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Early Start with John Berman and Zoraida Sambolin
Russia Fighter Jet Forces Down U.S. Drone Over Black Sea; Season's First Nor'easter Dumps Heavy Snow on NY, New England; Moody's Cut Outlook for Banking Sector, Warns About 6 Banks; New Poll: Trump, DeSantis Lead Among Potential GOP Voters. Aired 5-5:30a ET
Aired March 15, 2023 - 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: Welcome to our viewers in the United States and around the world. I'm Christine Romans.
We begin this morning with Russia and the U.S. facing off in their first physical conflict since the start of the war in Ukraine. Russian fighter jets forcing down a U.S. Air Force spy drone flying over the Black Sea. This is video of the type of Reaper drone that went down.
White House officials say that the Russian move over international waters is the kind of thing that could spark a dangerous escalation between super powers.
(BEGIN VIDEO CLIP)
JOHN KIRBY, NATIONAL SECURITY COUNCIL SPOKESPERSON: It could lead to miscalculations between, you know, two militaries that are operating not obviously in Ukraine together but certainly in proximity in the region. And we don't want to see the war escalate beyond what it has already done to the Ukrainian people and so this is clearly -- this was inappropriate, unsafe, unprofessional conduct by the Russian pilots.
(END VIDEO CLIP)
ROMANS: CNN's Salma Abdelaziz is live in London for us.
Salma, Russia and the U.S. have very different stories here about what happened.
SALMA ABDELAZIZ, CNN CORRESPONDENT: Two very different narratives about what took place in the early hours of yesterday morning on the Black Sea. The United States says that Russian fighter jets essentially reading between the lines harassed the United States drone. They say that this Russian fighter jet dumped fuel several times over that drone for about 30 to 40 minutes. It was in the vicinity of that Reaper before that physical confrontation that led to the propeller of the drone being damaged and the drone to be forced down.
Russia says this is simply not true. The Kremlin said there was no direct physical confrontation between a Russian aircraft and a U.S. drone. They say -- or the Kremlin says that its Russian fighter jets were scrambled when it detected an intruder and the transponders were turned off, and the Kremlin had already warned that it was conducting operations in the Black Sea area as part of its, quote, special military operations, and Russia points the finger at the U.S. saying that it is the U.S. that behaved dangerously and came too close to the Russian border and U.S. using a drone that they see as a threat because it could potentially carry weapons.
Now, the positive is that both sides the positive is that both sides agree that they don't want to escalate the confrontation. The Russian ambassador to the United States was summoned to the State Department and at least 30 minute conversation took place there. They don't want to see it escalate any further. And what is really important to note here as well, this is not unusual to see U.S. aircraft and Russian aircraft intercept along the Black Sea. That has happened several times in the last few weeks.
Most of the times, of course, the incidents go without any problem, without any issue. So there is hope that that can resume. But, of course, highly concerning at such a sensitive time to see this physical confrontation over the Black Sea, of course.
All right. Salma, thank you so much for following that for us.
Back here, the first nor'easter of winter dumping 3 feet of snow or more over parts of the Northeast. The snow, ice and strong winds knocking out power for hundreds of thousands of customers across the region. More than 1,200 flights canceled yesterday. The weather also toppled a tree in New Hampshire trapping a child who had to be rescued by first responders using chain saws, shovels and their bare hands. The child just suffered minor injuries.
Meteorologist Chad Myers is in the CNN weather center for us this morning.
Chad, how are things looking for today?
CHAD MYERS, AMS METEOROLOGIST: You know, I mean, runners on first and third, one in the Northeast, one in the Southwest. The storm though in the northeast is winding down. Not without wind, but at least the snow is winding down. This came down like concrete. This is difficult stuff to move. So a lot of kids are staying home today with snow days.
But look at some of these totals, approaching 4 feet of snow in the heaviest bands across parts of upstate New York and also Western Mass. But you go from 33 inches to Holly, Boston along the shore, not much at all. Boston suburbs, you have shovelable or plowable snow.
But today the problem is winds 50 miles per hour still at this point as the storm pulls away. Yes, there are still some snow showers around, but the next story you will hear is rain in southern California. It never rains in southern California, but when it does, it is that, very heavy from L.A. down to San Diego. It will eventually get into the Rockies making great snow for Salt Lake City, for the benches above that and also for of course the ski resorts in Colorado and the like.
So this is kind of where we are right now. We are still going to see some rain in California, but what you see is what you get really other than L.A. and San Diego, if you haven't flooded yet or the waters are kind of receded in California, this is the last storm for the next three to four days. Let that water come down. It has had enough time at flood levels out there.
ROMANS: All right. Chad Myers, thank you so much for that, Chad. Keep us posted.
All right. Good news/bad news for the economy in the wake of the implosion of SVB and Signature Bank.
Let's start with the bad news. Moody's is cutting its outlook for the entire U.S. banking industry and announcing that it is reviewing six U.S. banks for potential credit rating downgrades.
The good news: stabilization, broader economy seems to be recovering from its swoon earlier in the week. U.S. stock index futures down a little bit. And around the world markets are also mixed.
CNN's Clare Sebastian joins us from London.
Clare, Moody's says banks like the six it named for a possible downgrade are especially vulnerable, there is concern about depositors leaving and looking for higher yields a concern about what is on its balance sheets.
CLARE SEBASTIAN, CNN INTERNATIONAL CORRESPONDENT: Yeah, Christine, they are worried about this toxic cocktail if you will of long term debt on the balance sheet, a lot of it that was bought before interest rates went up and therefore have to be sold as a loss, combined with a majority of depositors with more than $250,000 in their accounts, and therefore not automatically insured if something goes wrong, so more than likely to pull out their money.
And that is what Moody's is worried about. In the case of first republic who has seen significant losses this week, they have recovered a bit, and they are warned capitalization levels, saying that they might not be at a high enough capitalization level. Now, these are important, because these banks, Silicon Valley Bank, certainly First Republic, they have assets that fall into the term of mid-sized banks.
And, you know that in 2008, Donald Trump had diluted this aspect of the Dodd-Frank post-crisis reform raising the threshold at which banks would enhance the enface face the enhanced regulations. And so simply exempting the likes of Silicon Valley Bank and First Republic. And the fed may be looking at tightening that up again.
We know as well that Congress is set to be looking at the reasons behind the collapse in the coming weeks.
ROMANS: Yeah, absolutely. Clare, thank you so much.
And we know this morning the justice department and SEC are investigating the collapse of Silicon Valley Bank. A source familiar with the matter telling CNN that federal investigators are looking into both the bank's failure and actions by senior executives just prior to its closure by regulators.
CNN's Phil Mattingly has more this morning for us from the White House.
PHIL MATTINGLY, CNN CHIEF WHITE HOUSE CORRESPONDENT (voice over): The Justice Department launching an investigation into the collapse of Silicon Valley Bank --
SHEILA BAIR, FORMER BANKING REGULATOR: It was rapid growth. It was poorly manage. It had this very close net group of depositors that all talk to each other and ran at the same time. That is unique.
MATTINGLY: -- as financial markets and the banking sector slowly shifted away from the precipice of crisis.
REP. JOSH GOTTHEIMER (D-NJ): I think you're seeing better news today than the last couple of days.
MATTINGLY: The federal investigation said to be in its early stages marking a clear escalation and following pledges from President Biden, financial regulators and lawmakers to hold those responsible for the collapse accountable.
JOE BIDEN, PRESIDENT OF THE UNITED STATES: In my administration, no one is above the law.
MATTINGLY: But as those investigations dig into the root causes, Biden administration officials still closely watching the markets for signs their dramatic emergency efforts are taking hold.
GOTTHEIMER: We have to make sure people know that if they put money in their bank, in the deposit, it will be there in the morning for them. Otherwise, you're going to have runs across the country and systemic risk obviously to the whole system, which is what the feds stepped in and took action on Sunday night about.
MATTINGLY: Regional banks, which had been hammered in equity markets on Monday, shifting rapidly into positive territory today with senior treasury officials continuing to see positive signs about dissipating deposit outflows from the most at-risk banks.
BAIR: Regional bank are fine. They're important for the banking economy and let's not worry about the (INAUDIBLE).
MATTINGLY: But as market step back from the brink, the political backlash has clearly started to escalate. SEN. TIM SCOTT (R-SC): Remember, the average household has around $5,000 to $10,000 in their average bank account. They're now going to have to subsidize people who had up to $5 million in their accounts. That is corporate cronyism at its worst.
MATTINGLY: With some congressional Republicans attacking the dramatic actions from the administration, and a growing number of presidential candidates, or likely candidates, taking their own shots at the move to backstop all deposits at Silicon Valley and Signature Banks, even those above the $250,000 threshold.
White House officials continuing to maintain taxpayers will not be on the hook for any loses from the actions.
BIDEN: And this is an important point, no losses will be borne by the taxpayers.
MATTINGLY: Echoing Biden's emphatic and politically deliberate point from a day ago.
BIDEN: Let me repeat that, no losses will be borne by the taxpayers.
MATTINGLY: And as Biden continued a three day West Coast trip, his economic team in Washington, buoyed by good news on inflation, as the consumer price index showed annual price increases declined year over year for an eighth straight month, with Biden in a statement noting the challenges in the banking sector are an example that economic setbacks are likely, but the U.S. faces, quote, these challenges from a position of strength.
MATTINGLY (on camera): And as the Biden administration officials express cautious optimism that the emergency actions they took are indeed starting to take hold, investigators on the federal side and congressional side dig into what exactly happened here, folks in Washington also clearly looking forward to just one week from Wednesday, that is when the Federal Reserve is set to meet again and make a decision on additional rate increases.
The expectation heading into that meeting, at least before the bank failures, was that it would be another significant increase. The convergence of what you are seeing with inflation and have seen over the course of the last several months and also what has tied to some of these bank failures. However in the wake of this banking crisis, even as it seems to have been receding from the brink, there is recognition that perhaps the fed will have to change course. Maybe not entirely, but at least perhaps not go as big as they were planning. It is a very open and real question with significant effects on the economy going forward. One that won't be answered for another eight days.
Phil Mattingly, CNN, the White House.
ROMANS: Next Fed meeting, March 22nd. A real balancing ability for the Federal Reserve.
All right. Still ahead, murder charges after a man died in custody.
Plus, Ukraine and the 2024 campaign, Republicans at odds over the country's importance.
And high stakes hearing on an abortion drug that has been used for more than 20 years. All eyes on a federal judge's decision.
ROMANS: All right. Now, this, today, a Texas federal judge will hear arguments in a high stakes court case that could block abortion medication. Now, the initial hearing was delayed after lawyers told lawyers that he did not want them to publicize the hearing citing a, quote, barrage of death threats aimed at him and his staff. Media outlets and legal experts criticized the Trump appointed conservative judge for undermining judicial transparency. Kacsmaryk will weigh revoking the FDA approval of the drug, which is one of two drug cocktail used in a medication abortion.
I want to bring in "Washington Post" congressional reporter Camila DeChalus.
This has been remarkable to follow over the past week when reporters and court sleuths started to realize that there was something secret happening here. In a transcript of the call, the judge told lawyers to hold off on publicizing the important hearing because of death threats that he was getting and to minimize disruptions in the proceeding. It's highly unusual for a case of this importance to be kept under wraps here.
CAMILA DECHALUS, CONGRESSIONAL REPORTER, THE WASHINGTON POST: Yes, that's correct. And I think that lot of that is because there is so much at stake. As you know abortion is a highly politically divisive issue, especially you saw after the Supreme Court ruled to strike down Roe v. Wade, there was hundreds of protests and we're hearing that there is expected to be protests outside of the courthouse and legal experts have weighed in that the judge may potentially weigh in and issue the ruling after the hearing because he knows that there is going to be a lot of potential outrage depending on the outcome of the ruling.
ROMANS: This is the biggest abortion case since the Supreme Court overturned Roe v. Wade last year. Remind our viewers what is at stake if the judge overturns the FDA approval of the bill that has been used in the United States for 20 years.
DECHALUS: Well, I've spoken to a lot of advocacy groups that deal with this matter and they say, look, we are scared that if the ruling is not favorable and this abortion pill is struck down and found that it is illegal, that states won't issue it, then maybe that that is going to lead to other potential legal challenges against the morning after pill, plan B. Or even birth control, that they think that depending on this ruling that it won't just stop here with this abortion pill, that it could lead to other legal challenges.
So, there is a lot at stake here. This is an issue that has been weighed on for months on end and you saw that with a lot of the outrage on Roe v. Wade. This won't just die after this ruling. A lot of advocates say it could lead to other political legal challenges. And a lot of Democratic governors have realized that and have formed their own coalition to strengthen access to abortion and looking for other ways that they can have in-state resident -- interesting that you would see how states are responding to this ruling and anticipating any outcome that may come from this ruling.
All right. Camila DeChalus, we know that you'll be following it for us at "The Washington Post". Nice to see you. Thank you.
All right. Vice President Kamala Harris will lead a round table event on abortion rights tomorrow in Des Moines, her first trip to Iowa since she took office and this is just days after the crucial early voting caucus state got a first taste of what could be a bitter fight for the 2024 Republican presidential nomination.
Kristin Holmes reports.
KRISTEN HOLMES, CNN NATIONAL CORRESPONDENT (voice over): As the 2024 Republican field takes shape, former President Donald Trump on the trail in Iowa.
DONALD TRUMP, FORMER U.S. PRESIDENT: We don't even know if he's running, but I might as well tell you.
HOLMES: Sending a clear signal about who he sees as his top rival.
TRUMP: Ron DeSantis strongly opposed ethanol.
And he also fought against Social Security. He wanted to decimate it.
He voted to severely cut Medicare. I will not be cutting Medicare and I will not be cutting Social Security. We'll live in the age where it is.
HOLMES: Trump's focus on Florida Governor Ron DeSantis coming as a new CNN poll shows the two leading the field of GOP contenders at this early stage of the race, with 40 percent of Republican and Republican- leaning independents saying they would most likely back former President Trump, and 36 percent supporting DeSantis, who has yet to formally announce a White House bid. No other GOP hopeful reached double digits among a list of nine potential candidates.
DENISE VASQUEZ, TRUMP SUPPORTER: True Trump voters are going to stay with Trump. He's already proven himself. So, we know what he's capable of doing. HOLMES: While many Republican voters remain up for grabs, the poll finds most Trump supporters say they're locked in.
UNIDENTIFIED MALE: No one else but Trump, Trump or death.
UNIDENTIFIED FEMALE: Trump's my president. That's it.
HOLMES: Among those backing Trump, 76 percent say they'll definitely support him compared with the 59 percent for DeSantis and 29 percent for the rest of the field.
CATHI FRANK, REPUBLICAN VOTER: I would lean more towards Ron DeSantis just because of his personality. I think he kind of appeals to more people.
HOLMES: As Trump aims to portray DeSantis as part of the Republican establishment --
TRUMP: Ron was a disciple of Paul Ryan, who currently is destroying Fox and would constantly vote against entitlements.
HOLMES: DeSantis is aligning himself with Trump on the issue of Ukraine, telling Fox Host Tucker Carlson in a statement, quote, while the U.S. has many vital national interests, becoming further entangled in a territorial dispute between Ukraine and Russia is not one of them. That stands at odds with other potential 2024 hopefuls who called for the U.S. to adopt a forceful role in supporting Ukraine against Russia.
MIKE PENCE, FORMER U.S. VICE PRESIDENT: There can be no room in the leadership of the Republican Party for apologists for Putin. There can only be room for champions of freedom.
NIKKI HALEY, REPUBLICAN PRESIDENTIAL CANDIDATE: We had no better ally at the United Nations than Ukraine.
HOLMES (on camera): And one thing Trump didn't say on the stage but told a small group of reporters traveling with him is that he regretted endorsing DeSantis back in 2018 when he was running for governor, that is according to the "Washington Post." And in the past, Trump has said that he believes that it is disloyal of DeSantis to even consider a presidential run against Donald Trump given the fact that he endorsed him in that race, but clearly now taking it a step further.
Kristin Holmes, CNN, Davenport, Iowa.
ROMANS: All right. Kristen, thank you for that.
Quick hits across America now.
Seven Virginia deputies are charged with murder after a man that died in custody. The 28-year-old burglary suspect was being taken to a hospital when authorities say he became combative and had to be restrained.
Dallas police say a vehicle hit three people on horse back killing one, two of the horses also died. It is believed the animals had been stolen. Police don't expect to charge the driver of the vehicle.
A man who served as chief of staff to former Maryland Governor Larry Hogan is now considered a fugitive. U.S. marshals are searching for Roy McGrath after he did show up for his fraud trial in Baltimore.
All right. Still to come, Facebook's parent slashing its workforce again. What this means for the company's future and what Mark Zuckerberg is saying about it.
And protests in Pakistan after r police try to arrest the former prime minister.
ROMANS: All right. While the fighting rages in the eastern city of Bakhmut, at least one person was killed when a Russian missile slammed into a residential area of Kramatorsk more than 15 miles from the frontline. At least seven others were wounded.
CNN's Ivan Watson spoke with survivors of Tuesday's attack.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Just hours after what Ukrainian authorities say was a deadly Russian strike on this apartment block, ordinary people are already hard at work with the cleanup. There are no tears here. There are no complaints. Even though at least one person was killed and several people injured. When it exploded, boom, I was knocked on the floor and blood came down my forehead this 76-year-old tells me, but I was lucky, these two pieces of shrapnel hit the wall and just missed my head.
It is simply part of life in this eastern Ukrainian city. It is located some 25 kilometers, about 15 miles away from a very active frontline. And Kramatorsk has been the repeated target of deadly Russian missiles and rockets.