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Early Start with John Berman and Zoraida Sambolin

Rampant Corruption As South African Government Fails To Take Action; NYC Grapples With Needs Of Thousands Of New Asylum Seekers; NBA Player Says Anxiety Forced Him To Retire At 22. Aired 5:30-6a ET

Aired December 16, 2022 - 05:30   ET





DAVID MCKENZIE, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): In Diepsloot's informal settlement the sewage water runs through the streets. The electricity is more off than on.

Vincent tried to set up citizen patrols but they ran out of funds. He says the police come late if they come at all.

The government says it's working to improve services and (INAUDIBLE) depend on its social grant program, but rampant corruption and mismanagement hamper these efforts.

IMTIAZ SOOLIMAN, FOUNDER, GIFT OF THE GIVERS: At the end of the day, it is our country. But I said very clearly the country does not belong to the government. It belongs to the people of South Africa.

So we can either sit and mourn and cry knowing nothing can be done, or work it ourselves. We can do something and fix it wherever we can.

MCKENZIE (voice-over): The cruel reality in the world's most unequal society, the rich can afford to secure their lives, the poor are on their own.


MCKENZIE: Well, the president has promised to do better. It has a huge amount of impact, though the lack of trust in government services here in South Africa, and I'm sure many countries around the world where people are having to just get by with what they can organize or afford -- Christine.

CHRISTINE ROMANS, CNN ANCHOR: All right, David McKenzie. Thank you so much for that report.

All right, quick hits around the globe right now.


Nurses picketing in London over pay and staffing. (END VIDEO CLIP)

ROMANS: Nurses on strike across the U.K. with about 100,000 on the picket lines. They say the National Health Service is in crisis. They want better pay and more staff.

Memorials are being held across South Korea today for the victims of the deadly crowd crush that killed 158 people in the Itaewon neighborhood of Seoul on October 29.

And former world number one tennis player Boris Becker has left for Germany after serving just eight months of his sentence in the U.K. He was found guilty of hiding money and assets after filing for bankruptcy.

All right, just ahead, the U.S. government releases thousands of new documents on the JFK assassination. And migrants from south of the border struggle in the cold north.


ILZE THIELMANN, TEAM TLC NYC: They don't have proper winter clothes. We have -- we see the little kids with babies showing up wrapped in a blanket with a diaper on.




ROMANS: New York is struggling to take care of tens of thousands of new asylum seekers. At last count, 31,000 have been processed with another 21,000 still waiting. Their needs are straining an already overburdened system.

CNN's Omar Jimenez has more.


OMAR JIMENEZ, CNN CORRESPONDENT (on camera): (Speaking foreign language).

DAILIN ROJAS, SEEKING ASYLUM IN THE U.S.: (Speaking foreign language).

JIMENEZ (voice-over): From Venezuela to Colombia, Central America, Mexico, and then by bus from Texas, eventually to New York City in July, Dailin Rojas says she was frightened nearly every step of the monthlong journey.

ROJAS: (Speaking foreign language).

JIMENEZ (voice-over): "The first fear is the jungle," she says, "navigating threats of possible violence, disease, and more," alongside her husband and son. In the middle of it all, the three of them found out she was carrying a fourth. She was pregnant. By the time she had gotten to New York, the harsh conditions of her travel had taken a toll.

ROJAS: (Speaking foreign language).

JIMENEZ (voice-over): "I got sick because I came with a urinary infection from the trip over," she says. "I was hospitalized because of the baby" -- the beginnings of a potential abortion." But in November, her daughter was born, symbolizing the future she came here for in the first place.

Her journey mirrors the more than 30,000 asylum seekers that have landed in New York City since the spring. Some, on their own volition; some sent on a bus from Texas to make a political point. As of this week, more than 20,000 migrants remain in the city's care and it's part of why Mayor Eric Adams declared a state of emergency in October, estimating the city will spend roughly a billion dollars on the influx of migrants.

MAYOR ERIC ADAMS, (D) NEW YORK CITY: We need help. This is some serious money that we're spending because we're doing the right thing.

JIMENEZ (voice-over): Mayor Adams says he plans to ask for more money from FEMA ahead of the expected lifting of Title 42. But as the weather gets colder, the reality for care in the incoming migrants is changing.

THIELMANN: We see people arriving in t-shirts and still, sometimes, even in flip-flops, and they don't have proper winter clothes. We have seen people -- little kids with babies showing up wrapped in a blanket with a diaper on and no winter clothing. So that is a huge challenge.

ROBERT GONZALES, MEMBER, VENEZUELAN ALLIANCE FOR COMMUNITY SUPPORT: Most of them have been coming from a tropical country.

JIMENEZ (voice-over): Robert Gonzales works with the New York-based group Venezuelan Alliance for Community Support, working to help connect migrants with resources like social service, mental health, and more. He knows while the journey here is difficult, an equally difficult one lies ahead.

GONZALES: To find a job. To learn the language. To be able to understand and to integrate to a -- to a new system and a new culture they want to be able to grow up.

JIMENEZ (on camera): Yes.

GONZALE: You know, like all the people coming to the United States looking for that.

JIMENEZ (voice-over): Rojas' husband is now working. But since they got here in July, a baby later, they've been in shelters and still in one now, trying to endure.

I asked her what she wants for her future here.

JIMENEZ (on camera): (Speaking foreign language).

ROJAS: (Speaking foreign language).

JIMENEZ (voice-over): "We're waiting for the year to end to put in citizenship papers to become legal," she says. "To get work. We're taking English courses. We're in this process to try and bring our family -- the kids that stayed -- to build a future here."


Omar Jimenez, CNN, New York.


ROMANS: All right. NASA is just moments away from launching a mission to explore Earth. We'll explain.

And cashiers who say they're sick of hearing holiday music at work.


MARIAH CAREY, SINGER-SONGWRITER: Singing "All I Want For Christmas Is You."



ROMANS: Romans' Numeral this morning, 15. It's been 15 years since interest rates have been this high after the Federal Reserve raised its benchmark rate for the seventh time in a row this year. It's now in a range of 4 1/4 to 4 1/2 percent. That, of course, means higher payments on your mortgage, credit card, car, student loan. On the plus side, in theory, your savings, CD, or money market account might start paying some actual interest if you shop around.


Looking at markets around the world right now, big losses in the U.S. spread to Europe. U.K. eurozone and Swiss central banks raising rates again to tackle inflation.

On Wall Street, stock index futures right now looking like they're going to have another down day after a dramatic selloff on revived recession fears. The Dow lost nearly 765 points. The S&P 500 down 2 1/2 percent. The tech-heavy Nasdaq -- that was a bad day for tech stocks, down more than three percent.

Central banks on both sides of the Atlantic are warning this week that the inflation fight is far from over. And U.S. economic data starting to show some weakness.

U.S. retail sales fell sharply at the start of the holiday shopping season. But mortgage rates fell for the fifth week in a row. Notable here, the 30-year fixed-rate mortgage averaging now -- averaging 6. 31 percent. Also on inflation watch, gas prices fell by one penny overnight, now at $3.18 a gallon.

I want to bring in Mark Zandi, chief economist at Moody's Analytics. Good morning, Mark. Nice to see you.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS (via Webex by Cisco): Good morning, Christine. Good to be with you.

ROMANS: OK, so Wall Street is in the grip of recession guessing. The jury, of course, is still out. But listen --


JAMIE DIMON, CEO, JPMORGAN CHASE: When you're looking out forward, those things may very well derail the economy and cause this mild or hard recession that people are worried about.

JANET YELLEN, TREASURY SECRETARY: There are always risks of a recession. The economy remains prone to shocks.

SCOTT KIRBY, CEO, UNITED AIRLINES: If I didn't watch business shows or read The Wall Street Journal, the word recession would be in my vocabulary because we just don't see it in our data.

JEROME POWELL, CHAIRMAN, FEDERAL RESERVE: I'll tell you what the projection is. I don't think it would qualify as a recession though because you've got positive growth.


ROMANS: I've been -- I've been calling it, Mark, the "yes, but" economy. Yes, we're worried about a recession, but all the indicators on the dashboard are still looking pretty good.

How do you describe it?

ZANDI: Well, it's pretty clear, Christine, the recession risks for 2023 are high. We're in a world of very high inflation and, as you pointed out, central banks around the world are raising interest rates aggressively. So, historically, when you're in that kind of environment recession often follows. So I think it's reasonable to be nervous and cautious about the economy next year.

But, you know, having said that, I think we have a fighting chance of getting through the next year without an economic downturn. It feels like inflation is coming in here pretty quickly and moving in the right direction. The economy's underlying situation is good. Consumers have a lot of cash. Most consumers -- middle-income, high-income consumers have a lot of cash.

And I think businesses -- they're just reluctant to lay off workers because --


ZANDI: -- they know the number one problem is just finding workers.

So given all that, I think we can make our way through just as long as we don't get nailed by, obviously, something else.

ROMANS: Yes, which, of course, has happened in the past couple of years -- a pandemic and invasion by Russia.

But I want to ask you about the psychology because so much of how people feel and how they spend is psychological.

And Scott Kirby, the CEO of United Airlines, who you heard just a moment ago -- he made a comment to our friend Poppy Harlow that I think is really interesting -- listen.


KIRBY: Look, we're planning as if there's going to be a mild recession next year. And a lot of people in the business world are trying to talk ourselves into one is what it sometimes feels like to me.


ROMANS: Talk to me a little bit about that because this is something that I worry about -- that we get so focused on a recession is coming, a recession is coming, that we actually help make on.

ZANDI: Yes. At the end of the day, a recession is a loss of faith, right? I mean, it's a loss of faith by consumers. They begin to think that they're going to lose their job and stop spending.

It's a loss of faith by businesspeople. They're worried that they can't sell whatever they produce and they start laying off workers. And you get into this kind of self-reinforcing negative cycle.

So when sentiment is this bad and starting to feed on itself, it -- we run the risk of talking ourselves in.

I will say, though, it may, in an odd kind of way, help things out. Because if everyone's so nervous about recession, they are cautious. They don't take big risks. They don't take on a lot of debt. They don't go out and make that big expansion move. That may cool things off sufficiently to being inflation down so that the Fed doesn't have to raise rates as much and we actually, weirdly enough, avoid a recession.

ROMANS: There's going to be a big, huge wall of tightening, though, that will hit sometime next year. All those monster rate hikes. When do you think we'll really start to see that putting the screws to the job market or to the overall economy?

ZANDI: Christine, I think it's already happening. I think the --


ZANDI: -- job market is throttling back. Job growth is slowing and I think that will become more obvious as we move into next year.

I do expect more layoffs starting to show up early next year. They're very -- actually interesting, they're very, very low by historical standards but I expect them to pick up.

But I think it's going to be a moderate -- just a moderate, steady slowing in economic activity as we move into next year. And hopefully, we don't lose faith and run for bunker and go into a recession. I think -- again, I think we have a chance at that. We need a little bit of luck not getting nailed by something else and some reasonably good deft policymaking by the Fed. They've got to thread the needle.



ZANDI: And if they can, we can make our way through.

ROMANS: It's just such a weird -- it's just so weird. If you had told me we'd have seven rate hikes and only 211,000 first-time unemployment benefits, I never would have thought those two things --


ROMANS: -- would go together. But they do and that's where we are.

ZANDI: Well, it's coming.

ROMANS: All right, Mark Zandi --


ROMANS: -- of Moody's Analytics, thank you so much. Nice to see you, Mark. Have a good weekend.

ZANDI: Thank you.

ROMANS: Selective free speech. Elon Musk suspending the Twitter accounts of journalists who cover Twitter and him.


ROMANS: All right. Retail sales fell six-tenths of a percent from October to November, the biggest decline of the year.


Let's bring in CNN Business reporter Nathaniel Meyersohn. So, what happened?

NATHANIEL MEYERSOHN, CNN BUSINESS REPORTER: Right. So retail sales went down 0.6 percent in November. It was the biggest drop we've seen month-over-month this year. Shoppers pulled back at furniture stores, electronic stores, clothing retailers.

A few factors drove this. There was an early start to the holiday season. Retailers were offering discounts starting in September through October. And so, that gave shoppers less of a reason to shop on Black Friday and in November.

We also say cost-conscious shoppers not buying new, expensive T.V.s and --

ROMANS: Right.

MEYERSOHN: -- furniture. They've been squeezed by inflation, really just focusing on groceries and essentials.

And then we also see people shifting their spending from goods to travel and entertainment.


MEYERSOHN: We -- you know, we have all the couches we need but we still want the experiences that we didn't get early in the pandemic.

ROMANS: Yes. Say no to the couch. Say yes to Disney. That seems to be what the numbers show.

And holiday music is back in the stores. Why do they play holiday music so loudly, too, and what do the workers think of it?

MEYERSOHN: Right. So you can hear this holiday music. It's getting me in the -- it's getting me in the shopping mode and I want to spend a little bit more. That's exactly why retailers do it. They're trying to prime us to add a little -- a few more items to our -- to our cart, buy a few more gifts for our family. Eighty-three percent of shoppers say they like hearing music when they're in stores.

Retailers spend a lot of time thinking about which songs to play, curating their playlist. Walmart even has its own radio station. It's one of the ways that retailers are trying to change their spaces and environment to get you to spend more.

The problem, though, is that workers are driven crazy by the repetitive songs. I spoke to one worker -- Target worker a couple of years ago who told me that he was waking up in the morning with the Mariah Carey "All I Want For Christmas" song stuck in his head. So maybe retailers can dial it down a little bit for the workers this year.

ROMANS: Oh my gosh, workplace hazards -- music. Too much music.

Nathaniel Meyersohn, have a great weekend. Thank you.

All right, the 49ers are NFC West champions after beating Seattle last night.

Andy Scholes has this morning's Bleacher Report. No Christmas music for you, Andy.

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: It's OK. I get enough everywhere I go, Christine. Good morning.

You know, no matter how many injuries this 49ers team has had -- you know, Trey Lance, Jimmy G., Deebo Samuel -- they just keep winning.

And Mr. Irrelevant, Brock Purdy, looking good again last night. Purdy, the very last pick in April's draft -- he's gone from third string to starter. Kyle Shanahan dialing up the double pump fake. Purdy then to George Kittle, wide open over the middle. That made it 7-0.

Later in the game, Purdy again going to find a wide-open Kittle, and this time he's going to make some moves. He cuts it back for another touchdown.

The Niners would end up winning this easily, 21-13, to clinch the NFC West.

And after the game, Shanahan said he continues to be impressed with his Q.B.


KYLE SHANAHAN, HEAD COACH, SAN FRANCISCO 49ERS: He's definitely the most poised rookie I've ever had, and he's been like that since he's gone here. From what I hear about him in college, I think it was very similar. You know, just starting as a -- as a freshman. And, I mean, he's been great.

BROCK PURDY, QUARTERBACK, SAN FRANCISCO 49ERS: It's special and everything but man, honestly, I'm just like another component. I'm another piece to this team in terms of a guy coming in just doing what he's asked of, you know?

I'm the quarterback. I have to make decisions. I trust in how the coaches teach me throughout the week. I just try to get the ball out to the guys on time.


SCHOLES: All right, to the NBA. Ja Morant and the Grizzlies hosting Giannis and the Bucks.

First quarter, watch what Khris Middleton does. He's going to get the ball stolen and then decides to just wrap up Dillon Brooks' leg and tackle him like he's playing football. Middleton got a flagrant foul for that.

This game -- it was all Grizzlies. They had a 29-point lead at the half. They led by 50 early in the fourth, the largest lead any team has had in the NBA this season.

It got so bad the crowd actually started doing the wave at one point. You don't see that in the NBA very often. And the Grizzlies' bench even joining in on the fun.

Memphis won that one by 41. They now sit atop the West with a 19-9 record.

All right, 22-year-old Tyrell Terry, meanwhile, announcing yesterday he's retiring from basketball. The 2020 first-round pick by the Mavs says the anxiety he felt playing the game led to some of the darkest times in his life. Terry posting on Instagram, "Intrusive thoughts, waking up nauseous

and finding myself struggling to take normal breaths because of the rock that would sit on my chest that seemed to weigh more than I could carry. This is just a brief description of the anxiety this sport has caused me. And while I'm grateful for every door it has opened for me, I can't continue this fight any longer for something I have fallen out of love with."

Terry played 13 games over the last two seasons for the Mavs and the Grizzlies. He acknowledged he may be called a bust but is eager to find his identity outside of basketball.

So seeing him --

ROMANS: You know, I mean, I really respect --

SCHOLES: Definitely, good luck to him.

ROMANS: Yes, and I respect his self-awareness and his willingness to tell people -- to tell the world about the anxiety that he suffers from. I mean, I think that's really important for other people to recognize and hear.

SCHOLES: Yes, and it certainly had to be tough.