Return to Transcripts main page
CNN LIVE EVENT/SPECIAL
Special Coverage of the Government Shutdown; U.S. Ends Government Shutdown; European Market Reaction; Asia Market Reaction; Iran Nuclear Talks; View from Europe; Republican Party Anger; Out of This World Discovery?
Aired October 17, 2013 - 03:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
HALA GORANI, CNN ANCHOR (voice-over): The U.S. steps back from the brink of disaster.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hopefully next time it won't be in the 11th hour.
JOHN VAUSE, CNN ANCHOR (voice-over): There's a deal to raise the debt limit and to reopen the government.
JOHN BOEHNER, SPEAKER OF THE HOUSE: We fought the good fight. We just didn't win.
GORANI (voice-over): Republican lawmakers blinked first in the 16-day staring contest and they're not happy.
SEN. TED CRUZ (R), TEXAS: This is a terrible deal.
SEN. MITCH MCCONNELL, MINORITY LEADER: This is far less than many of us had hoped for, frankly, but it's far better than what some had thought.
GORANI (voice-over): What could the backlash mean for the party and the country?
VAUSE (voice-over): Markets soared on the news.
SEN. HARRY REID, MAJORITY LEADER: The eyes of the world have been on Washington all this week. And that is a gross understatement.
VAUSE (voice-over): But has the damage already been done?
(END VIDEO CLIP)
VAUSE: Lots to get to in this special hour of CNN NEWSROOM. I'm John Vause.
GORANI: It is 3:00 am on (inaudible) --
VAUSE: It is 3:00 am -- GORANI: -- in the United States. If you're Central European time, it's 9:00 am. We want to welcome our viewers all around the world, including in the U.S., I'm Hala Gorani.
VAUSE: President Barack Obama has signed a bill officially reopening the U.S. government and avoiding what many predicted would be a catastrophic default on the nation's debt.
GORANI: Now the U.S. Congress agreed to the measure at the 11th hour on Wednesday night. It will fund the government through January 15th and it will raise the U.S. debt limit until February 7th. This is all temporary.
VAUSE: Indeed, 90 days, really. In the end, a teeny, small, itsy- bitsy change to (inaudible) ObamaCare, including a provision for income verification. Many analysts are critical of the plan, saying it just delays the financial issues which are facing the U.S. until early next year.
Mr. Obama spoke to reporters after the Senate vote and answered just one question.
GORANI: All right. CNN's Brianna Keilar asks, isn't this going to happen all over again in a few months? His answer, a definitive no.
(BEGIN VIDEO CLIP)
OBAMA: I've got some thoughts about how we can move forward in the remainder of the year, stay focused on the job at hand because there's a lot of work ahead of us, including our need to earn back the trust of the American people that's been lost over the last few weeks.
(END VIDEO CLIP)
GORANI: President Obama, we are already seeing some movement in financial markets around the world. We'll bring you those details in just a moment.
VAUSE: But first, hundreds of thousands of federal workers who have been off the job now for more than two weeks are expected to return to work later this morning.
Erin McPike has been following developments on the story. She is still with us. It's 3:00 am there is Washington.
At great risk to your circadian rhythms, it is nice to have you, Erin. Very quickly, walk us through how does this all happen now. What's the process here of the government actually getting back to some kind of normalcy?
ERIN MCPIKE, CNN CORRESPONDENT: Well, President Obama signed this bill just after midnight here on the East Coast, so less than three hours ago. The government is now officially reopened. We've seen a number of statements to that effect. One national park even said they were opening last night, once we had word of this deal. Federal workers are to report to work this morning, 9 o'clock. So just under six hours from now.
And the problem with that, though, is that while the government has been shut down, they have not been able to access their email or their phones. That has been against the law. And so, the government is trying to get the word out through news alerts and things like that. But essentially we're expecting all federal workers to show up in the next few hours. But that remains to be seen so far.
VAUSE: Unless that phone is conveniently turned off. If we look at this deal, it creates essentially three new deadlines. There's the December budget negotiation deadline on the longer-term debt issues; there's the January expiration for the government funding and then there's the February 7th deadline on the debt ceiling.
If you look at that, you've got to say, this is just three more opportunities for governing by crisis.
MCPIKE: That's true. But of course, President Obama has been warning against that. And Republicans, many senior Republicans, Republicans who have been around in Washington for a long time are saying essentially, see, we told you so. We knew this would not work.
And Republicans have really taken it on the chin. Polls are showing that Republicans have fallen out of favor even more drastically than before. So, we'll see if they change up the strategy going into some of these next fights. They're looking at entitlement reform, tax reform. They hope they can get that in the next budget fight. But we'll just see if they're able to do that.
VAUSE: Republicans didn't get a whole lot out of this, really. ObamaCare is still intact and they've had a pretty bruising couple of weeks.
What has this actually ended up costing the U.S. economy?
MCPIKE: Billions of dollars. One ratings agency said earlier today that it took a $24 billion chunk out of the U.S. economy. And, yes, furloughed workers will be getting back pay, but there are all other kinds of problems and other chunks taken out of the economy. It's supposed to grow at a slower rate in the fourth quarter than was expected. So, it's been a dramatic impact.
VAUSE: OK, Erin, thank you. Erin McPike. Seven minutes past 3:00 in the morning there in Washington. Thanks for staying with us.
GORANI: Let's see how investors are reacting, John. It will be a few hours before trading begins here in the United States, and by a few I mean 61/2. But European markets are just opening. Isa Soares is covering that from London. John Defterios will tell us about the day of trading ending now in Asia.
Let's start with Isa in London.
What are we looking at today in London and across Europe as far as stocks are concerned?
ISA SOARES, CNN CORRESPONDENT: Good morning, Hala. Traders here are optimistic that deal has finally been done. Markets sort of factored it in yesterday as a deal started to move along. We knew a deal was coming in at 11th hour, so traders were telling me -- if we bring up the graphics we'll see how markets are faring right now. Across the board was slightly lower, a bit of -- we're seeing a bit of a selloff. There was a lot of volatility that we've seen in the last three weeks, of course. So traders here expecting a dip early in the day and then that will pick up. We're then seeing -- we're expecting traders (inaudible) rally into Christmas and then back into crisis mode. More volatility come January-February next year when the crisis has been -- when we start talking about negotiations yet again.
One of the traders I was talking to however this morning, I said to him, are you relieved this is all done? And he goes, "A part of me, yes," this has been going on three weeks but we know we're going to start again come next year because they're -- in many ways, they're just kicking the can down the road. That's not what they wanted because really, that just creates more instability and just shakes up the global economy even further. That's what they want to try to avoid. Of course we know that's going to start again come next year, Hala, and they're all gearing up for it already.
GORANI: But let put things in context. Index levels are still very high historically speaking. I mean, we're hitting record after record on European indices as well as for the Dow and the S&P. So the fact that traders have this visibility, that they can expect a crisis, in other words, factor it in ahead of time, I mean, I suppose that means that we won't see big drops in European indices because of this.
SOARES: Absolutely. That's exactly what happened yesterday. We were expecting the markets to drop significantly yesterday in European markets and they didn't. Everyone was asking me why are they not dropping? Because, you know, the traders here, they've seen crisis after crisis after crisis from the U.S. when it started with Lehman Brothers, European crisis, to emerging market crisis. And in many ways they have gained some sort of financial muscles and they've learned to read between the lines.
And this political maneuvering that we're seeing in Europe, whilst this has rattled them slightly, it hasn't thrown the indices off the edge of the world. We are slightly higher in Europe, you know, on the month.
So, you know, they are ready to take this on the chin, although they would like to avert it because, you know, they've got so many -- so many crises already to deal with here in Europe. To be honest, they could do without this.
GORANI: All right, Isa Soares, thanks very much, live in London.
John Defterios in Hong Kong, what's been the Asian market reaction?
JOHN DEFTERIOS, CNN CORRESPONDENT: Well, initially, Hala, it was very positive. In fact, seven hours ago when this deal started to cross between the Senate and the House, we saw a rally in Japan better than 1 percent and the markets were up about 0.5 percent right across the board.
Let's take a look at the numbers as they start to settle here. We have the Nikkei index trading up 0.8 of 1 percent off the highs for the day. But the other markets are rather dismal. Hong Kong, the Hang Seng down about 0.25 percent, the same thing for Shanghai after losing nearly 2 percent in trading the day before, and the KOSPI and Seoul just up 0.25 percent.
The other interesting trend, if you ask me here, is that the dollar- based assets rallied into this when the deal was signed, Hala. Oil was up $1.45, is now trading below the line. Gold was up $5 an ounce, another dollar-based asset, now trading down $3. The U.S. dollar rallied right after the deal was signed and now the dollar is trading slightly lower against the British pound, the euro and even the Japanese yen. So what's it tell us? They were expecting the deal to happen. It's not a huge relief rally like we saw on Wall Street. But to be candid, the emerging markets and other developing markets in Europe and Asia are quite tired of the fact that every three months or four months there's a crisis. Big crisis in 2011, big crisis in 2012 and this debate has been carrying on for months until they just pushed it down to January and February. What happens next? Perhaps the silver lining is the Federal Reserve now will have to hold up, Hala, and not pull back on the quantitative easing. There was discussion back in May they would do so. They came off that gas pedal in September. Now with all this uncertainty in February, the Federal Reserve probably has to keep policy the way it is. This will give a nice boost to emerging markets and the global markets if, in fact, the Federal Reserve stays there. And the huge issue is, can they close the gap between the White House and Capitol Hill, and between Republicans and Democrats, because the distance is extremely wide as we talk now?
GORANI: OK, John Defterios, thanks very much. And do stay with us. We'll have a lot more live coverage, continuing live coverage of the agreement in Washington. Coming up, David McKenzie as well, we'll have reaction from Beijing, Diana Magnay is in Berlin. Stay with us. You're watching CNN. We'll be right back.
VAUSE: Welcome back to our continuing coverage here, three hours, 13 minutes since the United States avoided economic Armageddon with that debt ceiling deal. Economists are saying that deal, to get the U.S. government running again and avoid a debt default, it's a necessary first step, but many are also warning it's only a short-term fix.
GORANI: And that's because the deal only allows the government to remain open until January 15th and it and raises America's debt ceiling only until February 7th. There's a well-worn phrase for what we're talking about here -- (BEGIN VIDEO CLIP)
CRUZ: This deal kicks the can down the road.
UNIDENTIFIED MALE: We are kicking the can, but better to kick the can than to stomp on the can.
UNIDENTIFIED MALE: At the same time we can't keep kicking the can down the road.
UNIDENTIFIED MALE: Instead of kicking the can down the road --
UNIDENTIFIED MALE: Kick the can down the road.
UNIDENTIFIED MALE: You kick the can down the road.
UNIDENTIFIED MALE: The problem is we continue to kick it down the road.
UNIDENTIFIED MALE: It's hard not to be cynical when we've seen the can kicked down the road so many times.
UNIDENTIFIED MALE: We will continue to kick this thing down the road and with real harmful effect for the American populace.
(END VIDEO CLIP)
GORANI: All right. And with that metaphor firmly established, Richard Quest spoke with Harvard University economist Ken Rogoff.
(BEGIN VIDEO CLIP)
RICHARD QUEST, CNN HOST: We've got this deal until January 14th, the middle of January, on the budget, February on the debt ceiling. You know, Howard Lutnick said it on this program, our viewers know that this is more than just kicking the can down the road, isn't it? There is an inability to get this grand bargain.
KEN ROGOFF, ECONOMIST, HARVARD UNIVERSITY: I think the odds that it's as bad when it comes up in January and in February are actually probably less. I think this was sort of a small win for the center among many losses that there are certain crazy places you just don't go.
So I'm a little more optimistic on the outcome from this, but again, there's still all this deep divisions across the House and the Senate. It doesn't solve them and so it doesn't mean our governance is suddenly going to turn very productive.
(END VIDEO CLIP)
VAUSE: The Washington brinkmanship we've seen up until this point has had real economic effects and Richard has been keeping track of all of that as well.
(BEGIN VIDEO CLIP) QUEST: The dollar bill and the cracks have already begun to appear. In this crisis over the last week, first of all, we saw Treasury yields spike. There was a notable increase in the amount of money that the U.S. government was having to pay for short money, one month money. Just look at that. At the beginning we were down here, just barely 0.8. Then it spikes up to 0.3 and it comes down again today. That is a real increase in interest rates, at the short end, at the very shortest end of the curve. And yields are twice as high, higher than LIBOR. Today's auction saw a fall, but certainly nothing much to write home about. So Treasury yields will spike.
Then you have people deciding they're not going to invest in U.S. debt. Banks like Citi did and Fidelity, they ditched short-term Treasuries. JPMorgan, Fidelity reduced their exposure. Citi was no longer accepting short-term T-bills as collateral. Hong Kong says short-term bills now have less value as collateral. A real effect, U.S. debt, not as worthy as it was.
Then you have the CDSs, credit default swaps, the ability to bet against a U.S. government default. Unthinkable in the past. Market over the past month, the cost of buying CDSs, 12 times higher. You've got a spike in yield. You've got collateral not being accepted. You've got a CDS splurge.
Finally you have places like the CME requiring a greater level of margin before they'll let you trade up some 12 percent. The CME imposes this 12 percent premium on interest rate swaps. Real effects taking place. Even though the Dow Jones industrials is up 205 points.
VAUSE: OK, Richard Quest there. Investors around the world have been keeping a close eye on what's been happening in Washington to see if this whole debacle would be resolved.
GORANI: There's one investor in particular when he talks, everybody listens. I'm talking about Warren Buffett. Poppy Harlow caught up with the Berkshire Hathaway CEO in New York to get the billionaire's take on how the U.S. should manage its debt.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: We spoke to him just moments before news of that expected deal came down earlier today. He told me what's been going on over the past few weeks in Washington, D.C., he sees it as a game, a back-and-forth game of brinkmanship.
He also said to me that to hold the full faith and credit of the United States in jeopardy is, quote, "nuts." He went on to say that he does not even think that the United States should have a debt ceiling. Listen.
WARREN BUFFETT, CHAIRMAN & CEO, BERKSHIRE HATHAWAY: If you build a reputation for 237 years like the United States has for being the bastion of soundness, I mean we're the reserve currency of the world. And it isn't the president that's causing the problem. I mean they are -- simply enact -- get rid of the debt ceiling would be the best thing. But enact a long-term debt ceiling with a big number if they want and then get back to arguing about the other thing.
HARLOW: News came down of that expected deal did come down, I asked Buffett what he thought of it. He said he thinks it will pass but he also said that he wishes that what would also be included in it is that politicians on both sides of the aisle would agree to never again use the debt ceiling as a weapon, he said, like this.
We also talked about the fact that if this deal passes, it is a short- term temporary deal. He said, if we're back in the same position in just a few months having the same argument once again, that is just, quote, "crazy."
Important to note here, Warren Buffett is a Democrat, he has been a big supporter of President Obama, so I asked him if he's been in touch with the president over the past few weeks. He says he has. He had one phone call with the president. He would not disclose what they talked about, but clearly he has been in touch with the White House.
VAUSE: OK. Poppy Harlow there.
And we will have much more on the reopening of the U.S. government straight ahead.
GORANI: And there is something different about the Iran nuclear talks this time around. We'll tell you what that is coming up.
GORANI: Welcome back. We'll have much more on the crisis and the deal in Washington a little bit later but we want to update you on some of the other stories we're following.
We're getting reports of a deadly suicide bombing in a village in northern Iraq. Reuters is quoting police who say at least 15 people were killed when a truck packed with explosives blew up near the city of Mosul. The village is known to members of a predominantly Shiite minority group. Sunni militants have targeted them in the past, but there's no claim of responsibility for today's attack, the latest in a long string over the last few months.
VAUSE: Iranian and Western diplomats meeting in Switzerland have agreed to return to the negotiating table next month. Both sides are striking an optimistic tone. Some in Tehran even said a deal could be reached within months. We have more now from Jim Sciutto.
(BEGIN VIDEOTAPE) JIM SCIUTTO, CNN CHIEF U.S. SECURITY CORRESPONDENT: After two days of meetings here in Geneva, a clear sense that these talks were unlike any other between Iran and the West in recent memory. A senior U.S. official saying that this official had never seen such intense, detailed straight-forward and candid conversations with the Iranian side. The Iranians also expressing hope and satisfaction.
The Iranian foreign minister Javad Zarif saying that these talks could usher in, quote, "a new beginning in our relations with the West."
Even the timeframe that they're talking about for final agreement here, the Iranians saying they believe they could come to a final agreement within a year. The deputy foreign minister moving that up a bit, saying possibly even within three to six months.
Other U.S. officials, European officials expressing more reservations, but it gives sense of a new hope here in how things could proceed and how quickly. And they have already planned the next round of talks. They're going to meet here in Geneva November 7th and 8th. And in the meantime, experts from both sides will be meeting to discuss the details of Iran's plan.
There are still, though, substantive disagreements, U.S. officials saying that there are differences, for instance, over how quickly and how substantively the sanctions against Iran's economy would be eased also saying that Iran has to provide much more detail still on its plan for reining in its nuclear program.
As one U.S. official said, the work is hard, an agreement is not guaranteed but clearly the start here in Geneva very hopeful -- Jim Sciutto, CNN, Geneva.
GORANI: Also among other stories we're following, officials now say that they believe no one survived a plane crash in southern Laos on Wednesday, 49 people were killed when the turboprop ATR-72 went down in the Mekong River. Passengers from France, Australia and Thailand were believed to be on board.
Search and rescue teams are at the site. State-run media report that the plane was about to land when it hit bad weather and eventually crashed.
VAUSE: The controversial owner of the U.S. pro basketball team, the Dallas Mavericks, has dodged a major legal bullet. A jury in federal courts ruled that Mark Cuban was not liable of civil insider trading charges which had been filed by the Securities and Exchange Commission.
Cuban had dumped his entire stake in moma.com in 2004. That was after the firm's CEO told him about plans for a stock offering. The details were announced publicly later. Cuban's move saved him about $750 million in losses.
Hala? GORANI: Well, just ahead on CNN NEWSROOM, a deal has been reached to reopen the U.S. government. But what did it cost? We'll look at the numbers.
Plus, the U.S. debt default is off the table as well. We'll check reaction from Berlin to Beijing on the global implications.
(BEGIN VIDEO CLIP)
SEN. HARRY REID, MAJORITY LEADER: Let's be honest: this is pain inflicted on our nation for no good reason and cannot make -- we cannot, cannot make the same mistake again.
(END VIDEO CLIP)
GORANI: Welcome back to CNN NEWSROOM. I'm Hala Gorani.
VAUSE: And I'm John Vause. Like to welcome viewers in the United States and around the world. U.S. lawmakers have finally struck a deal to reopen the government and raise the debt limit.
GORANI: Now what does that mean concretely? That federal workers furloughed more than two weeks ago head back to their jobs today, on Thursday.
VAUSE: President Barack Obama signed the bill just a few hours ago. The White House says he'll have more to say about the agreement in a statement later today.
GORANI: But here's the thing, this deal is short-term, it funds the government only through January 15th. It raises the debt ceiling through February 7th. But despite Republican efforts, it leaves ObamaCare largely untouched.
VAUSE: And that is what this standoff centered on. House Republicans were trying to derail ObamaCare, but all this was resolved through a bipartisan effort in the Senate under the weight of today's deadline for a debt ceiling increase. This is what Mr. Obama had to say about that.
(BEGIN VIDEO CLIP)
OBAMA: I want to thank the leadership for coming together and getting this done. Hopefully next time it won't be in the 11th hour. One of the things that I said throughout this process is, we've got to get out of the habit of governing by crisis.
(END VIDEO CLIP)
GORANI: Barack Obama there. So, how much did the partial government shutdown cost the U.S. economy? The financial ratings agency Standard & Poor's says this all cost at least $24 billion. That's about $1.5 billion each day, according to S&P. And S&P also warn that the impact is not necessarily over by the way now that the government is open.
It says consumer confidence has been hurt by the shutdown, and if the issue resurfaces, which many expect that it will, people will remain afraid to open up their checkbooks and that will hurt the economy.
VAUSE: OK. Now it was two years ago that S&P downgraded America's credit rating. They did that despite a last-minute Washington deal to raise the debt ceiling.
So, what is S&P thinking right now in the wake of yet another 11th hour deal? CNN asked managing director there, John Chambers.
(BEGIN VIDEO CLIP)
JOHN CHAMBERS, MANAGING DIRECTOR, S&P: The reason we're at AA-plus and not AAA, there's a couple reasons but the main reason is that the fact that you even have to worry about the U.S. government paying its debt on time would indicate that it's not -- the government's not worthy of a AAA rating.
We think it will be back here in January, debating the same issues. And that given the composition of Congress, that it will be probably still acrimonious and we'll just have to see. We'll have to see where we are then. But this is, I fear, a permanent feature of our budgetary process.
(END VIDEO CLIP)
GORANI: Well, if it's a permanent feature, it's certainly going to have the markets on edge. The 11th hour deal that saves the U.S. from default also spares the world economy from untold harm.
Diana Magnay has reaction to that from Berlin. David McKenzie is in Beijing. We'll get to him in a moment.
First the perspective from Germany and the wider Eurozone.
Diana Magnay, what have you been hearing where you are about this last-minute deal?
DIANA MAGNAY, CNN CORRESPONDENT: Hi, Hala. Well, the editorials, and this is, of course, the top story across the German newspapers all say, fine, it's -- you know, no surprise that they did reach a deal at the very last minute. The markets had essentially factored that in.
But the main points that you read in the papers is that this damage is America's credibility as a global fiscal superpower, that we and the rest of the world look over what is effectively a political farce in Washington.
And even when you just speak to people on the street here, they say they are baffled that it could have come to this that the American government could shut down for a period of two weeks and more. There's also a concern about the fact that this is just, in that cliche that we've been using a lot, kicking the can further down the road, that we're going to be experiencing this same kind of budgetary trouble in three months' time.
That said, it seems that investors anticipate this kind of budgetary trouble coming from the U.S. And therefore, don't really play on it in the markets.
If you look at the European markets, now their reaction is incredibly muted. Last night the announcement that a deal might be struck pushed the DAX up in the last few minutes of trading. Now it's trading down slightly. That could be some kind of profit taking from yesterday's gains.
But the markets have really been doing extremely well over the last half of a year. They're hitting five-year highs. And to a certain extent, the way we always talk about markets being driven by confidence, it seems investors are clearly quite confident that the Americans -- that the U.S. was never going to default on its debt, Hala.
GORANI: All right. Well, they made the right bet in this case. Thanks very much, Diana Magnay is live in Berlin for us.
VAUSE: Well, China was very vocal about the U.S. government shutdown. Beijing urged lawmakers to reach a deal and avoid default. The stakes were pretty high for Beijing, about $5.6 trillion, one-third of the U.S. debt is foreign held and the biggest chunk of that is owned by China, nearly $1.3 trillion.
Let's go live to Beijing. David McKenzie joins us with more on this.
And, David, at the end of the day if China wants to wean itself off those U.S. Treasuries, they essentially going to have to change their entire economic system. That won't happen any time soon.
DAVID MCKENZIE, CNN CORRESPONDENT: Well, basically the short answer, John, is they won't be able to wean themselves off the Treasuries, $1.3 trillion, as you say, of U.S. Treasuries, double that in U.S. dollar assets. The Ministry of Foreign Affairs just making a statement right now about this. China has been unusually robust in its criticism of the U.S. from a government level and from a state media level. The spokesman saying U.S. is the largest economic power in the world. It's not just about its own interest but affects the world economic stability.
"China welcomes the progress and development of resolving the matter. And that's a quote from the Ministry of Foreign Affairs."
So, certainly the chaos in Washington has proved an opportunity for China to point a finger at the U.S., at its apparent legislative inability to put through procedural votes to keep the world economy ticking over. But in the medium term at least, China needs that debt to shore up its economy. John? VAUSE: And, David, how much of that criticism, that rare criticism, you know, if you look at it from the outside, it doesn't seem to be quite that fierce, if you like, or strong words, but they are strong words for China, because they don't often say that kind of thing. There's really not that criticism coming from Beijing.
But how much of that is actually for domestic consumption?
MCKENZIE: I think quite a lot of it is domestic consumption on some level, though, because some of the state media that you saw talking about this issue did not give out the same statements in the Chinese language. So it's been a double game China is playing. They don't necessarily want on the governmental level here to push the fact that they want the U.S. to end the impasse because they don't really want word out about how much they depend on the U.S. for China's financial stability. At the same time, though, for international consumption point of view, China has certainly pushed the envelope, calling for the world to de-Americanize from the U.S. dollar standard; that was in a Xinhua editorial just a couple of days ago, John.
So really from the soft power perspective, a number of analysts have told me that this has been a win for China from a long-term perspective. Their fiscal strategy might be to diversify away from U.S. Treasury bills on some level. But there really isn't a market big enough or safe enough, despite what's been going on in Washington, to hold the enormous amounts of excess cash that China has in its bank account.
VAUSE: OK. David McKenzie in Beijing, where a stiff breeze is clearing away some of the pollution. Thanks, David.
GORANI: We'll have a humorous take on the closing and re-opening of the U.S. government. We can always find humor in all situations.
Also ahead, we will find out about something a lot more dramatic. What it could be like to conduct chemical weapons inspections in the middle of hostile territory.
And remember this fiery scene in the skies above Russia earlier this year? Now scientists say they recovered a piece of that space visitor. Details ahead.
(BEGIN VIDEO CLIP)
MCCONNELL: Republicans remain determined to repeal this terrible law. But for today, for today, the relief we hope for is to reopen the government, avoid default and protect the historic cuts we achieved under the Budget Control Act. This is far less than many of us had hoped for, frankly. But it's far better than what some had sought.
(END VIDEO CLIP)
GORANI: The Senate minority leader Mitch McConnell there.
Well, he expressed disappointment with the outcome, but lived up to his reputation on Capitol Hill as a deal-closer.
VAUSE: Yes. He and the Democrat Harry Reid overcame a really frosty relationship to hammer out this compromise on the government spending and the U.S. debt. But after all bitterness in the past few weeks, one leading Republican says the path ahead is going to be pretty tough.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZ.: I hope that we can move on now. I hope that we can move on to other things because what we've done has been so harmful, not just to Republicans. The president's numbers went down. The Democrat numbers went down. Ours just went down further and faster. The American people have no confidence in their government. And can you blame them?
(END VIDEO CLIP)
GORANI: No. John McCain had more to say as Brian Todd reports, McCain and other Republicans are blaming some of their own members in Congress.
(BEGIN VIDEO CLIP)
BRIAN TODD, CNN CORRESPONDENT (voice-over): On the Senate floor, John McCain slammed the partisanship on both sides during this shutdown.
SEN. JOHN MCCAIN (R), ARIZ.: It is one of the more shameful chapters that I have seen.
TODD (voice-over): But in print, he was much tougher on his own caucus, telling "The New York Times," "Republicans have to understand we have lost this battle as I predicted weeks ago that we would not be able to win."
McCain's Republican ally, Lindsey Graham, says the GOP "really did go too far. We screwed up."
Former Republican congressman Mickey Edwards says while he believes President Obama was too inflexible in the standoff, it was the Republicans who over-reached by hammering on ObamaCare.
MICKEY EDWARDS, THE ASPEN INSTITUTE: The public is not going to believe that the president is responsible, especially when they're trying to undo a law that's already been enacted. So when you tie it in with also the threats about the debt ceiling and possibly reneging on the money the American people have already spent and owe, I don't think it is a message Republicans can win. TODD (voice-over): Senator Ted Cruz has been skewered from more than the party and by his hometown newspaper, which had endorsed him, comparing him to his predecessor, Kay Bailey Hutchison. "The Houston Chronicle's" editorial page says, "Cruz has been part of the problem in specific situations where Hutchison would have been part of the solution."
Another conservative group whose tactics are now under fire, Heritage Action for America, it pressured wavering Republicans to keep fighting against ObamaCare, keeping tabs on those who didn't by blasting out scorecards.
Their leader dismissed McCain's criticism that this was a losing battle.
MICHAEL NEEDHAM, CEO, HERITAGE ACTIONFOR AMERICA: I think that the Senate Republicans should spend their energy focusing on ObamaCare and the way it is ruining millions of American people's lives, and not trying to settle scores about policy -- tactical differences that they disagree with.
TODD (voice-over): But analysts say the party will still question the tactics of its own hardliners.
RON BROWNSTEIN, CNN SR. POLITICAL ANALYST: Has that line of argument, that political strategy been discredited by this defeat? There is no other word for it. And does that then allow other voices in the caucus to argue for a different direction?
TODD (voice-over): Another big question coming out of this, does John Boehner keep his speakership? GOP strategists we spoke to say he likely will, that he has got the votes to stay in. And who would want the job anyway, especially after this? Brian Todd, CNN, Washington.
GORANI: Now to some other news. International chemical weapons inspectors have their work cut out for them as they do their jobs in the middle of a war zone in Syria.
VAUSE: Fred Pleitgen joined a group of inspectors as they trained for a scenario they've never experienced before.
FREDERIK PLEITGEN, CNN CORRESPONDENT (voice-over): A sudden explosion during a chemical weapons inspection. Chaos, fear, this is a training exercise, the lessons potentially life-saving for inspectors as they do their work in war-torn Syria. Franz Ontal is the head of inspector training --
FRANZ ONTAL, HEAD OF INSPECTOR TRAINING, OPCW: We are performing our inspections in the middle of a conflict. We've never done this before. It's not something that you could have foreseen two years ago and planned for.
PLEITGEN (voice-over): These inspectors from the Organization for the Prohibition of Chemical Weapons are being trained to identify dangerous situations, to avoid getting kidnapped but also to help if they witness violent events. This hostile environments training course is conducted by the German army.
The German military makes this exercise as realistic as possible, the sounds, the pops that you hear, the hectic is exactly the same way it would be on the battlefield. In this sort of an environment, the weapons inspectors from the OPCW have to keep their composure and administer first aid in a correct way.
The knowledge could be vital to these inspectors very soon. OPCW has been tasked with cataloging and monitoring the destruction of Bashar al-Assad's chemical weapons after a major chemical attack in the Damascus suburbs, though the regime denies it was responsible.
In August, snipers opened fire on convoy of U.N. experts investigating suspected chemical weapons attacks. One vehicle was disabled in the attack. The inspectors were forced to turn back.
The German army's head of Hostile Environments Training believes the biggest threats could emerge when the inspectors move in areas contested between regime forces and the opposition.
COL. REINHARD BARZ, GERMAN ARMY: We have different players in Syria. And I think that it's not easy for the -- not easy for the job in Syria.
PLEITGEN (voice-over): After the inspectors dressed all the pretended wounds in the exercise, the head of inspector training says he was satisfied with their performance.
ONTAL: Given a situation, a crisis situation, and a chaotic situation and people screaming in language that you don't understand, they were able to stop and assess the situation before they performed any action. And that, I think, was successfully done today.
PLEITGEN (voice-over): As realistic as this scenario was, it was just an exercise. The next stop for some of these chemical weapons inspectors could be Syria, one of the most dangerous places in the world -- Fred Pleitgen, CNN, (Inaudible), Germany.
GORANI: Well, much of East Asia is dealing with what has been one of the busiest tropical storm seasons in years. They've gone through a lot.
VAUSE: They have. And they still are. Meteorologist Pedram Javaheri joins us now from the International Weather Center with all the details. Hey, Pedram. PEDRAM JAVAHERI, AMS METEOROLOGIST: Hey, guys. I mapped out what we're talking about as far as all these tropical storms and typhoons we've broken down for you over the past, say, 10 months across the Western Pacific. We're looking at 25 tropical storms, depressions or typhoons and anywhere from Palawan (ph) out towards Xanon (ph), out towards areas of Luzon, Taiwan, work your way towards Japan. If you're in across East Asia at some point or another you've dealt with storms in the past 10 months in this region. Of course, in the past 16 days, just the month of October, we've seen an historic amount of storms develop. Six named storms have come down so far in October making this the busiest October since 1995. Most recently, of course, we talked about Wipha brushing by right there across coastal Japan, 9 million people impacted by this as far as over 500 cancellations of domestic and international travel, we had wind related delays here and businesses disrupted as well with all of this.
But take a look at Oshima. This is about 75 miles, 120 kilometers or so away from areas of Tokyo where we had the brunt of the storm. If we have the video out of Oshima to share with you, absolute destruction here with the floods, landslides across this region, as this storm at one point was a category 4 equivalent coming across this region.
We know thousands of people losing power and on the order of some 17 people losing their lives. We know 40 people missing across this region as well. All of it with the storm system cruising in this region.
Beyond this, we have yet another storm sitting there on the Western Pacific. This would be the 26th storm of the season. That's typhoon Francisco. Right now, winds at 140 kph, sitting at a category 1 equivalent, say 80 miles per hour in the wind department there.
The track with the storm system, eerily similar to what we just saw with Wipha, it goes right towards southern Japan, Okinawa in the path of it. We have, of course, Oshima in the path of it, Tokyo could be in the path of it as we get on into Sunday and Monday.
This storm has the potential to get winds upwards of 230 kph. That would be equivalent to category 4 as it nears in that region.
So again, John, we've talked about all of these storms this season and it seems like Mother Nature continually cranking these storms out. And if you look at what's happening in the Atlantic Ocean impacting the United States, zero hurricanes have impacted the United States in one of the quietest seasons since the 1950s. So the disparities there in Mother Nature has to find a way to balance it out.
VAUSE: Yes. It's also because the dust cloud --
JAVAHERI: That's right, Africa inhibiting some of these storms.
Look at you go, John, always, always (inaudible).
VAUSE: I'm on top of it, Pedram.
JAVAHERI: You pay attention.
VAUSE: (Inaudible) weather.
GORANI: You're going to pick up a few world weather shifts after that.
JAVAHERI: Come on over.
GORANI: Pedram, thanks very much.
Apparently there's a lot of excitement in central Russia today.
VAUSE: Really, why's that?
GORANI: I'm not sure. Are you going to tell me?
GORANI: Something to do with --
GORANI: -- an out-of-the-world discovery.
VAUSE: Yes. Isha Sesay explains.
ISHA SESAY, CNN HOST (voice-over): This was the scene back in February as a massive meteor streaked across the sky, turning night into day. The fireball sent shock waves across Russia, shattering windows, injuring some 1,200 people and causing millions of dollars in damage.
Scientists say fragments of the space rock crash landed here, beneath the ice of this frozen lake, near the city of Chelyabinsk (ph). Now eight months later, the ice is gone.
And on Wednesday in an operation covered live on Russian TV, divers entered the murky water. At the bottom of the lake they found what is believed to be the largest single fragment of the meteorite. The 1.5- meter-long boulder was dragged to shore, then weighed where it literally tipped, then broke the scales.
ANDREI KOCHEROV, CHELYABINSK UNIVERSITY (through translator): If it weighs more than 500 kilograms then the object is unique in itself and is likely to be one of the biggest meteorites ever found.
SESAY (voice-over): The suspected space rock crumbled into several chunks but still weighed in at more than 570 kilograms. Now scientists want to confirm this is indeed the meteorite they've been searching for.
KOCHEROV (through translator): The initial visual survey which we are talking about now doesn't give us 100 percent certainty. We still need to conduct more research, a structural analysis and other tests.
SESAY (voice-over): When it entered Earth's atmosphere, scientists estimate the meteor weighed about 10,000 tons. It's just a fraction of that size now but scientists seem confident they have made an out- of-this-world discovery -- Isha Sesay, CNN.
VAUSE: Now we know why.
GORANI: Now we know why there's excitement in central Russia.
Still ahead on CNN NEWSROOM, the U.S. financial crisis has turned many people into comedians.
VAUSE: And Republican Senator Ted Cruz has been the butt of more than just a few jokes but there is no explaining this.
(BEGIN VIDEO CLIP)
A friend explained to me today finally what Ted Cruz is doing. And I finally understand. The snowshoe hare every 10 years multiplies sixfold.
ANDERSON COOPER, CNN HOST: Are you high?
UNIDENTIFIED MALE: I am high.
COOPER: What are you talking about?
UNIDENTIFIED MALE: I'm high. Let me explain. Let me explain. Totally high. I wish I was.
(END VIDEO CLIP)
VAUSE: Wednesday was a long day for lawmakers and everyone else who was working on Capitol Hill.
GORANI: Well, one of the House stenographers reached her breaking point, apparently. She stormed the floor while members were voting. Take a look at the video.
(BEGIN VIDEO CLIP)
GORANI: Banging the gavel there. It's hard to see and hear her with all that's going on. She's at the center of the podium. This is where the president usually delivers the State of the Union address. She yelled, "Do not be deceived, God shall not be mocked," and, quote, "A house divided cannot stand."
VAUSE: She's eventually escorted out by the sergeant-at-arms. People who know her and quite a few people there apparently do say that they were quite surprised by that.
GORANI: It seems as though she snapped. I mean, it's quite sad.
VAUSE: (Inaudible) a lot going on. And it's been a very stressful couple of weeks.
VAUSE: (Inaudible) on the deal to restart the U.S. government, so probably not too soon for a few jokes, I guess.
GORANI: No, it's not. And who else but Jeanne Moos doesn't think so, certainly, and she's not alone.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): Senator Ted Cruz, poster boy for the shutdown, led the press pack as he headed for -- wait a minute, the microphone's back there, about face, but not much saving face as Uncle Sam turned around the boat before it went over the falls, say goodbye to all those shutdown jokes.
JIMMY KIMMEL, ABC HOST: Our Congress today, in case you haven't heard, continued to play America's least favorite game show, "No Deal or No Deal."
UNIDENTIFIED MALE: It's time for "Let's Make a Deal."
UNIDENTIFIED FEMALE: There is a deal in the works.
UNIDENTIFIED MALE: This is a done deal.
WOLF BLITZER, CNN HOST: It's not a deal until there's a deal.
RICHARD QUEST, CNN HOST: The mere scintilla of a deal.
UNIDENTIFIED MALE: Get this puppy, like Stevie Wonder once said, signed, sealed and delivered.
MOOS (voice-over): Or as the Senate chaplain put it:
BLACK: Lord, we see a faint light at the end of a long, dark tunnel.
MOOS (voice-over): Amen.
Now that the shutdown and possible default are behind us, in the rear- view mirror, so to speak, so are some of those special moments.
DEFAZIO: I'm going to demonstrate if the Republican side will look at me, I will show you who is responsible. Right here, here you are, who is responsible for shutting down the national parks.
MOOS (voice-over): But what are we going to do without all those weird metaphors?
Senator Cruz was compared to a rabbit by a Republican consultant.
ALEX CASTELLANOS, REPUBLICAN STRATEGIST: He is having bunny sex, the snowshoe hare, every 10 years, multiplies sixfold.
ANDERSON COOPER, CNN HOST: Are you high?
MOOS (voice-over): Just hours before a deal was struck, a FOX News psychiatrist used President Obama's tough talk.
OBAMA: You do not hold people hostage.
MOOS (voice-over): To psychoanalyze the president.
DR. KEITH ABLOW, PSYCHIATRIST: There's a real victim mentality here. I think the president, going back to when his dad abandoned him, when his mother left him with his grandparents, the president sees himself as the victim-in-chief.
MOOS (voice-over): It is enough to make your head explode. Cartoonist Nate Dealer (ph) turned the movie "Gravity" into "Insanity," with the spaceship labeled Shutdown exploding, and the voters untethered, floating off into space.
The most succinct announcement of crisis averted was a tweet by Pee- Wee Herman, "No government default, 15 more days till Halloween."
Maybe Congress deserves a prize for making a deal.
UNIDENTIFIED MALE: It's a trip to Puerto Rico...
MOOS (voice-over): Make it one way, why stop at finger pointing when you can point mirrors? Jeannie Moos, CNN --
DEFAZIO: ... who's responsible--
MOOS (voice-over): -- New York.
VAUSE: Well, that does it for us. Thank you for watching this special coverage of the crisis in Washington, a crisis which has now been averted. I'm John Vause at the CNN Center.
GORANI: And I'm Hala Gorani. "EARLY START" is up next for viewers in the U.S. For everyone else, stand by for "WORLD BUSINESS TODAY."
OBAMA: -- the 11th hour.
ZORAIDA SAMBOLIN, CNN HOST: Breaking news overnight. A last-minute deal reached to avert economic catastrophe and reopen the government. We are breaking down the compromise that was reached by Congress. Reaction from Wall Street and why we could be in this exact same spot in just a few months. JOHN BERMAN, CNN CORRESPONDENT: Let's revel in the moment at least for a second.
SAMBOLIN: I know.
BERMAN: Welcome to EARLY START. I'm John Berman.
SAMBOLIN: I'm Zoraida Sambolin. It is Thursday, October 17th. It is 4:00 am in the east.
BERMAN: And it's a different morning this morning.