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First Move with Julia Chatterley
JPMorgan: Bank is Supporting U.S. Financial System with Deal; Thousands Evacuating to Jeddah, Saudi Arabia Amid Fighting; New French Protests Against Pension Reforms; Fed, ECB out with Interest Rate Decisions this Week; World Vision Temporarily Suspends Operations in Cuba; Cuba hit by Severe Fuel Shortages. Aired 9-10a ET
Aired May 01, 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)
RAHEL SOLOMON, CNN HOST: A warm welcome to "First Move", I'm Rahel Solomon in today for Julia Chatterley a busy hour ahead, including major news from
the U.S. banking sector after a weekend of tense negotiations and the breakdown of private rescue talks. U.S. regulators have seized the assets
of the once mighty First Republic Bank.
It is the second largest bank failure in U.S. history. It's also the third big U.S. Bank to collapse since March. JP Morgan winning the bidding war to
acquire the bulk of First Republic's operations, and this includes billions of dollars' worth of loans and deposits, making the country's biggest bank
JPM.
Even larger and shares of JP Morgan currently up, let's call it 4 percent pre market on the news slightly more than 4 percent there. Now the fate of
First Republic has been a major worry for investors for quite some time its shares have been plunging within 25 percent last week alone, that's after
investors questioned its ability to survive giving that huge scale of deposits been withdrawn.
That market reaction to this news is more muted. You can see NASDAQ, S&P slightly lower little change after last week's gains, European investors
meantime, they have the day off. DOW looks just about flat. We'll keep an eye on that for you. But lots more challenges ahead for investors later
this week.
The Fed of course out with its key policy decision on Wednesday and another quarter point interest rate hike is expected. The ECB also holding a policy
meeting as well. And Apple reports profits after the closing bell on Thursday. And that's not all because the U.S. is out with the April jobs
report on Friday.
A lot to discuss, to see the least. But let's begin with the latest on U.S. banks. The failure of First Republic Bank coming just days after the Fed
admitted some of the blame for the collapse of the Silicon Valley Bank. But the big question now is does this finally put an end to all of the bank
turmoil of the past few months?
Vanessa Yurkevich is outside of First Republic Bank in New York. Vanessa, good morning. So you've been on a media call this morning with Bank
Executives from JPM. What did they have to say?
VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT: Well, Rahel, the branch just behind me a First Republic opened moments ago, but it is
now owned and operated by JP Morgan as will be the other 83 branches around the country.
As you mentioned, I just listened in on a media call with Jamie Dimon, who said that they weren't looking for this deal, but it made sense financially
in the end, and this was after the FDIC held this auction with bids needing to be in by 4pm yesterday.
So this deal coming together very quickly. I want to take you through some of the key points here. The first one incredibly important. What does it
mean for customers of course Republic Bank while all of your deposits in the bank are safe? JP Morgan assuming 92 billion in deposits, also 800 JP
Morgan staffers made this happen in 24 hours.
JP Morgan also not assuming any of First Republic's corporate debt, and also JP Morgan paying 10.6 billion to the FDIC on this deal. But remember
how this is coming after JP Morgan led other banks to infuse First Republic with about $30 billion back in March.
That did not seem to hold them off very long. Jamie Dimon on the media call said that they were hoping that $30 billion of cash would help, but
ultimately, it was a stopgap, Rahel.
SOLOMON: It's a great point. It's sort of delay things that appears but ultimately wasn't enough to really change the outcome of things here for
First Republic. Vanessa, in terms of further contagion, at least based on market reaction and its, still early days here. But the sense appears to be
that maybe this is finally contained in terms of the banking sector. What are you hearing?
YURKEVICH: That is certainly what we have heard from analysts and what we just heard from Jamie Dimon himself. He says that he thinks that we're
nearing the end of these bank failures. He believes that the banking system is sound. And he is signaling that this is not going to play an impact in
terms of recession.
He also said that he didn't make this deal to stave off a recession. But of course, for consumers, they want to know that their money is safe for
health, the FDIC, the Treasury Park Department, and JP Morgan, all working together in some way on this deal. They are trying to signal to the
American people that the banking system is in fact safe, and that people's money is safe, Rahel.
SOLOMON: And maybe driving home the point that this was a good financial decision, as you pointed out, saying that this made sense financially.
Vanessa YYurkevich, it's great to have you, thank you.
[09:05:00]
Let's now turn to the conflict in Sudan, which is stretching into its third week. Despite the two sides agreeing to extend their ceasefire. People in
Sudan tell CNN that they continue to hear explosions early Monday including around the presidential palace in the Capital City of Khartoum.
Meanwhile, there are more efforts by foreign officials to try to get their citizens out of the region. Thousands including 100 Americans have been
evacuated to Jeddah, Saudi Arabia. And that's where we find CNN's Larry Madowo who joins me now. So Larry, for every person evacuated from the
region, I imagine there must be many more who are still there who are trapped stuck. What are you hearing?
LARRY MADOWO, CNN CORRESPONDENT: That is right, you can't evacuate 45 million people out of a country so those getting evacuated at those with
dual nationalities. They're Sudanese, British-Sudanese, American-Sudanese, Swedish-Sudanese, Australian, but they have to leave their families behind
and it's heartbreaking.
We took a journey with the Saudi Royal Navy across the Red Sea from Jeddah to Port Sudan on an evacuation mission and back and we heard heartbreaking
stories of people who saw bodies on the streets of people who had to leave everything one person's business is burned.
And that's why so many people are making this journey just this morning, about 105 Americans arrived here on the first U.S. naval ship to make that
journey that USNS Brunswick. There were just over 300 people in total on that ship. Many of them are Americans or legal permanent residents in the
U.S., but they're also 24 breeds, people from Australia and Germany and Sweden and Norway and from all around the world.
They're still using this route that the Saudis have opened, because that's the -- here in Jeddah, the main landing point for so many people who are
making the journey from Khartoum to Port Sudan and hoping eventually to make it here. This is what that journey is like.
(BEGIN VIDEOTAPE)
MADOWO (voice over): 2 am and they're finally getting out of Sudan after many anxious days. Saudi soldiers check documents and lead them through a
nightmare almost over.
MADOWO: Thousands of people have made them over 500-mile journey from the Capital Khartoum, to here in Port Sudan. One person told us it took them 36
hours but finally on a boat and eventually it was shipped to Jeddah.
MADOWO (voice over): Asad final goodbye to Sudan, victims of the stormy waters in Africa's third largest nation.
HAMZA NAVID, PAKISTANI EVACUEE: It's very, very hard for me and very deep, very hard and very painful for me because this like a second home my home.
MADOWO (voice over): CNN joined Saudi forces on an evacuation voyage from Jeddah to Port Sudan and back, bringing more people one step closer to save
shores. But the demand is high, and the military ships can only take so many people at a time. Our round trip was more than 24 hours, but brought
back only 52 people across the Red Sea.
Sudanese-American businessman Adil Bashir can finally sleep undisturbed for the first time in two weeks. He says his car dealership in Khartoum was
trashed, burnt, and some vehicles stolen. So he took the risky drive to Port Sudan.
MADOWO (voice over): Lot of human body, dead body on the street.
MADOWO: You say you were detained by men in rapid support forces uniform after you told them you're a U.S. citizen.
ADIL BASHIR, SUDANESE-AMERICAN EVACUEE: Maybe you are a U.S. citizen, you are a spy. I believe they want us to be like a human shield because they
were 13 ahead of me.
MADOWO (voice over): As more people escaped from Sudan, another ceasefire was broken over the weekend with fighting in the country. And during the
third week, the Saudi port city of Jeddah has become the main landing point for thousands. fleeing the conflict. The Saudis are throwing everything at
this rescue operation.
GENERAL TURKI AL-MALKI, ROYAL SAUDI AIR FORCE: The assets the capability military civilian in Saudi is taking the civilian from Sudan. So as long as
it's safe, we will keep doing our role.
MADOWO (voice over): This large commercial ship brought nearly 2000 evacuees from Port Sudan, one of the largest arrivals in Jeddah so far.
Hanadi Ahmed and her Sudanese-American family were among those in the vessel received by U.S. Embassy staff. They're relieved to be safe, but
heartbroken for those who couldn't get out.
HANADI AHMED, SUDANESE-AMERICAN EVACUEE: Very bad. It's very bad because all my family I had my mom, my dad--
MADOWO: You are scared for them.
AHMED: Yes.
MADOWO: I am so sorry.
AHMED: It's OK, alhamdhulillah we are --.
MADOWO (voice over): As if you'd like it, dual nationals and foreigners can leave. But most Sudanese people are trapped in a deadly conflict with no
end in sight.
(END VIDEOTAPE)
MADOWO (on camera): There is so much heartbreak in the people who are having to make that difficult journey to Port Sudan and then across the Red
Sea to here in Jeddah. But there's also beauty and innocence. I will introduce you to my little friend Omar. How are you doing Omar (ph)?
OMAR (ph): I'm doing good.
[09:10:00]
MADOWO: You have a little sister right?
OMAR (ph): Yes
MADOWO: How old is she?
OMAR (ph): She is 3 weeks old.
MADOWO: Are you excited to have a little sister?
OMAR (ph): Yes.
MADOWO: What do you want to be when you grow up?
OMAR (ph): I want to be an Astronaut.
MADOWO: Oh exciting! Are you looking forward to going to home?
OMAR (ph): No, I don't want to see Khartoum again.
MADOWO: You don't want to see Khartoum again. Why?
OMAR (ph): Because I'm scared that if I go back to Khartoum, and it's like, just like a holiday, if I go back to Khartoum, something will happen again,
and I will not be able to get out.
MADOWO: --you are safe now. You're going to be fine.
OMAR (ph): Yes.
MADOWO: Thank you, Omar. We didn't even plan that. That's how he's feeling. His three-week old sister was born just before the conflicts. They have
spent a week in Port Sudan, trying to make this journey and back home to Scotland where Omar and his family are from.
SOLOMON: Larry just incredible. I'm so glad you brought up little Omar great to see him smiling. But you just really have to wonder about the
perspective of children who are going through this ordeal and what they must be thinking watching all of this play out. Larry Madowo, thank you for
your reporting, great as always.
And we'll have more on the growing crisis later in the show with the Vice President of humanitarian and emergency affairs at World Vision, one of the
largest humanitarian agencies with the presence in Sudan. So more to come here. Stay with us.
Ukraine, meantime under Russian bombardment again over night. Officials say that Russia launched a new round of missile and drone attacks in the east
and against Kyiv. More than 30 people have been injured including 5 children. Ukrainian military says that 15 of 18 cruise missiles fired by
Russia war intercepted air defense forces destroyed Russian missiles above the Capital.
Meantime in the City of Uman, many remain in mourning. That's after a missile strike killed 25 people including 6 children in an apartment
building on Friday, funerals were held for the loss on Sunday. And CNN's Nic Robertson spoke with residents of the community who are paying their
respects.
(BEGIN VIDEOTAPE)
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR (voice over): In the shadow of death, there is love floral tributes and toys for victims of
Russia strike in Uman Friday. Anya you're 15 years old, is paying respects to her near neighbors.
So many innocent children died, she says I'm so sorry. They're not alive anymore. More than a day after the apartments destroyed, recovery winding
down 25 dead,6 of them children. Victoria points to where her father lived.
ROBERTSON (on camera): Fit this one with the blue wall here.
UNIDENTIFIED FEMALE: They are -- overseas.
ROBERTSON (voice over): She lists all the neighbors who are now dead. On the 9th floor a grandma, her daughter and two great grandchildren. On the
8th floor a father and son, on the 7th floor a mother and daughter, my best friend. And on the 6th floor a young couple both 30.
Her father survived. It was a miracle, he says they rescued me with a ladder and people gave me clothes. Victoria shows us documents a letter to
her now dead friend, the photo of another neighbor. She tells us she found them blowing in the wind. They're so important, she says they're all that's
left.
ROBERTSON (on camera): The recovery is painstakingly slow. The wait for answers about the missing just as painful. But in all the grief there is
humanity and there is anger.
ROBERTSON (voice over): In a nearby school neighbors sought clothes, a gift for survivors who lost everything.
NATALIE ALEPIKHOVA, VOLUNTEER: We saw all this family of the children they were crying. I don't know we just felt that something we need to do to help
them. We feel some hate for our Russian neighbors if we can call him like that. But most we are focused on helping just only happen.
ROBERTSON(voice over): Police already documenting the scale of the loss. Boris Bob telling them his vehicle destroyed. It's not what's been
destroyed that matters he tells us. It's the lost lives. We sent photos of the destruction to our distant relatives in Russia, so they can see what
the Army is doing. They didn't reply, he says.
All around life is being put back in some sort of order. The Broken patched up but ask anyone about repairing relations with Russia.
ROBERTSON (on camera): What do you think about Russia now?
UNIDENTIFIED MALE: Animals.
ROBERTSON (on camera): Imagine that for the next generation. Russia's attack, a life shaping memory. Nic Robertson, CNN Uman, Ukraine.
(END VIDEOTAPE)
[09:15:00]
SOLOMON: Meantime, people across France are taking to the streets once again this time using May Day. It's a fresh opportunity to protest.
Demonstrators coming out to slam changes to the pension system and also the Macron government that forced them through.
CNN Paris Correspondent Melissa Bell joins us with the details. So Melissa, as we could see in some of those live pictures that appear to be some live,
tear gas there and appear to be a very heavy police presence, what are you seeing on the ground?
MELISSA BELL, CNN PARIS CORRESPONDENT: Well, right here, Rahel, the very front of the protests where the Black Bloc traditionally kicks things off
and try and seek confrontation with the police. And that's what we've been seeing already just now behind us.
Just a few moments ago, one of those moments when there was a fair amount of clashes there still tear gas, thick in the air, and pretty violent
clashes between the protesters on one hand, and the police who are lining the streets of Paris trying to keep this March as peaceful as they can.
Now, we had been expecting it simply because as you mentioned, this is the context of the 1st of May, it isn't just that the pension reform protests
go on. Even though this is now going to become law. The unions have vowed that they will keep on fighting through the street.
And that's why you've got behind those initial Black Bloc protesters, all of the main trade unions and their balloons that go white back --. They're
here to protest the pension reform. The broader context, of course, is it this is May the 1st.This is the day when traditionally, Rahel, the French
get out and protest here in Europe. It is a day for coming out on the streets in favor of many causes.
And so you'll see lots of different signs in Paris, today. There are people out here demonstrating for the rights of women in Iran, there are people
here demonstrating in favor of action against climate change. But the protesters had been expected to turnout in huge numbers.
And authorities more importantly, had been expecting those violent elements to be perhaps more present than they have been, even these last few weeks
during the pension reform protests between 1000 to 2000 protesters they believe that are intentionally causing trouble. And certainly what we've
seen so far, is that it's gotten off to a fairly confrontational start with the police, Rahel.
SOLOMON: And Melissa, just for your own awareness. We're actually showing our audience in a different video inbox. Some of those clashes that appear
to be taking place as we speak with law enforcement in the heavy police presence there in Paris, Melissa, as you said, it is set to become law now.
This controversial were formed any sense now that it does appear to be becoming law and a sense of how long protesters plan to keep protesting. I
mean, what's next here?
BELL:I think that is the big question of this stage, the authorities clearly hoping, Rahel, I'm going to show you what's happening behind
because that is somewhere some of that there's scenes are happening as the protesters trying to make their way forward to the March has been
momentarily stopped because of those clashes.
What the authorities are clearly hoping is that this is going to run out of steam but now that the law is set to go ahead from September, in fact,
people are going to see an incremental rise in the number of months that they have to work to get their pension is they're clearly counting on the
fact that the protesters will get tired of this, the unions will give up.
As you can see, not only are the unions determined to continue, causing as many strikes as they can, holding as many protests as they can. But it is
those Black Bloc elements the far left, that we have seen in far greater numbers today than we had in many of the protests before.
Partly because of that made the first traditional significance of this March but also, because of the anger that is out there. I think another
interesting thing, Rahel, that the protesters know is that the popular support for this protest movement has actually gone up since January, it
began January 19thby 11 percent.
So despite the strikes, despite the protests, there's been an 11 percent increase in the proportion of the French population that actually backs
this protest movement. And I think that's very much on the minds of the trade unions and the protesters as they come out here today on May
1st,Rahel.
SOLOMON: Melissa, it's a fantastic point, because that would be my next question. I mean, if officials are hoping that this loses steam, public
support doesn't really bear that out, because you're actually seeing, as you pointed out, public support for this. Protesters are actually
increasing with time and so that's not helping there.
The last thing I would ask I suppose is that clearly from that poll side and from the government side, they will say this is about money. This is
about fiscal responsibility. What do protesters say in terms of just the fact that, at least according to Macron, this is not sustainable the way
the reform a program had been set up before?
BELL: That's right. We've been hearing from France's Labor Minister, Rahel, who says that if the current system can use continues, it does, the deficit
will be about 13 billion per year by 2027. And one of the points he made on French television recently was OK, you want to have a pause in the reforms.
Will you allow for a pause in that deficit now? What the trade unions what the great proportion of the public believe is that the government is
picking a fight and -- that it's pushed this through Rahel, it's not so much on the substance of whether pensions need to be reformed?
[09:20:00]
It is also the way the government has gone about it. Pushing as it has this reform, controversial to begin with, without a vote in Parliament, I think
that is partly what's added to a lot of the anger that you're seeing not just here on the streets today, but in the wider public.
Fear about the form that this particular pension reform has taken beyond the actual fact of raising the retirement age. So there is now a great deal
of anger that's very much focalized on the French President himself, remember that this builds on something that goes way back to the yellow
vest, protests.
A lot of popular discontent at the way that Emmanuel Macron governs, and the types of reforms that he's been bringing in. And I think that is once
again being crystallized also in a context where things have just gotten worse inflation, the cost of living, there is a lot of popular anger out
there. A lot of it focused on the French President himself, Rahel.
SOLOMON: And a lot of it very clear for me and all of our viewers around the world to witness today on the streets of Paris. Melissa Bell, thank you
for joining us from Paris. We'll have more "First Move" after the break.
(COMMERCIAL BREAK)
SOLOMON: Welcome back to "First Move". Let's get more on our top story today. The failure of First Republic Bank and JP Morgan's winning bid to
acquire billions of dollars' worth of the bank's assets. First Republic was once a mighty regional banking institution with a predominantly wealthy
client base, and now becomes the second largest banking failure in U.S. history and the third big bank to fail since March.
U.S. Treasury issuing a statement today saying, "Treasury is encouraged that this institution was resolved with the least cost of the Deposit
Insurance Fund and in a manner that protected all depositors." But the deal surely will spark new concerns over consolidation in the U.S. banking
industry.
And how the recent banking uncertainties might affect industry lending. Gerard Cassidy joins me now he is the head of U.S. Bank Equity Strategy at
RBC Capital Markets. Gerard, great to have you on the program today, thank you.
GERARD CASSIDY, MANAGING DIRECTOR AT RBC CAPITAL MARKETS: You are welcome. Thank you for having me.
SOLOMON: So top line developments of this news, top line reaction to this development.
CASSIDY: Yes, it's a development that is unfortunately had to be done. We never liked to see banks fail in the United States, but was handled very
efficiently with JP Morgan Chase, stepping in and purchasing the failed bank from the FDIC. So now as you pointed out, this all started in mid-
March with the failures of Silicon Valley and signature banks.
[09:25:00]
We believe now this is the end of it. There will not be any other large banks failing in our opinion due to what happened to these three banks.
SOLOMON: So to be clear you believe that this is really just a delayed reaction from SVB and not necessarily the start of additional banking
jitters moving forward.
CASSIDY: Very well said, you're absolutely right on that.
SOLOMON: What was ultimately the factor that did for First Republican because look, I'm a Business Correspondent, I talked to banking analysts
and very smart minds like yourself all the time. And there was a bit of surprise that ultimately, First Republic would have to go into receivership
because I'm told the quality of their loans were stellar, I'm told, I mean, they said that their deposits had stabilized. What was ultimately, what did
they mean here?
CASSIDY: You're absolutely right. When you talk about the asset quality of First Republic, as they've reported in the second quarter, I'm sorry, the
first quarter earnings, their credit quality is pristine unfortunately, they also reported that they lost $100 billion of deposits, these deposits
were not insured.
They're uninsured deposits and because of what happened at Silicon Valley, and signature banks, with the uninsured deposits, leaving so quickly,
people or depositors at First Republic felt the same way and they took their money and left. And that's what caused the problem.
SOLOMON: How many Regional Banks share a similar profile in that way? And what I mean to say is, how many banks are facing a similar vulnerability as
First Republic did?
CASSIDY: It's a really good question. And the answer is very few, if any. And the reason I say that is that these three banks and business models
were entirely different than the rest of the Regional banking industry. The number one difference is the percentage of deposits coming from consumers,
or less than $250,000, which is the insurance limit.
And these three banks, Silicon Valley and Signature, that number was in the low percentage of total deposits at First Republic in at the end of the
calendar year 2022. That number was around 20 percent, your typical Regional Bank in America has 40 to 60 percent of its deposits in the less
than $250,000 category.
SOLOMON: Yes, that's a great point. Here's hoping that bears out. Gerard, we had our Correspondent earlier, I'm not sure if you caught the report,
but that's OK. But she was on a call this morning with JPM executives, I believe it was Jamie Dimon who said, look, they ultimately did this deal
not to necessarily hold off a recession, but because it made good business sense.
Do you buy that? Or do you think he has to say that as of course, he benefits from a stabilized banking sector? And of course, he has confidence
remaining stable?
CASSIDY:I think he definitely, this transaction for them is definitely financially very rewarding. It has a 20 percent internal rate of return
based on their estimates. So certainly, it's something that their shareholders will benefit from, they did not go out seeking to do this
deal.
They were called in along with other banks. And yes, I think by creating the stability of having a somewhat seamless transaction in this
receivership trend situation, it does help the U.S. economy as well eliminate some uncertainty that was out there prior to this transaction
happening.
SOLOMON: In terms of regulatory changes, what do you see post, you know, the report last week from the Federal Reserve, what do you see as the most
likely regulatory change, after all of this banking turmoil.
CASSIDY: There will be a handful of changes, and one of the changes likely to take place is going to be centered on the banks with assets, probably
between 100 billion and 700 billion. And it will come with a mark to market their bond portfolio. And they take those unrealized gains and losses
through regulatory capital presently, they don't do that only the largest banks do that.
So right now the banks take it through their what we call a gap accounting, gap capital, but not through regulatory capital. So that's one of the
changes that is coming. And then the second change that will have to be some addressing of the uninsured deposits.
If you're a bank that has an excessive amount of them, maybe there's additional capital requirements that you may need to carry because you have
a greater than normal percentage of uninsured deposits.
SOLOMON: That's a great point and also we've seen certainly with SVB, how quickly bank runs can happen now, in the age of technology and innovation.
CASSIDY: Yes.
SOLOMON: Gerard, I don't have much time left. But before I let you go, of course, the FOMC meeting this week, do you think we still get another rate
hike? Or do you think the Fed has enough evidence now but slow down, that maybe they pause? What do you think?
CASSIDY: We're expecting another 25 basis points the inflation numbers are still stubborn, though they're down from the highs of last summer. They're
still well above their target. So we expect another one.
[09:30:00]
SOLOMON: Gerard Cassidy, wonderful to have your insights today. Thank you. That's RBC Capital Markets.
CASSIDY: You're welcome, thank you.
SOLOMON: We'll have more "First Move" after the break.
(COMMERCIAL BREAK)
SOLOMON: Welcome back to "First Move". U.S. stocks are up in running this Monday. It's a new week and a new month of trading on Wall Street. And U.S.
stocks, little change in early action, volume could be lower though than usual today because European markets are set for the May Day holiday.
News that U.S. regulators have seized first Republic Bank and has successfully sold its assets to JP Morgan. Potentially a market positive we
can see the Dow futures, Dow was up slightly, NASDAQ and S&P down slightly. JP Morgan's CEO Jamie Dimon is saying today that the deal will "Hopefully
help stabilize the banking sector".
And the major U.S. averages coming off a winning week and month. The NASDAQ is up some six and a half percent in April, but lots of challenges still
ahead for investors. First off the Feds interest rate decision on Wednesday, also the unresolved U.S. debt ceiling crisis set the loom large
in the weeks and months ahead as well.
Speaking of the debt ceiling U.S. House Speaker Kevin McCarthy about to address Israel's parliament, the Knesset, he is the first speaker of the
house to do so, since Newt Gingrich back in 1998. Hadas Gold is live for us in Jerusalem. So Hadas, what can you tell us about this trip and also how
it's being viewed?
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Yes, well, any minute now we are expecting the Speaker of the House to address the Israeli parliament right
now. The opposition leader Yair Lapid is speaking, the Prime Minister Benjamin Netanyahu has already addressed the Israeli parliament.
And this is Kevin McCarthy's actually first trip abroad since being elected speaker. And he has said already in some of his remarks since arriving here
yesterday that that is on purpose that he wanted to have his first trip is to Israel to highlight that the United States has no better ally, he says,
then Israel.
And it's been a different sort of tone and the tone we've been hearing recently from the U.S. administration from the White House from President
Joe Biden. If you remember just a few weeks ago, Joe Biden scoffed at the idea that Prime Minister Benjamin Netanyahu would be coming for a visit to
the White House this over the sort of controversy over the judicial overhaul plan that the Israeli government Benjamin Netanyahu has been
trying to push through.
[09:35:00]
That's been since pause, but President Biden was trying to get Netanyahu, he said to hopefully walk away from it. Instead, Kevin McCarthy praising
Netanyahu directly saying that the United States have biased him for his leadership and his courage.
And even saying going so far as to say in an interview with an Israeli paper yesterday, that if President Biden does not invite Benjamin Netanyahu
to Washington soon, that he will instead invite Netanyahu to speak to the U.S. Congress, even without a White House invitation that will be a pretty
significant event.
If it were to happen, McCarthy even joking, that he's being treated the same way by President Biden saying that he also has not received an
invitation to meet with President Biden since becoming elected. But what we're hearing to explore, what we're expecting to hear from McCarthy is
likely a lot of warm words about the U.S. Israel Alliance, that it's now Israel is now celebrating its 75th year as a country, saying that he
expects that alliance to continue for the next 75 years and beyond.
What we will are less likely to hear about is the many controversies that are swirling around this Israeli government. We know everything from the
extremist right wing ministers who are in positions of power people who once considered the four fringes of Israeli politics to this massive
judicial overhaul plan that have been called on democratic by some of Israel's critics. Likely this speech will be a lot of positive language
about the alliance and how it will endure in the coming years Rahel.
SOLOMON: Hadas Gold live for us there in Jerusalem. Thank you, Hadas. We want to now return to Sudan where the conflict between rival military
forces continues, it has been three weeks of devastation, and there does not appear to be any end in sight.
Now, despite the extension of another so called ceasefire, people in Sudan tell CNN that they heard explosions in and around the presidential palace
in the capital city of Khartoum early on Monday. And on the ground well, the situation is quickly worsening over the weekend, United Nations warning
humanitarian crisis is reaching a breaking point.
And the Sudan doctors union warning that the number of dead bodies scattered across the streets is creating an environmental catastrophe.
Joining me now is Mark Smith. He is the Vice President of Humanitarian and Emergency Affairs of World Vision. That's one of the largest humanitarian
agencies with a presence in Sudan. Mark thanks for being with us today.
MARK SMITH, VP OF HUMANITARIAN AND EMERGENCY AFFAIRS, WORLD VISION: Thanks for having me.
SOLOMON: So as I understand it, you still have teams in Sudan, but they are not able to do the work they so desperately want to do. Walk me through the
status of your teams right now.
SMITH: So right now, we have about 290 national staff who, frankly are hibernating right now. Our international staff, we were able to evacuate
last week via port Sudan in Jeddah, and one went into South Sudan. But our national staffs are at this point suspended operations. Tomorrow, we're
having a discussion with respect to how do we restart? Where do we safely restart and assessing where we can actually provide assistance?
SOLOMON: And walk me through those conversations? I mean, what are your staff, your national staff, they're telling you in terms of the scene?
SMITH: Well, basically, it's difficult to kind of stay in touch with all of them; given cell phone coverage has been disrupted. Electricity has been
disrupted; people have been on the move. So at this point, right now, we're hearing that the situation is very desperate, prices have increased
dramatically.
We have not been able to actually pay staff since the beginning of April, because we can't get cash into the country. So they're in a bit of a
desperate situation themselves. But they are kind of, you know, starting to think about what can we do? Where can we do it?
SOLOMON: Yes. And what concerns you most I mean, I have to wonder about the children. We had a correspondent earlier in the port of Sudan, who actually
now he's in Jeddah, but he talked to a young child Omar, who was remarkably smiling. But he said to him, he said to our correspondent, I'm scared if I
go back, I won't be able to get out. I mean, what concerns you most right now?
SMITH: So I would say that, from a safety perspective, we're probably most concerned about women and children. When you have people on the move, you
know, gender based violence, attacks on women, children, disabled; these are the people that are most vulnerable to violence, exploitation, abuse.
And so that would probably be our number one concern, of course, access to clean water, lack of access to food, these are issues that are very
concerning as well. And so, while we're assessing and beginning to assess what we can do inside the country, we are seeing tens of thousands of
people cross borders into Chad, Ethiopia, South Sudan. And so in those areas, we've already started programming.
SOLOMON: And as I understand it, World vision has been active in Sudan for decades if memory serves me correctly. Sudan, of course not far into
conflict for one was born in Sudan. I was born in Khartoum, it's a region of the world, I know very well.
[09:40:00]
What would you like to see done, what more needs to be done, perhaps from the international community to try to take care of some of these people
there?
SMITH: Well, I think obviously, we'd like to see an end of the fighting. And this is where I think help from outside of Sudan is probably really
important. The African Union, I think, is in a position to be able to kind of step up and help with negotiations to bring an end to the violence, that
is probably the biggest step that we can see in terms of assisting people is the violence has to end; we have to find a solution. Once that happens,
then we can begin to access populations with assistance.
SOLOMON: But as far as I know, I mean, both generals, both sides say they have no intentions to stop. So, what do you see happening from here?
SMITH: I mean that's the situation now. We're just hoping that at some point, negotiators can be working with these generals and bring them to the
table to figure out a way forward that's peaceful.
SOLOMON: Yes, well, Mark Smith, we are certainly thinking about your staff and hoping that they are able to do the work that they want to do safely,
to help the people who clearly need it. Mark Smith, thank you.
SMITH: Thank you.
SOLOMON: Vice President of Humanitarian and Emergency Affairs at World Vision. Coming up on "First Move" no May Day parade in Cuba, how an acute
fuel crisis is impacting the island nation, have a live report from Havana coming up next.
(COMMERCIAL BREAK)
SOLOMON: Welcome back. And update now on our top stories, one of our top stories around the world. As protests continue across France on May Day, as
you can see here, these are live pictures police are out in full force in Paris. The protests come after President Emmanuel Macron's pension reform
plan went through a very controversial plan. And as we can see here, people are clearly so angry about it.
We have seen tear gas, fires, broken windows; we've heard very loud booms there. CNN will of course say across these protests and bring you updates
as we get them, but those are live pictures in Paris as people continue to protest. And actually I want to take you to Melissa Bell in Paris who is
with us or is not with us guys. OK, Melissa, I want to bring you back into the conversation out. Walk us through again what more you're seeing on the
ground?
[09:45:00]
BELL: Rahel let me just show you what's happening where we are. This is the front of the protest where the black mark had been facing off with a riot
of police, the best part of the last half hour or so. And for now, the March isn't able to make progress because of these regular scuffles that
have been happening, and it's really been getting quite violent.
As you can see, the riot police are lining the side streets of where the marks should go. And it is against them that the black bloc had been facing
off for the last half hour, hour fairly violently, really trying to express some of that very violent anger that they're feeling now.
This is the front of the march, as I was saying a moment ago, it's important to remember that going further back; you've got all the trade
unions. There are, we expect many tens of thousands of people who'll be on the streets of France today, many of them protesting peacefully, these are
traditional May Day protests.
Of course, authorities expected there would be far more people in the street because of the pension reform process because of the anger that's
out there. But what we've been seeing, certainly as this March has kicked off, is a lot more of those black blocs that you tend to see at the front
of Marches seeking the direct confrontation with the police, than we had in many of the march or many of the protests these last few weeks.
And I think that speaks to a couple of things. First of all, of course, this entry reform is going ahead, the law has now been parsed, the changes
will be effective from September, and people will start seeing the number of months that they have to work raising any practice. And that of course
is causing a great deal of anger.
And this may, the first is being used symbolically to really make a claim the anger about that. It is also important to remember I think that that
pension reform anger has been taking place in the context of inflation, high cost of living, all of those grievances that were the heart of the
yellow vest protests a couple of years ago have really gotten worse.
And a lot of that anger that you're seeing expressed on the streets today against Immanuel Macron is something that's been seething simmering for
many years now, and has really gotten have gotten a lot more violent, a lot more overt, a lot more obvious over the course of the last few weeks as a
result of this particular pension reform protests, Rahel.
SOLOMON: It's a great point, Melissa, that bears repeating and it's the controversial nature of the reform, but it is also the way in which it was
pushed through that has clearly really inflame tensions there in Paris. Melissa Bell, wonderful to have you, stay safe. Thank you for your
reporting. Of course, that is the story we will stay on top of throughout the day. In the meantime, we'll have more "First Move" after this short
break.
(COMMERCIAL BREAK)
SOLOMON: Welcome back into Cuba now where severe fuel shortages have forced the government to cancel the traditional May Day Parade today. Now most
years that actually draws hundreds of thousands of people to Revolution Square in Havana.
[09:50:00]
Patrick Oppmann joins me now. So Patrick, what do we know about what's behind all the fuel shortages?
PATRICK OPPMANN, CNN CORRESPONDENT: Well, you know, surely shortages are nothing new to people who live in Cuba. Long lines are just a part of life
here. But the fuel shortages we've seen over the last few weeks are the worst in the years, if not decades, and they are affecting nearly everyone
who lives on this island.
(BEGIN VIDEOTAPE)
OPPMANN (voice over): It's a country running on empty. Across Cuba right now more cars seemingly wait online to fill up the drive on the road. Even
at stations when there is no gas people line up for when or if it finally arrives. For drivers like -- the sudden Island wide shortage of fuel means
they spend their days trying to fill up rather than working.
It ain't easy. They sell too little, he says only 40 liters. That only gives me enough for one day; they won't give me more than that. Some people
immediately siphon the gas they managed to pump either to resell or to hoard it as they get back in line all over again.
Increasingly, Cubans complain that police are letting too many of what they call indiscipline's, undisciplined behavior take place.
OPPMANN (on camera): What many people do is they save several spots per car, which multiplies many times over how many people are actually in this
line, waiting for gas. Once the guys actually arrived, so people come rushing back, they cut the line and that's when all hell breaks loose.
OPPMANN (voice over): As the lines get longer, tempers get shorter. Certain privileged groups like foreign diplomats have their own gas stations
assigned to them. But it makes little difference when there's no gas to pump. The Cuban government has said little about the crisis, the worst in
years, but acknowledges that there has been a disruption of shipments from suppliers like Venezuela, Cuba's socialist ally, who they receive oil from
in exchange for medical workers.
JORGE PINON, UNIVERSITY OF TEXAS AT AUSTIN ENERGY INSTITUTE: The first domino piece that falls out of this is Venezuela that it's selling its
better quality crew to those customers that can pay cash. So the good quality crews that Cuba used to get are no longer there because Cuba
doesn't pay cash for crude oil.
OPPMANN (voice over): The ripple effects of the gas crunch impact nearly everyone on this island, university classes have been canceled. Farmers
don't have fuel for tractors. There's not enough diesel for garbage trucks to empty dumpsters that overflow with trash.
And the Cuban government was forced to cancel the massive parade held every May Day in Cuba's Revolution Square. Usually the island's top leadership
looks on as hundreds of thousands of workers filed by. This May Day, officials are encouraging Cubans to march in their own neighborhoods. There
simply isn't enough fuel for anything on a large scale.
We will still commemorate May Day, he says, but rationally and with maximum austerity. Cuban officials have said the gas shortages will last at least
through the end of May. And as frustrating and punishing as this crisis is for Cubans, all people can do is hope and endure their long waits.
(END VIDEOTAPE)
OPPMANN: And as we reported, you know, these May Day celebrations when we were first told would be much on a much smaller scale. And then they were
moved, it was an announcement that came yesterday. From today, Monday, May Day, which is when it's always been held here to Friday, something that's
never been done before because of weather conditions, which is somewhat strange, because while it rained in Havana yesterday, it's a beautiful day
today.
It just speaks to how disrupting these shortages of gas are, how they are impacting nearly every event, every activity here and the fear that many
experts have is it's not a short term solution perhaps that's going to fix this. It's a question of how will cap the refineries have been over the
years they are falling apart, the cash crunch that Cuba is suffering from. So this may not as officials have said, be fixed in the next few weeks. It
may in fact become the new normal here.
SOLOMON: Yes, one official I was reading, I told the New York Times we still don't have a clear idea how we're going to get out of this. Patrick
Oppmann, thank you. Appreciate that. And finally on "First Move" if you are an animal lover, like me, and you like dressing up, well, we may have found
the job for you.
Blackpool Zoo in the north of England is advertising for a quote "Seagull deterrent to try to keep the birds away from food, visitors and other
animals". How you ask like this by dressing up as a giant bird. The zoo was looking for up to five people for this job. So you know I'm getting a flap
if you're worried about making the shortlist.
[09:55:00]
There is a job for everyone. Just as they say there is a lid for every pot. Before I go one quick programming note CNN will air special live coverage
of the coronation of King Charles the third. On Saturday, May 6, it all starts at 5 a.m. in New York, 10 a.m. in London, right here on CNN. In the
meantime, that is it for the show. I'm Rahel Solomon. "Connect the World" is coming up next.
(COMMERCIAL BREAK)
[10:00:00]
END
