Return to Transcripts main page
Early Start with John Berman and Zoraida Sambolin
Five Americans Released From Prison, But Under House Arrest; Mickelson Denies Gambling Allegations Made In New Book; American's Credit Card Debt Hits $1 Trillion. Aired 5:30-6a ET
Aired August 11, 2023 - 05:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL)
[05:32:14]
RAHEL SOLOMON, CNN ANCHOR: Welcome back.
And now to Iran where five Americans are a step closer to freedom in a potential deal calling for the U.S. to release $6 billion of Iranian funds that are currently frozen in South Korea. We know the identities of three men held for years. You can see them here. They've been released from prison but do remain under house arrest in Iran.
Secretary of State Antony Blinken calls this, quote, "a positive step."
(BEGIN VIDEO CLIP)
ANTONY BLINKEN, SECRETARY OF STATE: There's more work to be done to actually bring them home. My belief is that this is the beginning of the end of their nightmare.
(END VIDEO CLIP)
SOLOMON: CNN's Jomana Karadsheh joins us from London. Jomana, tell us more about what we know about this deal because apparently, the money is only one part of this.
JOMANA KARADSHEH, CNN INTERNATIONAL CORRESPONDENT: Well, look, Rahel, we don't really know all the details of this deal -- this agreement. But what we do know is that this could potentially mean freedom for these five wrongfully detained Americans in Iran -- some would say hostages.
We don't know the identities of two of those prisoners but we do know that four have been held in the notorious Evin Prison. One had been under house arrest previously. All five, according to the announcement on Thursday, were placed on house arrest, according to the lawyer of one of those prisoners. They were being kept in a hotel in Tehran in much better conditions than they had been facing previously.
Now, three of those detainees are well known to the American public.
You've got Siamak Namazi who has been the longest-serving American prisoner in Iran. He has been held since 2015. And as you'll recall, he made that really brave move a few months ago speaking to our Christiane Amanpour from inside Evin Prison, making that appeal to President Biden to get him out of there. Very courageous -- a major risk he took by speaking to CNN. And he said these are desperate times that call for desperate measures.
And the other two, Morad Tahbaz and Emad Shargi, have been held by Iran since 2018.
This was a very, very delicate negotiation -- a complex one that involved third-country parties. You've got Switzerland, Qatar, as well as Iraq and the UAE also involved in some way. It will involve the unfreezing of about $6 billion of Iranian funds. This is not U.S. money. These are Iranian funds in South Korea accounts that the Iranians now will have more access to. And also, the release of five Iranian prisoners from U.S. detention.
We don't know when this is going to happen. This was a first step, Rahel, in a very complex negotiation and it's not over until these Americans are on a flight and out of Iran.
[05:35:03]
SOLOMON: Yes. As Sec. Blinken said, essentially, it's the beginning of the end. A lot more to watch here.
Jomana Karadsheh, thank you.
All right, let's turn to India now. Last month, the Indian government announced an abrupt ban on exporting non-basmati white rice. The move has sent some U.S. shoppers into panic-buying mode, but it's really raising concerns for the world's most vulnerable and food-insecure populations.
CNN reporter Vedika Sud reports now from New Delhi.
(BEGIN VIDEOTAPE)
VEDIKA SUD, CNN REPORTER (voice-over): Dozens of panic-stricken buyers scrambling to buy Indian rice in a store in Dallas just a day after India, the world's largest exporter of rice, imposed a ban on shipments exporting non-basmati rice. The USA Rice Federation says it's got enough U.S. rice to go around. But New Delhi's export restrictions have triggered fears of a global food crisis.
India's rice supply has been hit hard after heavy rains devastated large regions where the staple is grown, crippling livelihoods.
Last month, the Indian government said it was necessary to hold all exports of non-basmati rice to calm domestic rising prices and ensure adequate supply at home.
In a village in north India, third-generation farmer Satish Kumar sits by his paddy field that's been submerged for over a month. It's destroyed his newly-planted seedlings. Farming is Kumar's only source of income. He's taken loans to recultivate his land. SATISH KUMAR, RICE FARMER: (Speaking foreign language).
SUD (voice-over): "I've suffered huge losses," he tells me. "Now nothing can be grown on this land until November. Here, the rice export ban is a double whammy."
KUMAR: (Speaking foreign language).
SUD (voice-over): "It's going to have an adverse impact," Satish Kumar tells me. "We won't get a higher rate if rice isn't exported. The floods were a death blow to us farmers. This ban will finish us," he says.
The South Asian nation accounts for more than 40 percent of world rice exports globally. In Delhi's rice export hub, traders face uncertainty as rice stocks are piling up.
ROOPKARAN SINGH, RICE TRADER, MAHAVIRA RICE LAND: (Speaking foreign language).
"The export ban has left traders with huge amounts of stock. We now have to find new buyers in the domestic market," trader RoopKaran tells me.
SUD (on camera): Many of the world's poorest countries depend on imports of Indian rice. Economists warn a prolonged ban could leave the world's most vulnerable people with even less to eat.
SUD (voice-over): Global food prices have soared to a near 12-year high, according to the United Nations Food Agency.
New Delhi's ban comes in the week after Russia's targeting of Ukrainian grain shipments, driving up grain prices across the world.
ARIF HUSAIN, CHIEF ECONOMIST, WORLD FOOD PROGRAM: Oil countries, food-importing countries, poor people in West Africa -- they are at the highest risk. It is about does the food stay affordable for the poorest of the poor in countries around the world.
SUD (voice-over): Almost 40 percent of the people on Earth rely on rice for sustenance. A shortfall in Indian rice could leave millions hungry.
Vedika Sud, CNN, New Delhi.
(END VIDEOTAPE)
SOLOMON: And ahead for us on EARLY START, the new CEO of X is explaining why the company is ditching the Twitter brand.
We'll be right back.
(COMMERCIAL)
[05:42:00]
SOLOMON: Welcome back.
X CEO Linda Yaccarino is opening up about Twitter's massive rebrand, which happened in the first two months of her tenure. Yaccarino took over the CEO role from Elon Musk, of course, after months of turmoil and she's now explaining why Twitter retired its highly-recognized brand name.
(BEGIN VIDEO CLIP)
LINDA YACCARINO, CEO, X: The rebrand represented, really, a liberation from Twitter -- a liberation that allowed us to evolve past a legacy mindset and a thinking.
(END VIDEO CLIP)
SOLOMON: CNN Business Writer Clare Duffy joins me now. So, Clare, this was her first interview as CEO of X. Made a lot of news. Covered a lot of ground. What were the big takeaways?
CLARE DUFFY, CNN BUSINESS WRITER: Yes. So Yaccarino did talk a lot about this rebrand and sort of what the vision for the platform is. She talked about some new features like video calling and payments, although I have to say it's hard to see how some of those things will play out. This platform has had a number of site reliability issues over the last couple of months just trying to operate as Twitter.
Yaccarino also tried to clarify what her role is versus Elon Musk's role and who is really leading the future of this company. Let's listen to what she said.
(BEGIN VIDEO CLIP)
YACCARINO: Now let's go to our roles and the clarity of that because it's pretty straightforward -- pretty straightforward. Elon focuses on product design. He leads a team of extraordinary engineers and focuses on new technology. So think about it as Elon is working on accelerating the rebrand and working on the future.
And I'm responsible for the rest -- running the company, from partnerships to legal, to sales, to finance -- all the things -- what we would --
SARA EISEN, CNBC FINANCIAL NEWS ANCHOR: "And you have autonomy in doing that?
YACCARINO: Yes, I have autonomy in doing that.
(END VIDEO CLIP)
DUFFY: So I think it's really interesting. I mean, in some ways, that clarifies something that we already knew to be true. But it's interesting to hear her say it -- that he is still leading the future and the vision of this company and she's responsible for trying to make it a viable business despite the fact that many of Musk's decisions have caused business problems for this company.
SOLOMON: Yes.
DUFFY: She did say that the company is close to break even after Elon Musk said the company was cash flow negative just last month. And she touted some of her brand safety initiatives for advertisers. But just to provide some context around that, one of the controls that launched just this week allows advertisers to avoid having their ads next to things like targeted hate speech, sexual content, gratuitous gore, spam, drugs, which implies that all of those things are still on the platform.
So I think a long way, still, for her to go in really convincing all of the advertisers that were there before the takeover to return to the platform.
SOLOMON: Really quickly, Clare -- I mean, one of the things about the last year is how many layoffs they did. I mean, what did she say, if anything, about hiring? I mean, the future of the company moving forward in that regard.
DUFFY: She did say that the company is sort of returning to growth mode. That she is going to be more -- hiring moving forward, which is interesting after months of cost-cutting, these mass layoffs. The company went from 8,000 people to about 1,500 people.
But she did strike an optimistic tone. She said we're hiring. We're moving into the future. But again, I think it will be interesting to see who wants to work for this company after all the chaos.
SOLOMON: There will be a lot interesting to see in the future with X, or Twitter -- whatever you want to call it.
Clare Duffy, great to have you.
DUFFY: Thanks.
[05:45:00]
SOLOMON: All right, Phil Mickelson denying really stunning allegations about his gambling habits made in a new book.
Andy Scholes has this morning's Bleacher Report. Hey, Andy.
ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Rahel.
So, yes, Phil Mickelson -- he's made no secrets about his struggles with sports gambling, but a book that's going to be released later this month alleges that the 6-time Major champion's wagers go well beyond what had previously been known.
In an excerpt from the book that was published Thursday by the Fire Pit Collective, professional gambler Billy Walters says Mickelson considered a $400,000 bet on the U.S. team to beat Europe in the 2012 Ryder Cup. Mickelson was a member of that U.S. squad that ended up losing. Walters wrote that he doesn't know if Mickelson ever placed that bet. But Mickelson released a statement on social media last night denying
the allegations, saying, "I never bet on the Ryder Cup. While it is well known that I always enjoy a friendly wager on the course, I would never undermine the integrity of the game.
I have also been very open about my gambling addiction. I have previously conveyed my remorse, took responsibility, have gotten help, have been fully committed to therapy that has positively impacted me and I feel good about where I am now."
Now, in his book, Walters also claims that Mickelson's total gambling losses are likely much closer to $100 million and that he's wagered more than a billion dollars over the last 30 years. Now, CNN has not been able to independently verify these claims.
Walters was convicted of insider trading in 2017 and served five years in federal prison. In his book, he says -- Walters says he believes Mickelson was to blame for that prison sentence.
All right. Elsewhere, week one in the NFL preseason kicking off last night with the Patriots and Texans. The second pick of the draft, quarterback C.J. Stroud making his debut and one to forget for the former Ohio State quarterback. He played just two series -- the first ending on this interception right here. Stroud saying, though, afterwards -- after the win, it was good to finally get his NFL feet wet.
(BEGIN VIDEO CLIP)
C.J. STROUD, HOUSTON TEXANS QUARTERBACK: I thought I played solidly. It felt good to get hit again and just get back in the groove. I just think the preseason -- that's what the preseason is for and it's important just to get back and put your feet back in the water. So I'm not -- of course, I'm not super excited how I played. I didn't get to play a lot. But just getting my feet in the water and learn from my mistakes, and just keep going.
(END VIDEO CLIP)
SCHOLES: All right. And finally, golfer Collin Morikawa is working to help the recovery efforts in the deadly fires that have just devastated Maui. The 2-time Major champion says he's going to donate $1,000 for every birdie he makes during the PGA Tour's FedEx Playoffs.
Now, several of Morikawa's family members were born and raised on Maui and his grandfather used to own a restaurant there. So he posted his pledge on Instagram along with the menu from that restaurant.
Now, Morikawa finished the opening round of yesterday's St. Jude Championship with six birdies. He's going to begin today in the second round, tied for third place.
And Rahel, he says he just wants to do anything he can --
SOLOMON: Yes.
SCHOLES: -- because he used to go there as a kid and Maui holds a special place in his heart.
SOLOMON: Yes, and it's just been devastating to see all of the damage.
Andy Scholes, great to see you. Have a nice weekend.
SCHOLES: All right, thanks.
SOLOMON: All right, coming up for us, more Americans are failing to make payments on their credit cards and car loans. We have the new report coming up next.
(COMMERCIAL)
[05:52:18]
SOLOMON: Welcome back.
It has been a busy week in the business world with new economic data and reports coming out pretty much every day. But one of the big headlines was debt -- and credit card debt to be specific. Data from the New York Federal Reserve shows that Americans' credit card balances rose by $45 billion in the second quarter to surpass a record $1 trillion. That is up 4.6 percent from the last quarter.
I want to now bring in Mark Zandi. He is the chief economist at Moody's Analytics. Mark, always great to see you.
So how do we interpret this? Higher than pre-COVID, but how concerning is this really?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS (via Webex by Cisco): Well, it shows -- Rahel, it shows a lot of stress among low- and middle-income households -- folks in the bottom third -- half of the income distribution. So less than $70,000 annual income.
They are under a lot of pressure. High inflation has cut into purchasing power and they have to turn to their credit cards and consumer finance loans to help kind of fill the void, and it's now resulting in an increase in the delinquency and default.
But having said that, the folks in the top third -- top half of the income distribution, no problem. They don't have any debt whatsoever. If they have a mortgage, they've got a 30-year fixed-rate mortgage that's locked in at very low interest rates. So there is no difficulty there at all.
But for low-income households, I do think it indicates a fair amount of financial stress.
SOLOMON: And just to put a fine point on it -- I mean, how do we compare this to what we all lived through and experienced in 2008?
ZANDI: You can't compare it. This is no comparison. I mean, in 2008- 09, delinquency rates were much, much higher -- rising much more rapidly and it was across all forms of household debt. Not just cards and consumer finance, but it was auto loans. And, of course, mortgages was the real big problem and that's the biggest chunk of household debt is the mortgages that they owe. And at that time, an enormous increase in defaults and foreclosures, and that's not happened in this go-around.
SOLOMON: Yes. We should say -- I mean, even according to your report, that mortgage loan delinquencies are actually below COVID levels. So -- I mean, that is certainly a sign of good news.
Mark, one thing that you and I talk about a lot is that consumer spending thus far, that the labor market thus far has certainly done a lot better than most would have expected despite the extraordinary amount of interest rate hikes and inflation. Do you see that continuing? What do you see?
ZANDI: I do. It's amazing resilience. Consumers are really hanging tough. They're not -- they're not spending with abandon -- that's not what's happening here -- but they are hanging in there. And there's good reason. Unemployment is 3.5 percent. That's about as low as it gets. There's lots of jobs.
Inflation has been a problem but the good news is that it is coming back down and now wage growth is stronger than inflation, so people's purchasing power is improving.
[05:55:04]
We talked about debt loads.
You know, the other thing is asset prices -- what people own -- stock prices, housing values. They've kind of gone flattish here over the last year or so, but you've got to put that into context. They're way up from when the pandemic began.
So -- and there's, of course, a lot of excess saving --
SOLOMON: Yes.
ZANDI: -- that folks -- particularly, high-income households -- built up during the pandemic.
So lots of reasons why consumers are in the game and doing their part, and why odds are pretty good here we'll avoid a recession.
SOLOMON: Mark, that said -- and really quickly, unfortunately, because we're running out of time -- what are you -- what are you keeping your eye on?
ZANDI: Sure.
SOLOMON: I mean, what's the biggest risk to the forecast from your perspective?
ZANDI: Well, the most immediate concern is oil prices moving up. Nothing is more pernicious on the economy than higher oil prices. It affects us directly and then, of course, it affects inflation expectations.
And the other thing, Rahel, is the government shutdown. You know, we're going to have one in all likelihood. It's just a question of how long. Hopefully, not too long.
SOLOMON: We will be watching. And, Mark Zandi, I'm sure I will talk to you much more in the future. Thank you, Mark. Have a great weekend.
ZANDI: Thank you.
SOLOMON: And thank you for joining us. I'm Rahel Solomon.
Coming up next on "CNN THIS MORNING" more on CNN's breaking news coverage of the Hawaii wildfires. Were people given enough warning to escape?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There's a lot of people -- more than 36 people that didn't make it. I tried to warn as many people as I could. I went and got my kids and we were stuck. And now I got the news that is like so many friends that -- I don't know if they made it.
(END VIDEO CLIP)
(COMMERCIAL)
