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Early Start with John Berman and Zoraida Sambolin

Volunteers Cleaning Up Decimated Village Near Kyiv; Rebranded McDonald's Restaurants Unveiled In Russia; PGA Tour Commissioner Blasts Saudi-Backed LIV Golf. Aired 5:30-6a ET

Aired June 13, 2022 - 05:30   ET

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

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[05:32:54]

LAURA JARRETT, CNN ANCHOR: Welcome back.

It's been weeks now since Russian troops withdrew from the Ukrainian capital of Kyiv, but the city and its suburbs are still recovering from the devastation that's left behind. Volunteers are working to help to make these areas livable again.

CNN's Salma Abdelaziz joins us live now from Kyiv. Salma, good morning. Tell us about this volunteer that you spoke with from the United States.

SALMA ABDELAZIZ, CNN REPORTER: Sure. Laura, even with Ukrainian troops mired in battles in the east -- in the east of the country -- street-to-street fighting here in Kyiv and the surrounding areas, please say it's time to return and to rebuild. And they have this wide call asking for help -- on that reached as far as Colorado. Take a look.

(BEGIN VIDEOTAPE)

ABDELAZIZ (voice-over): This was once someone's home -- a place where children played and families gathered. Now this group of volunteers is working hard to restore what was lost.

ANDRIY KOPYLENKO, CO-FOUNDER, DISTRICT 1 ORGANIZATION: I feel that we are really gathering --

ABDELAZIZ (on camera): You're unified.

KOPYLENKO: We're unified, yes. We are together. And we know that it's our home and all Ukrainians understand that we need to rebuild.

ABDELAZIZ (voice-over): Hundreds signed up to join more than a dozen clean-up operations across Kyiv's suburbs launched by charity group District 1.

DMYTRO NIKITYUK, VOLUNTEER: We are all different. Like, we have different age, different interests, but we work here together as one.

ABDELAZIZ (voice-over): Colorado native Karl Voll is among those helping out.

KARL VOLL, VOLUNTEER: The building that we're in now has been bombed by the Russians and this has to be covered by the homeowners themselves. So by all these people coming out and helping it's really helping to jumpstart that process for them.

ABDELAZIZ: This tiny village of Myla became a frontline overnight when Russian forces barreling towards Kyiv fired wildly at apartment blocks in their path. The rounds set the building's roof ablaze and destroyed the upper floors. Civilians were killed even as they fled.

[05:35:00]

Resident Mariya Popova witnessed the horror.

MARIYA POPOVA MYLA RESIDENT: (Speaking foreign language).

ABDELAZIZ (voice-over): "We hid in the basement. We were very scared," she says. "We sat and watched our houses burn."

ABDELAZIZ (on camera): Russian troops have withdrawn but the devastation they have left behind is incredible. Homes here were shattered in an instant but rebuilding life -- that will take much longer.

ABDELAZIZ (voice-over): And those recovering efforts are up to communities.

KOPYLENKO: Army has job -- soldiers working -- and we are working.

ABDELAZIZ (on camera): So they have a job on the front line --

KOPYLENKO: Yes.

ABDELAZIZ (on camera): -- and you have a job here, too.

KOPYLENKO: Yes, yes.

ABDELAZIZ (voice-over): Seventy-seven-year-old Popova was the first to return to the building. Her apartment was largely spared.

POPOVA: (Speaking foreign language).

ABDELAZIZ (voice-over): "I believe in our army," she tells me. "And there's no place like home. When you're at home, the walls calm you down."

With war never far, just living in Ukraine feels like an act of defiance.

(END VIDEOTAPE)

ABDELAZIZ: Now, Karl was just one of the international volunteers we met. He said he wanted to join the fight but he had no military experience, so this was his way of helping out. And with Ukrainian forces, of course, and the government busy with the fighting in the east of the country, it's up to these Good Samaritans, really, to start that recovery process.

But it's not just about the infrastructure being rebuilt here, Laura. It's about restoring a sense of security. A sense of hope.

One of the volunteers told me we're just going to have to accept that we live beside a country that could attack us and invade us at any time.

JARRETT: It's a hard truth. Thank you for your great reporting as always, Salma Abdelaziz.

CHRISTINE ROMANS, CNN ANCHOR: All right, 36 minutes past the hour this Monday morning.

So just what is an I bond --

JARRETT: What is an I bond?

ROMANS: -- and why it might be a port in the storm for investors right now.

JARRETT: And no Big Macs, no Happy Meals, but what does the McDonald's replacement in Russia taste like?

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[05:41:09]

ROMANS: All right, close your eyes. Let's get a check on CNN Business this morning.

Asian shares down sharply. Look at Tokyo, down 3%. That is a big one- day move. Europe has opened sharply lower as well here -- 2% in Paris, 2% percent in Frankfurt.

On Wall Street, stock index futures also hinting at a really awful day this morning in the market. Look at that. If this holds, it would be 600 points maybe on the Dow, and that's after a terrible day on Friday.

The Dow plunged more than 800 points on Friday on a really tough inflation report. The May Consumer Price Index at 8.5% year-over-year. That's worse than expected. No peak here in persistent inflation.

Investors already worried the Federal Reserve would announce a 1/2% interest rate hike this week. Now they fear it might have to go even higher. The Fed will have to be aggressively raising interest rates to try to get a handle on this inflation.

A big part of that inflation, energy prices -- up again overnight for gas. The national average for a gallon of unleaded creeping up to $5.01 a gallon. Up a fraction since yesterday. Up 14 cents in a week.

Americans are also seeing record price spikes for haircuts, eating out, fish, soup, car parts, lunch meats, chicken. And we're hearing every day from big companies and restaurant chains that are raising their prices to pass along packaging, energy, labor costs.

So what to do about it, especially on the energy front when big energy companies are making record profits? Here is former Labor Sec. Robert Reich.

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ROBERT REICH, FORMER LABOR SECRETARY: A big part of it has to do with corporations. Huge profits that they have been making and they are still pushing consumers to pay more. They are raising their prices when they don't have to raise their prices.

What the administration ought to consider, in my view, is a windfall profits tax. Even the conservative government in Britain just passed that and -- on the oil companies. The oil companies are raking in record profits and yet, they are increasing their prices at the pump. That's -- to me, that just makes no sense.

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ROMANS: And you've been hearing a lot of that from progressives. We'll see if it's falling on deaf ears at the White House.

In the meantime, inflation keeps rising, stocks are falling, and the phone is ringing for our guest, Doug Flynn, a certified financial planner and co-founder of Flynn Zito Capital Management. Nice to see you, old friend. I'm sorry it has to be --

DOUG FLYNN, CERTIFIED FINANCIAL PLANNER, CO-FOUNDER OF FLYNN ZITO CAPITAL MANAGEMENT (via Webex by Cisco): Nice to see you, Christine.

ROMANS: -- under these circumstances because, Doug, stocks have had a terrible year. We're moving into this new environment for investors away from high-growth tech -- which really made a lot of people rich over the past decade -- now into this new, more uncertain environment.

What are you telling your clients? I'm sure you're -- the old rebalance. You always need to be rebalancing, right?

FLYNN: That's true and, in fact, what happened is the S&P got more and more into tech itself. So people -- they had their S&P funds and then they added on additional tech names. And so, we've seen that movie before. We saw it in the late '90s and early 2000s where people super-loaded into tech and then there was a shift away from that.

This time, what you should have been doing -- and hopefully, what you can still do -- is take a look at history and say if we're not in a high-growth environment anymore and we're in a high interest rate and a high inflation period, those same names and those types of companies don't do as well. You need to look elsewhere. And those names are names like energy, which you just mentioned.

I always think about everybody wears two hats when they walk around. You are a consumer but you can be an investor. And so, when you have pain at the pump the way you offset that is to make some money by being an investor in those companies that are charging that money. That money is coming back in profits and translating into earnings, which translates into a higher stock price.

[05:45:00]

So that's the way to play that if you have money to invest. As we're all getting squeezed on all of these higher prices maybe you have a little bit less to invest, and that's part of the problem.

JARRETT: Doug, what's the number one question people are asking you right now? I have many personal questions for you, but what's the number one question you're getting these days?

FLYNN: I think the number one question is, you know, is it different this time? And that's the four biggest words that you can make a mistake with is this time -- you know, this time is different. And it's not different. You just need to not act like you've acted exactly the last couple of years, which was easy and a different environment.

So you have to take a bigger step back and say look, if it's your 401(k) money and you're putting money away that you don't need for 10 or more years, then these are the things you actually want to have happen. You want to have a 20 or 25, or maybe even 30% correction into a recession. Those things are terrible while you're living with them but when you're adding into the market, those are good things in the long run.

The trick is like a year ago or earlier this year, as you get closer to your goals you need to wind that down. And so, the big problem is people that needed money this year or next year should have been exiting the market at the all-time highs and --

JARRETT: That's not what I wanted to hear.

(Laughter)

FLYNN: So you're going to have to wait for that to come.

JARRETT: That's exactly the opposite of what I wanted to hear.

ROMANS: You're saying the woulda, coulda, shoulda --

FLYNN: I understand.

ROMANS: -- is not an investment strategy.

FLYNN: No, definitely not. However, if -- you know, that time will come back again. It's going to look a little bit differently and how long it takes. But when it does, those -- that's how you learn, right? So you learn the lesson that the next time maybe I'll take come chips off the table. You just can't hang.

Buying things is the easy part. We can find good things we like even now. The hardest thing for investors to do is to have a sell strategy. When do you get out?

ROMANS: Yes. FLYNN: And so, those are the things that maybe you'll learn. And maybe you take some profits, which is not the worst thing, and redirect that money elsewhere.

ROMANS: I know. I mean, I don't know if I have a chart of this but if you look back in the S&P 500 back to the last big crisis, if you had a stomach of steel you made a lot of money. That's this year. That's also a stomach of steel --

JARRETT: In a different way.

ROMANS: -- but in a different way.

So, over time, investing in the stock market pays off. And when you -- dollar cost average, meaning you're buying stocks all along the way, it is good when the stock market falls. I know that doesn't make anybody feel good this morning.

Let me ask you about something that boring but maybe a strategy --

JARRETT: Something that excites Christine a lot.

ROMANS: -- a DIY strategy -- these I bonds.

FLYNN: Yes.

ROMANS: You can't call up a broker to do this. This is something that just -- you know, we can just do ourselves. And they're returning something like more than 9% interest? Tell me about that.

FLYNN: That's correct. So everybody can do this themselves. You can actually put up to $10,000 per person. You can actually do more if you read online about how to deal with the refund.

But you can do it with $10,000 per person but you have to do it directly with treasurydirect.gov. You open an account and you can put some money directly with the government. And they're inflation bonds so they're tied to the inflation rate.

So, again, thinking about two sides of this. I'm paying more on one side. How do I participate on the cost of inflation by making money off of it? This is the way you do that.

And so, these I bonds are guaranteed by the U.S. government and the yields are over 9.6% right now. Now, that's going to adjust in October with inflation, but inflation doesn't look like it's coming down. You know, those famous words of it being transitory or the Fed saying we're going to be back down to 2% inflation by the end --

ROMANS: No.

FLYNN: -- of the year is not happening. So there's an opportunity here and you can get on there and you'll get that high interest rate.

A couple of caveats. You can't take it out for a year, so that's the first one. ROMANS: Not liquid.

FLYNN: If you have a year -- it's not as liquid in the first year but after that -- and there's a small penalty if you don't keep it for five years but the penalty is almost nothing. It's three months' interest when these rates are this high.

ROMANS: Yes.

FLYNN: And so, we definitely recommend that everybody do something with that. Try to get on the other side. If I'm paying all of this over here, how do I get --

JARRETT: Sure.

FLYNN: -- something on the other side thinking -- wearing that other hat. And that's the way to do it.

ROMANS: Did he answer your questions?

JARRETT: I went into this feeling OK and now I have more questions, but we can talk about that online.

Doug Flynn, thank you so much.

FLYNN: We'll have you back.

JARRETT: We'll have you back very soon.

ROMANS: Thanks, Doug.

FLYNN: Anytime.

JARRETT: All right, it is a big day on Capitol Hill. Donald Trump's former campaign manager about to testify in public, not voluntarily, before the January 6 Committee.

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[05:54:04]

ROMANS: All right.

In Russia, the Big Macs and golden arches may be gone, but 15 shuttered McDonald's restaurants there just reopened under new branding and ownership.

CNN's Frederik Pleitgen has a look.

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FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (on camera): So Russia now has its own version of McDonald's. It comes under a different name here. It's called Vkusno & Tochka, which essentially means tasty and that's it. It also has a different label or different logo. You can see it right

there. It's supposed to symbolize, the company says, fries and a hamburger.

Other than that, a lot of things are actually very similar to McDonald's. However, there is no Big Mac and there also is no Happy Meal either.

As you can see, this place is pretty much jampacked. There's really a lot of people who came here. We spoke to some of the customers, including some actually wearing the symbols of Vladimir Putin's war in Ukraine which, of course, the Russians call a special military operation.

[05:55:06]

SERGEY VLASOV, CUSTOMER: Food and politics have nothing in common. Like, c'mon man, keep things separate.

ARTEM KIRIENKO, CUSTOMER: Basically, it's important for me to have that McDonald's feel.

YEKATERINA KIRIENKO, CUSTOMER: I think it's not a good idea because McDonald's -- it's history, it's grand. It's a great idea. It's not classical McDonald's.

PLEITGEN (on camera): As you can see, the Russian version of McDonald's looks a lot like McDonald's. You have the double- cheeseburger here, fries. And this is a 9-piece -- not McNuggets. It's nuggets and some sort of soft drink. Let's see how it tastes.

So the packaging is also very, very similar to McDonald's. You can see the cup here. Everything except the branding. The same goes for the fries. And if you look carefully you can see the sauces seem to have the McDonald's logo blacked out.

It looks -- McNuggets look like nuggets. They taste pretty much exactly the same as McDonald's.

This is a very historic place also. This is where, in 1990, back then during the Soviet Union, the first McDonald's restaurant was opened. Now that, of course, led to a huge success story of McDonald's here in Russia. And the Russian company that's now bought these franchises from McDonald's says they hope they'll be able to replicate that success.

Fred Pleitgen, CNN, Moscow.

(END VIDEOTAPE)

ROMANS: All right, thanks for that, Fred.

The PGA Tour commissioner blasts the rival Saudi-backed LIV Golf and the players who left for the breakaway league.

Andy Scholes has this morning's Bleacher Report. Hey, Andy. ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Christine.

So, the LIV Golf series making its debut over the weekend going up against the PGA Tour's Canadian Open. And all the golfers that chose to leave the PGA Tour for LIV are banned from PGA Tour events moving forward.

And yesterday at the Canadian Open, PGA Tour Commissioner Jay Monahan -- he further explained his position.

(BEGIN VIDEO CLIP)

JAY MONAHAN, COMMISSIONER, PGA TOUR: Those players have chosen to sign multi-year lucrative contracts to play in a series of exhibition matches against the same players over and over again. You look at that versus what we see here today and that's why they need us so badly. You've got true, pure competition and that's why they need us. That's what we do.

But we're not going to allow players to free-ride off of our loyal members -- the best players in the world.

(END VIDEO CLIP)

SCHOLES: Now, Rory McIlroy winning the Canadian Open yesterday. It was his 21st PGA Tour victory, which gives him one more than LIV Golf CEO Greg Norman. And that was something Rory was well aware of.

(BEGIN VIDEO CLIP)

RORY MCILROY, 21 PGA TOUR VICTORIES: Going up against the best and beating the best -- you know, always makes it extra special. And then, I -- look, I alluded to -- you know, I had extra motivation of what's going on across the -- across the pond.

And the guy that's spearheading that tour has 20 wins on the PGA Tour and I was tied with him and I wanted to get one ahead of him, and I did. So that was really cool for me. Just a little sense of pride on that one.

(END VIDEO CLIP)

SCHOLES: Yes. For winning the Canadian Open, Rory got about $1.5 million.

Charl Schwartzel, meanwhile, won the inaugural LIV Golf event and the team portion, earning $4.75 million.

Now, the players that did compete in the LIV tournament can still compete in the U.S. Open this week outside of Boston. Phil Mickelson is slated to speak with the media there later today.

All right. Meanwhile, Daniel Suarez making NASCAR history at Sonoma Raceway yesterday, becoming the first Mexican-born driver to win a Cup Series race. The 30-year-old from Monterey led the majority of the final 49 laps and notched his first victory in 195 career starts. Suarez's team had been carrying around a taco-shaped pinata waiting for him to win. And guys, yesterday he finally got to rip that pinata open, so congrats to him.

ROMANS: All right. Thanks so much, Andy. Nice to see you --

SCHOLES: All right.

ROMANS: -- this Monday morning. It's going to be a big day today -- a big week.

Thanks for joining us. I'm Christine Romans.

"NEW DAY" starts right now.

BRIANNA KEILAR, CNN ANCHOR: Hello, I'm Brianna Keilar with John Berman on this new day.

A surprise witness testifies at this morning's second January 6 hearing in what the committee says will prove how Donald Trump's election lies helped fuel the Capitol attack.

And a significant breakthrough. Ten Democrats, 10 Republicans striking a bipartisan deal on gun safety. What lawmakers included in the framework and what they left out.

JOHN BERMAN, CNN ANCHOR: Retired 4-star Gen. John Allen, who once commanded troops in Afghanistan, is leaving a renowned think tank amid an FBI probe. What the investigation just uncovered.

And Justin Bieber sharing a personal health struggle for the world to see. The rare medical condition that has his fans worried.