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The Story Is with Elex Michaelson

U.S.-Iran Ceasefire Looks Shaky as Both Sides Trade Shots; Ongoing Hormuz Closure Strains Industries Worldwide; Three dead After Suspected Hantavirus Outbreak on Cruise Ship; Kremlin Tightens Security Around Putin; California Governor Race Up in the Air With First Debate Set for Tomorrow. Met Gala Kicks Off, as Some are Upset With Bezos Alignment. Aired 12-1a ET

Aired May 05, 2026 - 00:00   ET

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

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ELEX MICHAELSON, CNN ANCHOR: Stats that he's not talking about. The fact that California has the highest unemployment in the entire country, among the most unaffordable homes in the entire country, the highest gas prices, the most number of homeless, and real sort of embarrassing of problems like high speed rail which is, you know, more than $100 billion over budget.

And so there's that question, too, of the Democratic record and this idea of maybe good intentions, but not great results. And so Democrats are both trying to run with Newsom and against him at the same time.

LAURA COATES, CNN ANCHOR: Well, I cannot wait to watch. Have a great debate and a great show tonight, Elex.

MICHAELSON: Thank you so much, Laura.

THE STORY IS starts right now.

(BEGIN VIDEOTAPE)

MICHAELSON (voice-over): THE STORY IS the ceasefire under strain. U.S. and Iran escalate attacks in the Strait of Hormuz. Colonel Cedric Leighton is standing by live.

THE STORY IS the race for California governor. Less than 24 hours before CNN's debate, former governor Gray Davis is here to discuss what it's like to prepare for a debate for governor.

And THE STORY IS the Met Gala. One the biggest night for designers. Melissa Rivers is here live to play fashion police.

(END VIDEOTAPE)

ANNOUNCER: Live from Los Angeles, THE STORY IS with Elex Michaelson.

MICHAELSON: And welcome to THE STORY IS. I'm Elex Michaelson. Good to be back in Los Angeles after a week reporting from Washington. The top story is the fragile ceasefire between the U.S. and Iran is

being tested after both sides fired shots in the Strait of Hormuz. This comes after President Donald Trump launched what he calls Project Freedom, that guide commercial ships through the vital waterway.

President Trump posted on social media that the U.S. military, quote, "shot down seven Iranian boats" after Tehran targeted vessels trying to transit the strait. The president also warned Iranian forces that they would be, quote, "blown off the face of the earth" if they target U.S. ships.

Meanwhile, President Trump is denying that public support for the war with Iran is declining and calling recent polls, quote, "totally fake." Former U.S. defense secretary and CIA director Leon Panetta, a Democrat, told CNN the U.S. may have reached the point of no return when it comes to this war.

(BEGIN VIDEO CLIP)

LEON PANETTA, FORMER U.S. DEFENSE SECRETARY: I think the reality is that we may have crossed a line here. We aren't involved in a -- anymore in a six to eight-week war that was going to end in a few days. I think this is beginning to smell very much like a forever war.

You've seen Iran take additional actions with missiles and drones. You've seen the U.S. use our destroyers to try to go through the Straits of Hormuz. We've blown up, what, six of the Iranian small boats.

You know, what you're left with is continuing to try to use military action in order to make the other side blink. And the reality is that right now, neither side is blinking.

(END VIDEO CLIP)

MICHAELSON: Let's go live to CNN's Kristie Lu Stout in Hong Kong.

Kristie, the ceasefire is fraying after strikes on ships and a port in the UAE. What's the latest in terms of what we know?

KRISTIE LU STOUT, CNN CORRESPONDENT: You know, Elex, the ceasefire is showing some serious strain. This after U.S. President Donald Trump launched Project Freedom in a bid to reopen the Strait of Hormuz to facilitate commercial shipping. And Iran has lashed out. A number of commercial ships in the region have been hit, including a South Korean vessel. And on top of that, the UAE is saying Iranian drones and missiles have hit a major oil port.

I want to show you video that has been circulating online, on social media, of that incident. Now, the UAE has criticized and condemned this incident. You can see the port, there is ablaze, and its location is very significant. This port is in Fujairah, which lies just beyond the strait. This is one of the last few export routes for Middle East oil that doesn't need to pass through the Strait of Hormuz.

And this also represents the biggest escalation we have seen since the ceasefire was announced four weeks ago. There was violence and there was also no surge in commercial traffic, which was the intention of Project Freedom. According to the United States, only two American merchant ships managed to cross the Strait of Hormuz, which Iran disputes. The United States also says it destroyed at least six Iranian smaller boats. Again, Iran disputes that. And you have shipping executives watching from afar and saying, we are extremely cautious and wary of the situation.

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I want to share with you some comments I've been getting from some top shipping leaders. This I heard from Tim Huxley. He's the chairman of Mandarin Shipping based here in Hong Kong. And he tells me, quote, "The strait is still incredibly hazardous and I expect most ships will continue to avoid transit until both sides come up with something more concrete."

This morning I was speaking with Angad Banga. He's the CEO of the Caravel Group, and he tells me this, quote, "Efforts to restore freedom of navigation matter, but it may take time for political statements and military initiatives to translate into safe, workable operating conditions for vessels and crews and crowded and contested waters."

And need we remind our audiences, an estimated 20,000 seafarers remain trapped in the Gulf as the Strait of Hormuz remains effectively closed. Now we continue to watch the price of gas at the pump in the United States. Let's bring up the numbers for you. According to AAA, gas prices, they continue to soar. They're now at $4.46 a gallon. This is the highest level in nearly four years.

And, Elix, one oil market expert told CNN that gas prices on average in the United States will reach five bucks a gallon if the Strait of Hormuz remains effectively closed -- Elex.

MICHAELSON: And Kristie, here in in California, we're at $6.11 a gallon already, which is quite something.

STOUT: Yes.

MICHAELSON: So what's the deal right now with the status of peace talks between the U.S. and Iran? Are they actually talking?

STOUT: Yes. This is the state of play. What we heard was this on Sunday from Iran. Iran said that they had received the U.S. response to their 14-point peace plan. Iran says in that 14-point plan, there was no mention of its nuclear program. Of course keep in mind that goes directly against what we've been hearing all along from U.S. President Donald Trump, who has repeatedly said there can be no peace deal, no deal with Iran unless it agrees to curb its nuclear program.

So that's where we stand right now. We're four weeks into this ceasefire that was already fragile. And now, given the all out attacks on an oil port, on commercial vessels in the strait, this is a ceasefire that appears to be on the brink of collapse -- Elex.

MICHAELSON: On the brink for sure.

Kristie Lu Stout, starting us off live in Hong Kong. Kristie, thank you so much.

For more, let's bring in CNN military analyst, retired Air Force Colonel Cedric Leighton, joining us live right now from the East Coast.

Cedric, how do you read the tea leaves of what's happening? Is more military conflict essentially inevitable at this point?

COL. CEDRIC LEIGHTON, CNN MILITARY ANALYST: Yes. Elex, one would hope not. But, you know, I think Kristie Lu Stout pointed these things out quite well in her report because what you're dealing with here is very much a breakdown in the types of negotiations that one would expect in a situation like this. And certainly, as far as the ceasefire is concerned, Elex, I think what you're seeing is a situation where the -- all of the parameters of that ceasefire seem to be falling by the wayside.

So what that means is that Iran feels free to attack ports like the oil port Fujairah in the UAE. It feels free to attack commercial shipping and the U.S., of course, is using some of its capability to transit the Strait of Hormuz. But it's not a permanent transit. And the Iranians have said that they would resist this. We'll see if they actually do.

But the basic idea here is that the ceasefire is tenuous at best. I hope that conflict is not inevitable, but I think we're inching toward that. And certainly there are enough military forces on the U.S. side to basically go forward with some kind of an attack on Iran. But that may not happen, you know, for another couple of days. But the basic idea that the Iranians seem to have is that they seem to want to press forward with what they're doing right now.

And that, of course, is something that is directly antithetical to U.S. interests and what the U.S. has stated when it comes to the ceasefire and to eventual peace negotiations.

MICHAELSON: Yes, I mean, I remember talking to you literally the night that the U.S. launched the war with Iran. And we were looking at the military assets and we said, you don't usually put all of those assets on the table if you're bluffing. That's a very expensive bluff. And then 20 minutes later, the war started. So when we look at the assets that are on the table now, they've moved even more assets into the region. Right?

So what would be the likely targets for the U.S. if the bombing starts? What do those assets give them the capability to do?

LEIGHTON: Yes. So at this moment, what you're looking at, Elex, is the possibility of them trying to reopen the Strait of Hormuz by force.

[00:10:03]

That might mean that they go in and take one or a couple of the islands that are in the Strait of Hormuz that belong to Iran, such as Larak or Khasham, or at least have a presence on those islands. But most importantly, what they would have to do is they would have to clear the air almost literally of drones and missiles that the Iranians could lob into the shipping lanes of the Persian Gulf.

So that, of course, is something that would require 24/7 persistent surveillance, and it would require air cover to basically go after those kinds of targets as they pop up. So there would be a lot of dynamic retargeting in a situation like that, but it would also require the U.S. not only to pay attention to those missiles and drones that I mentioned, but it would also require the U.S. to pay attention to the small boats and other minelaying craft that the Iranians could potentially employ.

MICHAELSON: So the U.S. has been enacting this blockade with the Strait of Hormuz. The point of that was basically to try to choke the Iranian economy. Is that working?

LEIGHTON: Well, in one way it is, at least to the extent that it covers the trade that Iran has in the Persian Gulf. But one of the aspects of this is that we do see, when we look at the maritime picture, we do see certain traffic along the Iranian coastline, and that appears to be mostly Iranian traffic. So not all Iranian traffic has been stopped, number one.

Number two, there are alternatives for Iran. They do have a basically a sea route in the Caspian Sea that can take them to Russia and that could also give them access to rail lines that eventually end up in China. So those types of transportation links are not being cut off by the naval blockade in the Persian Gulf, the U.S. naval blockade there. So it's working partially, but there are things that the Iranians can do and in some cases have done in order to circumvent the blockade.

MICHAELSON: Colonel Cedric Leighton, thank you for being with us live. Really appreciate your insights.

The Port of Los Angeles represents half of one of the busiest container port complexes in the western hemisphere. Earlier, I caught up with the port's executive director, Gene Seroka, who is keeping a close eye on the developments in the Middle East. We were at the -- take a listen to our conversation on international trade disruptions from the sidelines of this week's Milken Institute Global Conference, bringing together thought leaders from around the world in Beverly Hills.

(BEGIN VIDEOTAPE)

MICHAELSON: Gene, good to see you. Where are we at when it comes to the ports right now?

GENE SEROKA, EXECUTIVE DIRECTOR, PORT OF LOS ANGELES: In Los Angeles, Elex, the cargo is flowing smoothly. I was just in China over the last two weeks, and it was really heartening to see how well those ports are doing in addition. What they've done is kind of segmented the cargo that was going to the Middle East and keeping that, which is going to the United States, Europe and other locations, flowing really well. No backups, no slowdowns. And the cargo ships are relatively speaking on time every week.

MICHAELSON: What about oil? What about the Strait of Hormuz?

SEROKA: This is still a problem. As we've discussed before, 20 percent of the world's energy goes through that strait. Instead of about 100 or 100 ships crossing per day, it's in single digits. And that means there's a real squeeze on the supply of these products, whether it be liquefied natural gas, oil or jet fuel. In Asia, many folks were telling me they're counting their days' supply in just that, not weeks or months.

MICHAELSON: In days.

SEROKA: In days. We've also heard the same thing in the E.U.. So the crunch on supply is really the topic of conversation there.

MICHAELSON: And so you say that they're looking for other places to go, some of these oil companies?

SEROKA: Right. Here in Los Angeles, our marine oil terminals are going full tilt. We've got seven of them at our port. But what's happening now is that you've got to look for other points of supply, whether it be Latin America, Mexico or Asia locations, whether it's refined or crude oil to make up some of which that's not going to be coming our way.

MICHAELSON: So for people that are concerned about what this does long term to the economy, you say what?

SEROKA: Prices of gasoline will continue to increase. They were up $0.40 around Southern California generally just last week alone. We've noticed that the price of airline tickets has gone up because the jet fuel supply, and in our business, shipping, the price of vessel fuel has more than doubled over the last two months.

MICHAELSON: And the question is, is that going to be a long term or short term problem?

SEROKA: It's going to take some time. Even if the strait was to open up today, you've got to fire up these production facilities once again, repair infrastructure that may have been damaged through this war torn community, and then get the supply out across to your customer base. That's going to take months on end.

MICHAELSON: Gene Seroka, thank you. Great to see you.

SEROKA: Great seeing you, Elex.

MICHAELSON: Appreciate it.

(END VIDEOTAPE)

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MICHAELSON: Next hour, we'll have more from the global conference in L.A., including my conversation with the U.S. secretary of Housing and Urban Development, Scott Turner, President Trump's pick for that, about what he has to say about housing affordability.

But now we take you halfway across the world. The cruise ship stricken by a suspected outbreak of hantavirus has been denied permission to dock in the capital of Cape Verde, an island nation off of West Africa. Three passengers have died. At least three other people are sick. Local health authorities have visited the ship and checked on those symptoms -- those with symptoms. But for now, about 150 people remain stuck on board while officials figure out their next moves, including possible medical evacuations.

More now from CNN's Larry Madowo.

(BEGIN VIDEOTAPE)

LARRY MADOWO, CNN CORRESPONDENT (voice-over): A suspected outbreak of hantavirus on board this cruise ship crossing the Atlantic Ocean. The MV Hondius, operated by Oceanwide Expeditions, departed Ushuaia on the southern tip of Argentina over a month ago. Details of the suspected outbreak emerged as it was anchored in Praia, the capital of Cape Verde, an island nation off the coast of West Africa, on Sunday.

One American travel blogger on board issuing this tearful message.

JAKE ROSMARIN, TRAVEL BLOGGER: We're not just a story. We're not just headlines. We're people. People with families, with lives, with people waiting for us at home. There's a lot of uncertainty, and that's the hardest part. All we want right now is to feel safe, to have clarity, and to get home.

MADOWO (voice-over): Cape Verdean authorities have refused to allow anyone to disembark. However, local health authorities visited the ship and assessed two symptomatic crew members requiring urgent medical care, Oceanwide Expeditions said in a statement. There are 17 Americans among the 149 people on board, according to Oceanwide. The company told CNN it is, quote, "currently focused on the health and safety of passengers and crew."

Humans most commonly get infected with hantavirus through contact with rodents like mice or rats, especially their urine, droppings and saliva, according to the Centers for Disease Control and Prevention, CDC. Early symptoms include fatigue, fever, and muscle aches, as well as headaches, dizziness, chills, and abdominal problems. Human-to- human transmission is rare, the World Health Organization says.

DR. SCOTT MISCOVICH, FAMILY PHYSICIAN: To have this many people clustered together on a ship, most public health officials would be looking and looking for human-to-human transmission. And I'm sure this is going to be investigated tremendously. But that would be where the arrows are pointing right now.

MADOWO (voice-over): So far, it's not clear how the suspected infections on the ship occurred. The first death on board this ship happened April 11th. The body of a 70-year-old Dutch man was taken to the island of Saint Helena, a remote island in the South Atlantic, according to South Africa's Department of Health. His wife later collapsed at an airport while trying to fly home and died in hospital. At this time, it is not confirmed that these two deaths are connected

to the current medical situation on board, the operator said. The World Health Organization says it is facilitating between member states and the ship's operators on a full public health risk assessment, but added, quote, "The risk to the wider public remains low. There is no need for panic or travel restrictions."

Larry Madowo, CNN.

(END VIDEOTAPE)

MICHAELSON: Our thanks to Larry.

Russia is hoping to avoid a Ukrainian attack on its annual Victory Day Parade by declaring a brief ceasefire. How Ukraine is responding. That's ahead. And later protests call for a boycott of the Met Gala because of its main sponsor, billionaire Jeff Bezos. We'll have more on the controversy. Plus the best fashion of the night with Melissa Rivers a little later.

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MICHAELSON: Russia says it will observe a two-day ceasefire in Ukraine later this week to mark its annual World War II Victory Day celebrations. This year's parade will be significantly pared back, with no military hardware on display. The Kremlin says that's because Moscow is facing a, quote, "terrorist threat from Kyiv."

And President Zelenskyy announced Ukraine will begin its own ceasefire starting Wednesday, saying he believes human life is far more valuable than any anniversary celebration. He went on to say that Russia needs to enact a permanent peace, especially since Moscow believes it can't hold a parade without Ukraine's goodwill.

Ukrainian lawmaker Kira Rudyk agrees. Rudyk.

(BEGIN VIDEO CLIP)

KIRA RUDYK, UKRAINIAN LAWMAKER: When you're starting the war, committing all kinds of war crimes, you should be expecting that at some point this war will come back at you and the amount of pain and suffering, the amount of killings and stolen children that Putin and his surrounding and Russia have committed in Ukraine gives us all, all the rights to fight back. And this is what we are doing. And we will continue doing that until Russia stops.

And this is why we are offering a ceasefire even before the military parade. In 2022, Putin wanted to have military parade in Kyiv. Right now, 2026, he is asking Ukraine about being able to have military parade in Moscow. And I think that's very significant. We are definitely not a country on our knees. We are a country that is fighting.

(END VIDEO CLIP) MICHAELSON: These pictures show the aftermath of a drone strike on an upscale building in the heart of Moscow late Sunday. Russian officials say no one was hurt and that other drones were intercepted before they hit their targets. The attack showcases the growing threat inside Russia all caused by Vladimir Putin's war in Ukraine.

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As CNN's Nick Paton Walsh reports, the resulting paranoia goes all the way to the top.

(BEGIN VIDEOTAPE)

NICK PATON WALSH, CNN CHIEF INTERNATIONAL SECURITY CORRESPONDENT (voice-over): It is a rare, pointed insight into one of the darkest secrets in Russia. President Vladimir Putin's security protocols. In it, a detailed intelligence report given to CNN by a source close to a European intelligence agency, portrays, predictably, a Kremlin in deep crisis.

Cooks, bodyguards and photographers working with Putin must have surveillance systems installed in their homes, it says. Putin has stopped visiting military sites this year entirely, it says, in contrast to last year, often spending time in fortified bunkers and keeping clear of some of his main lavish residences like Valdai. A tactic aided by many of his appearances, and he is in the media a lot, being prerecorded. His staff cannot use smartphones or public transport, the report adds. Visitors must be searched twice.

Not all of this information is new. Some of it rumored or evident before, but the massive detail is striking, as is the decision by a European intelligence agency to release a report like this. Clearly, an information salvo designed to stoke strife and paranoia at a time of perceived weakness in the Kremlin.

(Voice-over): The dossier also suggests something staggering, that the measures may be designed to protect Putin from a potential coup, something he had a narrow miss with in June 2023, when mercenary boss and former chef to Putin, Yevgeny Prigozhin, led a failed march on Moscow.

The risk of a coup, it says, now is from another former confidant, Sergei Shoigu. Once his minister of defense but now secretary of the security council, he retains significant influence within a military high command, it says. The report says a coup is more likely after Shoigu's former deputy and close associate Ruslan Tsalikov, was arrested in March, which it calls, quote, "a breach of the tacit protection agreements among elites."

But the report doesn't provide any evidence or explain why it has made this risk public, warning the Kremlin. It claims the new security measures came after a series of assassinations among the Russian top brass, likely by Ukraine. At an urgent meeting last year after the killing of Lieutenant General Fanil Sarvarov in Moscow on December the 22nd. The release of the report has convenient timing four years into

Russia's invasion of Ukraine, at a time when doubts about Russia's ability to sustain its war effort and its economic impact, a growing of major internet blackouts, growing internal criticism of Putin himself, and continued successful Ukrainian bombardment of targets deep inside Russia.

Especially ahead of the May 9th Victory Day parade scaled back dramatically this year for security, there are plenty of reasons European intelligence would seek to destabilize the Kremlin, and much of this is hard to corroborate. But it is rare detail and a confident presentation of a Kremlin in crisis that matches a moment of peaking criticism of Putin internally.

Nick Paton Walsh, CNN, London.

(END VIDEOTAPE)

MICHAELSON: Thanks to Nick.

It is the eve of the next debate for California governor. We'll get some intel from someone who has been on the debate stage for California governor before. In fact, he won that race. California's former governor, Gray Davis, you see him standing by there live, he joins me to break down the race next.

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ELEX MICHAELSON, HOST, THE STORY IS: A fireworks factory exploded in central China, killing at least 21 people, injuring more than 60. These new images just sent to CNN. The blast happened in a rural city known as the world's fireworks hub on Monday night, according to Chinese state media. Social media footage geolocated by CNN shows a massive column of smoke rising into the sky after that blast. The shockwave hit nearby buildings, leaving some with shattered windows. The cause of the accident remains under investigation. Chinese leader Xi Jinping urged all out efforts to search for those who are still missing.

Here in California, the largest home insurer, State Farm, could face millions of dollars in penalties for violating state laws. This comes after California's insurance commissioner launched an investigation into how the company was handling claims from the devastating 2025 wildfires across parts of Los Angeles County. 31 people were killed in the Palisades and Eaton fires, which destroyed over 16,000 structures.

Commissioner Ricardo Lara is accusing State Farm of hundreds of violations, including delaying claim investigations, providing insufficient payouts and failing to communicate with policyholders. In a statement, State Farm says it reflects the allegation -- rejects the allegations and will respond through the legal process. If the insurer is found to be willful in violating state law, the administrative judge could recommend a maximum of roughly $4 million in penalties.

We are less than a day away from the next California governor's debate airing right here live on CNN, and right now it is anybody's race. The seven candidates who have qualified include Riverside County Sheriff Chad Bianco, former Fox News host Steve Hilton, both Republicans.

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Democrats worry the five Democratic candidates could split the vote on the left, landing the Republicans on the November ballot. Here are the Democrats that will be competing tomorrow. Xavier Becerra, who served as Health and Human Services Secretary under President Joe Biden, Matt Mahan, the mayor of San Jose, California's third most populous city, Katie Porter, former congresswoman who represented Orange County, Tom Steyer, billionaire activist, and former LA mayor Antonio Villaraigosa, making his second bid for governor.

The top two candidates from the June primary advance, regardless of party, to the general election. Well, the LA Times writes, quote, the last contest that was this wide open was a generation ago when Titanic ruled the box office and Google was a startup. Gray Davis won that race for California governor in 1998. It was an upset back then. He joins us now live to talk about the race for governor. Governor Davis, welcome to The Story Is for the first time.

GRAY DAVIS, FORMER CALIFORNIA GOVERNOR: Good to see you. Good to see you. Good to be with you.

MICHAELSON: Nice to have you here. So, you know what it's like for it to be the night before the debate or the day of the debate and be a candidate. Most people cannot experience that. What's it like for the candidates right now in terms of their mental preparation, their mindset, all of that kind of stuff?

DAVIS: Well, if you're starting your preparation the last night, forget it. Our race was essentially tied in -- in June. And so we took those debates very seriously. We spent three or four days -- three or four days preparing. Not the whole day, but someone would play my opponents, someone would play the reporters. You'd see yourself on film. So, it's just impossible to respond positively and accurately if everything is on the spur of the moment.

MICHAELSON: Yeah.

DAVIS: However, there are some things you can't plan for. My first debate, I turn over, I'm running against the Attorney General, and perspiration is coming down his face, then more, and then it's -- it's enveloping his shirt. Finally, someone crawls out to hand him a handkerchief. You can't prepare for that.

MICHAELSON: No, you can't. Although I'm trying to have a lot of air conditioning tomorrow because I'm scared for me of having that situation.

DAVIS: Just turn down the temperature. That's what (ph) my opponent (ph) -- MICHAELSON: Yeah, yeah. It's going to be an ice box in there tomorrow. And so all that's interesting and then you're on the stage. How do you see the state of the race right now?

DAVIS: I think you're right. I think it's up for grabs. I mean, you have the top two or three that have the best chance. But I think Mahan and Porter are still in the mix. All the Democrats are very credentialed. The Becerra experience is not too different than mine. I was third place on April 8. My opponent runs the best picture ever taken of me in the beginning of his ad, on the strength of his ad. No one else has a dime on television. I went from last to first. Becerra seems to inherited all of Eric Swalwell's followers. He grew 15 points and is neck and neck with Hilton.

MICHAELSON: Yeah, because Becerra is now being compared to Joe Biden in the South Carolina primary. Essentially there was this big field of Democrats, if we remember, in 2020.

DAVIS: Yes, I remember.

MICHAELSON: This is right before the pandemic happened. All these people, every week somebody else was leading. Joe Biden had struggled and struggled. Nobody was really talking about Joe Biden. It looked like Bernie Sanders was going to be the guy. And then the Democratic Party just sort of all fell in line after the South Carolina primary. And it was reliable, old Uncle Joe. They call him Tio Javier. Right? And we'll see if he's the guy. But you know, we'll see. What do you see as sort of the key issue, though, for this race?

DAVIS: I think that's very simple. I mean, the cost of living. Gas prices are going up. We know why.

MICHAELSON: Yeah, over $6 a gallon in California.

DAVIS: Yeah. And groceries and rent and if you can afford to buy a house. I mean, it's just too darn expensive to live in California. And I would recommend that everyone preparing for these debates remember their real audience are people who are hurting. You got to show you can feel the pain and come up with an idea. Newsom and the legislature passed a law this August and September there will be $50 grants to people to pay their utility bill. Now, that won't pay for the whole utility bill, but at least it shows, it provides some methodology for the candidates.

MICHAELSON: California is thinking about doing a wealth tax for billionaires. Everybody who has over a billion dollars, 5% of their wealth. You think that's a good idea?

DAVIS: First let me say if I was governor, I would try to find some combination of a tax increase and cost reduction. But a wealth tax is a self inflicted wound. First of all, it takes away money from education. 90% of the wealth tax cannot go to education. Right now, 42% of all money is supposed to go to education. And secondly, the billionaires are leaving, the millionaires are leaving.

We need their tax to support our revenue. Newsom's budget says 45% of the taxes in California are paid by the top 1% taxpayers. So, I'm against it, the wealth tax, not to help the billionaires, but to help the rest of us.

[00:40:00]

That will have to fill the hole the billionaires leave behind.

MICHAELSON: Yeah, let's repeat what you just said. 45% of all tax revenue for the entire state of California.

DAVIS: Top 1%.

MICHAELSON: That's from the top 1%. What do you think of the job that Governor Newsom has done? Obviously, he's -- people are looking at him as a potential Democratic nominee. At the same time, California has the highest unemployment, the most expensive homes, the, you know, highest gas prices, the most homeless people. I mean, there's a lot of problems in this state, too.

DAVIS: So let me give you the good news. I'm not disputing we have problems, but there's -- So, Bloomberg and the governor talked about it in the clip you had earlier on. Bloomberg did a analysis of the first seven years of his governorship. California GDP went up 40%, more than any state in America and more than China and Germany. No place on earth except the United States had a faster GDP. Now, we have problems, but the revenue is still coming in at 6 or 7% a year. Now, maybe people may overspend, but it's not because the economy is not strong.

MICHAELSON: Interesting. If he runs, do you support him?

DAVIS: That is way down the line. But I will say this. A strong economy, and one of my clients won the Nobel Prize. I went over there with him and I discovered that California won five of the six prizes for science. So he's got good record on science and a good record on the economy. He has a case to make.

MICHAELSON: Governor Gray Davis, great to see you. Thanks for coming in.

DAVIS: Nice to see you. Continued (ph) success.

MICHAELSON: We appreciate it. And we want to remind everybody, watch the debate for California governor exclusively here on CNN. I'll be moderating along with Kaitlan Collins live at East LA College. Our coverage starts Tuesday night at 9 p.m. Eastern, 6 p.m. here on the West Coast. You can also watch it on the CNN app.

Still to come, fashion's finest put on their best for this year's Met Gala. Fashion expert Melissa Rivers joins us here in studio to break down the best in works -- looks of the night. Maybe Gray Davis will stay, can be team coverage if he can do the -- the Met Gala -- What do you think of Beyonce? Do you like that look?

DAVIS: I have -- I have no comments.

MICHAELSON: Okay, there we go. Well, Melissa will when we come back.

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MICHAELSON: Welcome back to The Story Is. I'm Elex Michaelson. Let's take a look at today's top stories. Health officials are working to evacuate at least two people showing symptoms of hantavirus on a cruise ship off West Africa. Three people who are on board have died. Several others are sick in the suspected outbreak. There are about 150 people on the ship. They're not being allowed to disembark while the World Health Organization investigates.

Two people were killed, several others injured when a car rammed through a busy pedestrian only shopping street in Germany. Police have arrested the 33 year old German driver. Officials say the suspect might have had possible mental issues and are investigating a possible motive.

The U.S. Supreme Court has temporarily restored telehealth and mail access to the abortion pill mifepristone. The administrative stay puts on hold a decision by the 5th U.S. Circuit Court of Appeals which had reinstated a nationwide requirement the medication be obtained in person. The one week pause gives justices time to review emergency appeals filed over the weekend by two manufacturers of the drug.

Fashion's biggest night is fighting for attention amid protests targeting billionaire Jeff Bezos and his wife, Lauren Sanchez Bezos. She was one of the first to arrive at this year's Met Gala. The couple are the main sponsors of the event, a noticeable shift from the usual corporate or tech sponsorship. In recent weeks, critics put up posters around New York calling the event, quote, the Bezos Met Gala brought to you by worker exploitation. That's a reference to criticism of worker safety and pay at Amazon, co-founded by Bezos.

Labor unions even hosted their own counter gala on Monday morning, The Ball Without Billionaires. It featured work from businesses linked to Bezos, as well as models and clothing from ethically minded designers. Now, the criticism hasn't stopped the Met Gala from raising a lot of money and attracting A-list attendees. It is the primary fundraiser for the Metropolitan Museum of Art's Costume Institute.

The event raised a record $42 million this year. This year's theme was costume art. Attendees encouraged to, quote, express their own relationship to fashion as an embodied art form. But we all know art is subjective, as will be the reaction to whom the public ultimately deems as best and worst dressed.

Joining me now to break that down is fashion expert television personality Melissa Rivers. Welcome to The Story Is for the first time. Great to see you.

MELISSA RIVERS, FASHION EXPERT & TV PERSONALITY: Yes. Nice to see you again. And I dare you to keep a straight face during this.

MICHAELSON: Okay, I will not, but I'm looking forward to your overall thoughts. So let's start with Anna Wintour, who was in Chanel, of course, the big -- the big creator, founder, the whole thing.

RIVERS: And this is her last night. This is her last time as the Met Gala Chair (ph).

MICHAELSON: She's not dying, but -- but --

RIVERS: No, but this is just -- She's stepping aside as the official.

MICHAELSON: Yeah.

RIVERS: So, you know, she wears a lot of Chanel. It looks like Anna Wintour. With her it's very much variations on a theme. It's green, it's pretty.

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Chanel's the big story this year with the new designer, Matthieu Blazy. It's -- It's Anna. You know, and of course, the glasses. And you know, I like it. It has art. It's -- It's Anna.

MICHAELSON: All we can think of is the bob, though. You almost can't even look at the dress. Nicole Kidman, one of the co chairs of tonight, also in Chanel.

RIVERS: Yes, also in Chanel. She opened the red carpet. It's always important to see who opens it and who closes it, because everyone is given a very specific time to show up, and you do not mess with that schedule.

MICHAELSON: Okay.

RIVERS: Like, you are told to be there at 5:02. You are there at 5:02. It is down to the second.

MICHAELSON: Did this work?

RIVERS: Here was my problem with tonight. I felt like the -- the theme was a little vague in the sense of people didn't know. Like, we saw a lot of, like, that's a beautiful dress, but it would have been beautiful on any red carpet.

MICHAELSON: Meanwhile, Lauren Sanchez, another co chair, and she -- she had something she was showing off.

RIVERS: Yes. So, I don't know if I can say this here, but, like, boobs and nipples were, like, a big theme today.

MICHAELSON: Yes. A lot of nipple.

RIVERS: So, we had -- we had boobs and almost nipples. I just read, it's Schiaparelli, which is amazing. People are saying that it was her wink and nod to the John Singer Sargent painting Madame X, which is actually at -- at the Met.

MICHAELSON: I didn't -- I didn't think -- I didn't think of that. RIVERS: But apparently you and I were not. I mean, I don't know if that's accurate. You know, it has been so controversial, and we all have to remember this is a charity.

MICHAELSON: Yes. And they raised a lot of money.

RIVERS: Yes, they did.

MICHAELSON: Okay. Speaking of the nipple theme.

RIVERS: Yes.

MICHAELSON: Which I feel weird even saying that, but the Jenner- Kardashian team all seem to be going with different versions of that.

RIVERS: Except for mom, thank God. But it was like, we just came off the Kentucky Derby. It was like the Jenner-Kardashian Stakes.

MICHAELSON: Okay, so here -- here we're looking at Kylie.

RIVERS: Yes. And this is in order of how I think they looked. I thought Kylie, Schiaparelli got the memo. It is art. The body, fashion. She nailed it. But again with the nipple bra thing.

MICHAELSON: Yeah. And then Kendall.

RIVERS: Kendall was in Gap Studio for Zac Posen. Very Grecian. It was like a bone color. Look at how beautiful her body is in that. But we have the one boob with the nipple. Like, this was, like, a theme.

MICHAELSON: And Kris now looks younger than all of us.

RIVERS: But Kris, and everyone's been saying that she's not been happy with her facelift. She's come out and said, I'm very happy. It has settled. She looks spectacular. Like, if you zoom in on that face. Look at that. And the coat was beautiful. It had very important sort of Grecian and bright (ph), it was Dolce and Gabbana, which she wears a ton of. And I cannot believe this. Kim was the least favorite of my Kardashians on the carpet.

MICHAELSON: Why is that?

RIVERS: It was a big sort of body plate. It was all molded. That was -- A lot of people did that look. Again, with the boobs, the super pointy. We kept laughing. You know, you gotta be careful, or someone's gonna lose an eye. You know what I mean with those. But I feel like it was very predictable, especially with a lot of women kind of going with the same thing.

MICHAELSON: Alright, we're gonna pick up the pace a little bit.

RIVERS: Yeah.

MICHAELSON: Doja Cat.

RIVERS: Loved. YSL, Yves Saint Laurent. It was latex, and she was literally monochromatic from her hair to the makeup to the dress. And to try and drape latex like that is a real art.

MICHAELSON: Sabrina Carpenter.

RIVERS: Loved. Again, got the memo. So this was a nod to Audrey Hepburn. This was Dior, film as art. And the negatives are actually copies of the film Sabrina.

MICHAELSON: Wow. And Anne Hathaway. You really liked her.

RIVERS: I loved her. Michael Kors. Again, got the memo. This is actually a canvas that was painted by a friend of Michael's, Peter McGough, who I guess they went to art school together. And it's all about, you know, it was inspired by Ode to a Grecian Urn. But to take an actual canvas is pretty spectacular.

MICHAELSON: She looks amazing. Sarah Paulson.

RIVERS: Okay, Sarah I think had an interesting -- You can read into this. She has a dollar bill as a mask. And the theme for the dress was Blinded by Money.

MICHAELSON: Wow.

RIVERS: Yeah. Kind of a little passive aggressive.

MICHAELSON: Yeah.

RIVERS: You know, but again, she is making a real statement with that.

MICHAELSON: Alright, let's look at two men real quickly. Bad Bunny was an old man.

RIVERS: I did not get this at all. And he shuffled. He did like a whole like shuffling.

MICHAELSON: Performance art.

RIVERS: Did not get it.

MICHAELSON: And then Connor Storrie from Heated Rivalry getting a lot of attention.

RIVERS: Well, he got attention from me because in Saint Laurent, but I swear to God, and I left (ph) my house, I had that shirt. I have that shirt.

MICHAELSON: And there's Hudson Williams from Heated Rivalry.

RIVERS: And there's Hudson Williams, which this is just, I don't know. But I had that shirt. It even had the tie in the back. Maybe not as flowing, but that's what caught me on that.

MICHAELSON: Yeah. You have those guns, though?

RIVERS: The guns.

MICHAELSON: The guns are a nice accessory.

RIVERS: Yes.

MICHAELSON: Melissa, we're out of time. Good stuff.

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Thank you so much. Great to see you.

RIVERS: Always good to see you.

MICHAELSON: We'll be back. More of The Story Is right after this.

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MICHAELSON: Actress Blake Lively has settled her lawsuit against Justin Baldoni's production company just weeks before their highly anticipated trial was set to begin. In 2024, Lively accused Baldoni of sexual harassment, a hostile work environment and reputational --

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