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First Move with Julia Chatterley
Zelenskyy Thanks U.S. Congress for Bipartisan Support; CNN Visits Beijing Crematorium seeing Surge in Deaths; New Data Shows U.S. Economy Remains Resilient; Kremlin: Neither Biden Nor Zelenskyy Showed Willingness to Listen to Moscow's Concerns; Netanyahu Announces Controversial New Government; Tesla Shares Lower for a Fifth Straight Session. Aired 9-10a ET
Aired December 22, 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)
RAHEL SOLOMON, CNN HOST: A warm welcome to "First Move". I'm Rahel Solomon in today for Julia Chatterley, great to have you with us. Ukrainian
President, Volodymyr Zelenskyy wrapping up his historic trip to Washington D.C. and delivering an impassioned speech to a joint session of Congress
Zelenskyy making the case for new aid but stressing "Your money is not charity". We will be live in Washington with the reaction.
Plus, Former Head of FTX Sam Bankman-Fried set for his first court appearance in New York today that's after being extradited from the
Bahamas. All this asked his former girlfriend and Alameda research CEO Caroline Ellison pleads guilty in the case. Also another Former FTX
Executive, also turning on SPF a full report just ahead.
But first U.S. futures and European shares are lower on the second to last trading day before Christmas, Wall Street coming off some nice gains
Wednesday with all of the major averages up more than 1 percent. We got some positive earnings from FedEx and Nike also encouraging consumer
sentiment numbers helping investor sentiment. And for U.S. economic data just out to the final read on third quarter GDP showing the American
economy growing at a 3.2 percent annual rate.
That has a significant revision higher on today's data just ahead green arrows, meantime in Asia, the HANG SENG rallying 2.5 percent. That's after
China vowed to do more to study the economy, particularly its hard hit property sector. But there is also growing worldwide concern that a dire
health emergency is unfolding in China after the lifting of zero COVID restrictions.
A full report on that coming up, but first, we begin with Ukrainian President Volodymyr Zelenskyy delivering a powerful speech to members of
the U.S. Congress asking for more help. Washington has provided more than $21 billion in security assistance so far this year. That's including the
$1.8 billion package that President Biden announced on Wednesday. Jeremy Diamond has more now from the White House.
(BEGIN VIDEOTAPE)
JEREMY DIAMOND, CNN WHITE HOUSE CORRESPONDENT (voice over): A historic visit to the United States Ukrainian President Volodymyr Zelenskyy meeting
face to face with President Joe Biden the first time since Russia's invasion of Ukraine nearly one year ago.
JOE BIDEN, PRESIDENT OF UNITED STATES OF AMERICA: Brutal Assault on Ukraine's right to exist as a nation.
DIAMOND (voice over): Zelenskyy expressing gratitude to the Biden Administration and the American people.
VOLODYMYR ZELENSKYY, PRESIDENT OF UKRAINE: First of all, I really all my appreciation from my heart from the hearts of Ukrainians.
BIDEN: The American people come with you every step of the way and we will stay with you.
DIAMOND (voice over): Biden making good on that promise hours later announcing a fresh package of military aid.
BIDEN: $1.85 billion package of security assistance that includes both direct transfers of equipment to you that Ukraine need.
DIAMOND (voice over): That equipment includes the highly sought after Patriot Air missile defense system.
ZELENSKYY: What's going to happen after Patriots are installed, after that we will send another signal to President Biden that we would like to get
more patriots.
DIAMOND (voice over): Zelenskyy's visit closing with a primetime address before a joint meeting of Congress, where he received a rousing welcome and
delivered a show of gratitude to the American people.
ZELENSKYY: I hope my wars of respect and gratitude resonate in each American Heart.
DIAMOND (voice over): In his upbeat speech, Zelenskyy tried to shore up public support in the U.S. and back home in Ukraine.
ZELENSKYY: To Ukraine didn't fall. Ukraine is alive and kicking. Ukraine holds its lines and will never surrender.
DIAMOND (voice over): A big promise in times of celebration for many around the world.
ZELENSKYY: We'll celebrate Christmas. Celebrate Christmas and even if there is no electricity, delight, or our faith in ourselves, will not be put out.
DIAMOND (voice over): Despite his optimism is Zelenskyy argued that Ukraine must continue to defeat Russia on the battlefield in order for the war to
end.
ZELENSKYY: Your support is crucial not just to stand in such fight but to get to the turning point to win on the battlefield.
DIAMOND (voice over): And he argued defeating the Russian invasion is a worthy investment.
[09:05:00]
ZELENSKYY: Your money is not charity, is an investment in the global security and democracy that we handle in the most responsible way.
(END VIDEOTAPE)
SOLOMON: And CNN's Kevin Liptak is live with us now at the White House with more, Kevin, great to have you. So as we said, this was a historic day. But
how much of this do you think timing is at play? We know there is a shifting of power here in the U.S. and Congress. And so how much of this
visit do you think has something to do with just the timing of it all?
KEVIN LIPTAK, CNN WHITE HOUSE REPORTER: Yes, the timing was certainly not incidental. President Biden just invited President Zelenskyy to Washington
10 days ago, and so certainly both men were highly cognizant of those political dynamics in the Congress, when Zelenskyy was speaking to them
last night. And he had so many constituencies that he was trying to address.
Of course, there were the lawmakers in the room, Republicans and Democrats alike. But also the general American public to which he was speaking, who
may be wondering why the United States continues to send tens of billions of dollars to Ukraine when there's so many problems in the United States.
And that's a concern that you've heard from Republicans in Congress, particularly the most conservative Republicans who are wary of this amount
of aid to Ukraine and aren't necessarily going to rubber stamp President Biden's requests going forward.
But there is a sense this morning that President Zelenskyy was able to accomplish what he came here to accomplish, which was to rally American
support, a demonstrate this unity between the United States and Ukraine sort of come as a symbol of the Ukrainian resistance.
And of course, yesterday was full of symbols, whether it was Zelenskyy's a draft military uniform, or President Biden's blue and yellow striped tie.
But underneath that, I think there are some lingering concerns about what comes next in Ukraine.
And you heard that in both men's remarks yesterday, President Biden saying that the United States will continue to support Ukraine through 2023
indicating that he doesn't see a quick end to this war. And President Zelenskyy, also acknowledging that there are some tough days ahead as
winter sets in as Russia regroups. On the battlefield, he came and said that the support, of course, he's thankful for it now, but that he does
need more, he says, is it enough?
Honestly, not really and that was kind of indication of where things stand right now President Zelenskyy's constant demands for more and more
armaments has been a source of tension with the Biden Administration. And I think in inviting him here in person, there was a sense that meeting face
to face talking eye to eye. They would be able to sort of de-conflict some of these things and that isn't necessarily what happens.
Zelenskyy came out afterwards, still very much saying that he wanted more weapons, including more of the Patriot missile batteries that President
Biden announced yesterday. Now, this morning, what U.S. officials said that they weren't necessarily surprised by those requests that they would be
surprised in fact, if you didn't make those demands known to the American public. But certainly we are emerging from these historic meetings with a
new sense of unity with American lawmakers, but certainly no more clarity on what the end of this war might look like, Rahel.
SOLOMON: Well, look, Kevin, as you say, I mean, so many takeaways, one of which was very apparent is that neither side believes that this will end
quickly as you say, stretching into 2023. Kevin Liptak, great to have you thank you. Meanwhile, strong reactions pouring in from Russia, the Kremlin
saying neither Presidents Biden nor Zelenskyy showed a willingness to listen to Moscow's concerns, and also strongly criticizing the U.S.
decision to supply that Patriot missile system to Ukraine.
Clare Sebastian is with us now live in London with the details. Clare, great to have you, so I mean, it is not necessarily a surprise to hear the
Kremlin say these things but what more are we learning? What else have they said?
CLARE SEBASTIAN, CNN CORRESPONDENT: Yes, Rahel, they weren't sort of defiant at times dismissive and the responses from the Kremlin full of the
kind of narrative flipping the ultimate reality that has become commonplace in their remarks on this wall.
As you say the Kremlin spokesman Dmitry Peskov talks about how the West in the U.S. are not listening and Ukraine are not listening to Russia's
concern. He said that they're ignoring the barbaric as he called it shelling by Ukraine in the Donbas and that by these provisions of weapons
the U.S. is now de facto fighting against Russia.
This is a line that we've heard repeatedly from the Kremlin throughout the war, in fact, but perhaps more so over the last few months, as Ukraine's
counter offensive has gained traction in response to the issue of the Patriot missiles, which we knew were a great concern to Moscow. This is
what Peskov had to say. He said this does not contribute to a speedy settlement of the situation. On the contrary, this leads to the fact that
unfortunately, the suffering of the Ukrainian people will continue longer than it could have.
[09:10:00]
SEBASTIAN: So shifting the blame onto the U.S. and the West for the suffering inflicted on Ukraine, which is a cause suffering inflicted by
Russia. But this was also an exercise in optics on the Russian side as well as Zelenskyy had his big moment in Washington. We saw President Putin a few
hours earlier, appearing at a huge meeting of his military and defense top brass touting the expansion that he's planning of the Russian Military.
And then there was a follow up to that today, the Defense Minister Sergei Shoigu, appearing in official video in what they call the zone of the
special military operation greeting troops inspecting conditions that are clearly Russia projecting an image of power and defiance even as we know
that it is locked in essentially a violent stalemate in Ukraine.
SOLOMON: Clare Sebastian, thank you. Sam Bankman-Fried is back on U.S. soil and expected to appear in a New York courthouse today. The Former CEO of
FTX is facing eight criminal charges including fraud, conspiracy and money laundering. Court records show two senior FTX executives have pled guilty
to multiple criminal charges and are cooperating with us prosecutors.
CNN's Kara Scannell joins me now with more details. So Kara, what happens now that he is back on U.S. soil in terms of the judicial process? Where do
we go from here?
KARA SCANNELL, CNN REPORTER: Good morning, Rahel. We have Sam Bankman-Fried after several false starts in the Bahamas is back on U.S. soil. He is
inside the courthouse behind me where later today hopefully this morning he will face the judge and face these eight criminal counts of fraud and
conspiracy. In one the U.S. Attorney for the Southern District of New York has called one of the biggest financial frauds in American history.
Sam Bankman-Fried was arrested in the Bahamas, where he has spent the past week there were several false starts in the courts there but he did agree
to not challenge his extradition. And the Bahaman Ministry of Foreign Affairs signed off on that yesterday that put him on a flight back to the
U.S. Now while he was in the air, the U.S. Attorney's office announced that they had charged two of his top executives.
That was Gary Wang, who was the Co-founder of FTX, as well as Caroline Ellison she was the Co-CEO of the hedge fund Alameda research. Those two
entities intertwined in this alleged fraud. As you said they are both cooperating with prosecutors.
That places significant pressure on Bankman-Fried having two insiders, two people close to him now working with authority. So when he appears in court
today, it's possible the judge will arraign him on the indictment where he will enter a plea in this likely not guilty. He's shown no inclination to
plead guilty at this point in this fast moving investigation, and then they will discuss bail.
And our sources tell me that his lawyers are in talks with federal prosecutors are working to arrange some kind of bail agreement that would
allow him to avoid detention in the U.S. Now that is not unusual for financial fraud cases. A lot of people compare him to Ponzi scheme or
Bernie Madoff. As you may remember, he was also released on bail, Rahel.
SOLOMON: Very interesting point Kara. We'll have to wait and see what happens with that what comes out of that, thank you. To China now the World
Health Organization is raising concerns about an unprecedented wave of COVID 19 cases in China. It says more information is needed to understand
how severe it is and has asked China to share more data. This has concerns grow about a shortage of drugs within the country. CNN Selina Wang has the
latest from Beijing.
SELINA WANG, CNN CORRESPONDENT: There's relief that after three years of its draconian zero COVID policy. China is finally opening up but the
country is not prepared. Hospitals are coming under pressure, fever and cold medicine is running out. The local versions of Tylenol and Advil are
nearly impossible to get drug stores across the country.
Now to try and calm panic buying some local governments are resorting to rationing the amount of medicine for sale down to the exact number of
pills, and dozens of pharmaceutical companies say they're going all out to try and increase production. But even as COVID is rapidly sweeping through
the country, China has only reported less than 10 Total COVID deaths for this entire month. That is a strikingly low number and the government now
saying that it is narrowing the definition of COVID-19 deaths.
To only include patients who died of respiratory failure directly caused by the virus. That means that people who died because of another underlying
condition will not be counted as a COVID death, even if they were sick with COVID at the time that goes against the World Health Organization's
guidelines and the WHO says it will severely underestimate the true death toll in China. This change in China's counting method also comes as
crematoriums across the country fill up. I visited a crowded crematorium in Beijing this week.
And from the video you can see the long line of cars waiting to get into the cremation area. The parking lot was also completely full. Several
people there told me their loved ones had died from COVID. An employee said they'd been swamped with work. I saw metal containers full of yellow body
bags and workers loading or coffins in.
[09:15:00]
WANG: Stores nearby selling funereally item said they're much busier than normal. I also went to a COVID designated hospital where a worker told me
elderly patients with COVID are dying every day. A new study by Hong Kong researchers estimates nearly 1 million people in China could die from
COVID, if the country doesn't take necessary public health measures, like increased vaccinations.
The vaccination rate is still lagging for people over 60 and only around 42 percent of those over 80 have received a booster shot. And experts say that
third dose is necessary to get enough protection since China is using less effective vaccines compared to the mRNA vaccines used overseas. China is
only now going through this painful reopening that the rest of the world has already gone through. But China is not sharing the same data. Selina
Wang, CNN, Beijing.
SOLOMON: Here in the U.S. holiday havoc has more than 1200 flights are cancelled. Over 100 million people are currently under alerts for severe
winter weather and wind chill as temperatures plunge and rates never previously recorded. Pete Muntean is at Chicago's O'Hare Airport where he
is seeing a lot of flights grounded.
Pete, there is an airport I know very well. I went to graduate school in Chicago. It's busy on a good day. What's it looking like now? I mean,
what's the latest with cancellations and delays?
PETE MUNTEAN, CNN AVIATION CORRESPONDENT: It is so busy here, Rahel. You know, this is not even the end of the security line. It makes hundreds of
feet behind me. These are the folks who have the right idea. Get out early before the snow starts. That's what travel experts and airlines have been
telling us as these cancellations are only now starting to ramp up.
But that one on every flight into and out of Chicago O'Hare here has been cancelled so far today. Just check Flight Aware nationwide, we've seen 1333
flights cancelled in the U.S. This is so critical, especially for our international viewers because Chicago O'Hare is a major connecting airport
not only for American Airlines, but it's the biggest hub for United Airlines.
Went behind the scenes to see their network operation center and how they are scrambling to save trips trying to reroute passengers who are making
connections through other connecting airports. They are trying to do this despite their best efforts. There has been so much effort put into this by
the airlines but they cannot control Mother Nature.
Once you should listen to Joe Heinz now who's the VP of network operations for United. He says the snow shore that's going to be a problem here. But
it's really the biting cold here tomorrow. The forecast high here, two degrees Fahrenheit, listen.
(BEGIN VIDEO CLIP)
JOE HEINS, VP OF NETWORK OPERATIONS, UNITED AIRLINES: Cold temperatures are going to stay through Friday and that's what's going to present challenges.
People who have gone on the ramp and experienced the high winds and in subzero temperatures are really going to be challenged to work safely.
(END VIDEO CLIP)
MUNTEAN: We are in for a real dozy here to help the big tip from airlines, download their app that is the way you get up to the minute up to date
information of whether or not your flight is delayed or cancelled. Airlines say delays and cancellations are inevitable with a storm like this winter
storms are a thing they deal with often thankfully, they know that this one was coming. United Airlines has an interesting innovation that they're
doing because in some cases, you could find out in the terminal that your flight has been cancelled.
They're going to be a really long line at the customer service desk. And in some cases, they're handing out a QR code to passengers scan that on your
phone you're connected live via video call with the customer service agent who can help you figure that out might actually be a customer service
agents. Not here in Chicago, not in a place where the weather is bad but in a place where the weather is nice and sunny like Los Angeles, because
they're not all that busy trying to solve problems for passengers Rahel.
SOLOMON: Well, I think that's such an interesting point, Pete that you know sort of put you through to someone who can actually talk to you and save
you a trip to the airport at least minimize that bit of frustration. Although your travel plans may be ruined. Pete Muntean, great to have you
thank you.
Well straight ahead, hoping for a miracle on Wall Street. What the Santa's have in store after what's been a really tough year for the markets. And a
deal right on the deadline we will head to Israel where a political veteran has just formed a new government. Stay with us.
(COMMERCIAL BREAK)
[09:20:00]
SOLOMON: Welcome back to "First Move". U.S. stocks still on track for a lower open across the board. Choppy trading so far this week we'll see DOW,
NASDAQ and S&P futures all half of the NASDAQ futures of the most about 1.2 percent right now. But hope springs eternal even still for some kind of
Santa Claus rally socks are hobbling toward the year end finish line with the S&P 500 down 18 percent.
The NASDAQ slumping 31 percent Since January, and the New Year won't be a walk in the park either. With major global central banks vowing to keep
hiking rates until inflation subsides further, even rate hike laggard the Bank of Japan could be tightening policy in 2023. Economic data today also
pointing to ongoing strength in the U.S. economy with the record of GDP revised higher to a 3.2 percent annual rate jobless claims rising at a less
than expected pace as well.
Maybe not so great news, though, for fed looking to slow the economy, we'll discuss. Paul Donovan joins me now he is the Chief Economist at UBS Wealth
Management, Paul, great to have you. So let's start there with this GDP report. I mean great news for the economy, maybe not so great news for the
Fed. I mean, how do you read it?
PAUL DONOVAN, CHIEF ECONOMIST, UBS WEALTH MANAGEMENT: Well, I think we got to be a little bit careful. I mean, the GDP numbers are subject to a lot of
revisions, more than we've had in the past, this number is going to be revised. Again, I think most economists believed that the U.S. economy did
slow down towards the end of the year economic activity has become more subdued. The Fed itself is now saying job creation, probably spot in the
second quarter.
The non-farm payrolls numbers are accurate. So beneath the surface, there is a clear sign of a slowdown in economic activity. And of course, what the
Fed needs to do is to get inflation down and that's a rather different question.
SOLOMON: I see, so even though we're still seeing consumer spending, I mean, does this at least lead to a bit more confidence in me, soft landing,
Paul?
DONOVAN: Well, so consumers are spending, which is quite remarkable when you think about it, because of course, real wage growth is still not just
negative. I mean, it's catastrophically negative, which is by no means a U.S. phenomenon alone. This is what we're seeing here in the U.K. and in
Europe as well.
But consumers still do have room to leverage their balance sheets, at least middle and higher income consumers do. Lower income consumers are feeling a
lot more of a strain. So you're starting to see divisions emerging in the consumer. And I think that it's fair to say that middle income consumers
may very well have a soft landing, but it will feel a lot harder for those at the lower income end of the spectrum.
SOLOMON: I think that's a fascinating point and I would argue it might already feel quite hard for people at the lower end of the spectrum. Paul,
I want to circle back to something you just alluded to that this is not certainly a U.S. phenomenon, this global inflation that we're experiencing.
German November, producer prices fell more than expected almost 4 percent month over month.
[09:25:00]
SOLOMON: Do you think heading into next year? We might actually see a pretty significant fall in global inflation maybe faster than we were
expecting.
DONOVAN: So I think this is where the risk is, because this is a rather peculiar set of inflation. The first point is we haven't had 18 months of
high inflation, while we've had three separate, totally distinct waves of inflation, very different causes and very different remedies. Now, the
current wave of inflation is mainly driven by profit margin expansion, not a wage driven inflation.
And that's important, because profits can get squeezed a lot more quickly than a wage driven inflation is likely to be. So its wage driven, the
inflation is likely to be stickier, whereas its profit driven as it is at the moment, that's more likely to come down quickly. And in fact, you've
only got to look at the complete collapse, in fact, unprecedented collapse in U.S. durable goods price inflation over the course of this year, to see
just how quickly price changes can come down when circumstances change.
SOLOMON: Well, that's an interesting point, because look, I think a lot of consumers have long suspected that some of this inflation was being driven
by let's face it greedy corporations that want it to sort of maintain their profits and their margins. I mean what to do about that? I mean, if you're
a Fed Chair Powell, and you're trying to fight this, you know, inflation monster, I mean, what to do about that?
DONOVAN: Well, when you get profit margin expansion, and of course, this is what companies are supposed to do? I mean, they're supposed to try and
maximize their profits. What happens is there are two ways of attacking this. So the first way is to simply slow demand and Fed Chair Powell is
rather trill cry of hike, hike, hike has certainly done that.
In fact, he's probably done a bit too much damage, in my opinion. But you've certainly seen a slowdown in demand. We've seen this in the U.K.
where disinflationary forces are coming through the starting to see it in continental Europe.
But the second thing you can do is just change consumers attitudes, because consumers are being sold a story that these price increases are justified,
or they start pushing back against that saying, no, actually, we don't believe this, then the companies will actually start to curtail the margin
expansion, for fear of losing customers.
And I think that's why we're starting to see a lot of central narrative, talking about profit margin expansion as a driver of inflation. We've had
the upgrade out of the Fed we've had Elaine of the ECB talking about this.
The problem is, generally ordinary people don't pay that much attention to Central Bank speeches. So it's something that I think if we start to see
complaints about margin expansion are trending on social media, that's probably a good disinflation indicator. But otherwise, it's going to be
mainly about slowing the pace of demand.
SOLOMON: Well, I think it's an interesting point, certainly within the financial news community, you know, we hang on every word that Powell says,
but it's always important to remember that most people don't. Paul, before I let you go, forecasts and predictions for 2023. I mean, what are you
expecting?
DONOVAN: So I think it's a year of inflection points, as we look ahead. I think we continue to see growth slowing into the middle of the year, and
then hopefully stabilizing. I think we've hit the inflection point of inflation, inflation is coming down.
The debate is simply as I've just said how rapidly it comes down, but I think we do get the inflection point in Central Bank policy. So the Fed I
think probably goes too far. Another policy error from Powell, but will by the end of the first quarter, you're looking at a peak of rates and England
is probably the first one to pick on rates.
The ECB will be lagging behind remember, hasn't even begun to Biden quantitative policy yet. But probably second quarter is the peak of
European rates. So we've come into this turning point and I think the way I would characterize 2023. Is this is the first year genuinely that we can
despite the global economy as being post pandemic.
SOLOMON: Here's helping Paul Donovan, wonderful to have you thank you.
DONOVAN: Thank you.
SOLOMON: He is the Chief Economist at UBS Wealth Management and coming up on "First Move". A powerful message from President Zelenskyy more on the
Ukrainian Leader's historic visit to the U.S. coming up next.
(COMMERCIAL BREAK)
[09:30:00]
SOLOMON: Welcome back to "First Move" and back to our top story. Ukrainian President Volodymyr Zelenskyy is delivering a powerful speech to the U.S.
congress and his historic visit to Washington.
(BEGIN VIDEO CLIP)
ZELENSKYY: Your money is not charity is an investment in the global security and democracy that we handle in the most responsible way.
(END VIDEO CLIP)
SOLOMON: He also presented Congress with the Ukrainian flag signed by soldiers on the front lines. Will Ripley is live with us now in Kyiv with
more. So Will, what's the reaction been like in Ukraine to this historic visit?
WILL RIPLEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hi, Rahel, well, certainly people here have tremendous pride in their president, he is
extraordinarily popular here. This nation has really rallied behind Volodymyr Zelenskyy. Any political differences that people had before the
war melted away on February 24, when he decided to stay in Kyiv and said he didn't need a ride to evacuate the country.
He needed ammunition and boy has he gotten it. And they have used it brilliantly on the battlefield. But nonetheless, when you're not dragging
on more than 300 days of this war, it is a strain on any country, not to mention the devastating loss of life on both sides as a result of this
brutal and unnecessary invasion launched by Vladimir Putin.
And yet, if this show of friendship in Washington if this speech was intended to make the Kremlin and Vladimir Putin think twice about all of
this, well, that's certainly not the indication that we get through their public messaging anyway.
The Kremlin saying that nothing that Biden or Zelenskyy said, gave them, you know, any indication that they have a respect for Russia's concerns
Russia's safety concerns, which they say was the reason that this invasion happened in the first place.
They're worried about the expansion of NATO. The Kremlin said that bringing the patriot missile defense systems which are designed to stop Russian
missiles from reigning down on critical infrastructure, plunging millions of people in this country into the dark.
I mean, the speech was in the middle of the night, but also a lot of people here couldn't have watched it if they were awake, because they were without
power, even here in Kyiv, sometimes people have less than one hour of electricity a day in the capital city, the most arguably well protected
area in the whole country.
And then you have the Russian Foreign Ministry saying that this is basically Russia preparing itself for a prolonged confrontation with the
west. They say that the U.S. actions are setting up this prolonged confrontation.
Vladimir Putin has been calling for the modernization of his military pouring more resources into it, training the hundreds of thousands of
conscripts to prepare them for you know more potential ground battles ahead.
[09:35:00]
RIPLEY: The Ukrainians believe the Russians will try to make a move on Kyiv sometime early next year. So even though it was a triumphant moment in
Washington, Rahel, for, you know, President Zelenskyy, he comes back home to the reality that this war is very much not over and in some ways may
even just be getting ready for an even more scary phase in the not too distant future.
SOLOMON: Yes, that's an interesting point, Will, one of the takeaways certainly that it appears all sides can agree on, is that this will likely
continue for quite some time. Will Ripley, great to have you. Thank you. And for more on this, the former U.S. Ambassador now to Ukraine, William
Taylor joins us.
Ambassador, wonderful to have you, so, do you think this visit for Zelenskyy was a success? Does he go back home with what he wanted?
WILLIAM TAYLOR, FORMER U.S. AMBASSADOR TO UKRAINE: Well, there's no doubt that this was a success. President Zelenskyy came here, not obviously, not
in triumph, but he came here to thank the American people to thank the congress, to thank President Biden for the amazing support the incredible
support, politically humanitarian, financial, but in particular military support.
And he made that point over and over; he thanked people over and over. So that was his first point. It was a brilliant move. And then he asked for
additional support. Of course, he's going to ask for additional support. He is facing Russia, Russia has attacked. So he needs additional support.
He'd laid out pretty clearly what kinds of support he still needs. And if he gets that support, he can prevail. He definitely believes and the
Ukrainian people believe they can win. So in that sense, Rahel, he came away, having done what it needed to do without boasting, being very
appreciative, but being very frank, that he needs more.
SOLOMON: Ambassador, I'm not sure if you heard our previous correspondent just a few moments ago, Will Ripley who suggested that if this trip was
meant to make Russia think twice, it didn't do that. And so in that sense, are you surprised at all by the strong reaction that we have gotten from
the Kremlin after this visit?
TAYLOR: Rahel, not at all. I did listen to Will, great report. And we expect that from the Kremlin, we expect no different from the Kremlin. The
Kremlin had no reason to invade Ukraine had no justification whatsoever. And it has continued to push soldiers, untrained soldiers into Ukraine and
continue to lose. The Russians have lost in every field that they have bought.
They've lost in Kyiv, they lost in Kharkiv, they lost in Israel, they lost in Kherson. There fighting to a draw there may be losing Bakhmut. President
Zelenskyy was just in Bakhmut, two, three days ago now. And he then came directly to the United States. So the Kremlin is losing. And they are
looking for some way to regain that. And so far they've not found it.
SOLOMON: Do you think I mean, certainly Ukraine has shown really remarkable military success certainly surprising many, right? I mean, we heard
Zelenskyy himself say against all odds and doom and gloom scenarios, Ukraine didn't fall. Do you think this missile patriot system will be a
game changer? Is there any one piece of ammunition piece of weaponry that could be viewed in that way as the game changer?
TAYLOR: I don't think it's the patriot system that's going to be the game changer. I would say there are two game changers. One, we've already seen
and the other is to come. The one we've already seen so called high Mars, these long range rockets that were much longer than the standard artillery.
These high Mars that the Americans have provided to the Ukrainians and Ukraine reviews extremely effectively have turned the tide these high Mars
have turned the tide they are game have been game changers. And we've seen since they've arrived the counter offensives that the Ukrainians have
mounted, and it pushed the Russians back.
There's another game changer that is yet to come, that I believe is being considered by the administration and that is even longer range versions of
those high Mars. The longer range versions would allow the Ukrainians to go deep into Russian held territory, still Ukrainian territory, but the
Russians hold territory in Ukraine that they're using to mount these offensive.
Even though defenses of manned by untrained soldiers, that the targets that are deep behind the Russian lines are the ones that these longer range
weapons built up. And then the other game changer Rahel are the tanks and the aircraft that will, that triple will allow the Ukrainians to push the
Russians out of their country.
[09:40:00]
SOLOMON: What do you think would have to happen for the U.S. to more seriously consider providing that type of weaponry, those longer range
missiles, those tacks what would have to happen before we actually see movement and momentum in that direction?
TAYLOR: I think we're seeing some movement in that direction already. It's not yet there. But I think what's caused it and you asked the right
question, what's caused that reconsideration that is allowing administration to think about these longer range heavier weapons, and that
is these brutal attacks on civilian targets.
The Russians are just they're losing on the military battlefield. So they're attacking civilian targets, unarmed civilian targets that are
causing Ukrainians to freeze in the dark, without light, without heat, without water that is affecting the decisions. And you got to stop that
somehow.
And in order to stop that, the longer range weapons and the more offensive weapons allow the Russians, the Russians to be pushed back the Ukrainians
to push the Russians back out of their country. I think that's coming.
SOLOMON: You know it's been incredible to just watch the resolve and the morale of the Ukrainians, even in the midst of these barrages of these
missile strikes. And even in the midst of these attacks on their critical infrastructure, how significant do you think Zelenskyy's visit to U.S.
President Joe Biden was for the morale of the Ukrainians in terms of just holding on and pushing through even longer?
TAYLOR: Rahel, you're exactly right. Morale is so key to this war, to any war, but morale is to weapons as three is to one, as the leader say, the
military leaders say. It is so critical. And the morale on the Ukrainian side is high because they know what they're fighting for. President
Zelenskyy is able to tell everyone, Ukrainians, Russians, the International Committee, why they're fighting, they're fighting for their land, and
they're fighting for their freedom.
They're fighting for their independence; they're fighting not to be subordinated to Russia. That's a morale booster. And the Russians don't
have that. President Putin can't tell his soldiers, anything about why they're there. Why are they there? He cannot explain this. So the morale is
a big factor and this visit by President Zelenskyy will highlight that.
SOLOMON: Ambassador, wonderful to have you, thank you so much.
TAYLOR: Thank you, Rahel.
SOLOMON: Ambassador, William Taylor there. And still to come on "First Move" Benjamin Netanyahu has formed a government. So a new government,
we're live with Jerusalem with the details and his call with Vladimir Putin after the break.
(COMMERCIAL BREAK)
[09:45:00]
SOLOMON: Welcome back to "First Move". Former Israeli Prime Minister Benjamin Netanyahu is announcing that he formed a coalition government just
minutes before the deadline. The new government will likely be the most right wing in Israel's history.
His office says Russian President Vladimir Putin called Netanyahu to congratulate him. CNN's Hadas Gold joins me live from Jerusalem, Hadas,
great to have you. So when we say right wing help me understand what exactly does that look like in Israel?
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Well, when you look at the Israeli history, you look at who has made up the different governments in previous
years; you look at sort of what their positions are. And then you look at the coalition that Benjamin Netanyahu has built. And that's where you see
and that's where you're getting a lot of the experts, the people who study this, who are saying this is likely going to be the most right wing
government in Israeli history.
Now, last night, just minutes before the deadline he had at midnight in order to be able to announce that he had formed the government, Benjamin
Netanyahu really took it down to the wire, something like 15 minutes before the deadline that he actually called the Israeli president notified him
that he had managed to form this government.
And it's not necessarily a surprise that he's managed to form the government. That's because from the November 1 election, he and his allies
actually did much better than the polls were expecting. And it was quite a win for these extreme right wing parties that are now seeing themselves in
position of power.
That honestly a year ago, for many people in Israel, it would have been unfathomable that they would be in them. Now, there are still a few hurdles
that they have to pass before they can be officially sworn in. Namely, they actually have to pass a few bills that would even allow some of these
ministers to take on their roles or even serve as ministers.
For example, one of the ministers that has been suggested he's been convicted of tax offenses in the past. And so there needs to be a bill that
will be passable essentially, work around the law to allow him to become a minister. But all things are pointing towards this new government is
expected to be sworn in within a week or so.
And because of the makeup of its ministers, it's causing several of Israel's allies even around the world to brace themselves for the next few
months. Here's why.
(BEGIN VIDEOTAPE)
GOLD (voice over): The new Israeli government setting off alarm bells around the world. Even allies are warily eyeing Benjamin Netanyahu's new
ministers who will make up the most right wing government in Israeli history. A stark change from the last coalition now made up all of men and
all Orthodox except for Netanyahu himself.
Most recognizable is Itamar Ben Gvir once convicted of anti-Arab racism and supporting a Jewish terrorist group. Now National Security Minister in
charge of Israeli police eager to allow Jews to pray at Jerusalem's holiest site were only Muslims are now allowed to worship, a place that has sparked
intifadas and even wars. Former Israeli ambassador to the United States Danny Ayalon warning Washington will be on high alert.
DANNY AYALON, FORMER ISRAELI AMBASSADOR TO U.S: If they will perform what is conceived in Washington as provocations. For instance, change of status
in Temple Mount or unchecked enlargement of new settlements. This could be a very, very big problem for Netanyahu and for the government.
GOLD (voice over): Then there's Bezalel Smotrich, another far right settler lawyer turned politician has been named Minister of Finance, and has also
been given power to appoint the Head of the Israeli body which controls border crossings and permits for Palestinians. Smotrich supports abolishing
the Palestinian Authority and annexing U.S. Bank. Israel staunchest ally the United States perhaps hoping the rhetoric won't match the actions.
ANTONY BLINKEN, U.S. SECRETARY OF STATE: We will gauge the government by the policies that pursues rather than individual personalities.
GOLD (voice over): Other appointments causing uproar include a gay rights opponent who has vowed to ban pride parades to position in the education
ministry and proposed changes to the law of return for the restricting who was considered Jewish enough to be permitted to immigrate to Israel.
Netanyahu, for his part has repeatedly claimed that the buck will stop with him.
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER-DESIGNATE: I've had such partners in the past and they didn't change an iota of my policies. I
decide the policy with my party.
GOLD (voice over): But as the government has taken shape, his critics like this cartoonist say he's creating a monster he won't be able to control.
(END VIDEOTAPE)
GOLD: And as you noted, one of the first people to call Benjamin Netanyahu to congratulate him after being able to form the government was Vladimir
Putin. And it's interesting timing considering Zelenskyy was in Washington just last night. Now Vladimir Putin is somebody that Benjamin Netanyahu
used to tout on the world stage as somebody that he had a good relationship with.
[09:50:00]
GOLD: At one point during one election 2019, there was a billboard up in Tel Aviv that Netanyahu put up with him shaking hands with Putin. So it'll
be very interesting to see how that relationship plays out now, after Russia has invaded Ukraine and whether that relationship will change at
all, since Netanyahu has been out of power before he comes back, Rahel.
SOLOMON: Yes, great points. Hadas Gold, great to have you, thank you. And stay with "First Move" more to come after this.
(COMMERCIAL BREAK)
SOLOMON: Justin, Ukrainian president Volodymyr Zelenskyy has met with the Polish president on his way back to Kyiv from the U.S. After the meeting
Zelenskyy said, "We discussed strategic plans for the future bilateral relations and interactions at the international level in 2023. It is not
clear what time he arrived in Poland".
To the stocks now and the markets U.S. stocks are up and running for the second to last trading session before Christmas. Stocks more naughty than
nice today with the S&P 500 on track to break a two session winning streak tech getting hit the hardest. That's been a common theme this year with the
NASDAQ down by well over one and a half percent.
And forget about that popular song last Christmas. This month has been and a gasp Christmas for the bulls with the S&P down 6 percent and traders of a
certain age might prefer to call it a Blue Christmas. Paul R LA Monica joins me now. Paula, look, whatever Christmas lyric you want to use, it has
been a rough season certainly a rough year for U.S. stocks.
PAUL R. LA MONICA, CNN REPORTER: Without question Rahel, I mean, this is the Grinch stealing the Christmas rally perhaps, we're going to talk about
Scrooge the - is if you want, you know, go as far as you want with all these Christmas metaphors. But it is obviously a very, very concerning time
for Investors.
And what's interesting is that it's a good news is bad news type of day today because GDP for the third quarter revised higher 3.2 percent growth.
You had jobless claims while still up slightly from a week ago, near historically low levels. I think that has Investors wondering if the Fed
has to keep raising rates aggressively for the foreseeable future.
So that's why stocks are down and that includes Tesla as well, Rahel. They are down again for I believe the fifth straight day another 52 week, multi-
year low down 60 percent this year, tough times for Elon Musk.
SOLOMON: I mean, look, I think that and Twitter has been one of the biggest business stories this year, just the takeover the fact that it went through
his leadership skills. Paula, you know, I wonder do you think Investors have been a bit knee jerk this year.
I mean, as you say it's sort of good news is bad news. But you know, I spoke to a guest UBS guest earlier who said look, GDP was revised higher,
but it is still slowing consumer spending is still slowing.
[09:55:00]
SOLOMON: And so I wonder, do you think that we've all become just a bit too sensitive to the headline story?
MONICA: I think definitely that is the case Rahel, because it's clearly even though we've had this solid GDP number for the third quarter, there
are questions about whether or not the fourth quarter is going to be problematic. We saw some weak retail sales numbers not that long ago for
the month of November.
There's also the issue of all these rate hikes the Fed has done this year to fight inflation, they will eventually have an effect slowing the
economy. And that's why a lot of people are talking about a recession at the end of 2023.
SOLOMON: Paul R LA Monica, great to have you as always, and if I don't see you, Happy Holidays, Merry Christmas, my friend.
MONICA: Thank you.
SOLOMON: And that is it for the show. I'm Rahel Solomon. Again, it is the second to last trading day of this week before Christmas. So we will see
how it all ends, so a lot more of the session to go, thanks for joining us, "Connect the World" is coming up next.
(COMMERCIAL BREAK)
[10:00:00]
END
