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First Move with Julia Chatterley
Zelenskyy on Azovstal: Ukraine Needs Ukrainian Heroes Alive; China's Zero-COVID Policy has Worldwide Ripple Effect; Fed Adopts Aggressive Stance to Tame Inflation; Walmart: Higher Costs, Supply Problems Squeeze Profit; Ukrainian Entrepreneur Raises Money for UNICEF; U.S. House Panel to Discuss "Unidentified Aerial Phenomena". Aired 9-10a ET
Aired May 17, 2022 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
ALISON KOSIK, CNN HOST, FIRST MOVE: You're watching CNN. I'm Alison Kosik in New York. And we begin in Ukraine where Russian artillery attacks
continue across the Sumy region in the northeast, which is close to the Russian border.
Ukrainian military reported more than 80 impacts on Tuesday morning. It's not clear why the Russians are targeting border villages with such intense
fire. Meantime, Russian missiles damaged railway lines close to the Polish border. Local military officials say the attack happened near the town of
Yavoriv, which is home to a large military base. There are no reports of casualties.
Ukraine says its combat mission in Mariupol is over with commanders at the massive Azovstal Steelworks ordered to save the lives of their personnel.
More than 260 people left the plant on Monday. Many of them are wounded and were taken to areas controlled by Russian troops.
A Ukrainian official says there'll be brought home as a part of an exchange. Some Ukrainian forces remain at the plant and efforts are
underway to get them out. The Commander of the Azov Regiment defending the steelworks had this message earlier.
(BEGIN VIDEO CLIP)
LT. COL. DENYS PROKOPENKO, AZOV REGIMENT: This plant should evenly balance the task at hand with the preservation of life and health of personnel.
Perhaps that's why war is called an art, not a science. And the task here is to preserve the maximum amount of personnel.
(END VIDEO CLIP)
KOSIK: CNN Correspondent Melissa Bell is in Kyiv for us. Melissa with the Ukrainian military saying that their combat mission in Mariupol is over the
city has now fallen to the Russians.
MELLISSA BELL, CNN CORRESPONDENT: Clearly, militarily, this is bad news for Ukraine, as you say, Alison, because this last readout, this last bastion
of Ukrainian resistance, had been holding out and had become such a symbol of that resistance more globally sort of embodying that sense of Ukraine,
trying to hold on.
So clearly it's a blow and there's been a really interesting difference between the sort of language we've been getting out from here in Kyiv and
the language that's been coming up from Moscow. Clearly what's happened and what is underway are fairly tense and difficult negotiations, as we
understand it, to try and secure some kind of exchange to allow those who've been evacuated so far from the plant to be handed over to Ukrainian
authorities.
Now, more about the people in question we don't know exactly how many have been evacuated? We don't know exactly as we've just been hearing how many
remain? But we understand that of those that have been evacuated 53 are severely wounded and in need of immediate medical attention. And 211 are in
much better shape.
Now bear in mind that over the course of the last few days, because communications with inside the plant it becomes so patchy and so difficult,
even for the family of those inside. What we've been learning is in a fairly patchy way of the conditions that had been severely deteriorating so
several 100 fighters had found themselves inside that still works, some of them amputated, some of them limbless but with no more medical supplies, no
means of getting any kind of pain relief and dwindling food supplies.
And the families have been telling us over the course the weekend is that they essentially had about a week of food left. So that is how desperate
the situation had become. The preferred solution from the point of view of both Ukrainian authorities and the families of those inside had been some
kind of exchange mediated either by Turkey or China.
There have been these desperate appeals from the families of those inside. That has not happened instead, these fighters are now in the hands of
Russian forces, or inserting in Russian controlled parts of Ukraine. And it is we understand negotiations towards with a view towards some sort of
prisoner exchange.
If that happens if those fighters are handed over to Ukrainian forces it would be Alison, the biggest prisoner swap that we've seen since the war
began. But again, negotiations still underway and as we understand, they're difficult, intense, and as President Zelenskyy reminded, everyone in a
television address yesterday, what is needed at this stage is both delicacy and time, Alison.
KOSIK: Melissa, strategically, how significant is this for Russia? How will taking the steel plant allow Russia to maybe gain an even bigger foothold?
BELL: Well, I think if you just look at a map of where Mariupol lies and remember the scenes from earlier in the conflict, the strategic importance
that it had for those Russian controlled parts of Ukraine for Moscow is it sought to eke out some kind of territorial victory from this conflict over
the course of now nearly the last three months.
[09:05:00]
BELL: You get a sense of, of what they can claim to have achieved as a result of Mariupol falling? It is strategic for them, of course, because it
is a port city there on the Black Sea. They can claim it as something that they've been hoping to achieve, and to get strategically from the start,
and as a result of winning it, perhaps claim that they have achieved at least one of their aims in this conflict.
And I think that's something of a first as well, so clearly, a defeat for Kyiv. And this is important again, when you look at the language on the
side of the Russians over the course of the last 12 hours or so since we've understood that these evacuations have begun, they've been talking about
surrender, they've been talking about the fact that these fighters will be kept in certain conditions that respect the conventions, therefore alluding
to them as prisoners of war.
Ukraine key for their part have been talking much more about the fact that they need their heroes back alive, and that it is just about bringing their
men and women home Alison.
KOSIK: OK, Melissa. Melissa Bell live for us in Kyiv, thanks so much! Ukraine says an airstrike near the City of Odessa has destroyed buildings
and damaged tourist infrastructure. Odessa is Ukraine's largest black seaport, making it a target for repeated Russian attacks. Sara Sidner has
more.
(BEGIN VIDEOTAPE)
SARA SIDNER, CNN CORRESPONDENT (voice over): The remains of freshly bombed buildings a hotel and homes reduced to dust the result of the latest
Russian missile attack in the Odessa region that has experienced strike after strike on places people live, work and visit. This is Russia's
attempt to terrorize a target it desperately wants to possess.
SIDNER (on camera): Tell me what the strategic importance is of Odessa?
GENNADIY TURKHANOV, ODESSA MAYOR: This is the Seagate of our country he says. This is a city of legend younger.
SIDNER (voice over): its home to Ukraine's largest Black Sea Port used both commercially and militarily. Russia has already attacked its oil refinery.
If Putin's forces were to take the Odessa region, Ukraine's entire Black Sea coast would be controlled by Russia, the Mayor of Odessa bristles at
the IDF.
Ukraine today is a maritime power it will be a completely different state without access to the sea without transport logistics he says. We and our
armed forces will do everything to prevent the enemy from entering.
SIDNER (voice over): But the ties to the enemy run deep, historically and financially. Before the war Russian tourists help this Ukrainian seaside
city thrive.
OLEKSANDR BABICH, HISTORIAN: Ideal Russians really liked our cuisine, our shops here the sea, architecture, and there were no problems.
SIDNER (voice over): Oleksandr Babich, she's a historian who also owns a tour guide company. He says citizens of Odessa speak Russian more than they
speak Ukrainian. Pro-Russian politicians were voted into office regularly. The mayor was once friendly with Russia. He himself spoke to us in Russian.
SIDNER (on camera): Were you pro-Russian before and changed?
TURKHANOV: I want to say that I have always had pro-Odessa views he says, but I love and respect the history of my city where I was born.
SIDNER (voice over): Everywhere you look in the city as a reminder of its Russian history, there are statues of Alexander Pushkin considered Russia's
greatest poet and monuments to the conqueror of this land Russian Empress "Catherine the Great" her sculpture used to be guarded and kept pristine
now it's soiled and a fresh Ukrainian flag flies on it. There has been a long fight over whether to remove these symbols of imperialism in Odessa?
BABICH: There is social demand and we need to get rid of the symbols he says.
SIDNER (voice over): Not everyone agrees. Odessa Writer and Poet Paul Makaraov says the monuments should stand.
PAUL MAKARAOV, WRITER AND POET: The attitude was positive we appreciate and respect Catherine. Today's events should in no way affect our attitude
towards her.
SIDNER (voice over): And there is this problem if we remove the monument to Catherine we need to rename the square he says it was for a time named
after Karl Marx for a while named after Hitler then again Karl Marx.
And here again after Catherine what name should we choose? But the more Russian missiles wipe away lives here, the more fierce the argument to
erase the physical reminders of its Russian past.
(END VIDEOTAPE)
KOSIK: And that was Sara Sidner reporting. In the last hour the Finnish Parliament voted overwhelmingly in favor of joining NATO. The leaders of
Sweden and Finland are meeting now in Stockholm to discuss bids by both countries to join NATO. This was Sweden Foreign Minister signing the
application to join the group.
[09:10:00]
KOSIK: Russia has said any expansion of the block would provoke retaliatory measures. The Swedish Prime Minister was clear in her aims when she spoke
earlier today.
(BEGIN VIDEO CLIP)
MAGDALENA ANDERSSON, SWEDISH PRIME MINISTER: The best thing for the security of Sweden and the security of the Swedish people is to join NATO
and to do it together with Finland.
(END VIDEO CLIP)
KOSIK: And in the past few minutes, we've heard that the U.S. President will welcome the Leaders of both Sweden and Finland to the White House on
Thursday to discuss that NATO bid. Authorities in Beijing are tightening restrictions on movement even further as efforts to eliminate COVID-19
continue. Officials say anyone who wants to enter a residential compound must show an up to date negative COVID test result.
Already the governments strict zero COVID policies have hit China's economy hard and are deepening global supply chain issues. Selina Wang joins us
live now with Beijing with more. Selina, what's the latest?
SELINA WANG, CNN CORRESPONDENT: Well Alison, China's uncompromising zero COVID strategy has dealt a massive blow to the country's economy and that's
sending shockwaves across the global economy on two levels.
First of all, this has absolutely crushed retail sales in China. That means Chinese consumers are contributing less to global demand than on the supply
chain side. These lockdowns are worsening global supply chain woes and inflationary pressures that are already stressed by the war in Ukraine.
And unfortunately, these lockdowns are not going away anytime soon. Even though the world wants to move on from COVID China's lock downs are not
making that possible.
(BEGIN VIDEOTAPE)
WANG (voice over): When the world's factory shuts down, it ripples around the globe. China's COVID lockdowns are jamming ports, choking off supply
chains, increasing costs for companies that leaves American and global consumers waiting longer to get their goods and paying more for them.
RICHARD MARTIN, MANAGING DIRECTOR, IMA ASIA: It is going to be a painful time on prices from goods that come into America from China. And that's a
lot of goods.
WANG (voice over): Shanghai, China's manufacturing and financial powerhouse now a ghost town. Unused factories have been turned into quarantine
centers, and this one on the outskirts of Shanghai medical trash backs are used to protect their beds from the rain.
Some offices now makeshift hospitals, the world's largest container port in Shanghai has been running at about half its capacity for more than a month.
One in five container ships are now stuck at ports worldwide according to windward and about 28 percent of the backlog is coming from China.
Shipments from China to the U.S. are taking 74 days longer than usual according to the Royal Bank of Canada with no end to the delays in sight.
MARTIN: The orders will take a lot longer. If you thought it was bad in 2021 it's going to get worse in 2022.
WANG (voice over): At least 31 cities in China are under full or partial lockdown impacting up to 214 million people. American companies from Apple
to Amazon, Starbucks, Coca Cola, and General Electric have blamed China's lock downs for squeezing earnings.
Foxconn a major Apple supplier temporarily halted production added Schengen factory for a few days in March Pegatron and iPhone Assembler suspended
operations in Shanghai and - plans in April. CEO Tim Cook said last month that China's lock downs along with the global chip shortage could reduce
quarterly sales by as much as $8 billion. But for small businesses this is make or break it.
JOSH VAUGHN, CEO, BLACK SHADES: My last order that shipped to United States took about four to five months, we've went over a month without making like
any money as a business. We've also lost money from people wanting to place orders and not be able to ship them. I'm terrified. I'm literally I'm
terrified that that Black Shades could be over.
WANG (voice over): Some factories have remained open by putting workers in a bubble with staff working and living in the factory. A social media video
show workers at Apple and Tesla supplier - jumping over factory gates and massive workers protesting COVID prevention measures in the factory,
underscoring how hard it is to keep factories open. For decades relying on China has kept prices for American consumers low. Now that might be
changing.
MARTIN: There'll be short term and long term decoupling things like zero COVID that could knock you over. So you've got to move some production out
of China.
WANG (voice over): China's leadership is doubling down on its zero COVID strategy despite the devastating impact on the country's economy. And a
slowdown in China will be felt around the world.
(END VIDEOTAPE)
WANG: We're seeing China's economic activity collapsing under the weight of these lockdowns it's also spooking global investors and multinational
corporations.
[09:15:00]
WANG: According to the American Chamber of Commerce in China, more than half of American companies in China have already reduced their revenue
projections for 2022.
The big concern is that there is just no end in sight to these harsh and unpredictable measures because the pressure on these local officials across
China Alison is to keep COVID cases at zero, no matter the cost to the economy and no matter the knock on effects that has for the rest of the
world.
KOSIK: Selina I know you've been living this you've been under lockdown now you're out. How does it feel?
WANG: Well Alison, I went from a 21 day strict quarantine to entering a city the capital that's under partial lockdown. It is an absolute ghost
town where I am right now. And exiting that 21 day quarantine was surreal.
Every single item that left that facility was disinfected as you can see in that video even the cardboard boxes, disinfectant being sprayed everywhere.
And when I exited my quarantine hotel in Kunming China, I realized there was a steel fence and barrier surrounding the entire hotel.
A worker in a hazmat suit drove me to the Kunming airport. And Alison at the airport, I was escorted around the airport because I was still
considered high risk since I had come from overseas 21 days before when I got on that airplane got off at Beijing.
The first thing I did here in Beijing was getting COVID test, we are COVID tested daily here. I'm currently living in what's considered a high risk
area, China's largest district, Chaoyang and all non-essential businesses here are closed, you cannot get a taxi subway system is closed.
It is completely quiet here. I used to live in Beijing and it is unrecognizable being back here when it is so quiet, but officials here
they're avoiding from calling this the city wide lockdown.
They want to show that in Beijing, they've got things under control. It's not going to spiral out of control like it did in Shanghai. But really more
and more activity every day is being restricted and controlled here, Alison.
KOSIK: Well, I'm glad that you are our eyes and ears, Selina Wang thanks so much. North Korea has mobilized its army and more than 10,000 health
workers to distribute COVID-19 medicines and trace infections.
The isolated country is battling its first publicly acknowledged outbreak of the virus. Official say well over a million people have fallen ill with
a fever, but only around 170 have been acknowledged as COVID-19.
They say 56 people have died. The World Health Organization warns the virus could spread fast in a country which has no vaccination program and has
declined international help. These are the stories making headlines around the world.
U.S. President Joe Biden is traveling to Buffalo, New York to console families who lost loved ones in a mass shooting on Saturday.
The White House says he will also speak with first responders and leaders of the predominantly black community where a white gunman killed 10 people.
Authorities say they're investigating the attack as a racially motivated shooting.
Hezbollah and its allies have lost their parliamentary majority in Lebanon's general election, reformers groups made gains at the expense of
the Iranian backed party.
The election was the first in Lebanon since nationwide protests in 2019, a reaction to the country's economic collapse.
Coming up little crises all over the world, economist Mohamed El-Erian joins us to discuss the consequences of surging inflation, plus Elon Musk
setting a condition for his Twitter purchase to go forward. Stay with us.
(COMMERCIAL BREAK)
[09:20:00]
KOSIK: Welcome back. I'm Alison Kosik, U.S. stock futures are all in the green with the tech heavy NASDAQ futures up about 2 percent. Retail sales
rose almost 1 percent last month showing no signs of demand letting up despite high inflation.
In Asia stocks close up with the HANG SENG jumping more than 3 percent.
Hopes arising that Shanghai will gradually reopen businesses; the city has reported no COVID case outside of its quarantine facilities for the third
day in a row. Meantime, oil prices are pushing further into triple digit territory.
This comes after both Brent and WTI jumped about 3 percent yesterday. Joining us now Mohamed El-Erian, he's the Chief Economic Adviser for
Allianz and President of Queens College at Cambridge University, great to have you on the show. So glad you could make it.
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: Thank you, Alison.
KOSIK: And I want to start with the - because that's all we're talking about. So let's continue talking about it. I want to know how concerned you
are that inflation has been running too hot for too long.
And why lots of people are coming out of the woodwork to say including you that the Fed really doesn't seem to have a handle on it? And so what's it
going to take for the Fed to get control of this?
EL-ERIAN: So I've been concerned for a long time, as you know, Alison, for two primary reasons. One is that this particular inflation hits the poor
segments of our society particularly hard. It's another great un-equalizer, and we've had quite a few already. So there's a very important social
aspect to it. And then there's a very important economic and financial aspect to it, which is that inflation by itself that is high and persistent
can destabilize an already wobbly economy and can add to financial instability.
And therefore we all look to the Federal Reserve. And unfortunately, the Federal Reserve has been very late in recognizing disinflation, and in
doing something about it.
So a lot of people are starting to - in a major way about a policy mistake that adds to the other challenges facing the global economy.
KOSIK: What does the Fed have to do that it's not doing?
EL-ERIAN: Three things. First, we store its credibility in terms of telling us why it got its inflation call so wrong for so long. And how has it
improved its forecasting ability, the ECB has done that and the Fed has not.
Second, be much more open about the situation we're in. Look to Andrew Bailey of the Bank of England, the governor there who has been brutally
honest. And that's the role of a technocrat to tell politicians what the situation is.
And then thirdly, to move with determination to contain inflation expectations, all these things are possible. And they've been moving that
way, but moving too slowly, given what's happening on the ground.
KOSIK: And you think if the Fed does those three things, we'll see inflation abate at least a little bit?
EL-ERIAN: We would, I think the fact that we've lost so much time is problematic. So we no longer have the first best solution, what people call
a soft landing, where you control inflation without sacrificing growth and employment.
I think there will be some pain. Unfortunately, you know, central banking is about time, skill and luck. And unfortunately, the Fed has lost a lot of
time already. KOSIK: You've written a couple of op-eds recently about the risks that are hitting the global economy including the impact of the
dollars rapid rise, the fallout from the war in Ukraine. And you talk about little fires everywhere. Talk us through what you mean by that, and why
it's so important to put those fires out?
[09:25:00]
EL-ERIAN: So when we look at the global economy, we tend to focus on the big fire. And the big fire is how the Ukraine war is adding to our
inflation concerns. So our supply chain is concerned to high oil prices, high food prices.
And we are focusing on that. Meanwhile, that big fire has started lots of small fires in the developing world. And if we're not careful, the small
fires can come together into something that really undermines the global economy in a major way.
If you're sitting right now, in a developing economy, your policy is already exhausted by the battle against COVID. And now you're looking at
higher energy prices, higher food crisis, a stronger dollar, slowing global economy, and you just feel exhausted, you don't have the resilience of a
rich country.
And that's why it's really important to take steps now, to make sure that these little fires don't burn uncontrollably.
KOSIK: How much of a threat is stagflation?
EL-ERIAN: Is the baseline unfortunately for the global economy, that's the big change over the next six months. Stagflation used to be a risk; it is
now the baseline, lower growth, high inflation. And the risk is now a recession.
And we get a recession if you get a major policy mistake, or if you get a major market accident. So this is something we really need to avoid right
now.
KOSIK: And what are your chances of seeing a recession? Obviously, you're putting your bets. It sounds like more on stagflation. But why are you
less? Why are you seeing less of a chance of a recession?
EL-ERIAN: So it depends where you're talking about. For the global economy as a whole, I would put it low; I would put it at 20 percent. If you're in
Europe, it's higher. It's 50 percent plus.
If you're in the U.S., it's actually lower than it is for the global economy. So we also are seeing a lot of dispersion in different countries
outlook.
KOSIK: OK, fantastic to get your comments today, Mohamed El-Erian. Give us a lot to think about. Mohamed El-Erian, President of Queens College at
Cambridge University. Thanks again.
EL-ERIAN: Thank you.
KOSIK: Next up Elon Musk, adding fuel to the fire in his public route with Twitter's Chief. Now he says no takeover without hard data on fake
accounts.
(COMMERCIAL BREAK)
[09:30:00]
KOSIK: Welcome back. I'm Alison Kosik in New York. Stocks look like they are starting higher. U.S. retail sales rose in April for the fourth
straight month even amid rising inflation.
Shares of Citigroup are jumping after Warren Buffett's Berkshire Hathaway took about a $3 billion stake in the bank. Meantime, United Airlines is up
after the company raised its revenue forecast for the current quarter, predicting the busiest summer travel season since before the pandemic.
Elon Musk is once again airing out his business via tweets. This time Musk says his Twitter takeover is on hold until he gets hard proof of how many
fake accounts are on the platform.
Yesterday Twitter CEO Parag Agarwal posted a lengthy thread alleging just 5 percent of active users are spam bots. Musk responded ever so formally,
with a poop emoji.
Christine Romans, this is getting down and dirty. The poop emoji, it says a lot there. Listen, we're enjoying reading his Twitter feed. But you know
there are real investors involved in this. So let's keep that in mind.
And then the other thing I want to know about is this bar account is it just an excuse that Elon Musk is using? Or is there something really
significant to what he's talking about?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: So there are some analysts and people who cover the company today who are saying that perhaps
as one said he's got cold feet, right; the value of his own company has declined since he made this offer.
And the whole, you know the whole playing field in terms of the economy and the international scenario has really changed here. So maybe he just has
cold feet, or maybe he's trying to drive down the price, the purchase price, or maybe he just got bored with this.
I mean, look, this is Elon Musk; we're talking about right who uses poop emojis when he's talking about a very serious multibillion dollar
acquisition. For its part, Twitter says it is committed to completing the transaction on the agreed price and terms as promptly as practicable.
Elon Musk without providing any evidence says 20 to 90 percent of the traffic on Twitter are bots. You saw the CEO of the company, very clearly
laying out what their metrics are here.
But it's a fight over bots that may or may not be maybe some sort of cover for him backing out. He would have to pay a breakup fee ride of a billion
dollars. But clearly, Tesla's shares are down 27 percent so far this year.
So Elon Musk not he doesn't quite as much money as he did when he started this whole process. But he still has an awful lot of money. I will say and,
and I'm assuming you agree with me here, Alison.
It is so unusual to see details like this tossed about rift about on social media, you're very right to point out the real true people who are affected
here, those are shareholders in Twitter.
And in Tesla, quite frankly, whose investments move when Elon Musk riffs is something that has been at the forefront of SEC has watched this and has
actually chastised sanctioned Elon Musk in the past, we'll see if they say anything about this one.
KOSIK: Yes. And I've been asking if the SEC is going to step in since you know, he started tweeting about this. We have yet to really see any action
there. Is there a deadline to this or is this back and forth on Twitter these negotiations in public, is this all going to just go on endlessly?
ROMANS: He says he cannot move forward until there's clarity on the number of bots here. So now I guess this means the ball is back into Twitter's
cord, although yesterday you pointed out the CEO had a lengthy post explaining sort of their you know algorithm, if you will, not quite the
right word, but for how they decide you know, they measure the bots on their site.
Maybe the two sides can talk about this. But you know we'll have to just wait and see, I just think it's never a dull moment when Elon Musk is
concerned. And when Elon Musk is concerned using Twitter to talk about Twitter it's just you couldn't write this stuff.
KOSIK: I do, I have to admit I am enjoying it. Sorry, not sorry. You know, Christine Romans, CNN's Chief Business Correspondent thanks so much.
ROMANS: You're welcome.
KOSIK: A disappointing first quarter profit setting Wal-Mart shares lower at the moment, The Company also slashed its profit outlook for the year
blaming rising costs, meantime Home Depot shares are up following better than expected quarterly earnings.
[09:35:00]
KOSIK: Paul R. LA Monica joins us now. These were interesting to read the earnings I'm talking about with Wal-Mart. Let's get to these first. You
know, Wal-Mart's bottom line getting hit by things like, you know, inflation supply chain issues and overstaffing.
PAUL R. LA MONICA, CNN REPORTER: Yes, it is interesting to see that Wal- Mart did and you'll say overstaffing was an issue. I think the bigger problems Alison for Wal-Mart are clearly that inflation is taking a bite
out of consumer paychecks.
We've seen it with rising energy prices, the soaring cost to refill your car at the gas station if you are still driving a gas guzzler and are not
an Elon Musk Tesla aficionado.
So clearly, that is a problem for Wal-Mart. And I think the company is you're nervous about the outlook because inflation could continue to hurt
consumer demand. But we're obviously not seeing that in the housing market.
I think that middle class consumers, more affluent consumers that have homes that they're looking to spruce up, are obviously still happy to head
to the Home Depot and buy all those supplies they need for home improvement projects.
KOSIK: What did Home Depot get right here?
LA MONICA: I think Home Depot is still benefiting from the fact that this is an extremely resilient housing market. I think it'd be very interesting
to see whether or not their top rival Lowe's also reports strong numbers when they give earnings out tomorrow morning.
So I think Home Depot is in the right place at the right time. We keep waiting for the housing market to really cool off. But there is a lot of
pent up demand, people wanting to buy new homes.
And there aren't that many new homes on the market because of the building problems that we've had in this country, both a worker shortage as well as
your soaring commodities costs that have made it difficult for builders as well.
So there's a lot of people just chasing few existing homes that are on the market. And that's good news for Home Depot.
KOSIK: And we learned that retail sales numbers show that the consumer is still holding up despite inflation.
LA MONICA: Yes, I mean, the Wal-Mart numbers could be a bit of an anomaly. It'll be interesting to see what target says when they report their results
tomorrow as well.
But you're right Alison overall retail sales; including car sales have been pretty strong. I think that if we are going to be heading into a recession,
numbers like this really make it difficult to say that a recession is coming soon.
It could be maybe a 2023 or 2024 type story, but it's starting to look less likely that a big downturn is coming in 2022 when you have retail sales
numbers like this and a still pretty healthy job market with wages going up and unemployment being low.
KOSIK: Yes. All right, Paul R. La Monica, great to see you, thanks for your analysis. Still to come, helping Ukrainians with their mental health, I'll
be speaking with Ukrainian business owner about how she's supporting not just her employees, but many others in Ukraine too, stay with us.
(COMMERCIAL BREAK)
[09:40:00]
KOSIK: One Young Ukrainian entrepreneur is using mental health and fitness to help Ukrainians during the war. 29 year old Victoria Repa is the Founder
and CEO of the digital health coaching website BetterMe.
The company has donated $40,000 to the Come Back Alive Foundation, which supports the Ukrainian army and is providing Ukrainians with free access to
its mental health app. BetterMe also launched the creating freedom within set of leggings and bra set in the colors of the Ukrainian flag. 50 percent
of the profits from this set will be donated to UNICEF.
Victoria Repa, Founder of BetterMe joins us now great to have you on the show. Let me start with - nice to see you too. So your company actually
pivoted as the war in Ukraine has continued. Talk us through how your company is helping the war effort.
VICTORIA REPA, FOUNDER & CEO, BETTERME: So first of all, I understood as a young entrepreneur, as all of our revenue come from United States or
Europe. So first of all, I need to support all the workplaces because in my company now working more than 200 people and I need to support their
salary.
And then of course, expand my businesses as a lot of level of unemployment in Ukraine. We now need to provide new workplaces, it's the first part and
of course we donate a lot to Ukraine army and also create new - our entire obligation free for Ukrainian to support mental and physical health.
Create fairy tales support special for Ukrainian children and help new program to cope with mental panic attack and et cetera. And of course from
our audience from Europe and United States, we launched new apparel which is yellow - like this for sport and support. Ukrainians sample for five -
things of our independence.
KOSIK: I know this is very personal for you to keep your business alive and to contribute to the war effort. I know conflict isn't new to you, you
already Ukrainian you're from the Donbas region. You had a home there.
And then you had a home in Kyiv, talk about what happened to you and how your experiences impacted the growth of your company?
REPA: Of course, my life was turned upside down in 2014, when Russia crossed with military pressure on Ukraine and my whole region of Donbas in
the east was seized by Russian military army in 2014. I just get my bachelor's degree.
And I understood that in my university dorm history was in Ukraine, not Ukrainian but Russian soldiers. So I packed all my belongings in 2014 under
the watch of soldiers, and I understood that it was a start.
We began to see Russian separatist troops on the street and hear gunfire near our university drums. So then I moved to Kyiv and started business and
finance in Kyiv's School of Economics, get my master's degrees.
And I go to the Procter & Gamble as financial analyst, but having struggled with my - is the nature I dreamed of starting a business to help organize
diets and exercise routines in 2016. BetterMe was established.
[09:45:00]
REPA: Now we are taking care of the physical and mental health of more than 100 million people worldwide. And our goal is to help create gradual
changes in the minds and body, improving the overall quality of life.
So with workouts, nutrition tracking, mental health of course, BetterMe is one stop shop solution for the body and mind. And our main goal is to
create products that - everyone and one of our key radios is inclusion and diversity.
KOSIK: Well, it certainly seems like you're doing some great things that I know that you're a big champion for Ukrainian businesses, and a real
example of how to adapt and change through war time.
I would certainly wish you all the best Victoria Repa, Founder of BetterMe. Thanks so much for your time. Two more major brands and McDonald's and
Renault are pulling out of Russia over Putin's war in Ukraine.
Both companies were a symbol of Russia's integration into the West following the lifting of the Iron Curtain. Now their exits may herald a
return to isolation and the economic pain that came with it. CNN's Clare Sebastian reports.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT (voice over): There are often unreliable and always - Lada in the 1970s was a potent symbol of the Soviet Union's
economic self-reliance. By 2022, a majority stake in the brand now owned by Renault, it was a symbol of Russia's global integration, that integration
now unraveling because of the war in Ukraine and western sanctions.
Renault has announced it's selling its stake in Lada and make Avtovaz to a Russian State Research Institute, that with an option to buy it back within
six years.
Avtovaz was announced in March, it would have to redesign some of its cars to make do without foreign parts. Initially, that will mean no special
features like anti-lock brake systems, according to one expert, and that's just the beginning.
EVGENY ESKOV, EDITOR-IN-CHIEF, AUTO BUSINESS REVIEW: If that - will be with us in future we have not new cars, we will be with just only used cars, in
my opinion.
SEBASTIAN (voice over): And it's not just the car industry in reverse.
ELINA RIBAKOVA, DEPUTY CHIEF ECONOMIST, INSTITUTE FOR INTERNATIONAL FINANCE: Metals and mining will go to chemical production paper, textiles,
even foods. Every industry is now either cutting their production by half or at least looking for new ways to import and new waste to experts.
SEBASTIAN (voice over): Westernizing the economy was one of the hallmarks of Vladimir Putin's Russia in the wake of the chaos and confusion of the
1990s. This policy helps bring prosperity, hope and a real taste of something new.
Now shutters and plastic sheets barely obscuring the remains of what was. Even McDonald's which opened its first restaurant in Russia in 1996, since
it's now starting the process of selling its business and "de arching its restaurants".
Putin himself has played down the idea that his war and the resulting sanctions have undone 30 years of progress.
The Soviet Union lived under sanctions he said in March and achieved colossal success, rhetoric designed to strengthen his grip on power as he
prepares Russia for a potentially painful economic transition.
VLADIMIR PUTIN, RUSSIAN PRESIDENT: The economy will adapt to the new situation. If we can't anchor one ship, we'll try another. If we can't go
to one country, we'll go to a third country. You can't buy it here or buy it in a fourth country.
SEBASTIAN (voice over): In the Soviet Union and the decade that followed its collapse, economic isolation meant regular shortages of consumer goods
and food, queuing for things a part of life. So far Russia is not seeing this on a wide scale. But experts say it will if the war drags on.
SEBASTIAN (on camera): How much of a mess is this going to be do you think?
RIBAKOVA: I think this is the worst crisis that most people in Russia going to experience in their recent history. So we invented the time machine and
it is the pain of the 90s but they are the way we're going towards darkness.
SEBASTIAN (voice over): The Cold War didn't just cement the Soviet Union's isolation. It also required ever increasing defense spending, the true
scale of which only emerged in its final years.
Russia's hot war in Ukraine could deal a similar double economic blow. Clare Sebastian, CNN, London.
(END VIDEOTAPE)
KOSIK: After the break, keep your eyes on the skies for the first time in decades. The U.S. holds a public hearing on UFOs.
(COMMERCIAL BREAK)
[09:50:00]
KOSIK: At the movies, the idea of UFOs and flying saucers plays on our fear of the unknown. Just like this scene from closing counters of the Third
Kind with police chasing mysterious flying objects.
Now a panel of the U.S. House of Representatives is holding a congressional hearing on UFOs in public for the first time in 50 years.
What you're seeing there is a real UFO encounter. A year ago a U.S. intelligence report examined 144 reports of unidentified aerial phenomena
since 2004 and could only explain one of them. Kristin Fisher reports.
(BEGIN VIDEOTAPE)
KRISTIN FISHER, CNN SPACE & DEFENSE CORRESPONDENT (voice over): Seven years after Navy pilots spotted this unexplained object off the Atlantic coast.
Top Pentagon officials will be grilled by members of the House Intelligence subcommittee, the first public hearing on UFOs or UAPs unidentified aerial
phenomena in more than half a century.
REP. ANDRE CARSON (D-IN): Before too long this issue wasn't even taken very seriously. It was essentially relegated to science fiction. But in a very
real sense, UAPs present a very real national security risks and the Intelligence Committee has responsibility to investigate.
FISHER (voice over): The hearing comes almost a year after the Director of National Intelligence released a highly anticipated report which examined
144 reports of UAPs, but identified only a single one, which turned out to be a deflated balloon, "the others remain unexplained". The report also
documents 11 instances in which pilots reported near misses with a UAP.
LUIS ELIZONDO, FORMER DIRECTOR, ADVANCED AEROSPACE THREAT IDENTIFICATION PROGRAM: This is not tinfoil hats and you know conversations of - being on
the motherships.
FISHER (voice over): Luis Elizondo was the former Director of a pentagon program that investigated UAPs and he's been pushing for more transparency
ever since he left in 2017.
ELIZONDO: This is a very serious national security issue. Something is in our skies. It has been there for quite some time. And we're just now having
the conversation publicly about it.
FISHER (voice over): UFOs first hit the American public's radar about 70 years ago, pushing Pentagon officials to try to explain the unexplainable.
ELIZONDO: This I'm here to discuss the so called Flying Saucers.
FISHER (voice over): In the 1960s, then Congressman Gerald Ford asked Congress to investigate leading to the last public hearings on UFOs "I
believe the American people are entitled to a more thorough explanation than has been given to them by the Air Force.
But the Air Force investigation known as Project Bluebook concluded that UFOs were not extraterrestrial, nor did they pose a threat to our national
security. Now, another Congressman Andre Carson is pushing for similar answers.
CARSON: I believe it's important that they work to declassify some of this knowledge so the American people can effectively understand what's
happening.
[09:55:00]
FISHER (voice over): Could these objects that caught the attention of trained Navy pilots be part of a top secret U.S. program? Could they be
coming from a foreign adversary or somewhere else?
Whatever they are, the intelligence report concedes a handful of UAPs appear to demonstrate advanced technology, some without discernible means
of propulsion.
LT. RYAN GRAVES, FORMER U.S. NAVY PILOT: Speeds that they're exhibiting as well as the flight characteristics. There's no platform or really energy
source that I'm aware of that could allow something to stay in the air as long as these objects were.
FISHER (voice over): The only thing certain is that they exist.
ELIZONDO: The big question is whose is it? And where is it from and what are the intentions and what are the full capabilities? And is there
something we can learn from it?
(END VIDEOTAPE)
KOSIK: And finally, Ukraine won the Eurovision Song Contest at the weekend over the weekend and on Monday, the Kalush Orchestra arrived back home to a
hero's welcome.
They were greeted at the border by servicemen and women. The band's front man who wrote the winning song, Stefania, as a tribute to his mother says
he plans to sell the trophy and go on tour to raise money for the war effort.
That's it for the show. I'm Alison Kosik. Follow me on Instagram and Twitter @alisonkosik. Thanks for joining us. "Connect the World" with Eleni
Giokos is next, I'll see you tomorrow.
(COMMERCIAL BREAK)
END
