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New Russian Nighttime Attacks Reported by Ukraine; No Reduction in Russia-Ukraine Cross-Border Attacks; Biden Increases Congressional Pressure About Funding to Ukraine; Trump's Claim of Immunity Contested by Special Counsel; Trial Run Held for Times Square New Year's Eve Ball; North Korea Rejects Reunification; Fighting in Khan Younis Prompts IDF to Establish an Evacuation Route; Protest in Tel Aviv to Demand the Release of Remaining Captives; Mia Schem, Kidnapped Israeli-French Woman, Recounts Ordeal in Gaza; Second Mosque Vandalism Being Looked at by Philadelphia Police; How the U.S. Economy Surprised Us in 2023; Hong Kong Fireworks Extravaganza; Tokyo Welcomes Approaching New Year With Light Extravaganza. Aired 4-5a ET

Aired December 31, 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]

(COMMERCIAL BREAK)

KIM BRUNHUBER, CNN ANCHOR AND CORRESPONDENT: Welcome to all of you watching us here in the United States, Canada, and all around the world. I'm Kim Brunhuber. This is "CNN Newsroom".

Cross border strikes leave death and destruction in Russia and Ukraine. Now, President Biden has a message to those who would hold up additional aid to Kyiv.

A former Israeli hostage released and reunited with her family, but hear why she can't make peace with her return home.

And from Hong Kong to Key West, we'll take you around the globe to see how the world is preparing to ring in the New Year.

ANNOUNCER: Live from Atlanta, this is "CNN Newsroom with Kim Brunhuber."

BRUNHUBER: Moscow has fired a new salvo in the wave of cross border attacks and counterattacks between Russia and Ukraine that's been going on for the last couple of days. Ukraine says Russia targeted the Kharkiv region overnight, where three people were killed and 28 others injured. Three regions in Southern Ukraine also came under attack, while officials in Kyiv say they've repelled the latest wave of drone strikes.

Now, hours early, Ukraine says Russian missiles pummeled the city of Kharkiv, wounding 26 people. Those strikes damaged residential buildings, hospitals, businesses, and government offices.

(BEGIN VIDEO CLIP)

IRYNA NIKITINA, KHARKIV RESIDENT (through translator): This is our New Year. What a present Russia gave us this New Year. They are black souls, simply black souls. They bomb residential areas. There are people here. How can one do such a thing?

(END VIDEO CLIP)

BRUNHUBER: The second attack on Kharkiv followed a Ukrainian strike in the heart of the Russian City of Belgorod. Russia says, at least 21 people were killed and more than 100 others injured. Nic Robertson reports on the aftermath.

(BEGIN VIDEO CLIP)

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice-over): In the middle of the Russian city, Belgorod, the fiery aftermath of a suspected Ukrainian rocket attack. Russian officials claiming it was a massive assault using Ukrainian and Czech made ammunition fired from a multi-barreled rocket launcher. Some of which, they claim, to have intercepted.

IGOR KONASHENKOV, SPOKESPERSON, RUSSIAN DEFENSE MINISTRY (through translator): The key regime by carrying out indiscriminate attacks on squares and committing this crime is trying to divert attention from defeats at the front, as well as provoke us to similar actions.

ROBERTSON (voice-over): The death toll, including children climbing through the day. It comes the day after Russia launched its biggest air assault on Ukraine in almost two years of war. At least 40 people were killed, more than 150 injured. The Ukrainian strike on Belgorod, barely 20 miles from its border, Saturday, is its deadliest known cross border attack of the war. According to Belgorod's governor, Putin dispatched his health minister and an emergency ministry team. Three months out from his upcoming re-election, the chaos dents his carefully created image of a war going well.

ROBERTSON: It's unclear if this was Ukrainian revenge, and Ukrainian officials don't routinely comment about this type of attack. But the up-tempo does seem to speak to frustrations, fears even, and a determination in Ukraine that absent the financial support that they need from their allies, they can still land blows and thwart Putin's aggression.

ROBERTSON (voice-over): Russia's U.N. spokesperson called for an emergency U.N. Security Council session to censure Ukraine, much as Russia was the previous night for their massive air assault.

VASSILY NEBENZIA, RUSSIAN REPRESENTATIVE TO U.N. (through translator): Today, Security Council members have a chance to fulfill their duty and to assess what happened a few hours ago. The terrorist attack by the Kyiv regime against a civilian city of Russia, Belgorod.

ROBERTSON (voice-over): Russia's defense ministry says the attack will not go unpunished. By late Saturday, Russia attacked Ukraine, in Kharkiv with drones. More deaths can be expected.

Nic Robertson, CNN, London.

(END VIDEO CLIP)

[04:05:00]

BRUNHUBER: And for more analysis, we're joined from Kyiv by Maria Avdeeva, a research director at the European Expert Association and she's the research director at -- with the Focus on International Security, I should say. I want to start there where we left with the package with this Ukrainian attack on Russia. I want to get your take on what Ukraine was targeting and the motive behind it.

MARIA AVDEEVA, SECURITY EXPERT: Ukraine is always targeting military targets inside Russia, and Ukraine needs this to stop Russian aggression because the more, munition depots, the more logistics being hit in Russia, the more -- like, the less Russia can attack. And this is why Ukraine is always asking for more aid.

And, you know that Russia is attacking Kharkiv from Belgorod. So, they use usually this S-300 missiles which the allowance from their territory. So, we can presume that the targets inside Russia were military to stop for the Russian aggression and to defend Ukrainian cities because this is actually the only way how to protect such cities as Kharkiv that are very close to the border.

BRUNHUBER: Yes, I want to ask you about Kharkiv in a second. But just since you're in Kyiv, I just want to ask you, are people in Kyiv talking about this attack? Does it provide a moral boost at all, striking back at the enemy like this?

AVDEEVA: Well, this was a huge, news, because, Kyiv is still a -- recovering from the attack that happened here just two days ago. And today, more bodies were uncovered under the rubble of the warehouse destroyed here. So, of course, this is -- this was the most massive Russian attack on Ukraine in -- since the war started/ And people were looking for retaliation.

So, every strike on military targets inside Russia is the -- is discussed and is supported here in Ukraine because Russia started this war and everyone wants people in Russia to realize that they have to stop. They have to stop war, withdraw troops, and then people will stop dying.

BRUNHUBER: You mentioned Kharkiv. You're from there, that's where you normally live. The Kharkiv Palace, a hotel in the center of town was among the Russian targets.

AVDEEVA: This was the first hotel directly hit in Kharkiv. And Russia today, says that they specifically hit the hotel. Many international media, international humanitarian organizations, missions stayed in the hotel. It was like a landmark, a symbol of hierarchy. And so, this deliberate attack, almost on the New Year Eve, was meant to show Ukrainians that Russia is not stopping. They will continue to hit, specifically, civilian targets in Ukraine and that the -- they continue with their aggressive war.

BRUNHUBER: How are folks there coping? I mean, the city has sort of been a barometer for the state of the war in a way? AVDEEVA: Well, it -- it's difficult. For people -- for my friends in the city because after this attack in the evening, and it happened when people were outside in the late -- sorry, in the early evening hours. So, after that, when people were recovering from this attack, Russia again hit city center of Kharkiv with Shahed drones. The heart of the city, where all the historical buildings and landmarks are.

So, people are now -- like, we're waiting what might come next on the New Year Eve. And of course, everyone is feeling frustrated because the war is going for almost two years now and Russia is continuing its attack on civilians, but people nevertheless, their -- they feel strong and they want to continue fighting because they understand that if we just stop for a moment, Russia will crush Ukraine and this is their goal. So, we need to continue going.

BRUNHUBER: You mentioned, you know, New Year's Eve, people celebrating, as well just the war weariness, I guess. As we look ahead to the New Year, to the upcoming year, what are your realistic hopes for the country?

AVDEEVA: Well, we have heard several times from the top military leadership in Ukraine that we have to be prepared for the long months of the war. It will not stop now.

[04:10:00]

There will be turning points in this war when Ukraine will actually receive fighter jets and when Ukraine will receive more long-range missiles from our allies and from the United States as well. And we are looking forward for the new -- this new aid package that will allow us to make a change in this war, to change the pace of the war. But anyway, it will not stop at one point because Russia is converting everything to military wheels and there Putin pouring millions into the war.

So, we have to realize that this is a huge power and they are in war, not only with Ukraine, but with NATO, with the United States, with other countries. Because as Russian Ministry of Defense stated today, they hit not the hotel in the city center of Kharkiv. They hit the NATO military base. That's how they see this war.

BRUNHUBER: Yes, and still so much uncertainty around that U.S. aid package. We'll have to leave it there. Maria Avdeeva, thank you so much for speaking with us. Really appreciate it.

AVDEEVA: Thank you for having me.

BRUNHUBER: President Biden is turning up the pressure on lawmakers to approve more aid for Ukraine. More than $60 billion in military aid is stalled in Congress as western officials warn Ukrainian forces will face an uphill battle without more assistance. Kevin Liptak has more.

(BEGIN VIDEO CLIP)

KEVIN LIPTAK, CNN SENIOR WHITE HOUSE REPORTER: President Biden is sharply condemning Russia's attack on Ukraine, calling it the most serious since the war broke out. And really using it to remind Americans of the continued war on the ground there. Saying that Russian President Vladimir Putin's intentions have not changed in the two years since this war broke out.

He's also using this as a moment to call on Congress to pass new assistance for Ukraine, and really telling lawmakers that the defensive systems that have been passed already, the Patriot missile batteries of their defensive systems have saved lives on the ground there, including just this week. But that -- if those systems aren't provided in the future, the Ukrainians will essentially be left defenseless.

In a statement, the president saying, unless Congress takes urgent action in the new year, we will not be able to continue sending the weapons and vital air defense systems Ukraine needs. We cannot let our allies and partners down. History will judge harshly those who fail to answer freedom's call.

But remember, this new funding for Ukraine is tied up in this debate back in Washington between Democrats and Republicans over immigration, over tightening the rules at the border. And it remains to be seen whether this new air assault will do anything to change the minds of skeptical Republicans, who at the end of the day really just don't support new funding for Ukraine. They don't believe that it is in America's best interest.

Just this last week, the White House said that it had approved the final amount of money that was left in the existing authorization, $250 million in assistance to Ukraine, but essentially saying that that was the bottom of the barrel. That no new funding would be going forward unless it is passed by Congress.

So, President Biden really hoping to use this moment to convince these lawmakers that that assistance is necessary going forward. And as he returns to Washington next week, that will certainly be at the top of his agenda as the war in Ukraine continues to rage on.

Kevin Liptack, CNN, traveling with the president in Saint Croix.

(END VIDEO CLIP)

BRUNHUBER: U.S. Special Counsel Jack Smith is pushing back against Former President Donald Trump's claims of presidential immunity amid his 2020 election interference case. Smith's claims are in a new court filing on Saturday. It says that Trump's sweeping assertion, "Threatens to license presidents to commit crimes to remain in office." He also made an unusual request for the appeals court to implement its ruling quickly.

Now, that could fast track the case ahead of the 2024 election. CNN's Zachary Cohen has more from Washington.

(BEGIN VIDEO CLIP)

ZACHARY COHEN, CNN NATIONAL SECURITY CORRESPONDENT: Special Counsel Jack Smith is arguing that the Former President, Donald Trump, is wrong in claiming he should have absolute immunity from criminal prosecution in the federal election subversion case. And he's asking a federal appeals court to move quickly in hopes of preventing the March 4th trial date from being delayed.

Now, this is in a new court filing by Smith in which he says, Trump's claim of absolute immunity, "Threatens to license presidents to commit crimes to remain in office." Smith also emphasizing the historical importance of the court's decision, warning that granting Trump such broad immunity, "Threatens the democratic and constitutional foundation of our Republic."

This filing is coming ahead of oral arguments. Those are set to be -- begin in Washington on January 9th. The trial was initially scheduled to begin on March 4th, but Trump has been trying to delay that and his fight over the immunity claim really underscoring those efforts. But if the appeals court moves quickly, it could keep the original trial date from sliding. And with the looming presidential campaign only months away, it's clear that timing is critical for both sides in this case.

[04:15:00]

Zachary Cohen, CNN, Washington.

(END VIDEO CLIP)

BRUNHUBER: In New York, the Times Square New Year's Eve ball got a test run before the famous countdown. It's 12 feet in diameter, covered with more than 2,600 crystal triangles, and weighs nearly 12,000 pounds. Organizers say, for the first time ever, it'll be relit after the traditional playing of "New York, New York."

And luckily, not a whole lot of rain and snow in store for U.S. -- for the U.S. as the New Year approaches. CNN Meteorologist Elisa Raffa has more on what we can expect.

(BEGIN VIDEO CLIP)

ELISA RAFFA, CNN METEOROLOGIST: That potent storm that we've been talking about that's been kicking the waves in California, well, it's not going to really make it all too far east. It's not bringing a lot of rain and it kind of dies in the Rocky Mountains there, you can see that on that future radar.

We do have a little hiccup that wants to pop from the Great Lakes going into the Appalachian Mountains, but not going to really find too much of either rain or snow out of that one, that's because we have this big dominant area of high pressure that's going to bring that dry sinking air and keep us quiet going into the New Year's holiday. Like I mentioned, some of those rain and snow total was not really all that impressive. Even for the spine of some of those highest elevations, only looking at a few inches of snow.

So, it leaves you with some pretty quiet conditions as you're headed out for your New Year's in the evening. Not too much rain and snow, pretty much really nationwide. Temperature is kind of seasonal, a little bit on the chilly side going for a temperature at 32 degrees in Minneapolis. Some 30s down to St. Louis. You've got temperatures in the 30s and 40s even up into the northeast.

If you're looking for that forecast for Times Square, that ball drop, headed into the upper 30s by midnight with just a few clouds, maybe a flake or two could fly. But for the most part, looking at some dry conditions with a little bit of a breeze, you'll find those wind chills in the middle 30. So, you'll definitely want to bundle up. But upper 30s is kind of seasonal, kind of right where those temperatures usually are for this time of year.

When you look at the records, the warmest records for that midnight ball drop in New York City, all those records are in the middle 50s. We actually hit one, the third warmest on record coming into this year, 2023, but that temperature of 54 degrees, 2022 was also top five for record warm. Back in 2018, we were rivaling one of the coldest ball drops on record, we just missed it. Second spot, nine degrees, that was set back in 2018.

We're going to keep things quiet going into New Year's Day. Again, not too much in the way of rain or snow, really anywhere in the U.S. Things are staying pretty quiet. Temperatures are seasonal or a little bit below average. Temperature of 49 degrees, I thought it is on a chilly side for Atlanta.

(END VIDEO CLIP)

BRUNHUBER: No end in sight to the fighting in Gaza. Palestinians who have already fled their homes are facing food shortages and disease outbreaks. We'll have a look at the miserable conditions they're forced to endure just ahead.

Plus, North Korea rejects reunification with South Korea as it vows to launch more spy satellites and step-up war pressure -- preparations. We'll have details ahead. Stay with us.

(COMMERCIAL BREAK)

[04:20:00]

BRUNHUBER: Israeli Prime Minister Benjamin Netanyahu says, the war against Hamas will continue for months. He says, Israel's military has the upper hand right now and claims it has killed more than 8,000 terrorists since the war began.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): The war is at its height. We are fighting on all of the fronts. We have huge success, but we also have painful cases. Achieving victory will require time. As the Chief of Staff has said, the war will continue for many more months.

(END VIDEO CLIP)

BRUNHUBER: The Hamas-run Ministry of Health says, the majority of victims in Gaza are children and women. They put the latest death toll at nearly 22,000 and more than 56,000 wounded. Now, CNN can't independently confirm information from the ministry, which doesn't distinguish between civilians and combatants.

Near Khan Younis in Southern Gaza, Israeli forces warn people to use alternate routes, they claim, are safe amid intense fighting around the city. They posted a map with instructions online, but it's not clear how many will actually be able to receive that information because of a lack of communications and internet in the enclave.

Joining us now is journalist Elliott Gotkine in Tel Aviv. So, Elliott, you've been, looking into the worsening conditions for people in Rafah. What have you found?

ELLIOTT GOTKINE, CNN JOURNALIST: Kim, yes. What we're seeing is that as a result of these evacuation orders and the IDF in Arabic on, ex- formerly Twitter has reiterated these evacuation orders in Central Gaza, for example, part of the Central Gaza Strip. People who are receiving those messages and are acting on them, tend to be gravitating towards Rafah.

Now, some of these people, of course, have been displaced multiple times now. So. they're turning up at Rafah in the southern part of the Gaza Strip by the border with Egypt. And according to international organizations, more than a hundred thousand of them have descended on Rafah over the past few days, and that is adding to an already dire humanitarian situation.

So, you've got overcrowding, you have got a lack of sanitation, you've got a lack of food, and at the same time we're seeing the prices of food skyrocketing. And we spoke with one Abu Misbah (ph), who's a 51- year-old construction worker from the northern part of the Gaza Strip. He's now there in Rafah, and he was telling us that he and his family are constantly hungry, and that they're having to beg for food from U.N. schools which have been turned into shelters.

He says that the prices of some basic goods have skyrocketed. For example, salt has gone up 15 times the price that it was before October the 7th than when Hamas launched that terrorist attack on Israel. Yeast has gone up ninefold. The price of flour has gone up fourfold. And of course, as the prices of these goods go up, and we know that not enough humanitarian aid is getting into the Gaza Strip for them to get hold of that food, the most basic necessities from humanitarian organizations, it becomes that much harder to get food to remain well-nourished and to avoid succumbing to diseases which are also proliferating.

[04:25:00]

The World Health Organization talking about things like diarrhea and respiratory diseases proliferating. And there is a real concern that even if more people don't descend on Rafah and more people are expected to descend on Rafah, that the already dire humanitarian situation will only get worse. Kim.

BRUNHUBER: All right. Thanks so much, Elliott Gotkine in Tel Aviv. Appreciate it.

Thousands of people gathered for another rally in Tel Aviv on Saturday. Calling for all remaining hostages in Gaza to be freed. They protested outside Israel's defense ministry where Prime Minister Benjamin Netanyahu was holding a news conference. Some carried Israeli flags and posters of hostages. One woman said, she's worried that the Israeli government isn't prioritizing the release of the hostages and said a ceasefire is needed now.

An Israeli-French woman who spent more than 50 days in Hamas captivity is sharing her story to shine a light on the horrors that the remaining hostages are facing right now in Gaza. Mia Schem was kidnapped from the Nova music festival on October 7th after suffering a gunshot wound to her arm. She describes receiving surgery in Gaza without pain medication. Mia says, she spent much of the time in a house with a Hamas member, his wife, and their children. She says, no one treated her with kindness. Then, she was taken to the tunnels.

(BEGIN VIDEO CLIP)

MIA SCHEM, FREE ISRAELI HOSTAGE (through translator): I met other hostages in my last five days in the tunnels. Six people, seven people. In a room of two-by-two meters. One on top of the other. In a cage. Getting one pita a day with no air. This is why I didn't digest my return home. I cannot make peace with it because there are more people there and I know what it's like to be there. And it's in my head all day, every day. It doesn't leave me.

(END VIDEO CLIP)

BRUNHUBER: You can see here, Mia's emotional reunion with her family. Mia says, while she was in captivity, she saw her mother on TV and drew strength from her mother's strength.

Police in Philadelphia are investigating a second act of vandalism to a mosque since the start of the Israel-Hamas war. A local Muslim group says, someone spray painted a mosque Friday morning. Police say, officials at the mosque reported an unidentified white male in a red raincoat and blue jeans vandalizing the mosque. The group says, the vandal spray painted both messages and symbols. They called for increased police protection. Police confirmed they're also investigating a similar act at a different mosque on October 19th.

North Korean leader Kim Jong Un says his country will no longer seek reconciliation and reunification with neighboring South Korea. State media also report that Kim said it would be a mistake to deal with people who consider North Korea to be, "The main enemy." Now, this comes as Kim instructed his army this week to accelerate war preparations in response to what he called, confrontation moves by the U.S. And North Korea also says it will launch additional spy satellites next year.

CNN's Marc Stewart looks at what it can mean for the country's missile program, which has been banned by the U.N. Security Council.

(BEGIN VIDEO CLIP) MARC STEWART, CNN INTERNATIONAL CORRESPONDENT: In a forceful statement, North Korea announced plans to launch three spy satellites in 2024. Experts feel this is significant because this technology could help advance its long-range missile program. The remarks were made during the ruling Workers Party meeting to set state goals for the next year.

North Korea successfully launched a spy satellite in recent months after two known failures. This comes as the International Atomic Energy Agency expressed concern after detecting signs of a new reactor operating at the nation's main nuclear complex. That potential raises concern as it could allow North Korea to produce nuclear components at a faster pace.

Recently, state media reported that North Korean leader Kim Jong Un instructed the country's army, the weapons industry, and others to accelerate war preparations in response to, "Confrontation moves by the U.S." Some context, these remarks by Kim Jong Un come amid perceptions by North Korea of a strengthening alliance between the United States and South Korea. This, as North Korea and Russia could possibly solidify their own relationship in the year ahead.

Marc Stewart, CNN, Seoul.

(END VIDEO CLIP)

BRUNHUBER: All right. Still to come, police are on high alert to keep New Year's Eve revelers safe across the globe. How New York is preparing for the famous ball drop in Times Square, just ahead. Please stay with us.

(COMMERCIAL BREAK)

[04:30:00]

BRUNHUBER: Welcome back to all of you watching us here in the United States, Canada and all around the world. I'm Kim Brunhuber. This is "CNN Newsroom".

Law enforcement agencies around the world are ramping up security ahead of New Year's Eve celebrations. New York is deploying thousands of officers with a million people expected to gather in Times Square to bring in the New Year. CNN's Polo Sandoval is in New York with more.

(BEGIN VIDEO CLIP)

POLO SANDOVAL, CNN CORRESPONDENT: Well, security is always extra tight here in Times Square ahead of New Year's Eve celebrations. This year, though, authorities will certainly be operating with a heightened sense of alert. According to a security analysis obtained by CNN, a collection of law enforcement agencies at the local, state and federal level, including the FBI, the Department of Homeland Security, certainly the NYPD, saying that in light of the Israel-Hamas conflict, that's actually created a so-called heightened threat environment. Specifically, U.S. Intelligence officials are growing increasingly concerned about the threat posed by these difficult to predict lone wolf attacks. These are very simple, unsophisticated attacks. Very similar to what we saw play out New Year's Eve last year, which is one individual that would later be described by law enforcement officials as a homegrown violent extremist actually attacked law enforcement personnel at one of those checkpoints in place, which is one of the reasons why they are increasing those security measures this year, according to the NYPD.

JOHN CHELL, CHIEF OF PATROL, NEW YORK POLICE DEPARTMENT: So, lone wolf attacks are very tough. But like you saw last year, unfortunately we had a lone wolf attack about 10:00 at night. But our cops were aware of their surroundings, they reacted quickly. It's imperative that our cops be aware of their surroundings, stand tall, and react quickly to their training. And that's what they did last year.

SANDOVAL: Similar to years past, the NYPD rolling out a long list of prohibited items for those folks who actually plan to spend New Year's Eve here in Times Square. Items like umbrellas, large bags, prohibited.

[04:35:00]

?Also, New York City Mayor Eric Adams saying that this year, the security zone itself, it will be expanded. Creating a, sort of, buffer zone, this in light of some concerns about possible disruptions caused by these protests that we've seen break out almost on an everyday basis here in New York City since the October 7th attacks. So, time and time again, we keep hearing from authorities who are emphasizing that there is no credible threat at the moment.

Polo Sandoval, CNN, New York.

(END VIDEO CLIP)

BRUNHUBER: Now, of course, other cities around the world are setting the stage to bring in 2024. And why brave the cold and crowds of Times Square to watch the ball drop when there's Key West's high heel drop? On Saturday, organizers in Key West did a test run of the drop, a New Year's Eve tradition that's been going strong for nearly three decades.

And in London, workers loaded nearly 12,000 fireworks onto barges for the UK's biggest New Year's Eve fireworks display. And fireworks also the centerpiece in Rio de Janeiro. Some 2 million people are expected to gather at Rio's popular Copacabana Beach.

And you can join us New Year's Eve for live coverage around the clock as the world brings in the New Year. Our special coverage begins just before midnight in Sydney, Australia, which is midday in London and morning in New York. It carries on throughout the day and night.

All right, still to come, the U.S. economy took some surprising turns in 2023 as many of the twists turn out better than expected. We'll talk about that and look at what could happen in 2024. That's coming up. Please stay with us.

(COMMERCIAL BREAK)

BRUNHUBER: Well, if there's one thing that could be said about the U.S. economy in 2023, it's that things weren't as bad as we were told to expect. Now, this time last year, the storm clouds were building, inflation was sky high, markets were shaky at best, and a recession seemed inevitable.

Now, while the Fed did raise rates pretty consistently through the year, it never really led to a downturn in the economy. ?Inflation is still stubbornly high, and problem for millions of American households is continuing to recede towards the two percent target the Fed wants to see.

[04:40:00]

And job growth has been solid over the past year, which has helped keep the unemployment rate below four percent. And then the markets, well, the main indices each close out the year with double digit percentage point gains.

Now, earlier, I spoke with Brian Patel, a senior fellow at the Drucker School of Management at Claremont Graduate University. I asked him what the experts missed in their economic expectations for 2023. Here he is.

(BEGIN VIDEO CLIP)

RYAN PATEL, DRUCKER SCHOOL OF MANAGEMENT, CLAREMONT GRADUATE UNIVERSITY: I think it was a resilience. I think the economic conditions that they could not believe that the inflation would stay -- you know, would stay high with unemployment needing to actually increase and unemployment stayed low.

And I think the other thing too is many businesses have become more resilient during COVID, and I think part of that we see people kind of plan out to that degree. And consumer spending was actually -- didn't decrease very much either. And so, I think that kind of shock with some of the numbers, but obviously we're still not out of the woods, but definitely when you talk about 2023 and double-digit growth for the market, that is not something that many would predict and it turns out to be a good year for those on the market and still through all the instability, you know, something you -- it's a win.

BRUNHUBER: Yes, throughout -- all these so-called bad times, it didn't stop people for -- from spending, that's for sure. Listen, last time you and I spoke, I think it was in the wake of those bank failures. Three of the four largest bank failures in history happened last year. An extraordinary sequence of events that seemed, you know, to me at least, like it was so long ago. I mean, are we out of the woods on that front?

PATEL: I love how you brought that up, Kim, because people forget that financial crisis, we're not out of the woods when it comes to still having good balance sheets. When you think of 2024, interest rates are going to probably drop, but not that much, maybe 50 to 75 basis points here in the U.S. the Fed is looking at. But what does that mean? When you had interest rates at so high this whole year, you're going to start feeling that next year. And so, when those that are -- haven't -- you know, bankruptcies, companies being acquired more. Some stabilities of those balance sheets are not there. We may see some of that from the banking sector.

So, I don't want to say, you know -- the -- you know, the big banks are going to fail. I think that the banking and finance, in general, really need to pay attention and continue to, you know, tighten their balance sheets.

(END VIDEO CLIP)

BRUNHUBER: All right. Still to come, an inside look at Hong Kong's first new year's celebration fireworks since 2018 and the man behind them. Stay with us.

(COMMERCIAL BREAK)

[04:45:00]

BRUNHUBER: In the northern French city of Lille, some people have found an unusual way to bid adieu to 2023. They're paying to break things as a way to release their frustrations. It's happening at a so- called Rage Room, where visitors don protective gear and destroy bottles, plates or just about anything else. The manager says, most customers are women. And people of all ages use the service, adding that business has ticked up in the days approaching the new year. It looks like fun.

After a five-year hiatus, Hong Kong's New Year's fireworks show is back. CNN's Kristie Lu Stout met up with the pyrotechnic mastermind behind what's billed as the city's biggest fireworks countdown ever.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Happy New Year.

KRISTIE LU STOUT, CNN CORRESPONDENT (voice-over): In this city, New Year's Eve is a feast for the senses. It's where lasers and light shows illuminate a world-famous skyline. And this year, the big harbor fireworks are booming again. The mastermind? Fireworks engineer Wilson Mao.

WILSON MAO, CEO, PYROMAGIC: Well, we're going to see the biggest firework countdown ever in Hong Kong.

STOUT (voice-over): For the first time since 2018, Hong Kong's traditional New Year's display is back. And Mao was born ready as the third generation in the family business of fireworks.

MAO: My memory goes back to the 1970s. I went to my hometown in China. My hometown was very famous in fireworks and is still very famous. My early memory in the fireworks was how to make firecrackers. I always like to -- STOUT: How to make them?

MAO: Yes, how to make firecrackers.

STOUT: You were making them when you were seven years old?

MAO: I was making them, yes. Every home, every family make firecrackers.

STOUT: You were playing with fire when you were seven years old?

MAO: Oh, yes.

STOUT: Family business.

STOUT (voice-over): Since 1997, Mao has designed and staged major fireworks displays in Hong Kong for New Year, Lunar New Year, and National Day. In his Kowloon office, we see just a fraction of the hardware that goes into each show.

MAO: We have mortars.

STOUT: Yes.

MAO: Launch tubes, OK. We have racks. We have cables, modules, panels. We have sandbags.

STOUT (voice-over): And the software that runs it.

MAO: It all begins with the music. Once the music is done, my choreographer is going to put the music into a software. She will start a script using that software by plugging fireworks into the music. Line by line. It is a very tedious work.

STOUT (voice-over): Mao's displays are massive. In October, his National Day show involved over 31,000 firing shells and lasted more than 23 minutes. More than 400,000 people came out to watch, according to authorities. Hong Kong last enjoyed big countdown fireworks show in 2018, with later New Year's Eve displays cancelled due to social unrest and the pandemic.

This year's show spans 1,300 meters, involving five barges across the harbor. Preparing the barges takes 15 days, with Mao's team carefully placing the firework shells into the cylinders ready to fire from a remote computer on New Year's.

STOUT: So, fireworks and firework displays, what you do has been around for so long. But how is it changing? How is it modernizing?

MAO: The fireworks in the future will be integrated with drones. ?Drones can actually carry pyrotechnics and it will feature another texture different from display shells.

[04:50:00]

And it also carries an angle, we can actually film that from drones and shooting fireworks at the same time.

STOUT: Oh, wow.

STOUT (voice-over): Technology is further igniting a craft that dates back centuries and this pyro master is leading the charge.

Kristie Lu Stout, CNN, Hong Kong.

(END VIDEO CLIP)

BRUNHUBER: And we'll have some amazing guests, including Andrew Reynolds and Josh Gad, plus Paris Hilton, Rachel Zegler, the stars of the "Gilded Age", Martin Sheen, Cirque du Soleil, Andrea Bocelli, Sam Neill, many, many more as we look back on the year that was. Hear their plans for 2024, that's right here on CNN.

Well, the Powerball jackpot is still up for grabs here in the U.S. after nobody won the massive prize in Saturday's drawing. The jackpot has now grown to an estimated $810 million and will likely go higher. The next drawing is set for Monday, New Year's Day. It's been more than two months since anyone has won the grand prize, and that jackpot worth a staggering $1.76 billion still hasn't been claimed.

All right. I'm Kim Brunhuber. In just a moment, we'll go live to Tokyo as Japan prepares for the new year with a special release of lanterns. Stay with us.

(COMMERCIAL BREAK)

[04:55:00]

BRUNHUBER: Welcome to all you watching us here in the United States, Canada and all around the world. I'm Kim Brunhuber.

Still a few hours until the world welcomes 2024, but there's something special getting underway in Japan right now ahead of the clock striking midnight. We want to take you now live to Tokyo. So, have a look here. We're going to look at Civic Plaza, next to the city's Metropolitan Government Building, where a magnificent light show is about to begin.

CNN Correspondent Hanako Montgomery joins us now from Tokyo. So, I see plenty of lights back there, a stage, lots going on. I can't imagine many more cities that I'd want to be in other than Tokyo to ring in the new year. Take us through what we're going to see.

HANAKO MONTGOMERY, CNN INTERNATIONAL CORRESPONDENT: Yes, so it's not quite midnight here in Tokyo yet, but we have hundreds of people gathered here in front of the Tokyo Metropolitan Building. And I don't know if you can see this, but they have red lanterns, and on these red lanterns, they have all these different New Year's resolutions that they have written. Things like, good health, hope and happiness for the new year, academic success for students.

And they're going to be raising them at the strike of 7:00 p. m. I think some people have been releasing them a little bit, but it's just very exciting. There's a lot of excitement and happiness in the air right now.

BRUNHUBER: Take us through the people participating. Were they, you know, special people who've been invited there? I mean, who are they? And take us through, sort of, what they've been telling you.

MONTGOMERY: Yes. Well, so, Pikotaro, who is a singer in Japan, and he's very well known for his "Pen Pineapple Apple Pen", just performed a few minutes earlier. And he had a special version of his song for Tokyo because, of course, this is the Tokyo Metropolitan Government Building. And then we also saw some Sanrio characters who were just adorable. They were doing this little dance up on the stage. I wanted to join in myself. And then, of course, we heard a few words from the Tokyo Governor Koike.

And now, we're just getting ready for the lantern release. We have a projection map up there and you see some beautiful photos of flowers, Sakura, a symbol in Japan. And again, we are just about ready to release those lanterns.

BRUNHUBER: All right. And the people in the crowd, could anybody just come there and release lanterns? Who are the people in the crowd there? You've been speaking to them, what have they been telling you?

MONTGOMERY: Yes. So, there are so many different types of people here today. I mean, out of the hundreds of people that are here, we spoke to a couple of them. And a lot of them, you know, had hopes of good health in the new year. Lots of different -- also, resolutions for their family and friends. We have a couple of people who spoke to us, so just give this a listen here.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE (through translator): My friend told me about this event. I had a tough year with many sad moments. I came here with the wish for better things for next year.

UNIDENTIFIED MALE (through translator): The whole world feels a bit unstable at the moment. I came here and hoped that people would be more considerate of each other next year so we could live more harmoniously alongside each other in 2024.

(END VIDEO CLIP)

MONTGOMERY: So, again, just -- you know, really looking forward to the new year. What's to come? A fresh start for the entire country and for many of us here today. I just want to take a moment and look behind me right now. We're going through the seasons, it seems. Right now, we're on autumn. And there's just beautiful photos of very historical sites and cultural sites across Japan, what they look like throughout the seasons.

And again, we're just about getting ready to release those lanterns. The clock should strike 7:00 p.m. any minute now, and we should see those lanterns floating on up.

BRUNHUBER: And we have about a minute before they release them. So, I just want to ask you about this. I mean, lantern festivals, they're a tradition in Japan. What do they normally represent?

MONTGOMERY: Yes, you know, in Japan, when we have lantern festivals, a lot of the time it's to write down different hopes and resolutions, right? It's a moment where people can kind of reflect on what they -- what kind of year they've had in the past and what they're really looking for. And you know, it's almost like a physical release, I suppose, of the -- perhaps some of the stresses that we've been experiencing, right?

[05:00:00]