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New Day

Looking Ahead to 2015

Aired January 01, 2015 - 06:05   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: We have breaking news, Malaysia Airlines confirms that it has lost contact with a plane carrying 227 passengers and 12 crew members.

ROBIN WILLIAMS, COMEDIAN/ACTOR: Good morning, Vietnam!

UNIDENTIFIED MALE: This is the tail section of MH-17.

WOLF BLITZER, CNN ANCHOR: The first confirmed case of Ebola in the United States.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Tonight I'd like to talk with you about immigration.

JAKE TAPPER, CNN ANCHOR: A cease-fire between Israel and Hamas is history.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Airstrikes are authorized.

UNIDENTIFIED FEMALE: Republicans grabbing control of Congress.

ROGER GOODELL, NFL COMMISSIONER: The vast majority of our players are great men.

CHRIS CUOMO, CNN ANCHOR: Teargas just dropped right near us. It's going to get very bad here if we don't have masks.

UNIDENTIFIED MALE: Black lives matter! We can't breathe!

UNIDENTIFIED FEMALE: Black lives matter! We can't breathe!

UNIDENTIFIED MALE: Black lives matter! We can't breathe!

UNIDENTIFIED MALE: We are being tested in Sydney.

(END VIDEOTAPE)

CUOMO: Good morning, welcome to this special New Year's Day edition of NEW DAY. it is Thursday, January 1, the start of two-zero-one...

MICHAELA PEREIRA, CNN ANCHOR: Can you believe it?

CUOMO: ... cinco.

ALISYN CAMEROTA, CNN ANCHOR: Happy new year.

PEREIRA: Happy new year.

CUOMO: Chris Cuomo here with Alisyn Camerota, Michaela Pereira. Who's luckier than me on NEW DAY? Nobody. Nobody.

So what are we going to do today? Let's look at the year ahead, shall we? Politics, how big could the GOP wins figure in, in the next two months? They happened two months ago. Now what they're going to mean today.

Also, let's examine where this unofficial war with ISIS might go. Could 2015 be the year that the terror group gains ground, expands its influence? Or will it be the year of the group's demise?

CAMEROTA: We will also be looking at the economy and how 2015 might treat your bank account. Will those gas prices keep falling? And could this be the year to pull the trigger on finally buying a house? And what financial resolutions should you be making today and keeping?

PEREIRA: And with all those economic dollars saved, maybe you can go see a movie. We'll tell you what is coming up this year in terms of Hollywood. We'll look at the big awards season that's upcoming, who's up for the Golden Globes and what that could mean for Oscar glory.

But first, let's give you a check of your headlines. Let's head over to the news desk.

JOHN BERMAN, CNN ANCHOR: Good morning, everyone. Thanks for being with us this New Year's morning. I'm John Berman. The time, about seven minutes after the hour.

A break in the weather has search teams scrambling to find more victims and the fuselage of AirAsia Flight 8501. Officials say it could take a week or more before the plane's flight data and voice recorders are found. Eight of the 162 people on board have been recovered, and CNN has learned that the USS Fort Worth could be dispatched to the search area today.

Let's get the latest now from CNN's David Molko from the phone right now from Surabaya, Indonesia.

Good morning, David.

DAVID MOLKO, CNN CORRESPONDENT (via phone): Hi, John. Good morning.

It is just about 7 here in Surabaya. I am outside the police hospital and family crisis center. And just a couple of hours ago, you know, hearts turned heavy here. We have the first formal identification of one of the passengers on that flight. It is casket No. 1. We saw that coming off of the plane on the tarmac on Wednesday in a very somber ceremony.

She is no longer just a number. She is now a name, Hayati Lutfiah Hamid. On the flight, she was No. 108 on the passenger manifest, I.D.-ed by a fingerprint match and I.D. card and a necklace with her initials.

Just about an hour after that announcement was made, paperwork and her remains were turned over to her family members, her brother. And unfortunately, as well, John, as the case that we're seeing with many of the families who were traveling on that flight, her husband and daughter were also on the plane.

Out in the search zone operations also continuing at this hour. But challenging weather conditions, including reports of waves in the three-to-four-meter range now as well as nightfall are hampering that, though. The big priority, though, according to the mayor here in Surabaya, recovering those remains and also keeping hope alive. She's telling families to pray for miracles and pray to God that they are possible (ph) -- John.

BERMAN: All right. David Molko for us in Surabaya, Indonesia, where at least for the time being, the search is continuing. The weather has been very difficult, raining very hard there. David Molko, thanks so much.

About nine minutes after the hour. New Year's Eve celebrations turning deadly in Shanghai. A stampede along the city's historic waterfront just before midnight led to 35 deaths and nearly 50 injuries. More than a dozen of those injuries are considered serious. China's official news agency reports people started scrambling for coupons being tossed out of windows, thinking it was money.

Kim Jong-un says he is open to the idea of a high-level summit with South Korea. In a New Year's address, the North Korean leader said he is willing to resume talks with the South Koreans if they are serious about resolving differences. South Korea proposed resuming negotiations earlier this week. Government officials in both countries say the reunification of the Korean Peninsula is a top priority.

New York City says its plans to honor NYPD officers Wenjian Liu and Rafael Ramos, who were ambushed in their squad car -- they are going to honor them by renaming streets on the Brooklyn blocks where the officers lived. The city council will take up the plan later this month. The wake and funeral for Officer Liu is scheduled for this weekend. Word is that FBI director James Comey will attend the service.

Former Florida Governor Jeb Bush seems to be moving closer to a 2016 presidential run. He has resigned all of his remaining board memberships, including parting ways with his own education foundation. The move does not affect business interests where he is a principal partner or an owner. Last month Governor Bush announced his intention to actively explore a White House bid.

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UNIDENTIFIED MALE: Five, four, three, two, one!

UNIDENTIFIED FEMALE: Five, four, three, two, one!

UNIDENTIFIED MALE: Five, four, three, two, one!

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BERMAN: And welcome to 2015. An estimated million people crammed into Times Square. Over now to NEW DAY.

CUOMO: 2014, big, big year news-wise. A lot of headlines.

On the global front, you had the fight against ISIS, right. You had tension in Israel. You had the battle of Ukraine, Ebola crisis, the disappearance of Flight 370.

Here at home, a new Congress; immigration battle; protests erupting in nearly every major city following the police incidents in Ferguson, Missouri and Staten Island, New York.

So what will this all mean politically and economically in the new year ahead? Let's bring in people who know: Ron Brownstein, CNN senior political analyst and editorial director for the "National Journal"; and Ms. Rana Foroohar, CNN global economic analyst and assistant managing editor for "TIME."

Happy new year to both of you good people.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Thank you. Happy new year.

CUOMO: All the best of health and happiness.

And now, Foroohar, I ask you this. When you look politics, economics, hand in hand, especially on the government level -- they got that $1.1 trillion spending bill, right?

FOROOHAR: Yes.

CUOMO: The process is what is going to be predictive for the economic environment. What do you see going forward about what needs to be done in D.C. to keep the markets stable?

FOROOHAR: Well, it's interesting. You know, business people have always complained the political gridlock was one of the reasons we've had a slow economy in the last few years. You know, by some estimates it shaved a third of the growth that we should have had off.

What tends to happen is that these two things go in snowball cycles. As the economy gets better, there tends to be a little bit more of a collaborative environment.

I think the question is how strong is the economy going to be in the year ahead, and is the recovery really going to be more broadly felt? I think if you start to see a middle class that feels stronger, people that feel we're in this together, that you could see more collaboration around political issues in Washington. CUOMO: Foroohar deals in numbers. But you, Brownstein, and your

political ilk, you deal in perception as reality. You now have the Democrats as the out party. They were so critical of the Republicans and the constipation of process down there. Do you expect them to be better, or do we expect more of the same?

RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: I like numbers, too, by the way.

But I expect more -- by and large, I expect more of the same. I think the -- what we saw on the spending bill was more a convergence about tactics then about goals. That Republicans had come to conclude, however reluctantly, that shutting down the government is not a really effective lever to drive their policy agenda. And so they did not want to use that tool.

But I think the gulf between what President Obama has set out to do on a variety of fronts, including immigration, including climate and implementing the healthcare law, and what the Republicans want are so big and the pressure from the Republican base to confront him is so substantial, that I think confrontation will be more the rule than compromise in 2015.

CUOMO: All right. Let's do some -- let's do some yes-no's here. Immigration reform, Ron, do you think anything significant happens? Yes or no?

BROWNSTEIN: Not legislatively.

CUOMO: Not legislatively. OK. So then, when you look at the idea of spending and moving forward, do you think we'll see another shutdown?

FOROOHAR: I don't. I think that Ron's right. I think that everybody has learned that this is terrible at the polls. You know, the Republicans have certainly learned that. And I think that we're in a situation now where, you know, there's positive momentum. I think nobody wants another shutdown. Nobody wants to be back where we were a couple of years ago.

CUOMO: That was a long "no." But it was well taken.

But you know what? Here's the thing, though. Rana is thinking yes, they learned their lesson. This lesson has been learned many times. Democrats have shut down the government -- correct me if I'm wrong -- more often than Republicans have in terms of times it's been done. Remember, we had that long list of how many times the government has been shut down?

The question is, why would they be any better this time? Why wouldn't they just do what was done to them? Not saying they should, but what do you think, Ron? How about that (ph)?

BROWNSTEIN: The Republicans, they have funded the government, by and large, most of the government through September. Of course, the one area they did not fund through September was the Department of Homeland Security, because they want another crack at overturning President Obama's executive action on immigration.

In the end, I don't think they will find a legislative lever strong enough to do that. But I do think -- again, this will be one of the themes of the year -- that the lawsuit by Republican attorney general against the immigration action, like the lawsuit against the Obama healthcare subsidies, are going -- is going to be a big part of the story. The confrontations between Obama and Republican courts, Republican-leaning courts or Republican-appointed judges, I think could be as much of the story in 2015 as the confrontations between President Obama and the Republican Congress.

CUOMO: Staying with you, Ron, does the Supreme Court make a decision either on executive actions or the legality of Obamacare?

BROWNSTEIN: I think they do make a decision on subsidies in Obamacare. And I could -- basically, you know, you're asking where John Roberts falls out. Is he willing, again, to protect the Obama healthcare law against a strong consensus on the right to move against it? And I think that will be the critical question.

CUOMO: Internationally, oil -- oil, petrol -- what's going to happen? We understand -- first of all, tell us, Rana, why this is happening. Why are Saudis pushing down the price of oil? Who are they coming after?

FOROOHAR: Well, there's two things, really. The Saudis are pushing down the price of oil. And that's, some people think, part of a very complex geopolitical strategy to put pressure on the Iranians, who actually have more budgetary problems. They don't have the kind of foreign currency reserves that the Saudis do. Their oil is more expensive to get out of the ground. There's a lot of sectarian conflict right now in the region, as we all know. And so there's a lot of impetus right now for Saudis to keep pumping and keep the prices low. At the same time...

CUOMO: What about the U.S. market, with the shale oil and how expensive fracking is, and trying to lower the margins and collapse our market?

FOROOHAR: Absolutely. And that's the big thing. On the one hand, you've got lower prices of oil as a kind of a tax rebate in the consumers' pocket to the tune of $100 billion.

At the same time you've got the economic viability of our shale gas, which needs about $70 a barrel, becoming less and less competitive. So you've got people now saying is some of that going to go offline? And will that then start a snowball effect for the manufacturers that were counting on that cheap oil to grow jobs at home will maybe cut back? So...

CUOMO: Last two questions: When does oil pop? Take a guess.

FOROOHAR: When does oil hit a low?

CUOMO: No, pop.

FOROOHAR: When does it go back up? I don't think that's going to happen.

CUOMO: Don't hedge on me, Foroohar. Oh, really? All year?

FOROOHAR: I think we're going to see -- we will not see oil above $90 barrel again. I don't think.

CUOMO: That's a pretty decent pop. We're like $60-something now. You're giving me 30 points?

FOROOHAR: Yes, $100 a barrel was, you know, what people were talking about, $100 a barrel.

CUOMO: OK. The century mark.

FOROOHAR: Yes.

CUOMO: Strong, strong choice, Foroohar. We'll see if you're right. Don't think I'll forget just because a year in between.

One last one for you: Do you think -- or who do you think, Ron, is going to pop on the Republican side as the 2016 potential that we don't see right now?

BROWNSTEIN: Well, the first thing I think is that Jeb Bush probably will come into the race and will become the focal point of the race. Not that he will be the clear -- not that he will be a decisive front- runner, but that the choice in the Republican race will instantly be kind of realigned about whether or not you want another Bush.

I think the one who is probably less on the radar now would be Scott Walker, the governor of Wisconsin...

CUOMO: What about Kasich?

BROWNSTEIN: ... who I think has the ability to bridge the more managerial and populist side of the party. But Bush becomes the central issue if he comes in the race.

CUOMO: What about the governor of Ohio?

BROWNSTEIN: I think if Jeb Bush gets in the race, John Kasich is squeezed out. All of those Midwestern governors have a harder time, because I think there's a real strong interest on the Republican -- inclination on the Republican side to look for an executive, to look for someone out of Washington, and Jeb Bush, if he comes in, fills a lot of that space, makes it tougher for some of the others.

CUOMO: Interesting, interesting. What are the odds on Hillary running? What do you give me?

FOROOHAR: Oh, boy. Eighty percent.

CUOMO: Eighty percent?

FOROOHAR: Yes. It's going to happen.

CUOMO: All right, all right. Some good predictions. We will hold you both accountable. By "we," I mean me.

Thank you very much. Happy new year again.

FOROOHAR: Happy new year.

BROWNSTEIN: Happy new year.

CUOMO: Alisyn.

CAMEROTA: All right, Chris.

Have you all made your New Year's resolutions? Are you watching us from the gym? Well, in addition to vowing to eat right, we could also improve our financial health. We'll give you expert advice on the best resolutions for your money.

Plus, this is the year to see who will really run for president in 2016. We'll take a look at political predictions for the year ahead, when this special New Year's edition of NEW DAY continues.

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CAMEROTA: Welcome back to a special New Year's edition of NEW DAY.

After spending so much money on holiday gifts and parties, some financial advice might be in order. We've got experts here with everything you need to know about your money in 2015.

Let's bring in CNN chief business correspondent Christine Romans; and CNN global economic analyst, Rana Foroohar.

Ladies, happy new year.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Happy new year.

CAMEROTA: Great to see you. OK. Let's start with the stock market. Because Christine, you have told us how in 2014 it was on fire.

ROMANS: Yes, it was. It was.

CAMEROTA: What are you predicting for 2015?

ROMANS: I don't think you're going to see another year like you did in 2014. I mean, it's been several years of double-digit stock market gains for investors. I think single digits is more likely. CNN Money polled economic advisers and market watchers, and on average they're saying maybe 8 percent next year.

CAMEROTA: Still a nice little return.

ROMANS: I think you want to be...

CUOMO: It's not eight percent, though. Is it one of those eight percents?

ROMANS: Oh, I think it's definitely one of those. CUOMO: That's harder for the -- you know, for the regular people to get involved with, right?

FOROOHAR: Well, absolutely. You've got to hang tight. I don't think this is the time to sell. I think it's going to be a very volatile year. In part because the rest of the global economy is very up and down right now, which is one of the reasons U.S. equities will probably benefit. We're still the safe house for stocks.

CAMEROTA: Let's talk about gas prices.

FOROOHAR: OK.

CAMEROTA: They, too, experienced record lows at the end of 2014. We have a graphic that we can show. The average national price in 2014 was $3.40 per gallon. In 2015, the prediction is it will be $2.60.

ROMANS: And that's from the government. The government is saying $2.60 is what they're -- you know, I think you're going to see gas prices are going to stay like this through the year. This is going to act as a stimulus for the American economy: $100 billion or something, which is real money for people. You're not going to get wage increases, probably. You're going to get your wage increase from your -- at the gas tank.

FOROOHAR: Absolutely. And we just have to hope, though, that the U.S. shale production, which is predicated on $70-a-barrel gas, doesn't go offline. Because then that could also affect the U.S. economy in a negative way. So it's an interesting balancing act.

CUOMO: So it's good, but it could be bad?

FOROOHAR: That's right.

CUOMO: Right?

FOROOHAR: Volatile. Like that.

CUOMO: So -- so it could help our pocketbook, but it could hurt the economy in general?

FOROOHAR: That's right. It could hurt production.

ROMANS: In energy you've seen a lot of great job growth in energy, in North Dakota and in Texas over the past few years. I think you could see maybe some job cuts in the energy patch if you're going to see lower -- if you're going to see any kind of projects that are going to be stalled or delayed.

FOROOHAR: And a lot of U.S. manufacturers are counting on cheap energy here at home to really fuel their own expansion. So we have to hope that that stays online.

CAMEROTA: Why do they have to be mutually exclusive? Why can't we continue energy production here at home even as gas prices go down? It just doesn't work that way? There's not enough demand? FOROOHAR: If people feel that they're not going to make their money to even get the gas out of the ground, it's a real -- real incentive to stop production.

CAMEROTA: OK. Let's talk about housing market? Will -- Christine, will this be the year for some people to get in and start buying?

ROMANS: I hope that first-time buyers are going to have a better year this year. But again, I'm worried about wages. So I mean, I think they need to -- rents are going to rise next year. I mean, we know that rents...

CUOMO: Why?

ROMANS: Rents are rising, because more and more people are renting. Because the population is growing, and credit is tight. People are not getting a loan. First-time home buyers are having a hard time getting loans.

What I'd like to see is that the lending standards loosen up; first- time home buyers get in there. Zillo did a study just recently that millennials might be able to get in there. Rents are rising so quickly. Millennials who are starting to get jobs are going to start buying apartments. So we'll see. That might be too bullish.

CUOMO: What happens if you loosen up lending restrictions, though? Then don't you wind up starting the cascade of problems we had a few years ago?

FOROOHAR: You know, there was a boom, but then there was a real contraction that left a lot of middle-class and working-class home owners out of the market. If you look at what's been driving the increase in home prices in the last few years, it's really investors and cash buyers. It's not average people, who want to take advantage of these historically low interest rates.

ROMANS: They need to get in. There are qualified people who need to be able to refinance or get a mortgage, and they haven't been able to. Hopefully, next year will be easier for them.

CAMEROTA: Are there new guidelines that we're looking at in the coming year?

ROMANS: There are some new guidelines. You're going to see -- for some qualified home buyers, you're going to be able to see 3 and 5 percent down payments. Again, you know, Fannie and Freddie loosening some rules. So we will see some rules that are meant to loosen the standards but not loosen the standards like you're talking about where it was crazy time in the end of the 2000s. Remember, there were loans where you didn't have to show a job and income or any assets.

CUOMO: Yes. And the banks have shown great discretion. It's not like they would abuse it or anything like that for their own gain.

ROMANS: Regulators are telling them be careful.

CUOMO: Yes, and regulators are so good at keeping track. We have nothing to worry about.

CAMEROTA: Yes, exactly.

(CROSSTALK)

ROMANS: There is no financial conversation that does not have...

FOROOHAR: ... sarcasm.

CUOMO: They just gave them these gifts in the last big budget bill before the new year that loosened up the banks' ability to play with these derivatives. And guess who asked for it? Who asked for it? Jamie Dimon went in and lobbied.

ROMANS: But the White House -- the White House went with it. The White House took that trade. Yes. The White House took that trade.

FOROOHAR: Revolving door. Revolving door between Wall Street and Washington is still open. But hopefully, a better economy this year. Volatile. Stay firm; don't sell your stocks. Ride it out.

ROMANS: I agree.

FOROOHAR: Think long-term.

CAMEROTA: Great advice, ladies. Thanks so much. Christine, Rana.

ROMANS: Don't spend money you don't have. Please don't spend money you don't have.

CAMEROTA: Always a good idea.

CUOMO: You just told them to buy a house. You just said go crazy with extra cash from gas. And now you're saying don't spend money you don't have.

ROMANS: Well, you know, be careful. This is the year to really repair your finances if you need to.

CAMEROTA: That's great. Great advice. Thanks so much.

CUOMO: These economists, they always have another hand. "On the other hand." The other hand.

ROMANS: On the other hand...

CUOMO: Thank you very much. Now of course, what happens at home, very much affected by what's going on abroad. So you have Ukraine, Israel, Gaza, Syria, Iraq, Afghanistan. 2014, as you know, was just filled with conflicts. So could some of these areas find peace in 2015? Where could we see more violence? Christiane Amanpour is here to break it all down for us.

CAMEROTA: Plus, this could be a big year for gridlock and a tough year for cooperation in Washington. Really, again? A look at predictions when this special New Year's edition of NEW DAY continues. CUOMO: So 2014.

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