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CNN This Morning
Stock Futures are Down Due to Uncertainty about Investment Company Credit Suisse and International Banking Sector; Rep. Michael Lawler (R-NY) Interviewed on Russia Forcing Down U.S. Drone over Black Sea; Severe Weather Threatens Parts of California with Flooding; Today: High-Stakes Hearing In Medication Abortion Lawsuit; San Francisco Considering Reparations Plan, $5M Per Black Person.. Aired 8-8:30a ET
Aired March 15, 2023 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is CNN breaking news.
POPPY HARLOW, CNN ANCHOR: We are glad you're with us this morning. We are following breaking news on Wall Street. Stock futures are plunging as turmoil continues for banks across the globe. Shares of Credit Suisse falling more than 20 percent premarket, a new record low after the Saudi National Bank said it would not be injecting new capital into Credit Suisse, that is because of regulatory barriers, I should note, though. But this is all just injecting new fear into the global banking system. All this in the wake of two U.S. bank failures, Silicon Valley Bank and Signature Bank.
Let's bring in chief business correspondent Christine Romans for more. What is happening with Credit Suisse is different, but it's all spooking thing market.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It is. And so this is European banking fears that are now spreading back into an already fragile and vulnerable U.S. system. Credit Suisse, as you pointed out, Poppy, down 20 percent to a record low. And you've got several European bank shares that are actually halted in European trading. So again, that's just feeding into the worry about rising free agents and fragilely in banking around the world.
You've got Dow futures down one-and-a-half percent. If this holds today, this would take away the rally from yesterday. Nasdaq futures, S&P 500 futures are also lower here. And when you look at some of those regional banks that bounced back in the U.S. yesterday, that was a sign of stability, a sign of relief, kind of a mixed performance here. First Republic shares in premarket trading were up a little bit. But some of these other banks are down.
And again, what folks are really zeroing in here is what are the exposure to these banks, these long-term treasuries, long-term securities that are going to be hard to sell in the near term? And do they have customers with deposits who are going to be try to walk away? I also wanted to also bring up -- you and I have been talking offline,
Poppy and I, about Larry Fink, the CEO of BlackRock, who has his annual letter to shareholders out this morning. And Poppy, he talked about this era of easy money that's over and the consequences, the dominoes that might be falling. He says this. He said, "We don't yet know what the consequences of easy money and regulatory changes will cascade throughout the U.S. regional banking sector akin to the S&L crisis," I do not like to hear that, "with more seizures and shutdowns coming."
Again, after that regulatory or the Federal Reserve and the Treasury this weekend taking extreme measures to shore up depositors and let a couple of banks fail, there are concerns about what other weaknesses in the overall strong banking system, but there might be pockets of weakness, you guys.
DON LEMON, CNN ANCHOR: So we are looking at futures now. The markets open here in just over an hour. They halted European banks. Could that happen here in the U.S.?
ROMANS: I don't think you're going to see moves like that this morning here. I'm just showing you those regional bank stocks, those are down just a little bit. And I should note that Dow is down 500 points. That sounds like a lot. It's not even two percent. So that is within kind of the margin of a rough but a normal kind of sell-off.
HARLOW: Look, when you have Larry Fink, one of the most listened to voices on Wall Street saying anything could be akin to the Savings and Loan crisis, people really listen. Thank you, Christine.
ROMANS: You're welcome.
LEMON: Christine Romans with our breaking news this morning. Stock futures plunging as this turmoil is continuing. Futures down 500 points, the Dow, she said less than two percent, but something to watch. But they don't think that they are going to halt U.S. banking.
KAITLAN COLLINS, CNN ANCHOR: Also this morning we are tracking a huge international development as tensions between the United States and Russia are flaring after the Pentagon says a Russian fighter jet forced down a U.S. Air Force drone. The U.S. Reaper Drone like the one you see here was flying over international waters in the Black Sea when one of the Russian jets intentionally flew in front of it, dumped fuel on it several times according to the Pentagon. The aircraft had hit the propeller of the drone forcing the U.S. to bring it down. The White House say it may never be recovered.
(BEGIN VIDEO CLIP)
LEMON: Has the drone been recovered, and what is the status?
JOHN KIRBY, NATIONAL SECURITY COUNCIL COORDINATOR FOR STRATEGIC COMMUNICATIONS: It has not been recovered and I am not sure that we're going to be able to recover it. Where it fell into the black sea very, very deep water. So we are still assessing whether there can be any kind of recovery effort mounted. There may not be.
We took steps to protect information and to protect -- to minimize any effort by anybody else to exploit that drone for useful content.
(END VIDEO CLIP)
COLLINS: Republican Senator Lindsey Graham saying this is how the U.S. should have responded.
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM, (R-SC): We should hold them accountable and say that if you ever get near another U.S. flying in international waters your airplane will be shot down. What would Ronald Reagan do right now? He would start shooting Russian planes down if they were threatening our assets.
(END VIDEO CLIP)
COLLINS: Joining us is Republican Congressman Mike Lawler of New York who serves on the Foreign Affairs Committee and is also on the Financial Services Committee. If the U.S. cannot recover this drone, what are the implications of that?
REP. MICHAEL LAWLER, (R-NY): Well, obviously, it is a very precarious situation, and Russian aggression, not just in Ukraine but in the region, is a problem.
And so I think the fact that Vladimir Putin once again violated international law and international order, he needs to be held accountable. And I think there are serious consequences. You look between this and the Chinese spy balloon that traversed the entire United States, our enemies are provoking us, and they are challenging us in ways that we haven't seen in a while. And I think the Biden administration needs to be very firm and resolute in dealing with them. These are challenging times, and we need to take it seriously.
COLLINS: What should that accountability look like? You heard what Lindsey Graham said there.
LAWLER: I don't disagree with what Lindsey Graham said. The bottom line is, if you are in international airspace and you are being provoked, and the Russian military is taking aggressive action, then we need to take that seriously. And we should not be having our drones or military equipment either shot down or forced down. That is a serious provocation, just like it was a few weeks ago with the Chinese spy balloon.
So I think the Biden administration needs to recognize that we are being challenged, and they need to take it seriously. They need to respond in a way that makes it very clear that we will not stand idly by when either Russia or China or North Korea shooting missiles off, we are not going to stand idly by and watch this happen.
COLLINS: You have got a new resolution coming out today on Ukraine. What exactly does it say?
LAWLER: Well, obviously, the war in Ukraine has been going on for over a year, and this resolution introduced by Chairman Tom Kean from New Jersey, the subcommittee chair on Europe of which I serve, reaffirms our support for Ukraine and the people of Ukraine. It condemns Russian war crimes. It condemns the behavior by Vladimir Putin and really calls on Russia to recognize the sovereignty of Ukraine, and it calls on our allies to join us in increasing our support and making sure that we provide the weaponry needed so that Ukraine can reclaim its sovereignty.
COLLINS: Given that new resolution today, we heard from Governor Ron DeSantis. He said he doesn't think defending Ukraine is a vital U.S. interest. Do you agree with him?
LAWLER: No, I don't. I think the bottom line here is this. Vladimir Putin is a vile thug and dictator, and his conduct in this war is atrocious, and he needs to be held accountable. And if -- I've said this many times. My wife is from Moldova. Her family lives on the Ukraine border about 30 miles from an area called Transnistria, which is Russian occupied. And the bottom line here is this. If Vladimir Putin is successful in Ukraine, he absolutely will be going to Moldova and other countries that were formerly Soviet satellite states next. And that cannot happen. It is not in the interests of the United States or our allies in Europe for that to happen.
And when you look at Russian aggression in Ukraine, we must also look at what China is doing with respect to Taiwan. And if Ukraine falls and we do not act, that will give the Chinese a clear indication that they can do what they want with Taiwan. That is unacceptable.
COLLINS: So when he refers to it as a territorial dispute, do you think he is minimizing what's happening?
LAWLER: Look, I'll let him speak for himself, but to me this is not a territorial dispute. This is an invasion by Russia in violation of international law and in violation of Ukraine's sovereignty. And when Ukraine gave up its nuclear power in 1994, we entered into a treaty. We have an obligation to fulfill that commitment. And I just, in my opinion, we are dealing with a new axis of evil between Russia, China, North Korea and Iran, and we need to take those threats seriously. We are seeing provocations by China, by Russia. And the United States, it very much is in our interest to support Ukraine.
COLLINS: Your view on that is very clear, but I do want to push back because it's not just Governor DeSantis. Former President Trump feels this way, too. Together they have got a pretty broad swath of support in the Republican Party. Are you worried about how long the Republican Party is behind supporting Ukraine at the level we are now?
LAWLER: No. When I talk to my colleagues in Washington, everybody agrees there needs to be transparency, there needs to be accountability with how the funds are being spent. But the bottom line is this -- you cannot allow Vladimir Putin to succeed here.
And so, frankly, I think the Biden administration needs to ramp up the weaponry that it is providing and do it expeditiously so that Ukraine can secure back its sovereignty and this war can come to an end.
COLLINS: You are also on the financial services committee. Do you want congressional hearings on the collapse of SVB?
LAWLER: Yes. I think the Biden administration moved expeditiously. The treasury secretary, the Fed, and the FDIC had the tools needed to do what was required in the short term. But I think we need to evaluate what occurred, why, and make sure that it doesn't happen again. We have ensure that we don't have contagion and that you do not have a run on these small community banks and regional banks, because that would, obviously, be disastrous for the economy.
COLLINS: Some of your Republican colleagues are saying it's because of the diversity policies that this bank had, that that contributed to their collapse. Is that what you think is behind it? Or do you think it's because of the other steps they were taking, the policies they were pursuing when it came to the treasury-backed bonds?
LAWLER: I think, clearly, this bank was mismanaged, SVB. But beyond that, you had a situation with the long-term treasury notes and the fact that we are dealing with record inflation, interest rates went up, the value came down on long-term treasuries.
I do think when we are talking about ESG and some of the policy decisions that are being made in corporate America and on Wall Street, I do think that has an impact on the bottom dollar, and people need to take into account your number one fiduciary responsibility is to, obviously, maximize profit and ensure the sustainability and viability of your entities.
COLLINS: JPMorgan and other banks have those DEI policies. They didn't collapse.
LAWLER: Look, there is all different levels here --
COLLINS: It's not -- you could say it's not the cause of the collapse, right?
LAWLER: But I didn't say it was the cause. What I'm saying to you, I talked about, obviously, the long-term treasury. There's all sorts of policies that are being enacted in corporate America and by the Biden administration. This is why we passed a resolution just a few weeks ago on ESG. The number one responsibility of any bank or corporate entity is to ensure the fiduciary viability and the long-term sustainability of that company. And sometimes the policies that are being enacted are actually having a detrimental effect on that bottom dollar.
So that's something to be looked at. To me, in this instance, that's not the root cause here, but it is something we will look at going forward as Financial Services Committee will reconvene.
COLLINS: Yes, we'll stay tuned to those hearings. Congressman, thank you for joining us here on set today.
LAWLER: Thank you.
LEMON: We want to get now to the brutal, relentless storm clobbering California. Parts of that state have broken daily records as the rain keeps falling. Most of California is under a state of emergency right now. It's not heavy rain doing the damage. It's high winds. Look at this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And I started to tell him it looks like it's leaning. There it goes. There it goes. Oh, my God! Oh! Anyway, there goes my neighbor's house.
(END VIDEO CLIP)
LEMON: "Oh, my God" is right. Thankfully, no one was home, no one injured there. No injuries to report.
Let's get straight to CNN's Natasha Chen who is in -- reporting to us from Ventura about an hour outside of Los Angeles. I would say, Natasha, what are you seeing on the ground, but you are not seeing much ground there. It's flooded.
NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Absolutely. I am standing about ankle-deep here, but it's really a lot deeper behind me. The rain just let up in the past hour after a continuous about 16 hours of rain that we saw since yesterday. And you can see back here this is a neighborhood that has been flooded since the January storms, an example of how some Californians can't catch a break with storm after storm. This is the 11th atmospheric river that they've experienced in the state. You can see the slowdown, kids playing sign. But really, all we have seen this morning are some ducks swimming by.
Another problem in another part of the state, especially in the foothills, the mountains, is with unusually heavy snowpack causing heavy waste on those rooftops, and now mixing with the rain. Those are causing some structural collapses. Here is a first responder talking about that.
(BEGIN VIDEO CLIP)
CAPTAIN SCOTT ABRAHAM, SAN BERNARDINO COUNTY FIRE DEPARTMENT: It does affect us, and the fact that the rain making the snow wetter snow is going to increase the weight that we're seeing on these roofs. It also brings in the water component. We are swift water capable, so we are mentally preparing and also equipment-wise preparing for any sort of swift water incidents that we might have up here.
(END VIDEO CLIP)
CHEN: There are a couple of swift water rescue teams that were pre- positioned here in Ventura County, thankfully we've heard they didn't have too many incidents overnight. Now, Californians are bracing themselves for yet another atmospheric river coming next week. All of this though, all of this moisture could be good news for the wildfire season. Firefighter -- the fire department public information officer told me that means that there's going to be a lot of green and less of that dry brush when the fire season comes around, Don.
LEMON: But no break of the bad weather from the rain as of yet. Thank you, Natasha Chen.
HARLOW: Well, this morning a reparations plan is on the table in San Francisco ahead. What it includes, its millions and millions of dollars, and whether it can pass in one of America's biggest cities.
COLLINS: And in less than two hours from now I critical hearing on access to the abortion pill is going to get underway. What it could mean for abortion rights nationwide? We are live in Texas.
HARLOW: Happening this morning, a Trump-appointed judge in Texas will hold a high-stakes hearing on whether to overturn the FDA approval of the abortion pill. This would be the most consequential abortion case ruling since the overturning of Roe versus Wade. That judge also says, the court has received a quote barrage of death threats. This is 14 Democratic governors wrote a letter asking several national pharmacies if they plan to continue dispensing the abortion pill after that ruling. Rosa Flores is live in Amarillo, Texas. Rosa, good morning, judge Kacsmaryk has a lot on his plate today with national consequences.
ROSA FLORES, CNN CORRESPONDENT: Yes, a lot definitely as you mentioned, Poppy, this is the largest legal battle involving abortion since Roe v. Wade was overturned last summer. And let me take you through what's going to happen today. Today, there is an injunction hearing in which the plaintiffs who are a coalition of anti-abortion groups, they're asking this judge to block the FDA approval, excuse me, a Mifepristone, this is an abortion drug.
Now, the plaintiffs argue that this drug is not safe, saying that the approval process was flawed and the FDA, of course, disagrees with this. Now, there's so much controversy regarding this. And this is so unprecedented because if this judge rules in the plaintiff's favor, that would mean that a judge who's not a subject matter expert would be telling the FDA who are subject matter experts, who are using science. And by the way, Congress and trust them in approving drugs with the American public.
This judge would be telling them what to do, which raises so many questions about what happens after that. Like, how does a judge even begin to do that? Because the FDA has processes, procedures, protocols to be able to remove drugs from the shelf. Now, one of the things that I want to mention is right now it's still dark. We're expecting a protest later. Today, I talked to the organizers, it's the Women's March and their concern is if we start with limiting drugs and overturning approvals of the FDA regarding abortion, does it stop there? Take a listen.
(BEGIN VIDEO CLIP)
RACHEL O'LEARY CARMONA, EXECUTIVE DIRECTOR, WOMEN'S MARCH: It is an attack on our public health system. Where's that start? We start with Mifepristone. Does it stop at plan b? Does it stop birth control? Does it stop that prep? Does it stop that, you know, other drugs?
(END VIDEO CLIP)
FLORES: Now, one of the big questions, of course, is could the judge rule from the bench today? We don't know, if could he, do it? Of course, but it is probably unlikely Poppy, given the fact that he was very concerned about a barrage of threats that he mentioned. There was a lot of secrecy surrounding this hearing and -- but we'll be here. We'll see what actually happens, once this hearing starts. Poppy, back to you.
HARLOW: Rosa, thank you. We're glad you're there, a lot. The nation's attention, frankly, on that courthouse today and that Judge. Thanks very much.
LEMON: Let's talk about San Francisco. San Francisco's Board of Supervisors unanimously adopting a draft reparations plan that includes a one-time $5.00 million payment to each eligible black person and more than 100 other recommendations. It comes to the city seeks to make amends for centuries of slavery and systemic racism. During a more than five-hour hearing supporters explain, what the plan would mean to the city's black community.
(BEGIN VIDEO CLIP)
YULANDA WILLIAMS, PRESIDENT, OFFICERS FOR JUSTICE PEACE OFFICERS ASSOCIATION: My dad always taught me never to bake. And I'm not begging you today. But I am telling you, when my parents migrated here from Louisiana to San Francisco, it was for a hope and a dream that they would be treated fairly and equally, and for them to have had to witness the racial disparity that I received in this city as a peace officer was absolutely atrocious. It is time for you to do the right thing and provide us with the reparations.
(END VIDEO CLIP)
LEMON: And the overwhelming support for the draft plan does not mean all the recommendations will ultimately be adopted. A final proposal due in June.
HARLOW: It could be fascinating to watch. Next, we will speak to a tech journalist who has been covering the collapse of Silicon Valley Bank, will also trying to get her company's money out of the bank.
COLLINS: And something everyone's watching fresh data on inflation and retail sales. How does it time into all of this? Christine Romans will be back on set in just a moment.
[08:25:00] (COMMERCIAL BREAK)
COLLINS: All right, as you can see here, we are keeping an eye closely on the Dow futures ahead of the opening, bell now down more than 500 points. We're going to keep watching those and updating you. Meanwhile, businesses that use to Silicon Valley Bank known as SVB now, have had a pretty rough ride in the days since the bank sudden collapse. Among them a publication that covers tech in the business world called The Information.
The Information's founder and CEO tweeted over the weekend saying, quote, "This is by far the most insane experience of my professional life, in real-time helping the team lead and serve readers, while also staying up at night moving money, settling up accounts and more." Joining us now to talk about her insane professional life experience with the collapse of SVB is the Information's founder and CEO, Jessica Lessin. Jess, thank you so much for being here. I mean, this is remarkable that you're in this moment where you guys are covering this. But you're also trying to figure out how are these people going to get paid. What is going to happen with your finances?
JESSICA LESSIN, FOUNDER, THE INFORMATION: You know, like, I think they call it a front-row seat, and we've certainly had one. I mean, our team of reporters in New York and San Francisco have been breaking news on this. Since before the closure of the bank, we're the first to really get inside the reaction and concern in Silicon Valley. And yes, that's also been a trigger to make sure that our company is in good shape. And I've been working hard on that.
HARLOW: How did you balance -- this was reported in the Atlantic, in this interview that our former colleague Brian Stelter, did with you. How did you balance dealing with your money at SVB, the company's money, what you were hearing about from VCs about pulling out? And then reporting on it because as I understand it, you know, you guys made effort to pull out some of your money before you reported on it. And how you thought about sort of, what do I say, when do I say it, when is it verified versus some I acting as a CEO because of what I'm hearing in my gut instinct. Does that make sense?
LESSIN: Absolutely, and we actually didn't pull our money out, before we reported on it. But I was certainly paying attention --
LESSIN: -- to tuition.