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Early Start with John Berman and Zoraida Sambolin
Credit Suisse Borrows More Than $50 Billion from Central Bank; North Korea Fires Missile Ahead of South Korea-Japan Talks; Top General: Russian Downing "Aggressive", U.S. to Keep Flying Drones; Judge Appears Open to Blocking Abortion Pill After Hearing. Aired 5- 5:30a ET
Aired March 16, 2023 - 05:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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RAHEL SOLOMON, CNN ANCHOR: Good morning, welcome to our viewers in the United States and around the world. I'm Rahel Solomon, in for Christine Romans.
We start with fears of the bank turn well that began the United States that is spreading around the world. Credit Suisse, one of the biggest lenders in Europe, now says it will borrow almost $54 billion from the Swiss central bank as it looks to reassure investors that it has enough cash to stay afloat.
The bank stock is surging in the first few minutes of trading today in Europe. It shares a plunge to a record low on Wednesday. That was after getting cut off by its biggest shareholder.
CNN's Anna Stewart live in London.
So, Anna, markets there are now open. What's the latest?
ANNA STEWART, CNN CORRESPONDENT: Yeah, I think we are seeing a little bit of relief now on the European indices, particularly with the banking stocks.
Let me show you how the European market open in the last hour, you see all the major indices are higher by a around a percentage point, lead, right now by the SMI in Switzerland. So that's their main index.
And in terms of Credit Suisse, check this out. Credit Suisse close the day yesterday down 24 percent. That was actually pairing back some heavier losses during the trading session. And look at Credit Suisse today, you will see the share prices no upper owners went 3 percent. I think some investors saw a little bit of value early this morning, as a result of what the Swiss Central Bank has decided, which is that they would provide a liquidity backstop and Credit Suisse had taken them up on that offer $53 billion in terms of the lone. And they'll be buying background two and a half billion dollars worth of their own debt.
Now, the story obviously does not end there. Not for Credit Suisse which is already undergoing a huge restructure. This is a bank plagued by problems. As a result of the market turmoil you seen, we have to question do the revamped this restructure? Do they accelerated?
Then what about the other European Banks. What about the banking sector, frankly, in general here in Europe in the U.K., but also the United States because so much of this stems from interest rates. The decision to raise rates for so many months and what this means for the balance sheets of these banks.
Now, we will have a very interesting test case today because the ECB, European Central Bank, will be making its decision in the next few hours. Not great timing, perhaps for the ECB. But perhaps I want to talk about the crisis that we saw in Credit Suisse. And the slump in the banking stocks yesterday.
Will they still increase rates by the expected half a percentage point? I don't know. That may have to increase it by a lot less, or perhaps halt the retackle together. I think other central banks will be watching this very closely.
As you know, next week is busy. We have the Bank of England. We have the Federal Reserve. We even have the Swiss national bank all making great decisions.
SOLOMON: And can bet all the central bankers and policy makers, Anna, will be choosing their words very closely and very wisely.
Anna Stewart, thank you.
North Korea launching a long-range ballistic missile just hours before the leaders of South Korea and Japan were due to meet for landmark talks, the first of such visits in 12 years.
The ramped up missile activity from Pyongyang comes as the U.S. and South Korea hold joint navy drills.
CNN's Marc Stewart live in Tokyo with more.
So, Marc, have the leaders of South Korea and Japan discussed North Korea in their meeting? What are you learning?
MARC STEWART, CNN INTERNATIONAL CORRESPONDENT: Hi, Rahel, good morning. Yes. That is expected to be a point of conversation. These North Korean missile launches who shared stress between both of these nations. But that's not the only issue expected to be on the table for discussion, certainly China, and its influence in the geopolitics is going to be something that would likely be discussed.
Will Korea join Japan? The United States, India, and Australia in this alliance which, for now is known as the Quad, to deal with military stability there. Also issues of trade, and commerce are expected to come up for conversation. Some agreements have already been reached even in these early hours of this visit.
I also cannot underscore the importance of the fact that these two men, the prime minister of Japan, the president of South Korea, are standing side by side. You use the phrase, landmark. This has not happened in the more than a decade. The moves between these two nations have been very strong, and for a
number of reasons including wartime issues, wartime abuses. One point of contention has been labor force upon Korean individuals, Korean citizens, when Japan occupied Korea.
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There has been some resolution on this. But it has taken many, many years to come forward. It has left emotional scars that I've gotten in the way of politics and economics in the region. But now in this new landscape, with threats from China, and North Korea, both nations are realizing that there is a very strong need to get along, hence the reason for these conversations, which have now started, Rahel, here in Tokyo.
SOLOMON: Marc Stewart there for us in Tokyo, thank you.
Defense Secretary Lloyd Austin condemning the Russian downing of the U.S. drone over the Black Sea, the first incident of its kind since Russia's invasion of Ukraine began. Austin calling Russia's actions aggressive and bowing that the U.S. will continue flying in international airspace.
(BEGIN VIDEO CLIP)
LLOYD AUSTIN, DEFENSE SECRETARY: This hazardous episode is a part of a pattern of aggressive risks and unsafe actions by Russian pilots and international airspace. And the United States will continue to fly into operates wherever international law allows.
(END VIDEO CLIP)
SOLOMON: CNN's Salma Abdelaziz is live in London with more.
Salma, what is Moscow saying about all of this now?
SALMA ABDELAZIZ, CNN CORRESPONDENT: Well, right now, really. It is all about the Black Sea. That's where all eyes are as there is a mad dash now to see if any wreckage from that MQ-9 Reaper drone can be recovered at the bottom of the Black Sea.
Russia's already said that it has reached the crash site. That is according to two U.S. officials. But it is unclear what they've been able to get, in terms of remnants of this drone.
The United States have already admitted it's highly unlikely that it could reach this place. If you take a look at a map you would see absolutely why that is. The Black Sea is very much a place that Moscow operates on. The Caspian, sorry, you have Crimea there, of course, an area that has been very occupied by Russia for many years, illegally annexed many years ago.
And we understand, from U.S. officials, that the crash site is about 70 miles southwest of Crimea, in one mile deep into the Black Sea, extremely difficult recovery operations. Russia has made it a priority, Moscow, says to get the remnants of that drone. Obtain any information from, of course, what is highly classified technology.
But the United States says don't worry about it. We've already erased remotely the information on that drone. It will not be a security threat. And, quite likely, it is so broken up, so damage there is nothing there at all.
I still expect that there's some hand wringing in D.C. over the course of the next several days. , and the outcomes become clearer. We also have, of course, that huge diplomatic spat with Russia and the United States. Reigning allegations, pointing fingers at each other Russia's blamed the U.S. saying that it took on actions that were controversial, but escalated the situation on the ground, that were provocative.
It says that there was no physical confrontation between the U.S. aircraft and between a U.S. drone and a Russian fighter jet. The United States, of course, absolutely denies this and says that Russia is acting dangerously, and recklessly in this region.
Yet again, it brings that fear, that specter of a possible direct confrontation between Russia and the United States at a highly sensitive time in the Ukrainian war.
SOLOMON: Salma Abdelaziz, thank you.
In the meantime, women nationwide are on edge awaiting a ruling from the Trump appointed Texas judge and a high stakes hearing on the future of a key abortion medication. During the arguments on Wednesday, the judge asked questions which insisted he is seriously considering blocking the FDA's approval of the drug that women in the U.S. have used for over two decades.
CNN's Rosa Flores has more.
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ROSA FLORES, CNN CORRESPONDENT (voice over): The national abortion debate heating up at a federal courthouse in Amarillo, Texas. Inside, the biggest legal battle over abortion since the Supreme Court overturned Roe v. Wade. A federal judge is seriously considering undoing FDA approval of Mifepristone, an abortion medication that is been available for more than two decades in a lawsuit brought by an anti-abortion coalition.
DR. KATHERINE MCHUGH, FELLOW, AMERICAN COLLEGE OF OBSTETRICIANS AND GYNECOLOGISTS: The impact of overruling the FDA's approval of Mifepristone is far reaching. Doctors and patients will not know if we can trust the national guidelines which tell us to follow the standard of care.
FLORES: During the four-hour preliminary injunction hearing the judge raised one possible scenario where he could keep the drug's approval intact and instead block the FDA's most recent moves to make the abortion pills easier to obtain.
UNIDENTIFIED FEMALE: It's a 20-year-old drug that's actually used to save women's lives.
FLORES: Legal concerns, already restricting access. Walgreens announcing it plans to stop the sale of abortion pills in states where abortion remains legal after Republican-led states threatened to sue. In this case, the plaintiffs are arguing the drug is unsafe and the FDA's approval process was flawed.
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The Women's March and other abortion advocacy groups say the plaintiffs went, quote, judge shopping to find someone they believe will rule in their favor. By filing the case in Amarillo, where there is one federal judge, Matthew Kacsmaryk, a President Trump appointee who went from working at a religious liberty law firm on anti-abortion advocacy to the federal bench.
JENNIFER RODGERS, CNN LEGAL ANALYST: It would be unprecedented for a judge, a single judge to say the FDA got it wrong 23 years ago. There's never been an instance where anyone has overturned the ruling of the FDA against the FDA's wishes.
FLORES: Judge Kacsmaryk's handling of today's hearing had been shrouded in secrecy. The judge saying he didn't want to publicize the proceeding out of security concerns, pointing to unnecessary death threats and voice mails and harassment, sparking outrage over the lack of transparency.
UNIDENTIFIED FEMALE: I'm dressed like a clown to show what a circus he's created. It's a joke. He's making the American court system into a circus.
FLORES: More than half of abortions in the U.S. in recent years were medication abortions, most using Mifepristone, and a ruling against this drug would have wide implications.
MCHUGH: And Mifepristone is not just used in abortion care, it is also used for miscarriage management.
FLORES: The judge didn't rule from the bench today and said he'd issue an opinion as soon as possible.
Rosa Flores, CNN, Amarillo, Texas.
(END VIDEOTAPE)
SOLOMON: Just ahead, one of the biggest school districts in America was just been taken over by the state of Texas.
Plus, the burglar tried to take a joyride in a chopper. Did you hear those words correctly?
But first, President Joe Biden's oil drilling dilemma. Did he just pick politics over the planets? We will discuss.
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SOLOMON: Welcome back.
There are now two lawsuits challenging the controversial Biden approved oil drilling project in Alaska. Environmental groups are trying to stop the $8 billion Willow Project, saying that they will jeopardize wildlife in the area and release planet warming emissions.
Earlier this week, the Biden administration gave the greenlight to an oil giant, ConocoPhillips, to extract 600 million barrels of oil from the federal land in Alaska.
Joining me now is Lisa Friedman. She is a climate and environment reporter at "The New York Times".
Lisa, great to have you this morning. Thanks for coming in.
LISA FRIEDMAN, CLIMATE AND ENVIRONMENT REPORTER, "THE NEW YORK TIMES": Thanks for having me.
SOLOMON: So, I think it would be helpful for us to start with explaining what this project is exactly.
FRIEDMAN: So the project, which we have shortened it as the Willow Project, is a vast oil drilling project in Alaska's National Petroleum Reserve. It is led by ConocoPhillips and at its peak, the company believes that it can extract about 180 million -- pardon me, 180,000 barrels a day over the 30-year lifespan, 600 million barrels of oil, that is around 1.5 percent of U.S. production they are looking to do.
So this was just approved by the Biden administration.
SOLOMON: OK. I want to play for you a few clips of comments that the president has made over recent years about drilling, and then we will discuss on the other side of this. Take a listen.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: No more subsidies for fossil fuel industry. No more drilling on federal lands. No more drilling including offshore. No more ability for the oil industry to continue to drill, period. Ends.
There is now more drilling. I have not approved any new drilling.
(END VIDEO CLIP)
SOLOMON: So how do we get from there to here?
FRIEDMAN: A mix of politics and legal constraints, it looks like. A few things are going on. Obviously, the war against Ukraine has been roiling energy markets. This administration has been very concerned for keeping gas prices low and has been calling on oil companies to produce more, to ramp up production in the United States.
Secondly, the entire Alaska delegations, Republicans and Democrats, and unions, business trades, are all in favor of this project.
SOLOMON: Because of all the jobs they say it creates, and the money.
FRIEDMAN: Exactly. Also a factor is the administration according to folks we have talked to, and they felt that they would be on the losing end of a lawsuit if ConocoPhillips sued.
This company has held leases in this region since the '90s. Administrations of both parties have acted favorably in allowing them to pursue and consider permits.
SOLOMON: So some economic ramifications here. Some legal considerations here.
How about political? We are seeing on TikTok, Stop Willow I think the hashtag is, going viral essentially. Help us understand the political considerations in terms of -- I mean, did he lose some younger viewers, some younger voters because of this?
FRIEDMAN: Young voters that I've talked to are furious. This has really felt like a gut punch too many young voters and people who care about climate change who feel that they helped elect President Biden. Also true is that this president has done an extraordinary amount to address climate change. The inflation reduction act the president signed is no joke, it will reduce emissions if it acts as it has intended to about 40 percent below 2005 levels by the end of this decade.
That is enormous, but there is a lot of anger and frustration and a feeling in the environmental community that this was a betrayal of the president's campaign promise.
SOLOMON: Anger, frustration, and now lawsuits?
FRIEDMAN: Indeed.
SOLOMON: Lisa Friedman, great to have you. Thank you.
FRIEDMAN: Thank you so much.
SOLOMON: Quick hits across America now.
Federal and state investigators are leaning into the role that Congressman George Santos had in the sale of a $19 million yacht. He allegedly brokered the deal between two of his wealthy donors.
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(BEGIN VIDEO CLIP)
AUDRY NATH, PEDIATRIC NEUROLOGIST AND PARENT: The data shows that takeovers don't work.
(END VIDEO CLIP)
SOLOMON: The state of Texas is under fire for its plan to oust the current Houston independent school board. The state says that the district failed to meet certain standards.
A manhunt underway in Sacramento for a burglar who police say broke into several helicopters overnight. They say he eventually got one started, crashed it and then fled the scene. And that is something you don't say every day.
Straight ahead, the Chinese dissidents now accusing of billion dollar fraud case.
And the real life princess who is about to join the military.
We'll be right back.
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SOLOMON: Welcome back.
An exiled Chinese billionaire is under arrest in New York now. He is accused in a billion-dollar fraud scheme.
CNN's Selina Wang is in Beijing.
So, Selina, the suspect here is no stranger to authorities in China or the U.S. What can you tell us?
SELINA WANG, CNN CORRESPONDENT: Yeah, exactly, Rahel.
He's been wanted by Chinese authorities for years. And it is shown that he defrauded his followers out of a billion dollars out of his complex investment schemes. So he's charged chair taking advantage of them by promising that these outsized returns, if you invested his cryptocurrency media, or other companies.
He is also known as a Ho Wan Kwok and Miles Guo, and I want to read to what U.S. attorney Damian William said about this case.
He said, quote, Kwok is accused of lining his money with the money he stole, -- a three and a half million dollar Ferrari and even to 36,000 dollar mattresses and financing a 37 million dollar luxury yacht. Now you may remember him, he is also known for being close to former Donald Trump advisor, Steve Bannon. In fact, Bannon was erected in 2020 on his yacht.
Now, in China, Guo reportedly saw a property empire, and while he was facing charges from the Chinese government, fled the country and has been living in the U.S. since around 2015. He has been a staunch critic of the Chinese government for years. Guo founded two nonprofit organizations called the Rule of Law foundation and the rule of law society, which prosecutors alleged he used to amass followers who aligned with his self proclaimed policies when it came to China.
Now there is a bizarre twist to all of this. A person familiar with the matter told CNN that a fire broke out in his apartment when the FBI was on site to execute a search warrant earlier on Wednesday. A spokesperson for the U.S. attorney's office said that the cause of the fire is currently under investigation, we've also reached out to Guo's lawyer for comment on this -- Rahel.
SOLOMON: Selina Wang, live for us in Beijing, thank you, Selina.
In Israel now, widespread demonstrations are underway, once again, against the government's judicial overhaul. Israel's president on Wednesday presented a compromise proposal and a stark warning.
(BEGIN VIDEO CLIP)
ISAAC HERZOG, ISRAELI PRESIDENT (through translator): I'm going to use a phrase I haven't used before, an expression that there is no Israeli who is not horrified when he hears it, whoever thinks that real civil war of human lives is a limit that w will reach has no idea. Precisely now, in the 75th year of the state of Israel, this is within touching distance.
(END VIDEO CLIP)
SOLOMON: And President Herzog's plan to soften some of the judicial changes rejected by Prime Minister Benjamin Netanyahu.
Elliott Gotkine is live now in Tel Aviv.
So, Elliott, what happens now? What happens next?
ELLIOT GOTKINE, JOURNALIST: Well, Rahel, often making those comments, President Herzog was waiting for some kind of feedback. The opposition seemed open to having this kind of discussion based around his so- called, self styled peoples framework for judicial compromise.
But on the tarmac, before he flew to Berlin for a meeting with Chancellor Olaf Scholz, Prime Minister Benjamin Netanyahu seemed to reject them as out of hand.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, PRIME MINISTER, ISRAEL (through translator): Unfortunately, the things presented by the president were not agreed upon by the coalition representatives. Key sections of the outline he presented only perpetuate the existing situation, and do not bring the required balance to the Israeli branches of government. This is the unfortunate truth.
(END VIDEO CLIP)
GOTKINE: So, the situation remains as it was before, President Herzog spoke. This judicial overhaul will continue going through the Knesset. The government says they want to get it through Israel's parliament before the Jewish festival of Passover, which starts at the beginning of April. And if that happens and as that judicial overhaul process continues, the protests will continue as well.
Now, you can't see them behind me right now. This is where the action will be throughout most of the day. This is usually chockablock full of traffic. The roads have been blocked. There are thousands of protesters out mystery, not just in Tel Aviv, but in the country, and it seems that that is like Herzog would've hoped in terms of the compromise, that is not something that is in the offering right now -- Rahel.
SOLOMON: Elliott Gotkine for us, thank you.
Ukrainian President Zelenskyy has warned that a Russian capture of Bakhmut would give Russia a, quote, open road, to capturing other key Ukrainian cities in the East. The U.S. says that Russia is making, quote, small tactical advances there, but at great cost.
CNN's Melissa Bell, reports.
(BEGIN VIDEOTAPE)
MELISSA BELL, CNN CORRESPONDENT (voice-over): Wagner fighters at an industrial plant inside Bakhmut. They are making very gradual advances, but at huge cost.
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