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First Move with Julia Chatterley
Russia Claims it has Captured Ukrainian Town of Soledar; U.S. Chamber of Commerce: Business "Fed Up" with Washington; Inflation Eases, but Consumers, Businesses may not Fell it; Petrides: Banks are Healthy, This is not Like 2008; At least 49 have Died Since Protests Began in December; Lisa Marie Presley, Daughter of Elvis, Dies at 54. Aired 9-10a ET
Aired January 13, 2023 - 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)
ELENI GIOKOS, CNN HOST, FIRST MOVE: A warm welcome to "First Move", I'm Eleni Giokos in Dubai; I'm sitting in for Julia Chatterley. And just ahead
on today's program, document drama, the U.S. Attorney General appoints a special counsel in the President Biden classified document case. And that
says Democrats fret over the potential political fallout.
And Cook's commitment Apple CEO asks for and gets a steep 40 percent pay cut amid high compensation concerns as part of a corner office trend. But
first, check off the global markets U.S. stock set for a lower open that's across the board as you can see, and that's as U.S. earning season gets
underway in earnest. A number of major U.S. banks just start with Q4 results.
Their shares set to open lower, European shares mostly higher, and on track for a second straight week of gains and that's after a positive Asian
handover. Now Investors encouraged by news that the U.K. economy grew ever so slightly in the fourth quarter, versus expectations for a contraction
Germany's economy growing at a faster pace than expected last year too.
All of this after news Thursday that U.S. inflation is for a sixth straight month in December. This could give the Fed room to raise rates by a less
aggressive quarter of a percentage point at its next policy meeting.
Now as for the action in the banking sector, decent results overall, but concerns about how a weaker economy will impact profits going forward. JP
Morgan reporting a 6 percent profit rise, but the bank is setting aside more money in case loans go bad, CEO Jamie Dimon warning of new headwinds
as well.
More on back profits later in the show. But first, Russia's Defense Ministry says its forces have taken control of the town of Soledar in
Eastern Ukraine. But a Ukrainian official has dismissed that claim saying fighting is still going on. The battle has been brutal, with heavy losses
on both sides.
(BEGIN VIDEO CLIP)
IGOR KONASHENKOV, RUSSIAN DEFENSE MINISTRY: On the evening of January 12 deliberation of the City of Soledar, which is important for the
continuation of successful offensive operations and on test region was completed establishing full control over Soledar, makes it possible to cut
off the supply routes for Ukrainian troops in Bakhmut. And then block and take into culture and the unit of the armed forces of Ukrainian remaining
in it.
(END VIDEO CLIP)
GIOKOS: Well, CNN's Ben Wedeman and his team are just outside the town. Let's take a look.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (on camera): We're in a trench just about 2.5 miles or 4 kilometers from the front from Soledar.
All right now the situation in Soledar at this point is not altogether clear. Ukrainian officials say they still hold part of it speaking to the
soldiers, it's a mixed story.
Some of them say it's either fallen or it's about to fall. Others say they still are making minor advances inside. What's interesting in these forward
positions, we spoken to many of the soldiers, they're fairly confident, and morale seems surprisingly high, given the situation.
They're confident that they can hold these positions a rear position, but what appears to be going on is an organized pull out from the town of
Soledar. We've been watching as they've been firing mortars in the direction of Russian positions and rockets, as well.
You can hear in fact, some of the thuds of some of that fire some of it of course, going towards Soledar, some in the direction of Bakhmut. And of
course, there is fire coming the other direction. I'm Ben Wedeman, CNN, outside Soledar.
(END VIDEOTAPE)
GIOKOS: Well, let's get more on this. We've got CNN, Scott McLean in Kyiv and have some new information for us as well. Look, Scott, we've heard
conflicting reports about Soledar's salt mining town, Russia says a second control.
What is the Ukrainian saying at this point? We've just heard from Ben Wedeman that the soldiers are talking to saying that the fighting is still
going on. And there's also sort of mixed information that is emanating from the frontline.
SCOTT MCLEAN, CNN CORRESPONDENT: Yes, that's right. It really depends on who you talk to you. Case in point we've been in touch with a soldier
inside of the city as recently as last night who said that his unit had been abandoned that they were running low on water.
[09:05:00]
MCLEAN: They had no food and their window to actually withdraw and pull out was closing very quickly if it hadn't closed already. So it seemed like
they were very much pin down. The Ukrainians officially say that, look; they are still continuing to fight.
But as you heard from Ben there, he's describing something that looks more like an orderly withdrawal. I just spoke with a soldier who was in Bakhmut,
Soledar, and obviously continues to be in touch with soldiers on the front line, and this is how he described the Ukrainian presence in the town.
(BEGIN VIDEO CLIP)
TARAS BEREZOVETS, CAPT. 1ST SPECIAL FORCES BRIGADE, UKRAINIAN ARMED FORCES: So for to my knowledge, all our regiments have already been moved to the
west and outskirts of Soledar. And restaurants encircle the city from north and south. But they didn't manage to make food supplement so Ukrainian
regiments can easily withdraw in all in case if such an order would be issued.
MCLEAN: It's safe to say that the Ukrainians have a toehold in the town but just barely.
BEREZOVETS: Well, it's it wouldn't be fair to say that Ukrainian still holding some parts of Soledar. But I will say some minor parts Soledar.
(END VIDEO CLIP)
MCLEAN: I also asked him Eleni about morale and he said, confirming Ben's point that it is quite high at the moment. And the reason for that is that
look, Ukrainian troops recognize that the Russians needed a win, and they threw everything but the kitchen sink at this particular town. But from the
Ukrainian point of view, they don't think that Soledar is frankly all that important that it's all that strategic, it only had about 10,000 people
before the war.
And this soldier says that virtually everything inside of that town has been completely destroyed. And so there's really not that much fighting for
it. He said that the plan going into this defense of Soledar was not to fight till the death, not to hold on to it at all costs but it was to hold
on as long as they could, and in the process tried to kill as many Russian troops and Wagner mercenaries as they possibly could.
And he says by that measure, this was a success and so now it seems like they're moving back there, maybe on the outskirts of town. But in terms of
trying to recapture Soledar, immediately, that doesn't seem to be a priority at this moment.
I also asked him whether they're concerned that this gives the Russians perhaps more ammunition to go at Bakhmut or a different angle or to cut off
supply lines to Bakhmut, which is really a more strategic town that is a stronghold for the Ukrainians.
And he said, no, there are still plenty of supply routes into Kramatorsk. There's still plenty of ways to defend it, sorry to Bakhmut excuse me, he
thinks that the real prize for the Russians right now isn't going to be Bakhmut. It is going to be Kramatorsk, a much bigger city, Eleni.
GIOKOS: Yes, and the story, of course, is evolving. We'll be keeping you updated in the coming hours. Scott McLean, thank you very much for that
insight so moving to Washington now, U.S. Attorney General Merrick Garland, appointing a special counsel to investigate where the President Biden
mishandled classified materials earlier this week.
It emerged that classified documents from the Obama Administration were found at the President's home in Delaware, and his former private office in
Washington. CNN's Senior Legal Affairs Correspondent, Paula Reid joins me now with the latest. It is interesting, this special counsel investigating
both sitting and current Presidents and Former Presidents of the mishandling of classified documents. The question now becomes why the White
House didn't get out in front of this sooner?
PAULA REID, CNN SENIOR LEGAL AFFAIRS CORRESPONDENT: Absolutely, this is going to be taught in crisis communications classes for years. It is
unclear why the White House did not get out in front of this. Almost everything we've learned before it yesterday's press conference came from
media reports and was then followed by these begrudging statements from the White House that often left out key details.
Now going forward, it is unlikely that the White House is going to change their approach. Their argument has been that they are deferring to the
Justice Department allowing it to do its work. What will be seen with other investigations like this? For example, the investigation into possible
mishandling of classified information by Hillary Clinton.
What we saw there is if the public, if voters, if they feel like there are constantly new classified documents popping up. They're not getting all the
information, they kind of suspect a cover up, even if no legal charges are ever brought. These cases can become serious political liabilities.
And that is what he appears to have right now. The President does not appear to be any direct legal Jeopardy. There are also rules and norms
against indicting a sitting President, but he has a serious communications problem that can easily balloon into a political problem.
GIOKOS: Yes, and that's a question sort of what is the political fallout here. But many are asking what is the difference, if any, between what we
saw with Donald Trump and classified documents and the Biden administration at the moment?
[09:10:00]
REID: Big differences here, first of all is the volume of information that we're talking about. As of now, we've confirmed 10 documents at one of the
Biden locations. We don't know how many at the others, but with Trump, we're talking about hundreds of documents that he retained.
There is also this issue of cooperation. The Biden team said they did the right thing they called the archives that cooperated with the Justice
Department. The Trump team, Former President did not do that. They were not cooperative, which is part of why he's under investigation for possible
obstruction of justice.
So there are a lot of key differences between these two investigations not only in the volume of material, how they've handled themselves and the
different crimes that are being examined here? But I will caution you know we don't know that much about the Biden situation. This case to our
knowledge is only we've only known about this for about five days.
It's been going on for about two months, where the Trump case was it almost a year and a half before that came to light with a duly executed search
warrant and his Mar-a-Lago residence. So while yes, they aren't really apples to apples right now, one is certainly far more serious sign even the
first special counsel that has investigated the Former President.
We do need to caution that we don't know what we don't know and now there's a special counsel who's going to investigate more thoroughly what's going
on with the Biden classified documents.
GIOKOS: And we will be finding out a lot more I'm sure in the coming days. Paula Reid, thank you so much. Now to China, the world's second largest
economies exports are shrinking sharply while trade data with Russia hitting a new record high. Mark Stewart is in Hong Kong with the details
for us.
MARC STEWART, CNN CORRESPONDENT: There are two big headlines concerning China's economy. First, let's talk about exports the items that China
shipped to other nations. The end of the year revealed some challenges. According to government data exports plunged by nearly 10 percent in
December compared to the same month that previous year.
To give you some context, it's the worst drop since the start of the Coronavirus outbreak in February 2020. So what's behind the contraction,
some analysts from Capitol economics are pointing to weakening global demand and disruptions due to labor shortages that occurred because of
illness as things started to reopen. And then another significant headline, China's trade with Russia hits a record high.
This is according to a spokesman from China's trade authority, accounting for 3 percent of China's total trade. It comes at a time when China and
Russia have strengthened a closer economic relationship after Russian President Vladimir Putin visited Beijing early last year back to you.
GIOKOS: Right straight ahead, the President of the U.S. Chamber of Commerce joins me to discuss the state of American businesses and the challenges
they face this year. And later, leaner times for Apple's top boss why Tim Cook Asphalt and he was given a huge pay cut stay with CNN.
(COMMERCIAL BREAK)
[09:15:00]
GIOKOS: Welcome back to "First Move". When it comes to Washington, the state of American business is fed up. That was the message from U.S.
Chamber of Commerce President and CEO Suzanne Clark, Thursday during the annual State of American business address.
The Chamber of Commerce is the world's largest business organization. Its members range from Fortune 500 companies to mom and pop shops representing
the full spectrum of the American business community. Clark says business owners are frustrated and urged lawmakers to do better.
(BEGIN VIDEO CLIP)
SUZANNE CLARK, PRESIDENT & CEO OF THE U.S. CHAMBER OF COMMERCE: Businesses don't have the clarity or the certainty to plan past the next political
cycle. It means our country won't be able to advance an agenda that extends beyond two or four years or past the policies needed to position us for our
future.
(END VIDEO CLIP)
GIOKOS: We'll talk outlined what the U.S. Chamber is calling its agenda for American strength, which includes bolstering strength through building
people, energy, global leadership and rule of law. Joining me now is Suzanne Clark, President and CEO of the U.S. Chamber of Commerce. Great to
see you I mean what a journey what arrived over the past few years?
Whether it was the pandemic, whether what we're seeing now with geopolitical tensions, and that resulting in an inflationary environment.
It has been a tough journey. But you say that business has fed up with Washington; I want you to tell me what worrying business is the most right
now?
CLARK: Thank you and good morning to you. Look, I think at the end of the day, what we're seeing in the United States is companies saying the state
of their own business is strong. But the state of the economy is fragile, and they're worried about government not doing the right thing.
They're fed up and almost in a state of despair over a lack of national leadership on solving really complex problems. So this is a moment our
Chief Economist Counsel is saying to us could end up in a mild recession in the middle of next year. But there are things the government could come
together and accomplish and do right now for American families and businesses and to the benefit of our allies.
GIOKOS: You know, when we were watching what was playing out with electing House Speaker, there was a growing sense that there's concern that the
Senate and the House won't reach consensus on certain issues. Are businesses feeling the same in terms of consensus on spending, legislative
efforts and so forth? What are you hearing?
CLARK: I think we're hearing two different things. The first thing that we're hearing, again, is concern on behalf of companies, that our
government won't take their role seriously.
And that's everything from an administration that's doing too much, that is overzealous in their regulatory approach and way outside of the authority
and lane that they should be in to fear that Congress won't step up and do the things it needs to do, like defaulting on the debt like increasing and
increasing that debt limit. So there are concerns on both ends government doing too much, and government doing too little.
GIOKOS: I think if you be spoken about inflation a few years ago, you know, it really wasn't on the agenda. We're looking at an inflationary
environment. Numbers are looking, you know, a little bit better over the last couple of months but there's still major concern and that's resulted
in an unprecedented scenario where the Fed had to hike aggressively.
Business confidence has slid to what extent are you seeing major concern about where inflation is going because let's be real here, this is going to
impact input costs? It starts raising questions of just how much to pass on to the consumer? And that could result in a weaker economic scenario.
CLARK: It's an excellent question and I think your open was a sophisticated take too, right? Which is most of the leaders in positions today have
worked in positions like this the last time inflation was this high. So we're also looking at business and government leaders who've never seen
anything like this. It's new muscle everyone's developing.
[09:20:00]
CLARK: On top of the new muscle everybody had to develop during the pandemic. So you're right that I think leaders are concerned. How do you
set your pricing strategy? How do you think about budgets? How do you think about your supply chains? It's certainly a complex time to operate a
business.
That said a lot of CEOs are optimistic that they can get through this right with the right fiscal policies. And it's one of the reasons we talked
yesterday, during the speech about America's worker shortage. If you think about the numbers that came out yesterday, there was yes, good news.
But if you looked underneath it all, service industry, inflation was still growing. That is in large part due to labor cost. It's why addressing the
worker shortage is so important. We're having problems with childcare in the United States; a number of childcare centers closed during the pandemic
and have not reopened.
Some of that is due to regulatory morass and how hard it is to get a permit. We have problems with not allowing enough legal immigrants into
this country. We've got millions of migrants illegally crossing the border and yet legal migration is low, historically low. We need more engineers
and more nurses. We've got to be able to secure our border and double the number of employment based visas to help get out this worker shortage
that's driving inflation.
GIOKOS: Yes, and that's a really interesting perspective in terms of worker shortages, and how to alleviate that pressure. In that breath, I mean,
we're hearing about the potential recessionary scenarios. We don't really know if it's going to be a tough environment we'll be dealing with in the
next year, whether it's going to be mild. What are businesses planning for and pricing in?
CLARK: You know, again, we get the Chief Economists from America's big smart companies together. They're still hopeful, I mean, I think they're
largely predicting a mild recession in the middle of this year of 2023. That said, there are things that we can do to mitigate it and so I think
people are trying to be practical, it gets back to being fed up.
CEOs have to get up every day, and employ their people, serve their customers, serve their markets, take care of their employees. And we need
government to do their jobs and enough with outrage, politics and click bait. Let's get down to what can we do to mitigate this potential
recession?
GIOKOS: Suzanne, just one last question. The Japanese delegation is visiting you recently how the U.S.-Africa summit as well, to what extent as
well, U.S. businesses looking to invest, expand out of country, given the uncertainties locally and also the global economic environment?
CLARK: Excellent question and important point, you know, we have some 75 or 80 people who work full time in international investments, here
investments, abroad relationships with allies, and certainly trade deals. And a big part of what we're pushing for here is to revive America's trade
agenda. We have not been to new trade deal in the last 10 years.
Meanwhile, the rest of the globe has named 100, leaving the United States behind. We need access to other markets. We need better deals with our
allies. We need to be setting global standards and we are pushing the Biden Administration to get that trade agenda back and alive, both to help our
allies to help us and help American families.
GIOKOS: It was great to see you Suzanne, thank you so much for your insights, much appreciated for your time.
CLARK: Thank you.
GIOKOS: Suzanne Clark, the President and CEO of the U.S. Chamber of Commerce. Although inflation is easing in the U.S. consumers may not feel
it just yet small businesses and owners are still struggling and bracing for a host of challenges in 2023. And that's from a looming recession to
the ongoing recovery from the pandemic. CNN Gabe Cohen has more for us.
(BEGIN VIDEOTAPE)
GABE COHEN, CNN CORRESPONDENT (voice over): At Teddy and the bully bar near downtown D.C. business post pandemic has never been the same.
ALAN POPOVSKY, FOUNDER AND OWNER OF PRG HOSPITALITY: I'm still climbing the hill.
COHEN (voice over): COVID close two of Alan Popovsky's four restaurants, government loans, save the other two. But with city centers struggling to
bring back traffic, his revenue is still down more than 45 percent from pre pandemic. And Alan says they're struggling to stay open. And now it's time
to pay back those loans.
POPOVSKY: It's very difficult. We just got over paying back the landlord. We're just a hamster spinning on a wheel.
COHEN (voice over): At the start of COVID with business stalled nearly 4 million small business owners took out what are called economic injury
disaster loans or EIDL loans from the federal government on average about $100,000. In many cases just to stay afloat 30 years with a fixed interest
rate of 3.75 percent and unlike some other pandemic programs, EIDL loans were expected to be paid back down the road.
[09:25:00]
COHEN (voice over): Now the first monthly payments are coming due, most businesses will owe money by the end of January.
POPOVSKY: It's daunting.
COHEN (voice over): Alan says he owes more than $3,700 per month, roughly $780,000 in all, a lot of which he says he's spent on rent and payroll.
POPOVSKY: We can't afford anything, but what we're doing is we're paying interest only right now.
COHEN (on camera): So you haven't made a dent on the actual loan?
POPOVSKY: Have not made a dent on the principle.
COHEN (voice over): A new survey from a leading Small Business Association found only 36 percent of its members have reached their pre pandemic sales
levels, amid staffing shortages, supply chain issues and inflation. Now add a possible looming recession just as these loans come due.
HOLLY WADE, EXECUTIVE DIRECTOR OF NFIB RESEARCH CENTER: It is one more cost that they're going to have to deal with some small business owners,
unfortunately are going to struggle and kind of meeting those obligations.
LISA KLEIN, OWNER OF KLEIN INTEGRATIVE PHYSICAL THERAPY: Let's open up your diaphragm here a little bit and see if it helps.
COHEN (voice over): Lisa Klein says COVID is still keeping some clients away from her physical therapy practice. Making it tough to pay off her
EIDL loan nearly $1,000 each month with 80,000 to go.
KLEIN: All the costs of everything have gone up. We can't pay the staff but we'd like to pay the staff. The whole business is still suffering. And this
is just kind of adding insult to injury.
COHEN (voice over): The Small Business Administration says struggling businesses can declare hardship and make small partial payments for six
months. But interest keeps accruing, forcing the owners like Lisa Klein to weigh short term protection against a big bill down the line.
KLEIN: We have no choice because if we don't keep paying it it's going to accrue more interest.
(END VIDEOTAPE)
GIOKOS: Alright, CNN's Gabe Cohen reporting there for us. And coming up on the show banking on the banks, Wall Street earnings season begins not with
a bang but with a whimper as results from the financial sector disappoints will tell you what the results say about the health of the global economy
and what that means going forward. It's coming up next on "First Move".
(COMMERCIAL BREAK)
[09:30:00]
GIOKOS: Right, trading has just begun in New York. It is the last day of the week and as you can hear excitement as always as the ringing of the
bell. It happens as you can see DOW Jones down seven tenths of a percent NASDAQ is in the green and S&P also losing about 1 percent at this point in
time.
Welcomes of course the Memorial of the Foundation in celebration of Martin Luther King today his legacy lives on. All right, so U.S stocks are up and
running on Wall Street. It is the last trading day before a long holiday weekend. Watch out bulls.
It's also Friday. It's the 13th I forgot about that. We're not superstitious whatsoever. That said it's a week open for all the major
averages as U.S. earnings season gets underway. In earnest the NASDAQ pulling back after 15th fifth rather straight session of gains.
Tesla shares falling and early trading on news that is slashing EV prices in the U.S. and Europe amid ongoing demand concerns. Reductions of around
20 percent in some cases, all of this hot on the heels of Tesla's price cuts in China. And the news pressuring shares of other auto giants as well.
Investors worry that sales of their electric vehicles will be impacted, too. You can see Tesla in the red down over 5 percent GM as well losing
almost 5 percent. Shares of major U.S. banks are also trading mostly low as investors dig deeper into the just released Q4 results.
Investors concerned that banks are once again adding to their reserves in case loans go bad. JP Morgan CEO Jamie Dimon warning of economic headwinds
ahead as well. John Petrides is joining me now. He's a Portfolio Manager at Tocqueville Asset Management.
John, great to see you thank you so very much! I mean, I was just looking at some of these numbers and it's not so much about the Q4 results
themselves, but it's about the forward looking statements, that I think everyone is really worried about what the future holds.
Could you break this down for us? Let's start with JP Morgan, because, frankly, these economic headwinds we've heard before. Jamie Dimon mentioned
these last year, I guess he's reiterating the point that we're still not out of the words?
JOHN PETRIDES, PORTFOLIO MANAGER, TOCQUEVILLE ASSET MANAGEMENT: Yes, I mean, I think it's important that's right. Jamie Dimon did say, you know,
about six months ago or so that he was expecting a hurricane to come in the fall. And now he's kind of backtracked a little bit from that.
But he did say in the press release that he thinks that you know, the central case, the base case is that recession is on the horizon. But if you
take a look at the banks in general, and there are a handful, the global banks, the multinationals and also the regional's, some that reported,
there are two things going on one, the banks are healthy in general for balance sheet standpoint.
So anyone worried about 2008 or 2009, this is not that situation, although they are reserving more, that's more of an accounting regularity that they
have to reserve for, to increase the reserve loans. The loan portfolios by and large are still quite healthy.
You've seen some tick up in the consumers. Loan delinquencies pick up a little bit, but we're still well below 2019 levels. In general, banks have
spent a lot of time cutting costs or working through their efficiency ratio.
The biggest issue and this is the sort of the concern with lack of visibility on bank earnings is Deposit Beta, meaning the cost for CDs, the
cost to pay out with the yield curve inverted meaning that short term bonds are yielding more than long term bonds.
And investors are trying to get more income from their savings, banks have to pay them more on their CDs. They're paying them more in their savings
and the spread with they're getting on what they're loaning is really tight if not going in the opposite direction for what's profitable for banks.
The banks really want to see in general, a positive yielding positive slope curve. They want short term borrowing costs to be less than what they're
charging on loans. And right now it's the opposite.
And all of that will depend on how long and how high the Fed keeps interest rates? And as interest rates come down, that'll be better for the banks in
the short term; because they bought their cost that they're paying savers on CDs could go down.
GIOKOS: John, you know you mentioned something really interesting. And of course, this was sort of across the board where banks are, you know,
gearing up for a potential increase in defaults or loan defaults. Do you think this is just the banks being prudent or do you think this is based in
a real risk scenario that could emerge?
[09:35:00]
PETRIDES: The answer is twofold. I do think the banks are being prudent there, but really out of 2008, they had been required to have enough
reserves on their balance sheet capital ratio, so we don't have a repeat of 2007, 2008 and 2009 ever again.
So they have more than enough capital on their balance sheet. The banks also a year or two ago, were required to follow something called CECIL
Current Expected Credit Losses, which basically is the accounting regularity that says the banks need to every loan that the bank makes that
have to put some probability that it's going to default and reserve for it.
So it's kind of like the moment that you're a banker, you make a loan, you have to assume that there's some percentage, it's going to default right
away. So part of their reserves that they have to put is for this accounting regularity.
And if the forecast for the economy is to weaken, let's say over the next 12 to 15 or 18 months, then every loan you're making today, the likelihood
of some sort of default goes up, which requires them to reserve more. So there are a couple of factors going on there for sure.
GIOKOS: Yes, I mean, look, big lessons learned with regards to capital adequacy ratios, from what we saw in 2008. So we definitely don't want to
repeat that. But look, you've got a rise in interest rates, which is, you know, pretty unprecedented historically in the United States.
And then it brings into question the ability of consumers to be able to pay off their loans. You've got inflation easing, but we don't really know what
the Fed's next move is going to be. But how are you weighing up all these uncertainties which are very much in play right now?
PETRIDES: I mean you really hit the nail on the head on the conundrum that the world is facing, because the consumer is actually proving to be a bit
more resilient than what the math would tell you.
You know, when your eggs go up 30 percent and your gasoline to fill up your car is up, you know, 15 percent, and the cost of everything, judging by you
knows inflation numbers are up 6.5 percent year-over-year.
And that's, you know, we all know and feel that the cost of living is significantly higher today than it was a year ago. And if your wages are
not keeping up with that, it's how the consumer is hanging in like it is.
And the only thing that we could point to really is that the unemployment situation is very tight, and you have an unemployment rate below 4 percent.
You have job openings, still north of 10 million.
So if you do get laid off, there are job opportunities out there. Wages are still growing north of 4 percent, closer to 5 percent. So it's a conundrum
that that the cost of everything is higher, but the consumer has been able to hang in better than what I would have expected at this point.
But clearly, the momentum going forward looks like the economy is continuing to slowing looks like the consumer is going to be running into
the wind. So I think for the next several quarters, we're going to continue to be scrutinizing the health of each bank's balance sheet for sure.
GIOKOS: Absolutely. And whether wage growth is meeting what you're seeing on the inflation front? It is an interesting scenario, one that you
sometimes see playing out mostly in emerging markets, but John Petrides, thank you so much. Good to see you.
PETRIDES: Great to see you as well. Thanks for having me on.
GIOKOS: We'll talk again soon. I'm sure Portfolio Manager Tocqueville Asset Management. Alright, ask and you shall receive Apple CEO Tim Cook asked for
a pay cut and he got a massive one. The world's largest tech company said it would reduce Cook's pay package to $49 million.
That might not sound too bad to most of us. But it's 40 percent lower than his target pay for 2022. The cut comes after Apple stock fall, which fell
nearly 27 percent last year. Paul R LA Monica joins me now. I was just doing the math that we do even in that in the lifetime. I don't know. But I
have to work that out. Paul, good to take me--
PAUL R. LA. MONICA, CNN REPORTER: I don't think - Eleni.
GIOKOS: Yes, I don't think most of us don't tell us.
MONICA: Yes, I mean, let's be honest here. Tim Cook is obviously still paid very handsomely for running Apple, the world's largest company that is
still doing reasonably well despite the massive stock drop last year, which to be honest, was not exclusive to Apple.
In fact, Apple actually held up slightly better than the NASDAQ and many others of the so called Fang stocks, but Tim Cook realizes that you know,
you can't skate by and just say hey, we did less worse. So pay me as much as I used to get. You have to consider his pay package before last year was
closer to 100 million.
[09:40:00]
MONICA: And a lot of the reasons for the big drop in the price are because of Apple's share price falling as dramatically as it is and his
compensation, much of it is tied to the stock and stock grants. So it's only natural that if Apple stock and Apple investors are getting hit then
Tim Cook is a big shareholder needs to as well.
GIOKOS: Paula R. LA. Monica, great to see you thank you very much for breaking that big number down for us! All right, still to come, deadly
protest script Peru as senior government minister resigns and calls for fresh elections more on developments there that's coming up next.
(COMMERCIAL BREAK)
GIOKOS: In Peru, a Senior Government Minister has resigned in the deadly protests and called on the President to hold fresh elections. At least 49
people have died in clashes between police and demonstrators since the impeachment and arrest of Former President Pedro Castillo in December.
CNN's Rafael Romo is following developments and joins us now.
It's good to see you. In the past month there have been calls for new President Dina Boluarte to resign and also calls to move up elections. How
has the situation evolved since the resignation of the Former President Pedro Castillo in December?
RAFAEL ROMO, CNN CORRESPONDENT: Hi, Eleni, that's right. It's a political crisis that has been going on for years and it only seems to get worse. The
latest turn started in December when then President Pedro Castillo was impeached after he tried to dissolve Congress.
I had a vote on his impeachment that he saw he was likely to lose. After he was ousted protests broke out throughout the South American country leaving
49 people dead as of Thursday afternoon, according to a report by the Peruvian Ombudsman, and the crisis doesn't seem to be getting any better.
Thousands of people marched through the streets of Lima, the Capital Thursday night, demanding the resignation of the Dina Boluarte the current
President who has only been in power for a little over a month.
They were also demanding changes to the Constitution, new elections and the release of Former President Castillo who remains in jail after a judge
ruled he must stay in pretrial detention for 18 months. Also Thursday night Peru's Labor Minister Eduardo Garcia Birimisa resigned calling on President
Boluarte to apologize for the 49 deaths in the protest and hold the general elections before April 2024.
[09:45:00]
ROMO: And he's not the only one who holds the current government responsible for the deadly clashes between security forces and protesters
that have swept the country. Peru's top prosecutor's office launched an inquiry Tuesday into President Boluarte and Senior Cabinet Ministers over
the deaths that has happened during the current turmoil. Peru's Prime Minister Alberto Otarola made it clear the precedent he said will not
resign let's take a listen.
(BEGIN VIDEO CLIP)
ALBERTO OTAROLA, PERUVIAN PRIME MINISTER: She will not resign. That will not happen. Not because she does not want to but because the Constitution
requires that this constitutional succession needs to fall into place and because to leave the presidency vacant, will open a dangerous door to
anarchy and that will not happen. I want to address 33 million Peruvians trust democracy, trust the state of law.
(END VIDEO CLIP)
ROMO: And Eleni this is the latest chapter of Peru's political crisis. The South American country has had listen to this six Presidents since 2018 and
if the unrest is not solved soon, the current situation may be unsustainable for the current one back to you.
GIOKOS: Rafael Romo for us thank you so much! Days after an anti-government mob ransacked government buildings in the Brazilian Capital. The new
President is vowing to remove diehard supporters of his predecessor from power. President Lula da Silva says some of Brazil's military police and
members of the Armed Forces colluded with protesters helping them to enter the Congress, Supreme Court and Presidential Palace on Sunday.
Lula says he wants to see all of the tapes from inside government buildings to determine who was complicit in the violence. Police eventually dispersed
the crowd with tear gas and arrested around 1800 people but that was only after Lula ordered the federal government to step in to stop the riots. Now
questions are being asked about the role played by the police as Isa Soares reports.
(BEGIN VIDEO CLIP)
ISA SOARES, CNN CORRESPONDENT (voice over): They came in their hundreds on alert and with weapons at the ready, a show of force to protect democracy
and head off expected pro-Bolsonaro protesters. For the police this was about projecting control and order.
After growing accusations they colluded with rioters on January the 8th. Video shared on social media showed security forces talking to protesters
some even standing idle as rioter's storm the three branches of power. Former policeman Cassio believes some of the criticism is unwarranted.
CASSIO THYONE, LAW ENFORCEMENT RESEARCHER, FORMER POLICE OFFICE: Some policemen ended up not acting because they didn't think there was a risk of
invasion. Also, we've had a big ideological influence inside the security forces right wing influence. I don't think it was incompetence.
SOARES (voice over): For the last four years Brazilian forces have taken orders from Former President Jair Bolsonaro but several sources here tell
me what remains are accusations of a politicized police force.
THYONE: We have research results that show that between 50 and 60 percent of policemen were Bolsonaro sympathizers. But that doesn't mean they are
against democracy.
SOARES (voice over): President Lula da Silva has called for tough action to stamp out any acts of collusion within the security forces in Brasilia and
he's tasked this man, Ricardo Capelli with doing it.
RICARDO CAPELLI, INTERIM HEAD OF SECURITY, BRASILIA FEDERAL DISTRICT: Police officers have every right to make their political choice that
doesn't interest me. What is important is the respect for the Constitution.
SOARES (voice over): Respect that Capelli says most have even as investigations begin into the role some may have played still, he believes
there was set up to fail.
CAPELLI: What happened on the 8th and today's operation clearly demonstrates that was the absence of command. The previous head of security
was traveling.
SOARES (voice over): The man he is referring to is Anderson Torres until December 31st Torres was Bolsonaro's Justice Minister. After leaving
office, he became Head of Security for Brasilia on January 2nd.
CAPELLI: He changes the core of the leadership travels and leaves the office without command allowing the unacceptable actions of the 8th.
SOARES (voice over): Torres denies wrongdoing and says on Twitter that he's always based his actions on ethics and legality. Despite that comment or
authorities have issued a warrant for his arrest. His involvement and ties to Bolsonaro too much of a coincidence Capelli tells me
CAPELLI: He was Justice Minister to Jair Bolsonaro that's a confidence role in one of the highest importance. He would not be Justice Minister if he
didn't have President Bolsonaro's complete confidence.
[09:50:00]
SOARES (voice over): A damning accusation that suggests the enormity of the security challenge ahead Isa Soares CNN, Brasilia, Brazil.
(END VIDEO TAPE)
GIOKOS: Coming up after the break, Graceland in mourning at the shock death of Lisa Marie Presley at only 54. We all saw her at the Golden Globes only
a few days ago the sad details are up next.
(COMMERCIAL BREAK)
GIOKOS: Lisa Marie Presley, the only child of Elvis died suddenly on Thursday after suffering an apparent cardiac arrest. Presley had appeared
in public just days earlier, at the Golden Globe Awards with the star of a biopic about her father won the Best Actor category. She was 54 years old.
Joining me now is CNN's Entertainment Reporter Chloe Melas. Chloe such sad news I know you also have the Golden Globes. We saw her just a few days
ago, remembering her father's legacy and take us through what we know.
CHLOE MELAS, CNN ENTERTAINMENT REPORTER: You know there are still so many questions left unanswered. We don't have the autopsy report. We don't know
what potentially could have caused this. But we do know that paramedics were called to her home Thursday morning in Calabasas, California for a
possible cardiac arrest.
Her mother Priscilla takes to social media last night, asking for prayers and support really leading many to believe that perhaps she would pull
through not knowing how dire the situation was. We know her mother was at her bedside. We know that one of her daughters Riley Keough an Actress was
right at her bedside as well. And then shortly thereafter, I received a statement from Priscilla Presley's representative saying that she didn't
make it.
And like you said, 54 years old, a life lived in the spotlight since the moment that she was born the only child of Elvis Presley and she leaves
behind three children. And it's been a rough time for her. She lost her one of her children Benjamin to suicide in 2020.
And she opened up about that loss in an essay this summer in July that she penned for National Grief Awareness Month. And, you know, this is a family
that has experienced a lot of hardship, a lot of grief and, you know, this just adds to that very, very sad list of things that they've gone through.
GIOKOS: Yes. And especially watching the biopic on Elvis, you get the sense of what she went through? What her family went through? She was a musician
in her own right. She built a career a name for herself as well. I mean an interesting legacy that she leaves behind?
MELAS: You know, she's spoken interviews in the past that she didn't realize how quite big her father's shoes were to fill? But she loved music.
She loved writing music. She loved performing.
[09:55:00]
MELAS: At one point she even married and had children with someone in her band. And so one of her albums went on to hit number five on the Billboard
Hot 100 Chart so she, I think it was certified gold. And you know, she was a very, you know, acclaimed musician and had a lot of fans, and people
really loved her and when it comes to the Elvis movie, from Baz Luhrmann, that's getting a lot of Oscars - that Austin Butler just won the Golden
Globe for earlier this week.
This was a celebratory time for the family. You know, this was a moment where they were celebrating, you know, her father's life, and she was a big
supporter of that film so very sad timing for all of this to be happening. What a wonderful life she did leave though very interesting, colorful life.
GIOKOS: Yes, Chloe Melas always good to see you. Thank you so much.
MELAS: Thank you.
GIOKOS: Well, it is Friday the 13th. So I might as well talk about UFOs - the U.S. Government has received over 350 new reports of what it's calling
unidentified aerial phenomenon or UFOs since March 2021.
There in a new report released by the U.S. Director of National Intelligence, lawmakers have put pressure on the Pentagon to investigate
claims of extraterrestrial activity. The Pentagon attributes almost half of these incidents to drones to birds and balloons. Well, that's it for the
show. Thank you very much for joining us. "Connect the World" is up next, stay with CNN.
(COMMERCIAL BREAK)
END
