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First Move with Julia Chatterley
Villages face Relentless Shelling Outside Kherson; Shanghai Residents Living Near COVID-19 Patients to be Sent to Quarantine Center; Former Russian Foreign Minister Assesses Kremlin Strategy; Former Russian FM: If Putin loses in Ukraine, he will Double Down on Repression and Propaganda in Russia; Deadly Clashes in Sri Lanka; Bitcoin Regains some Ground after Plunging in Value. Aired 9-10a ET
Aired May 10, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, CNNI HOST: You're watching CNN. I'm Max Foster in London. Now in Ukraine, Russian forces have launched a major strike on the southern
port city of Odessa, firing hypersonic missiles at a shopping mall and two hotels at least one person was killed.
In Mariupol the Azovstal Steel Pant came under heavy bombardment overnight. Ukrainian soldiers are trapped there and many are said to be badly hurt.
Combat Medic - who led the soldiers in a Battle Hymn, which went viral last week, sent a defined message on Facebook saying they will fight to the
Now with Ukraine's ports at a standstill and the Russian blockade enforce President Zelenskyy urged the international community to step in to prevent
a global food crisis. His remarks followed a visit to Odessa by Charles Michel, the President of the European Council. Before the invasion, Ukraine
was the world's fourth largest exporter of maize.
(BEGIN VIDEO CLIP)
VOLODYMYR ZELENSKYY, UKARINIAN PRESIDENT: This is not just a strike at Ukraine. Without our agrarian export, dozens of countries in various
regions of the world have found themselves on the brink of food deficit. With time the situation can truly become disastrous. Politicians have
already begun looking into ramification to the price crisis and food shortage in the countries of Africa and Asia.
(END VIDEO CLIP)
FOSTER: Also in Ukraine is the German Foreign Minister Elena Baerbock visited Bucha, the sort of North Kyiv, which is the focus of a war crimes
investigation. She's the first member of the German Cabinet to travel to Ukraine since the Russian invasion.
In southern Ukraine though Kherson region is vital to Russia's plan to establish control from the Donbas in the East to Crimea and official in
Moscow has said Russians plan to stay there forever but the battle for control is making life a nightmare for villagers trapped by endless. CNN's
Nick Paton Walsh reports.
NICK PATON WALSH, CNN INTERNATIONAL SECURITY EDITOR (voice over): Both nothing and everything has changed here. The front lines have barely moved
on the road to the Southern City of Kherson, the first Russia captured in the six weeks since we were last here.
But instead, since then, almost everything in between has been torn up by shelling that literally does not stop trapping people who physically cannot
flee in the churn of a brutal stalemate. Here in the village of Shevchenko are two neighbors both could--
We moved to the yard as the shells get closer. Lynette still manages to get down to his wife's basement shelter. She's installed a plank on the way
here to help him rest. They used to get dressed up to go to bed. It was so cold down here but mention leaving - a night spent here focused her hatred.
Across the road is Valentina alone. Shells always seem to just miss her.
WALSH (voice over): Overwhelmed, yet hauntingly eloquent. It's not so much that life goes on here, but that it has nowhere else to go these men
selling cow's milk although that's not what Leonid has been drinking. Hello to everyone he says 40 times a day and night they shell. Barely a window
was intact shrapnel flying through the class daily. Yesterday was - turn but she can't leave as she's waiting for her son to return from the war in
Our children are all at war. She says my son is a prisoner. If he comes back and if I have gone it's like I've abandoned him. We wait. Hope worry.
He is alive and we will live. On the road out of here the shrapnel rises fiercely above the warmth fields Nick Payton Walsh, CNN, Shevchenko,
FOSTER: Our other top story is linked to the stunning nerve rattling volatility in the global stock market so U.S. stocks fell to their lowest
levels in over a year Monday on continuing concerns about the war in Ukraine, a slowing Chinese economy as well as efforts by central banks to
contain soaring inflation.
The selling pressure taking a bit of a breather today though Wall Street Futures are pointing to a higher open tech stocks in the lead. European
shares are also on the rise. Rahel Solomon joins me, bit of a better picture today try and make sense of it for us?
RAHEL SOLOMON, CNN CORRESPONDENT: Hi, Max. Yes, it feels like a sight for sore eyes. Finally, some green on the screen, but not a ton of conviction
that this is the beginning of a turnaround or that this will be a turnaround Tuesday, because to your point, we have seen these sorts of
momentary breathers in the midst of a larger sell off.
I want to point you to yesterday and how the averages closed, the DOW closed down about 1.9 percent. The S&P 3.2 percent and the NASDAQ closed
lower about 4.9 percent. And if you go back to last week, they all closed lower.
In fact, it was the fifth consecutive week of negative closings for all of the major averages for the S&P though it was its longest negative run in a
decade. So why Max part of you know the macro factors that you've already mentioned, the war in Ukraine, inflation supply chain challenges, but also
this earnings season, we are hearing more from companies citing weak demand and their outlook and their forecasts.
And that is clearly creating some certainty. In fact, it is the most mentioned of weak demand since Q2 of 2020. So this is not great news for
investors when companies start signaling downs the pipe, but they're starting to see weaker demand. And you're seeing that sort of jitteriness,
and that anxiety reflected in the markets Max.
FOSTER: Yes, and if we look at some of the individual stocks, those stocks were doing incredibly well during the pandemic, some of them doing just as
badly post pandemic is a very unforgiving market, isn't it for some of them?
SOLOMON: Exactly. It's almost as if the pandemic darlings as they were called, that soar during the pandemic have now soured. Let's point at
Peloton perhaps the perfect example of a pandemic darling at one point Max it was up about $170 a share. It is now closer to about $12 a share.
That is a remarkable fall from grace for Peloton, in fact, they just reported about an hour ago. Last quarter sales tumbled 15 percent from a
year ago, they lost $757 million last quarter. The company's saying that they want to prioritize cash flow.
And it's a similar sentiment in fact, because Uber - Uber CEO Put out a note over the weekend an internal memo to its employees, essentially saying
that there had been a seismic shift in the market and that they were prioritizing free cash flow.
Max to your point it is clearly an unforgiving market and these companies these high growth tech companies that had really sore during the pandemic
and had prioritized growth over profits, it appears that's no longer going to work for investors and some companies like Peloton and Uber seem to be
acknowledging that now.
SOLOMON: OK, Rahel Solomon, thank you very much indeed. So markets are not the only concern U.S. gas prices hitting all-time highs amid rising
inflation. The national average price of regular gasoline is now $4.37 a gallon according to AAA. That takes out the previous record set two months
Later today, President Biden will deliver remarks that outline his plans to fight inflation. Jeremy Diamond is live at the White House on that one for
us. And it's such a difficult job to get this right because someone's always going to suffer isn't it?
FOSTER: Whatever he does?
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT: Yes, that's right. And listen, President Biden is delivering this speech amid incredible political
headwinds, a majority of Americans, according to CNN polling; don't believe the economy is in good shape or heading in the right direction.
They believe that President Biden's policies have hurt the economy, and they don't believe that he's doing enough to combat inflation. And so that
is why you're going to see President Biden step up to the podium today to try and combat some of that perception that he's not doing enough on
inflation, to talk about what he's been able to do so far, including on energy prices, for example, as gas prices in the United States hit record
The President is going to talk about his efforts to release oil from the Strategic Petroleum Reserve. He's going to talk about this waiver on the
sale of ethanol, ethanol gasoline, and he's also going to try and talk about some of his other efforts to lower costs for Americans overall.
He's going to lay out some of his plans for the future, including some of the proposals that we saw in his Build Back Better Act, which never
ultimately became law because not only of Republican opposition, but also because of opposition from some Democrats, a couple of key Democrats,
including Senator Joe Manchin.
But the President is also going to be trying to use this speech to contrast his agenda, his proposals with that of Republicans, most notably the tax
proposal put forward by Senator Rick Scott of Florida, who's the Chair of the Republican Senatorial Campaign Committee.
This is a proposal he put forward back in February that the White House says, is going to raise taxes on millions of Americans and President Biden
going to try and use that proposal to paint Republicans with a broad brush and to contrast those policies with his own.
But make no mistake, a lot of headwinds for President Biden heading into these midterm elections, and also a struggle to get these inflationary
pressures under control. That's largely because a lot of this comes down to what the Federal Reserve is doing? And so you can bet the President Biden
is going to hope that that latest rate hikes from the Federal Reserve will really have an impact on inflation going forward Max.
FOSTER: Jeremy Diamond at the White House, thank you! As China struggles to overcome its COVID crisis, Shanghai further tightening lockdown measures
despite the number of infections now falling. Now even people living near individuals who test positive have been forced to go to quarantine centers.
Selina Wang joins us live from Kunming, China. She's on day 18 of a 21 day mandatory quarantine at least we're keeping you company. I guess there is
that. But it's extraordinary to think that they can tighten even further on people's lives in Shanghai; they're really doubling down on this zero COVID
SELINA WANG, CNN CORRESPONDENT: I mean people in Shanghai Max, they've been trapped in their homes for more than a month and the restrictions are only
getting more draconian. Just last week, Xi Jinping said he was going to double down on zero COVID and punish anyone who questions the policy. And
so we're seeing these local officials under pressure to pursue zero COVID at all costs.
And Shanghai people are outraged over this new policy that is sending entire apartment buildings to quarantine facilities all because just one
person in the building tested positive for COVID. This is happening to apartment blocks where they have these communal bathrooms and kitchens.
But even in apartments where the person who tested positive is confined to a single room, you are still seeing their entire floor, the entire floor
above them and the floor below them. All three floors are being sent to government facilities.
This is causing fights between policemen and the residents in this one viral video you can see the resident arguing with the police who are saying
they're going to need to remove them by force because someone on their floor tested positive for COVID.
And you can see the worker in the hazmat suit the policeman saying "It's not that you can do whatever you want, unless you are in America. This is
China. Don't ask us why this is based on the country's epidemic prevention policy. That's it.
That was a response they gave to these residents who are outraged because they're saying we've tested negative why are we being forced out of our
homes? Now we have reached out to the Shanghai government for further clarification on this. We've yet to receive a response.
We do not know if those residents were ultimately sent to quarantine facilities or not. But it is heavy handed policies like this that are
making residents feel like they've lost any piece of freedom that they had left during these lockdowns.
And many of these videos you can also see that residents have actually been forced to hand over their keys to quarantine workers while they're being
stuck in these facilities so that workers in hazmat suits can spray disinfectant all over their homes, bring it indiscriminately over their
couches, furniture, artwork, spraying it all over their rooms. And in Shanghai right now people are not actually so much fearful of getting in
the virus itself.
WANG: But they're scared of testing positive and being sent away forced out of their homes to these quarantine facilities which many of them are in
extremely unsanitary and rundown condition, with many beds crammed together and lights on 24/7 with dirty toilet, sometimes even a lack of toilet
paper. Some of these facilities were put together so quickly that they don't even have beds, just wooden slats, for people to sleep on.
Now these lockdown policies they are causing extreme mental exhaustion for people it's taking a huge economic toll but right now in China, where zero
COVID is tied directly to the leadership of China's Supreme Leader. Critics are saying that zero COVID is now more about politics than science and Max.
It is here to stay.
FOSTER: Yes. I mean, it's just going to - it's certainly no sign of the going away whatsoever. Selina Wang, thank you very much indeed for joining
us. Now still ahead more on the war in Ukraine, we'll speak to Russia's Former Foreign Minister live on the show.
And we'll have more of the business news just ahead including why fears over the U.S. economy are proving kryptonite, even for crypto?
FOSTER: To remind of our top story the onslaught on the Ukrainian City of Odessa by Russian forces. Missile strikes have hit residential areas
destroying a shopping mall at a luxury hotel resort as well. Hypersonic missiles were amongst those deployed in the city.
While in Kharkiv new drone video shows a Russian tank being targeted close to where a civilian convoy was fired upon earlier on.
Let's speak to Scott McLean. He's live in Lviv for us keeping across all of these things and. Obviously Odessa a key target because it's so important
SCOTT MCLEAN, CNN CORRESPONDENT: Yes, Max. But what is unclear at this stage is these precise locations that were hit what is the strategic value
of those because you know, Odessa has been a huge target in recent weeks. Oftentimes the target is infrastructure bridges, that kind of thing.
But this was not that and so one of the - one of the missiles struck a series of warehouses that caught fire potentially there was some strategic
value there but others are real head scratchers seven missiles according to the Ukrainians were fired on at a mall.
This is a normal western style mall that had lots of internationally recognized stores in it. It was actually said for an expansion to the tune
of tens of millions of dollars it was one of the largest shopping centers in Southern Ukraine.
MCLEAN: And you have to wonder why it was hit. Now remarkably, only one person was killed there, a handful of people were injured. But surely there
could have been more if the mall was actually opened. The reason that it was closed Max is because, well, the government had imposed a curfew that
came into effect Sunday night and only lifted this morning anticipating there would be some kind of attacks on May 9 on this May 9, holiday day.
You mentioned that luxury hotel as well. This is in the southern part of Odessa. It's right on the beach there. It's owned by a pro-Russian
businessman was often frequented by Russian elites in the media and politics, again, not really clear why this was a target or if it was the
There was another hotel in a seaside village south of Odessa, this village is very close to a bridge that's been hit a few times by the Russians since
the war began, it is the only road or rail link between that far southwest corner of the Ukraine and the rest of the country so again, a lot of
questions why this hotel in particular would have been hit?
And one other thing to mention, Max, as you mentioned, the actual missiles that's been used a lot of has been made of these, it's a Kinsel missile.
What is significant about this? Well, it has a longer range, it has a bigger payload, it's bigger. And also it can be fired from fighter jets as
well. Other missiles can be fired from fighter jets as well.
But it makes it more difficult for the air defense systems to pick up. And so considering it can be fired from all different directions have a longer
range is bigger, it's maybe a little bit more dangerous than some other missiles that we've seen used in this war. And this is only the second time
that the Russians have used that kind of missiles since the conflict began Max.
FOSTER: They all making progress is very slow progress, though according to Western intelligence. We're hearing more stories about how Russian officers
are sometimes defying orders. Is this all linked to the, you know, issues with morale within the forces?
MCLEAN: Yes. So, Max, this is according to U.S. defense officials. So and they're citing anecdotal evidence. So I think we need to treat this with a
little bit of caution or treat it take it with a grain of salt. But what this defense official is saying is that anecdotal reports of Russian troops
and even mid-level officers either not obeying orders or not obeying orders with the same kind of enthusiasm that you would normally see in these type
These are orders to move forward in their march forward to retake the Donbas area. Now, the Americans have said for a while that the Russians
continue to struggle with morale issues, and in this case, they also say that they're struggling with some resupply issues.
These were the same kind of issues that really plagued Russian troops as they tried to take Kyiv. And that's part of the reason it seems why they
ended up retreating Max.
FOSTER: OK, thank you so much for joining us from Lviv. That's the view then from Ukraine. Let's consider Russia standpoint here. Joining us is
Andrei Kozyrev, Former Russian Foreign Minister, Author of the book "The Firebird: The elusive fate of Russian democracy". Andrei is in Washington,
D.C. for us. Thank you for joining us.
I know you're a part of the Russian Delegation that effectively negotiated after, you know, what information of Ukraine was recently about what they
would do about their nuclear weapons? And, you know, Ukraine gave up their nuclear weapons and irony being that they now feel threatened by those
weapons on the Russian side.
ANDREI KOZYREV, FORMER RUSSIAN FOREIGN MINISTER: Yes, it's not only irony, but its betrayal. Because we negotiated on the Russian side because the
Russian Foreign Minister with the Secretary of State of the United States at that time, it was Christopher.
We slept in Budapest, and that's why the product of our writing, joint writing actually is known as the Budapest memorandum, which provided
assurances for Ukraine in their borders, which were at that time, universally recognized.
And those included Crimea, and the whole of Donbas. And those assurances were violated by Russian side blatantly, and brazenly first time in 14 when
they annexed the Crimea, and then the Eastern part of Ukraine, and now it is violated altogether, you know, with this invasion, and it's now for the
United States and Great Britain, which were also initial participant but there were many others after that supporting this memorandum to live up to
KOZYREV: So yes, I was at the beginning. And I can tell you that it's very painful to see that my country that Russia is the wild leader of the most
important international agreements and norms. And that's why I don't hesitate to call for strong support military support to Ukraine and
sanctions as severe as possible against the Putin's regime.
FOSTER: Other Russians have got the same access to the same kind of information. So they feel that the aggressive side is coming from the West,
and that the agreements were undermined by Western nations and Ukraine. How would you argue that to a Russian that's just seeing Russian state media
KOZYREV: Well, I try to be on Russian not state media, because it's impossible. They don't invite me or they don't kind of the probably punish
those who try to invite me to state media. But I speak on some other free media, which is unfortunately now immigration in around there, you know,
like Czech Republic, Poland and others, and other countries, but they try to penetrate the new iron curtain.
And what we are taught telling, or trying to tell the Russian people, the same what I told you that it's absolutely inhuman war. It's a war of
choice. It's the war, just for aggrandizement of one person. But it is also important, in my mind to tell the Western audiences that they will pay
double price, they already start to pay double price for being timid with their response.
It was very timid in 14, but it's still puzzling, you know, not only Macron, but even, I hate to say President Biden starts to speak of the off
ramp or face saving for Putin.
I mean, that's ridiculous. First of all, he did not steal, base conflict, and there's more, it still should be done with more weapons. And, you know,
it's like, you come to oriental bazaar, with an elaborate business plan, which starts with what you want to, and then you start to tell the guy
there that you are worried what he will tell his family, if he loses in this bargain.
And he is just - he does not understand what you're talking about. He will come back home, if beaten, and probably if he won, and beat his family. He
will beat his wife or his wives. And that's what Putin if he loses in the Ukraine, he will come back and double down on repression and propaganda.
FOSTER: I just want to ask you a wider global question linked to this, because you were part of the team that negotiated with Ukraine to give up
its nuclear weapons. And now they don't have that deterrence.
We saw a similar thing happened in Libya, people are arguing and then we have a situation where North Korea is seeing what happened to Ukraine and
Libya, and seeing a very good reason never to give up its nuclear weapons, in fact, to get more aggressive about developing nuclear weapons, is that
your concern off the back of what happened to Ukraine?
KOZYREV: That's the real concern, and not what is the off ramp for Putin. But the problem was what is off ramp for the West? Because if people start
to understand that, that those assurances are not honest, then the whole system of international relations will be broken.
As you said, people all over the world not only in those rogue countries, but in good countries like Ukraine they will start thinking that there is
no international order they can rely on. There are no assurances they can rely on. There are only nuclear weapons they could - which could provide
them a degree of security or at least deterrence because that's what deterrence was for 70 years. That's why the Soviet Union never attacked the
United States or NATO for that matter.
KOZYREV: Because they knew that they will get it back and it is suicidal act. So, yes, the whole thing the whole world will be will go muted.
FOSTER: OK and Andrei Kozyrev thank you very much indeed for your insight Former Russian Foreign Minister. Stay with us Market Open coming up.
FOSTER: Welcome back! In New York, the opening bell has sounded on Wall Street and U.S. stocks are higher in early trading a bit of a respite from
the intense selling pressure we've seen over the past few sessions, thanks in part to a pullback in bond yields.
NASDAQ falling more than 4 percent on Monday is still down more than 20 percent on the year-to-date, would you believe? The big question on
investors' minds is when will the selling pressure ease? John Petrides is joins us. He's the Portfolio Manager to Tocqueville Asset Management. So
John, are we closer to the end of this selling the multimillion dollar question?
JOHN PETRIDES, PORTFOLIO MANAGER TOCQUEVILLE ASSET MANAGEMENT: Yes, I mean, I think we are clearly closer. I mean, you have nearly - particularly the
NASDAQ a 25 percent sell off year-to-date S&P down 16 percent. And it's not just stocks either it's you know, the bond market, the high quality U.S.
bond market, the Barclays aggregate is off 10 percent The high yield bond markets off, you know 11 percent.
So, you know, this is a broad base sell off and for the most part, this is just a recalibration of evaluations interest rates, when interest rates are
down low like we've had valuations and particularly in stocks and asset classes go up.
And now you're having that, you know, sort of reckoning and we've had a massive move on the interest rate side of things going higher despite the
Fed still have what seem to be early stages of quantitative tightening.
And then you have valuations are coming down and for the first time in a long time you know stocks are attractive from a valuation standpoint you
know in the past that story was well if you own cash, you're not earning anything in your cash.
PETRIDES: And before the year started the risk to bonds was that the Fed was going to taper reduce its balance sheet raise interest rates, and that
the wind would be the face of the bond market. And the U.S. 10 year bond was only yielding 1.5 percent. So people bought stocks, because there's
nowhere else to go. Now you can buy stocks, because the valuations are more supportive of it.
FOSTER: But valuations, you know, based on looking at interest rates is one thing, obviously, quite unpredictable. But you can at least try to figure
it out. We've got these two massive headwinds there haven't we which no one can really predict?
Russia and the impact on commodity prices but also all the disruption in China, where so much of the kit that we consume is maize? How are consumers
or Investors met to make sense of all these three things going on at once?
PETRIDES: Well, I think that comes down to your time horizon. If you're a trader, I think those two elements are almost are very difficult to
handicap, you know, to make sense of how long and where the Russia Ukraine conflict will turn is?
You know, pretty much anyone's guess. And to, then it comes down to in terms of China and zero COVID policies, at what point in time do they A,
ease up on their zero COVID stances and or inject massive money printing and quantitative easing to stimulate their economy while they're going
through this COVID retrenchment?
So I think if you're a trader, it's very hard to predict those types of events. But if you're a long term investor, war, probably war, I hope won't
last forever. And at some point in time, the impact of COVID will be felt.
You know, much like in United States where we were just kind of dealing with it, you got over the regulatory and the shutdown period, and you kind
of get to a degree of herd immunity. So, you know, at some point we do get through it, it all depends from an investment standpoint, what your time
horizon is, if you're willing to look out a couple of years, or if you're a trader, in the short term?
FOSTER: For a lot of people are life is pretty good, isn't it when you look at the employment rates? So that's pretty strong. But I do worry that as
people or firms compete over the best workers, that wages will continue to rise, and then you end up with that wage price spiral, which can be so
PETRIDES: Well, we can't complain or be worried about recession on one hand, and then a strong job market on the other, you know, it's that you
can't look at one without the other. So it are not what you necessarily what you make, it's how much you keep?
And that's the issue for people now are that inflation is going up. But if you have wage growth that can help offset those inflationary pressures in
the short term. That's a good thing. And I think it's better for people to be employed than unemployed.
And as you know, listen, last week, when we had the jobs data, you know, 460,000, people who once didn't have a job are now employed. And by and
large, that's, that's overall very good for the economy.
FOSTER: Are you not concerned that when figures do eventually come through that, you know, I know, quite positive about the state of the economy. But
there's a strong argument of saying it's already in recession, isn't it? And we should be sort of managing policy around that basis right now?
PETRIDES: Well, it's hard to see how the U.S. is in recession with the labor market so strong the housing market is so tight. I mean, just because
the stock market is down a lot, doesn't mean that we are in recession today.
In fact, you know, for the U.S. to go into recession. It's like turning a cruise ship in a lake. It's really, really hard to do, because the U.S. is
now much more of a service oriented economy, not a manufacturing economy.
I mean, if you look in the past 20 years or so, what are the events that have led us to recession? Well, it was the "Dot Com Bubble" exacerbated by
9/11 in 2000, 2001. It was the subprime crisis and greatest housing bubble we've seen since the Great Depression in 2008.
And it was, you know, 100 year pandemic, with COVID that led us into recession two years ago. So you know those are very much exogenous events,
and clearly not traditional monetary factors that force the economy into recession.
And, you know, if you take a long term time horizon, look what has happened after every one of those events? Clearly, the financial assets are worth
more today than they were at the time of those recessions.
FOSTER: John Petrides, as ever thank you very much for your time and your analysis.
FOSTER: Now, coming up, it's worse in Sri Lanka much, much worse economic collapse, sparking chaos and deadly violence. The outgoing Prime Minister
rescued and a pre-dawn operation details in a full report next.
FOSTER: Stories making headlines around the world today. Britain's Prince Charles has delivered what's traditionally the Queen's speech at the
Ceremonial Opening of Parliament is about the Queen Elizabeth was unable to attend because of what Buckingham Palace called mobility problems.
In the speech, written not by the Queen but the government. The Prime Minister sets out priorities for the coming year. The Queen has missed the
annual event only twice before when she was pregnant.
Sri Lanka's outgoing Prime Minister is said to be at a secret location with his family after the military rescued him when his home came under attack
by protesters overnight. Mahindra Rajapaksa announced his resignation on Monday after weeks of violent unrest over the country's worst economic
crisis ever. CNN's Anna Coren has more from Hong Kong.
(BEGIN VIDEO TAPE)
ANNA COREN, CNN CORRESPONDENT (voice over): The Sri Lankan military were forced to rescue outgoing Prime Minister Mahinda Rajapaksa in a pre-dawn
operation after anti-government protesters hurled petrol bombs at his private residence and tried to breach his home.
It follows a night of violent clashes between pro and anti-government protesters that left several dead and hundreds injured across the country.
Earlier the Prime Minister during an addressed to supporters that his official residence incited his followers to attack anti-government
protesters who spent months peacefully demonstrating against the Rajapaksa government as the country suffers from its worst economic crisis.
His supporters were filmed live on television hitting protesters with metal bars and setting tents at their makeshift settlements alight. The
protesters responded by torching dozens of homes of government ministers across Sri Lanka, including the ancestral home of the Rajapaksa family,
while the Prime Minister has stepped down saying he was paving the way for a unity government.
His younger brother, Gotabaya Rajapaksa remains the President of the country, the most powerful position in Sri Lanka. The Rajapaksa brothers
have ruled Sri Lanka for much of the past 20 years, and protesters are demanding the president to step down as well.
The Rajapaksa family has been accused of corruption, nepotism and economic mismanagement, which has led to double digit inflation and acute shortage
of fuel and medicine along with rolling blackouts.
A state of emergency has been declared and a curfew remains in place until Wednesday morning, in a desperate attempt to quell the violence, Anna
Coren, CNN, Hong Kong.
[09:45:00] FOSTER: In the Philippines, a preliminary election results show that
Ferdinand Marcos Jr., is poised to win the Presidency. The son and namesake of the Former Philippine Dictator, has a commanding lead over his closest
rival with more than 95 percent of the vote counted. His running mate, Sara Duterte-Carpio the daughter of a sitting President is also leading in the
Vice Presidential race. We get more details now from CNN's Ivan Watson.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): We're still days away from final official results of Monday's national elections
in the Philippines but the preliminary numbers suggest a landslide victory for Ferdinand Marcos Jr., known popularly in the Philippines as Bongbong,
the son of the late ousted Dictator of the Philippines.
Bongbong ran a campaign calling for unity also with a bit of a nostalgia message. Critics argue whitewashing the atrocious human rights record of
his father when he spent nearly a decade ruling through martial law, also downplaying allegations of gross corruption.
And millions tens of millions of Pilipino voters appeared to respond to his campaign message. Here's part of what he had to say to voters after polls
FERDINAND MARCOS JR., PHILIPINE PRESIDENTIAL CANDIDATE: I wanted to issue a short statement. And it essentially is a statement of gratitude to all of
those who have been with us in this long and sometimes very difficult journey for the last six months. I need - I want to thank you for all that
you have done for us. There are thousands of you out there.
WATSON (voice over): Part of what appeared to work for Bongbong. Marcos was a strategic alliance with another powerful political dynasty that have
Rodrigo Duterte, an outgoing, rather controversial Philippine President, his daughter, Sara was a running mate for the post of Vice President
And that combination seems to have won potentially a bigger electoral mandates than any other President, Vice President ticket has seen really,
potentially in generations. There have been reports of more than thousand vote counting machines that appear to have malfunction. And that has
triggered some displays of discontent, some protests in the Philippines Capital on Tuesday, take a listen.
UNIDENTIFIED FEMALE: We saw the need to mobilize ourselves because we've heard reports of cheating, malfunctioning vote counting machines, forms of
harassment from the electoral board and Police other forms of harassment of poll watchers and instances of vote buying so all of these are very
WATSON (voice over): The biggest rival to Bongbong Marcos is the presidential candidate, Former Vice President Leni Robredo she herself has
come out not conceding but admitting disappointment, and also calling on her supporters not to give in to disunity.
So we'll be watching closely to see how investigations into malfunctioning machines go forward and also into how the various politicians will position
themselves as the official vote count progresses? Ivan Watson, CNN, Hong Kong.
FOSTER: South Korea has a new Leader Yoon Suk-Yeol was inaugurated President just a few hours ago. He is a political novice embarking on his
first elected office, but he has plenty of decisions to make from day one. CNN's Paula Hancocks has the details.
PAULA HANCOCKS, CNN CORRESPONDENT (voice over): Yoon Suk-Yeol is sworn in as President of South Korea. His very first job in politics, a political
novice and an international unknown, untried and untested politically you made his name as the prosecutor who led the corruption case against Former
President Park Geun-Hye, in 2016 it led to her impeachment.
Praised and promoted by President Moon Jae-In, who replaced her. Yoon's new job will have to be swift 11 days after taking power; he'll be hosting a
summit with U.S. President Joe Biden.
During his campaign team stressed the need for a closer U.S. South Korean alliance. Yoon has also pledged to be more engaged on the international
YOON SUK YEOL, SUTH KOREAN PRESIDENT: We must take an even greater role in expanding freedom and human rights not just for ourselves, but also for
others the international community expects us to do so.
HANCOCKS (voice over): North Korea policy is expected to change quickly from Moon Jae-In, pro engagement push to Yoon's hardliner stance.
HANCOCKS (voice over): During the campaign Yoon floated the idea of a preemptive strike if Pyongyang look close to a threatening launch against
Suk-Yeol. In his inauguration speech however, he also said while the nuclear program is a threat, the door to dialogue does remain open. He said
he could work on what he calls an audacious plan to strengthen North Korea's economy in exchange for a complete denuclearization.
ANDERI LANKOV, PROFESSOR, KOOKMON UNIVERSITY: The policy of the conservatives will be hard line pure and simple, and there are chances that
such hardline will lead to military clashes, which might escalate.
HANCOCKS (on camera): Pressing domestic issues also await President Yoon COVID induced economic pain polarization population declined to name just a
few of them. The country who voted him in now waits to see what kind of a leader he'll be? Paula Hancocks, CNN.
FOSTER: So, next, a big tumble for Blockchain why not even Bitcoin is immune to fears about the U.S. economy.
FOSTER: A rollercoaster ride for Bitcoin the digital currency is regaining some ground after plunging over the weekend. At one point Bitcoin value was
more than 50 percent below its all-time high. This is how it's doing right now Bitcoin suffering from the same issues really that are dragging down
prices for stocks and bonds, including fears about inflation and higher interest rates.
Paul R. LA. Monica joins us now. I mean, it is up today but fell so sharply, didn't it? And it's losing the reputation of being a safe haven
PAUL R LA MONICA, CNN REPORTER: Yes, exactly Max. There had been a lot of investors who had been holding on to this notion that Bitcoin was like
digital gold, that it's a type of asset you would want to own in times of turmoil. That's clearly not the case with Bitcoin plunging this year due to
worries ranging from Russia's invasion of Ukraine and what that's done to oil prices and commodities.
You've had the dollar, the U.S. dollar spiking, which has hurt Bitcoin as a store of value and then just the broader market turmoil. I think investors
are starting to realize that Bitcoin is much more like a tech stock than a stodgy bond currency or commodity.
FOSTER: Had been an inflation hedge, hadn't they? But I guess, you know, Investors are just looking at all of these investments in a similar way
right now, because those headwinds are so strong.
MONICA: Yes, the headwinds are very strong Max. And I think that people realize that at a time where gold has been more stable, the dollar is
strengthening. They're not necessarily as much of an inflation hedge.
And we'll find out later this afternoon when Coin Base the big digital Crypto currency brokerage company that recently went public, they report
earnings after the close and they are likely to show many challenges.
MONICA: And that's why Coin Base's stock is down nearly 70 from its highs, it has been a very rough patch for Coin Base and other companies with
crypto exposure like Robin Hood.
FOSTER: Yes, so what affects that would then have the knock on effect wouldn't that on a wider market as well, if those companies with these big
exposures are hit really hard, which seems likely, as you say.
MONICA: Yes, I think that the problem with Crypto currency investors is that many people who are invested in Bitcoin and Aetherium and some of the
other large Crypto's they also have exposure to companies like Coin Base, Robin hood some of the Bitcoin miners like Riot Block Chain and Hive Block
Chain, Marathon Digital, these are companies that all will do well, at a time when Bitcoin prices and other Crypto's are rising.
But obviously, that is not the case right now. So many of these stocks are getting hit just as hard if not even more so than Bitcoin and some of the
underlying crypto assets that, you know, these companies have exposure to.
FOSTER: Unpredictable everything right now, Paul R La Monica, thank you very much indeed for joining us. We're going to take to Paris briefly.
Before we go one of the world's most famous landmarks lighting up in support of Ukraine, the Eiffel Tower, blue and yellow look at that glorious
scene. We'll be back on same time tomorrow "Connect the World" with Eleni up next.