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EU Bans Kremlin's Exports Of Diesel Fuel And Oil Products Over Ukraine; Erdogan: Nearly 1,000 Dead In Turkey After Major Earthquake; Viola Davis Achieves EGOT With Grammy Win. Aired 5:30-6a ET
Aired February 06, 2023 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[05:30:00]
CHRISTINE ROMANS, CNN ANCHOR: CNN's Clare Sebastian joins us live. And Clare, will this hurt Russia?
CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: You know, Christine, in theory, yes -- this hits Russia where it hurts. Oil products, along with crude oil, of course, the biggest export -- the biggest money spender and, therefore, the biggest contributor to Russia's war machine.
But we've got essentially three things going on here. We've got an EU embargo on seaborn oil products, which include the likes of diesel fuel oil and that kind of thing. We've got a ban on maritime transport and financial services from the EU, the U.S., and the G7. And we've got a price cut mechanism which essentially provides an exemption to that ban on maritime transport financial services if those cargos are purchased under a certain price.
So the biggest impact is going to come initially from the EU embargo. Russia, one of the biggest exporters of diesel in the world. The EU used to buy almost two-thirds of that. So this depends how quickly Russia can find new customers.
But take a look at this map because when it comes to crude oil we know that Russia has been selling a lot of the barrels that are displaced from Europe to India and China. But if you look there, China and India are also some of the biggest exporters of refined oil products. So it's much less clear where Russia can go to sell those barrels of diesel and other refined products that it used to sell to Europe. It will have to offer bigger discounts.
Then on the flip side, Europe now has to find new suppliers. It might have to pay more to do so, especially because all of this, Christine, coming at a time when we're likely to see demand rising from China because of the relaxing of those zero-COVID measures.
And, of course, if the price goes up around the world, that could mean --
ROMANS: Yes.
SEBASTIAN: -- more money for Russia. ROMANS: And that's how Russia pays for its war, right, with its big exports. And Russia -- the economy -- the IMF says the Russian economy is expected to grow this year, which I think is a surprise to a lot of people who thought maybe that all of these sanctions and international efforts would work a little more quickly.
All right, Clare Sebastian. Thank you so much.
All right, quick hits around the globe right now.
Iran's state media says its supreme leader will pardon thousands of prisoners. The amnesty will likely exclude most protesters. One human rights group calls it simply propaganda.
Pakistan's former president Gen. Pervez Musharraf has died after a long illness. Musharraf was a key ally of the United States in the wake of the 9/11 attacks. He was 79.
Pope Francis denouncing the criminalization of homosexuals and saying it's a sin to condemn gay people. He made the statement on the papal plane returning home from a visit to Africa.
Just ahead, the Chiefs and the Eagles arriving in Phoenix as Super Bowl begins. And next, a live update on our breaking news this morning. The desperate search for survivors, right now, after that earthquake disaster in Turkey and Syria.
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[05:36:49]
ROMANS: All right, breaking news. Turkey's president says nearly 1,000 people have died in that country alone after a powerful 7.8- magnitude earthquake that has devastated both Turkey and neighboring Syria. Thousands more people have been injured. And now, a race against time for rescuers to find survivors trapped in the rubble of collapsed buildings. Syria's White Helmets rescue group says the quake has left northwestern Syria in a state of catastrophe.
Let's bring in CNN's Salma Abdelaziz. Salma, how hard is it for a war- torn country like Syria to now deal with this disaster?
SALMA ABDELAZIZ, CNN CORRESPONDENT: I mean, it's absolutely devastating, Christine. You just played that video from the White Helmets showing that little girl being pulled out of the rubble -- scenes all too familiar in Syria. Of course, in this case, it is a 7.8-magnitude earthquake that has devastated the northwest of the country.
The Syrian president, President Bashar al-Assad, called an emergency meeting this morning, of course, and ordered all his departments and all his ministries to put any resources they have towards those affected areas. But as you can imagine, after over a decade of war -- nearly 12 years of conflict now in that country, there's very little of those resources left. When you think about hospitals and clinics, those were places that
were targeted during the conflict. So we already have images coming from these places where doctors are overwhelmed. They don't have the equipment they need. They don't have the medical resources they need to care for the wounded.
When you're thinking about heavy earth-moving equipment -- bulldozers and cranes to try to pull people out -- again, much of that equipment destroyed and damaged.
And the other thing to remember here is that the Syrian government does not have access to the entire affected area. There are parts of the northwest of the country that are still rebel-controlled. That means families there have to rely on volunteers. Have to rely on rebel groups for help.
And while Turkey is busy setting up, of course, spaces for families to gather, whether those be schools or public spaces, Syria will have none of those options.
And what's really horrifying about this very traumatized population is many people woke up wondering if they were warplanes, Christine. And now, of course, having to deal with this impact -- over 230 people killed so far inside Syria, more than 600 wounded -- that's according to the authorities -- the number is going up every hour.
And you have to remember on the other side of the border in Turkey, right along that area that was affected, there are thousands of families living in tent cities, living in refugee centers. So for the Syrian population, I can't even begin to explain just how devastating this is.
And in the hours coming ahead -- these critical -- this critical period, there will be very little resources for Syrian authorities to try to help those hurt and affected.
ROMANS: All right, Salma Abdelaziz. Just a -- just a tragedy there. Thank you so much.
All right, here is today's fast-forward look ahead.
U.S. Navy divers are working to recover debris from a suspected Chinese spy balloon shot down off the coast of South Carolina this weekend. That operation expected to take some days.
Ukraine's defense minister says their troops will begin training on Leopard tanks in Germany today. Crews are already in the U.K. training on British Challenger 2 tanks.
[05:40:00]
Some lucky winner could take all $747 million in tonight's Powerball drawing. The prize increasing to the lottery's fifth-largest after there were no jackpot winners in Saturday's drawing.
All right. Kyrie Irving's tumultuous tenure in Brooklyn is over. The NBA superstar reportedly heading to Dallas in a blockbuster trade.
Carolyn Manno has this morning's Bleacher Report. Hey, there.
CAROLYN MANNO, CNN SPORTS CORRESPONDENT: Hey, good morning, Christine.
The drama just continues and now we know -- we think we know where Kyrie Irving's going. His time with the Nets has been chaotic, to say the least, and his final days in Brooklyn have felt that way, too.
Two days after asking to be traded and one day after getting booed by Nets fans, the team reportedly sending the 8-time All-Star to the Mavericks for two players and three draft picks. And when he gets there the All-Star guard will certainly team up with maybe the best young superstar in the league, Luka Doncic.
Between injuries, his refusal to vet vaccinated, and his suspension over tweeting a link to an antisemitic documentary, the 30-year-old missed almost as many games as he actually played in his three-plus years with Brooklyn. Irving expected to play his first game for Dallas on Wednesday.
Elsewhere, Warriors superstar Steph Curry may be out for the foreseeable future with a knee injury after this collision on Saturday against the Mavs. The team has not set a timeline for his return. The reigning finals MVP expected to miss multiple weeks. That, according to a report from The Athletic.
And LeBron James is on the verge of becoming basketball's scoring king after scoring 27 on Saturday against New Orleans. LeBron now 36 points away from passing Lakers legend Kareem Abdul-Jabbar for the most in NBA history.
That is a number that he is more than capable of putting up in one night. He's averaging 30 points a game. He's been remarkably consistent in that regard. He scored at least 36 nine times already so far this season, including three of his last seven games. So it could be the night. He's got a chance to reset the record tomorrow night at home in L.A. against the Thunder on our sister channel TNT.
Some tickets are fairly reasonable all things considered. You can get some nosebleeds starting at just under $300. But if you're going to pay that price go ahead and watch it on T.V.
In college hoops now, a potential national championship preview yesterday. Fifth-ranked UConn hosting number-one South Carolina. Things starting off great for the home team. Lou Lopez, center, hitting the running three at the buzzer there to put the Huskie up 11 after one.
And the reigning Player of the Year, Aliyah Boston, didn't make a basket in the first half but turned on the jets after the break scoring 20 points to go with 11 rebounds. She now has 76 career double-doubles as South Carolina holds on to win by four and stay undefeated. Meantime, Iowa's Caitlin Clark continues to be a human highlight reel. A no-look behind-the-back pass to McKenna Warnock for the lay-in -- just ridiculous. She finished with 23 points, 14 assists, and 10 rebounds -- her ninth career triple-double in the Hawkeyes' Blowout over Penn State.
And lastly for you this morning, Christine, it is officially Super Bowl week. It is here. The Chiefs and Eagles touching down in Phoenix yesterday for what will be a historic showdown next Sunday. The first time that two Black quarterbacks will play each other on the NFL's biggest stage in Jalen Hurts and Patrick Mahomes. The first time two brothers will face off in Travis and Jason Kelsey. And two head coaches going up against their former teams in Andy Reid and Nick Sirianni.
We're going to have live coverage from Arizona all week leading up to Super Bowl LVII. We've got Coy Wire on the ground getting ready for media night, which is always fun.
ROMANS: Oh, great -- all right. Carolyn Manno, nice to see you. Thank you.
All right. Right now in Ohio, an entire town evacuated after a train derailment and the danger of an explosion. Details next on "CNN THIS MORNING."
And next right here, bosses hit a big milestone trying to get workers back to the office.
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[05:47:53]
ROMANS: All right, your Romans' Numeral this morning, 50.4. It's a back-to-office milestone. Offices across 10 major U.S. cities crossed 50.4 percent occupancy. That's according to security swipe tracker Kastle Systems. The badges don't lie. It's the first time since the pandemic that offices have been more than halfway full.
But workers aren't back every day yet. Data shows Friday, of course, is the lowest occupancy day. Tuesday, by the way, is the highest.
Looking at markets around the world right now, European markets are lower here. Asian shares mixed -- markets mixed on the day.
And when you look at Wall Street, stock index futures leaning down here. It looks like a big decline you're going to see this morning in the Nasdaq.
It was another strong week overall and a strong start to 2023. The S&P -- let's see. We're looking at the bounce in down markets on the week. Anyway, watching that there. The Nasdaq up three percent. A five-day -- a five-week winning streak there.
A shockingly strong jobs report Friday has investors wondering what the Fed's next move is. Even more rate hikes to cool down this economy? This week we'll get more information on that. A critical speech by the Fed chief Jerome Powell. We've got the State of the Union Address, the consumer sentiment data, and weekly jobless claims.
Another week of big earnings. Pepsi, Uber, and Walt Disney among the companies slated to report.
And on inflation watch, gas prices falling a penny overnight, now at $3.47 a gallon.
All right, let's bring in economics professor at Harvard University, Ken Rogoff. Ken, so nice to see you.
What do you make of that jobs report Friday?
KEN ROGOFF, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: Well, I was shocked. I wasn't expecting it. If you'd told me it was minus 100,000 -- it was over half a million -- incredible. It's good news. I mean, we can think of reasons of how do we react to this --
ROMANS: Right.
ROGOFF: -- good news, but it's good news.
ROMANS: So whatever happens this year -- and there are a lot of uncertainties -- but whatever happens, you're coming from a strong base in the job market essentially.
ROGOFF: Oh, absolutely. We're not about to have a recession now. The question, as you said, is what is the Federal Reserve going to do? How much higher are interest rates going to -- going to go? I think higher for longer and maybe that will lead to a recession down the road. But right now it's just surprising. I think everyone was surprised.
[05:50:00]
ROMANS: Absolutely. I mean, I guess the reaction I'm seeing this morning in futures for the Nasdaq, in particular, means they have to kind of change what their -- what their base case scenario was -- investors. They were thinking the Fed was going to maybe get a point where it could pause here.
ROGOFF: Well, the market cares even more about interest rates than we do. I think most people would care about jobs and is the economy doing well. But the market has to worry that, well, inflation is still there. It's come down a little but it's ingrained. And probably interest rates are going to go up at least a couple more times, and I think maybe more.
ROMANS: I wanted you to listen to something that one of your colleagues told one of my colleagues, Fareed Zakaria. Larry Summers on the program this weekend talking about concerns about bringing inflation to target -- listen.
(BEGIN VIDEO CLIP) LARRY SUMMERS, FORMER TREASURY SECRETARY: So it looks more possible that we'll have a soft landing than it did a few months ago. My continued fear though is exactly the one that you described -- that we had a set of inflation indicators during 2022 that were very strong that have now come back to Earth but they're still too high.
(END VIDEO CLIP)
ROMANS: There's a long way to go to a two percent or 2 1/2 percent inflation rate in this country still.
ROGOFF: There is. I mean, I think we're still looking at a four percent ingrained inflation rate. The labor market's really good and that means workers have bargaining power. It means wages should go up even more. That will push up prices -- not overall a bad thing. But it probably means interest rates are going to land higher. I think they're going to be higher the next decade than the ultra-low interest rates we had through 2021.
ROMANS: What about wage inflation? And we've seen some moderating in that but it is still kind of high. And you talk about how the worker has the upper hand. There are 11 million open jobs in this country. I feel like I see businesses -- business owners, bosses are more concerned about not being able to find the talent they need than they are about an inflation around the corner.
ROGOFF: No, absolutely. And it's sort of hard to know where we are with wages. Yes, wage growth is strong but it's been less than prices for a long time. There's a lot of catch-up due and so it's sort of hard to know where we land.
But I think the upward pressure on prices coming from the stimulus, the low interest rates --
ROMANS: Yes.
ROGOFF: -- for so long takes a long time to work its way out of the system.
ROMANS: So all of these things that economists look at, and then there's this Washington-watching happening at the same time. Back in December, you told me that often the debt ceiling is used as a -- as a tool -- a weapon by a party. The House, for example, controlled by the Republicans. There's a Democrat in the White House.
How critical is it that the politicians get this right on the debt ceiling at this point with everything that is happening with the economy and the uncertainties?
ROGOFF: I mean, the short answer is we don't want to find out. It's like oh, this is our credit card bill. Let's just tear it up. But this is the United States of America. It affects, yes, everyone getting Social Security checks, debtholders. I don't even know where to stop.
You can get hyperbolic about how bad it will be. I would just say I don't want to find out. It's very irresponsible to let it happen. We should have this. Yes, I see Congress wants to have more power. Go out and get more votes. Get -- do better in elections. Get your power that way. This is not the way to do it.
ROMANS: Hey, a conversation about taxing and spending is always a good idea but not when you have to pay the bill. You do that before you actually spend the money.
ROGOFF: You know, for next year, want to talk about taxes and spending, go for it. Let's have a conversation. We spent the money already.
ROMANS: Right.
ROGOFF: The bill has come due for the United States of America. The whole world depends on our credit --
ROMANS: Yes.
ROGOFF: -- rating. We can't just tear it up.
ROMANS: Ken Rogoff, so nice to see you.
ROGOFF: Thank you.
ROMANS: Thank you for dropping by.
All right. Next on "CNN THIS MORNING" Poppy will ask Bank of America boss Brian Moynihan about the chances of a soft landing for the U.S. economy.
And CNN following breaking news. The search for survivors underway right now after a devastating and deadly earthquake rocks Turkey and Syria. A live report just ahead.
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[05:58:30]
ROMANS: Our top of the morning, the top movies at the box office.
(BEGIN VIDEO CLIP)
Clip from Universal Pictures "Knock at the Cabin."
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ROMANS: The creepy new number-one this week, M. Night Shyamalan's "Knock at the Cabin."
Here's number two.
(BEGIN VIDEO CLIP)
Clip from Paramount Pictures "80 for Brady."
(END VIDEO CLIP) ROMANS: "80 for Brady" with a cameo from the GOAT himself. Brady's announcement that he's retiring again probably didn't hurt ticket sales.
As for number three --
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Clip from 20th Century Studies "Avatar: The Way of Water."
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ROMANS: After seven weeks at number one, "Avatar: The Way of Water" drops to number three, though it will go down as one of the highest- grossing movies of all time globally.
All right, a career milestone for Viola Davis, winning a Grammy Award last night to join the coveted EGOT club.
(BEGIN VIDEO CLIP)
Clip from Paramount Pictures "Fences."
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ROMANS: Davis won for the audiobook of her memoir "Finding Me." She already had an Emmy for her lead role in the T.V. "HOW TO GET AWAY WITH MURDER," a supporting actress Oscar for "Fences," and two Tony Awards. Davis becomes the 18th person to achieve EGOT status.
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