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Early Start with John Berman and Zoraida Sambolin

Markets Bouncing After Brutal Day; Oil Prices at 2009 Levels; White House Gives Biden Blessing to Run; Bush on the Border; IndyCar Driver Justin Wilson Dies After Crash. Aired 5-5:30a ET

Aired August 25, 2015 - 05:00   ET

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

CHRISTINE ROMANS, CNN ANCHOR: Let's start with markets, shall we, because yesterday was horrific. A devastating plunge for the Dow Jones Industrial Average, down more than 1,000 points in the first 10 minutes, the largest-point loss ever in a trading day.

[05:00:02] Stocks recovered some. At one point, the Dow was only down 102 points. A bunch of stocks were actually higher, and then, by the close, down almost 600 points.

Investors selling riskier assets like stocks and commodities, moving into safe havens like government bonds. Trading was the heaviest in four years. And trading some of America's widely held stocks was absolutely frenzied. Bank of America, Apple, GE and Microsoft saw the most action.

Stocks look ready for a comeback. U.S. stock futures are higher. European stocks are higher. But where the selloff started in Asia, another ugly performance. Shanghai's benchmark index down almost 8 percent for the second day in a row. It has fallen 40 percent since June, wiping out trillions of dollars of value and rattling global markets. And fears about weakness in China's economy sending investors around the world out of commodity prices, out of oil and into the safety of government bonds.

I want to bring in Andrew Stevens in Hong Kong. He's watching Asian markets.

Andrew, so the selloff continues really unabated in Asia.

ANDREW STEVENS, CNN CORREPONDENT: Yes, good morning, Christine.

Yes, absolutely. Well, unabated in China definitely. Shanghai down more than it was yesterday -- 7.6 percent versus 7.5 percent yesterday. These are massive falls in anyone's language. And there's no doubt, this is just panic selling in China.

They are mainly small investors and mainly want to get out of the market. A lot of them bought in near the height of the bubble. They borrowed money to do it. Now, they want to get out. Their concern is no sign of visible government support trying to ease the pain. So, there's a lot of angry and disgruntled investors in China and that anger is aimed at the central authorities. It is important to note here, Christine -- the Shanghai meltdown should be seen in isolation. The market does tend to operate in its own world. It doesn't necessarily reflect what is happening in the real economy. It's important to know that the market went up into a huge bubble territory while the market was going down. So, that just gives you a good indication of the disconnect here.

So, the other good news here, if you can call it that, if you look at markets like Hong Kong, they finished higher. They finished higher today. Japan on the other hand did finish quite a lot weaker which suggests there are fears about a potential slowdown in the global economy, which obviously would affect like Japan.

ROMANS: I guess the good news here, Andrew, is that sometimes you can see this thing feeds on itself. You know, if you got U.S. down and Europe wakes up and Europe is down and U.S. stock futures are lower and it all feeds on itself. It looks as though in Europe and the U.S. at least, this chain, this negative feedback has been broken.

STEVENS: Yes, absolutely. The contagion, which is really a real fear for policymakers because contagion, because you throw ruble out the window, you throw logic out the window. That does -- that cycle appears to have been broken. Not so much in China.

And, interesting, Christine, this morning, a lot of research today is coming out in this part of the world saying, well, steady on. It is not the end of the world for Chinese economy. They are not about to go into a recession. They're not about to hit the dreaded hard landing we hear quite a lot about.

Yes, there is weakness. Yes, there is weakness in manufacturing. But, remember, they are trying to transition into a consumer-oriented operations. Interestingly, if you look at the consumer services index, that is an 11-month high in China. So, that explains why we shouldn't be panicking about the state of the Chinese economy.

ROMANS: So interesting. And on this side of the world, you are hearing a lot of people talk about it. Those same research was talking about how, hey, remember, the U.S. economy is growing. And the U.S. economy and housing market and job situation improving pretty much every day. So, keep that perspective as well.

Andrew Stevens, thank you for that.

STEVENS: Thanks, Christine.

ALISON KOSIK, CNN ANCHOR: OK. So, China's financial markets and slowing economy is a huge cause of market panic. Another contributor of oil prices making moves. They are bouncing back a bit this morning, but they're still below $40 a barrel for the first time since 2009, in the middle of the global meltdown. And that's because supply at the moment is booming, while slowing growth in Asia and elsewhere hits demand.

I want to go ahead and bring in CNN's John Defterios. He's in Abu Dhabi. And try to get a sense, John, of where you think oil prices are headed at this point.

JOHN DEFTERIOS, CNN CORRESPONDENT: Good morning, Alison.

Yes, I'm watching that index in China and the index in very carefully because they're lead indicators for demand in the future. And China and Japan are two of the top three consumers of oil with the United States being number one. China takes in 10 million barrels a day of oil. And China leads the Asia Pacific region with Japan nearly 5 million barrels. We're watching it, that growth slows down in Asia Pacific, the impact it will have on prices.

Now, we've seen this slight recovery in oil prices today, but it's very slight, bounce right near a six-year low and there's good reason for it.

[05:05:03] We have been spoiled by Chinese demand for 25 years, 9 percent to 10 percent a year. It is very unlikely that's going to slow down to 6 percent.

So, of course, this will put pressure on demand for oil, but at the same time, we see a fight for global market share led by Saudi Arabia here in the Middle East against Russia which is producing 10 million barrels a day and the United States with the shale nearly producing 10 million barrels a day. Nobody wants to give up that market share. So, we have record supply in the market. That's a 17-year high. In fact, an oversupply of some 3 million barrels a day, that's why it's very likely we see this downward pressure on the energy prices.

Citigroup put a note out in the last 24 hours, suggesting we could see very close to $33 a barrel before the end of the year. We are hovering at $39 for West Texas Intermediate.

KOSIK: Just amazing to hear some of those prices. You know, consumers, though, John, really reaping the rewards of these oil prices via the gas pump.

John Defterios, live from Abu Dhabi, thanks.

And with the fall of the Dow comes an avalanche of political finger pointing. The Republican candidates blaming plunging markets on everything from the Federal Reserve and Wall Street elites, to President Obama's spending policies.

Listen to Republican frontrunner Donald Trump sounding a warning we've heard from him before.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), 2016 PRESIDENTIAL CANDIDATE: I have been telling everybody for a long time, China is taking our jobs, they're taking our money. Be careful. They will bring us down. You have to know what you are doing. We have nobody that has a clue.

(END VIDEO CLIP) KOSIK: Former Hewlett-Packard CEO Carly Fiorina blames the market slide on the Federal Reserve for its easy money policies. And New Jersey Governor Chris Christie insists it's the Obama's administration's fault for borrowing and spending too much.

Wisconsin Governor Scott Walker taking matters a step further, he wants a strong message sent to China.

(BEGIN VIDEO CLIP)

GOV. SCOTT WALKER (R-WI), PRESIDENTIAL CANDIDATE: I call on the president of the United States to cancel the state visit he is providing for the head of China, Xi Jinping. Why? Because to me, not just because of what they recently done to devalue their currency, because of what they're not doing when it comes to upholding those very values. Why would we give that state visit to a country that doesn't share our values and our allegiances?

I call on others to ask for the president of the United States to say we're not going to have that state visit.

(END VIDEO CLIP)

KOSIK: And on the Democratic side, this tweet from Bernie Sanders. He says we need banks that invest in the job creating economy. We don't need more speculation with the American economy hanging in the balance.

So far, no comment on the market jitters from Jeb Bush or Hillary Clinton.

ROMANS: All right. Will he or won't he? The intrigue is building on Capitol Hill as Joe Biden ponders a run for the presidency. The vice president now scheduled to meet with major Democratic fundraisers after Labor Day. Another sign he is serious about mounting a challenge to Hillary Clinton.

Let's get more this morning from CNN's Washington senior correspondent Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN SENIOR WASHINGTON CORRESPONDENT: After the White House lunch with President Obama on Monday, the buzz about the vice president's long exploration of his campaign options picked up in tempo after White House Press Secretary Josh Earnest seemingly went out of his way to praise Biden.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: The president has indicated his view that the decision he made I guess seven years ago now, to add Joe Biden to the ticket as his running mate was the smartest move he ever made. And I think that should give +you some sense of the president's view of Vice President Biden's aptitude for the top job.

JOHNS: The vice president himself making a series of moves behind the scenes, including scheduling more meetings with supporters and donors. And just last night, meeting with key former Obama officials at his residence at the U.S. Naval Observatory. The official message from the vice president's office is that he has not made a decision about running for president in any speculation to the contrary is false. Still, a Democratic source telling CNN, the vice president is leaning more toward running than not running.

One plan that's been discussed if Biden decides to take the plunge is to have him announce his intentions the first week of October and the run-up to the first Democratic debate. Biden has also been making a few subtle moves that only add to speculation that he just brought on Kate Bedingfield, a veteran message manager who has worked at the White House and Motion Picture Association of America, as well as in John Edwards campaign in 2008.

And Biden met over the weekend with Democratic Senator Elizabeth Warren, whose endorsement as a favorite of progressives would be very useful for another seeking the nomination.

(END VIDEOTAPE)

KOSIK: All right. Joe Johns, thanks for that.

Jeb Bush traveling to the Texas/Mexico border and taking on Republican presidential rival Donald Trump. Bush defending his use of the controversial term anchor babies saying he was actually referring to birth tourism which he says applies more to Asians than Hispanics.

(BEGIN VIDEO CLIP)

[05:10:06] JEB BUSH (R), PRESIDENTIAL CANDIDATE: What I was talking about was the specific case of fraud being committed where there's organized efforts, and, frankly, it's more related to Asian people coming into our country, having children, in that organized effort, taking advantage of a noble concept which is birthright citizenship.

I support the 14th Amendment. Nothing about what I said should be viewed as derogatory towards immigrants at all.

(END VIDEO CLIP)

KOSIK: And Bush, as we mentioned, also took direct aim at Donald Trump.

CNN's Polo Sandoval has more on the border war of words.

(BEGIN VIDEOTAPE)

POLO SANDOVAL, CNN CORRESPONDENT: This morning, Jeb Bush is back on the campaign trail after a brief stop here in McAllen, Texas. Just a few miles from the U.S./Mexico border, which is really the heart of this immigration debate that continues to intensify.

I have to tell you that yesterday, we noticed a different Jeb Bush. He was a bit feistier. He was working to redefine himself as a stronger pick for president. Also, a really higher level of energy. He used that new tone to take direct jabs at one of his main opponents here, Donald Trump, almost immediately after he step in front of the cameras. Take a listen.

BUSH: What I say is Mr. Trump's plans are not grounded on conservative principle.

It would cost hundreds of billions of dollars. It's not realistic. It won't be implemented.

SANDOVAL: And Bush also going on to say before he can explore the idea of granting legal citizenship to the estimated 11 million undocumented people already in the country, the key would be to secure the communities that dot that international boundary between Texas and California, that is a measure and proposal that may not be taken very well by some of the GOP base.

(END VIDEOTAPE)

ROMANS: All right. Polo Sandoval, thank you for that.

Now, Donald Trump unleashing his fury on FOX anchor Megyn Kelly again, slamming here in a pair of tweets, saying, quote, "I liked 'The Kelly File' much better without @MegynKelly. Perhaps she should take another 11-day vacation." And then he says this, "@MegynKelly must have had a terrible vacation. She's really off her game, was afraid to confront Dr. Cornell West. No clue on immigration."

The GOP contender last blasted Kelly after the two clashed at the presidential debate earlier this month.

It's clear that Donald Trump was watching a lot of television.

KOSIK: He certainly is, at least FOX.

New information about the man accused of an attempted attack on a Paris train taken down by hero passengers. What we are now learning about the suspect, coming up after the break.

(COMMERCIAL BREAK)

[05:15:38] KOSIK: This just in: A potential snag in the Iran nuclear deal. Turns out the cost of implementing it was underestimated. The IAEA, that's the agency that will monitor the Iranians if the agreement is ratified. It needs $10 million a year more than originally calculated from the member nations involved in order to continue monitoring, implementing and verifying compliance. The IAEA says its current funds are already running out.

ROMANS: Anti-terrorist police have until tonight to finish questioning Ayoub el Khazzani, who's the suspected gunman who was prevented from pulling off a massacre on a high speed in France. El Khazzani was not known to U.S. authorities. He could have easily entered the U.S. by air, raising new concerns about train safety here on American soil and across Europe.

I want to go to Paris and bring in senior European correspondent Jim Bittermann.

There has to be some soul searching among security officials about how you to prevent this from happening and still have such active and robust air travel -- or train travel.

JIM BITTERMANN, CNN SENIOR EUROPEAN CORRESPONDENT: Exactly, Christine. Both air and train travel. The fact is that's what French authorities are talking about a lot today, except how they can step up surveillance of thousands of train stations. One minister said this morning that she would favor having security -- the kind of security at airports at cross country European trains, for example. But that doesn't do anything to help the local trains. Train travel in Europe is very, very common. Millions of people take the trains every day.

Another proposal is one that came from police unions who are saying what about letting our police officers carry their weapons 24/7. That's not allowed at the moment. At the end of their duty, they turn in their guns and don't take them home with them. What if they were armed at all times. Maybe that will put more police on the streets. So, that's another proposal that's out there.

But this clearly has been kind of a black mark for the security forces here. This is once again, this has happened repeatedly with the terrorist incidents. Once again, somebody on the radar, sort of speak of the intelligence agencies. He had what was called a (INAUDIBLE), which is an "S notice", which means he was supposed to be under special surveillance.

And that originated in Spain, where he was known to be frequently apparently some radical mosques and associates. So, they put -- the Spanish authorities put out, it's got the French. And when it came to the French and he came here and he got fired from the job in France because he was not truthful about his working papers. He didn't have valid working papers. So, it was assume he went back because of the group where you can travel without any kind of immigration checks or anything like that, he was able to go back to Spain and disappear for about a year before being picked up on video of him going Turkey -- Christine.

ROMANS: Jim, tell us a little bit about his citizenship. So, he was in Spain, and he traveled to France, and he didn't papers to work in France, went back Spain. I mean, he was not on the radar of U.S. authorities. He could have gotten on a plane and come to the United States to carry out an attack.

BITTERMAN: Well, basically, that is not all that likely, in the sense that because of this, anytime he was traveling outside of the Schengen group, the 18 countries that are involved in Europe that cooperated and don't have border controls, anytime he would have left, the notice would have gone out that the authorities would have received word that he was boarding a flight and that is what happened in the case of Turkey.

When he left from Berlin to Turkey in May of this year. There was notice that went out that said he was on board a Germanwings that went flight to Istanbul. So, they're aware of that because of the asset. So, anytime he would have left the area, it would have been noticed.

But within the Schengen group, he was able to travel freely. He was Moroccan citizen. He was brought to Spain by his father who got working papers in Spain in 2007 and brought the family over. He was 18 at the time. He basically grew up in a small town in southern Spain.

[05:20:00] As I mentioned, he came to France for work, was later expelled from France -- Christine.

ROMANS: Such an interesting story to watch. Sort of, you know, the twists and turns that got him to the point. Thank you, Jim.

KOSIK: A stunning admission from an NFL quarterback. The incredible challenge facing Peyton Manning heading into the 2015 season. Andy Scholes has the details. That's coming up in the bleacher report, next.

(COMMERCIAL BREAK)

ROMANS: Racing fans are mourning the death of IndyCar driver Justin Wilson.

KOSIK: Andy Scholes, such a sad story. You've got now with the bleacher report.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: That's right. Good morning, guys.

Wilson died last night as a result of the injuries he suffered in Sunday's race. A piece of debris struck him in the head during an accident at Pocono Raceway. The 37-year-old was air lifted to the hospital and had been in a coma. The family released a statement saying in part, "Justin was a loving father, a devoted husband, as well as a highly competitive racing driver who is respected by his fears." Wilson is survived by his wife and two daughters.

All right. Turning to baseball. Last night's Mets and Phillies game looked more like a home run derby. New York set a franchise record with eight home runs. The Phillies also had two players go deep, making it the first time in Major League history that ten different players homered in a game.

[05:25:02] David Wright hit one out of the park since coming back from the disabled list back in April. Amazing that Mets won this game 16- 7.

Florida state running back Delvin Cook was found not guilty of misdemeanor battery. He was accused of punching a woman in the face outside of a Tallahassee bar in June. It took the seven-member jury less a half hour to deliver its decision after a one-day trial.

Cook's former teammate Jameis Winston making his second appearance for the Bucs against the Bengal on Monday night football. Winston looking sharp from the get-go. He went 3 for 3 and rushed for a 1-yard line touchdown on Tampa Bay's opening drive. He would leave the game after tweaking his ankle in the second quarter. But Winston is expected to be just fine. The Bucs win this 25-11.

And, finally, a shocking revelation from Broncos quarterback Peyton Manning. He told Peter King that he still doesn't have feeling in the finger tips of his throwing hand four years after undergoing neck surgery. In that time, Peyton has won league MVP award, set single season passing records and led the Broncos to a Super Bowl appearance.

And, guys, he says the doctors saying, you know, any morning he could wake up and the feeling could be back in his finger tips, and he wakes up every morning, hoping this is the day, and then looks at them and says no.

ROMANS: He should not want the feeling to come back.

KOSIK: He is doing just fine without it.

ROMANS: Just keep doing what you're doing.

SCHOLES: Imagine if he had it though.

ROMANS: Exactly. Well, that's true. That is true.

All right. Thanks so much for that, Andy.

SCHOLES: Have a good one, guys.

ROMANS: All right. China stocks plunging. Devastating markets around the world. The Dow down 1,000 points in 10 minutes. How in the world can this happen and will the market stabilize today?

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