to go on strike to shut kids out of schools.

But he says, in the long run, it's going to be the best for everybody because this should lead to cleaner, safer schools, and also the right pay for the workers who keep these schools running.

But listen, half a million kids are out of school today. And right now, they will be for the next three days.

I've spoken to both sides. Still no updates on whether their talks are even progressing. They were supposed to have some meetings late last night. They didn't even happen because the two sides fell out before that meeting could even begin - Brianna?

KEILAR: All right, Nick, we know that you'll be waiting to see if there are developments there. Thank you.

Coming up, the city of Miami Beach is not extending its curfew for this upcoming weekend. But it's finding other ways to crack down on spring break chaos after two fatal shootings this past weekend. And, hint, it involves alcohol.

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[13:53:03]

KEILAR: No more curfew. That was the decision of a special committee meeting last night in Miami Beach. The mayor had called the meeting to ask for an extension of the curfew put in place after two deadly shootings.

And because of scenes like this. Massive shoulder-to-shoulder spring break crowds over the weekend. The commission did keep a restriction in place that liquor stores will have to close at 6:00 p.m. each night.

There was a very different event also happening in Miami. Team U.S. will take on Team Japan in the World Baseball Classic Championship tonight. But not all of the drama is on the field.

We have CNN's Coy Wire here to explain.

Some of the drama has to do with the Cuban team. Tell us about this.

COY WIRE, CNN SPORTS ANCHOR: Hi, Brianna. The Cuban team was eliminated in the World Baseball Classic by the U.S. team on Sunday in Miami.

On Monday, the Cuban team landed in Havana without one of its players. A 26-year-old backup catcher has defected from his home nation.

This confirmed by Major League Baseball officials to "USA Today's" Bob Nightingale. CNN has reached to out MLB for comment.

CNN's Patrick Oppmann, in Havana, reports that Cuba's president met the team, congratulated the players upon arrival, but has not said anything about the reported defection.

But as for the on-field action in the World Baseball Classic, it's drawn record attendance across the board at venues all across the world. And at last night's semifinal, Japan down one to Mexico in the bottom

of the ninth. But Ohtani steps to the plate like an egg into the house party. A double. Getting the comeback party started.

He's usually reserved, without emotion, stoic. This time, he had to show it.

And then, Brianna, this happened.

(BEGIN VIDEO CLIP)

(CHEERING)

(SHOUTING)

(END VIDEO CLIP)

[13:55:08]

WIRE: Sayonara, he screams. Good-bye, see you later.

Japan getting the walk-off win, knocking in two runs. The championship tonight. Brianna, it will be Japan facing Team USA. Man, this is like baseball's version of March Madness in Miami.

KEILAR: Who is favored here?

WIRE: Well, it should - it's very evenly matched. You have the best hitting team and the best pitching team. I didn't check who is the favorite. Both, huge powerhouse baseball nations. This one is going to be must-see TV.

KEILAR: Very exciting.

Coy, thank you so much.

That does it for me. Thank you for joining us.

CNN NEWSROOM continues after a quick break.

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