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THE LEAD WITH JAKE TAPPER
Trump vs. FOX; Dow Drops; Will Biden Run?; Republican Rivals Fire Back At Trump. Aired 4-4:30p ET
Aired August 25, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALISON KOSIK, CNN CORRESPONDENT: Also, that rebound was just brief, brief enough for investors to make enough profit and then to get out.
We just heard the closing bell, Dow falling 205 points, this adding on top of the 588 points from yesterday. If anyone wondered if the correction was gone, the correction, I think, is here to stay, at least obviously for a second day -- John.
JOHN BERMAN, CNN GUEST HOST: Yes, the correction is officially official right now, down 200 points today, 588 points yesterday, 500 points on Friday.
BERMAN: And, Alison, again today, a wild 600-point swing here. Talk to me about the volatility and what it's doing to these investors around you.
KOSIK: There is this much volatility because there is so much uncertainty. We haven't even talked about the Fed. The Fed is expected to raise interest rates for the first time in six years.
Supposed to do this in September. Now there is a lot of uncertainty whether or not that is going to happen. Many believe one thing that could calm the markets is if the Fed comes out and says, look, we're going to hold off on raising rates for a bit, maybe do it in December.
Some say that could calm the market. And then we have China, the uncertainty about China. The fact is that a lot of companies rely on China to buy their goods and services. And if China's economy is slowing down as bad as everybody thinks it is, it doesn't spell good news for companies.
And, remember, all these symbols here at the New York Stock Exchange, these are companies. And if the companies aren't going to do well, you're seeing this readjustment of prices based on the global economic environment, John.
BERMAN: All right, Alison Kosik down at the New York Stock Exchange, where you did -- you heard an audible groan when the day turned from positive to negative.
Joining me now, Rana Foroohar. Rana, I have all these great questions that I planned all day about this big rebound, up 400 points. It's gone. The market is down 200 points now. What was supposed to be I think a vote of confidence in the U.S. economy and maybe the measures China was taking to address their financial system, what does this now indicate? Does this indicate that investors are truly nervous that there is a serious problem here when it comes to China?
RANA FOROOHAR, "TIME": I think that they are. And I think the thing that is amazing about China, world's second largest economy, a total black box in terms of figures.
You cannot trust the official figures coming out of China. It's very difficult to get any real economic data. What we do know is, there is a huge debt bubble in China. The debt-to-GOP ratio there is 300 percent. That's more than three times what it is in the U.S..
That's an epic bubble and it's bursting. And traders are worried, because policy-makers in China have been going back and forth. A few weeks ago, they were sending billions of dollars to prop up the markets. Now suddenly they let them fall. Investors don't know what to expect and I think that Alison is right. That's one reason you're seeing this dip right before closing.
BERMAN: Let's take one more look at the board. We're at 205. it's settling at 205 points down right now.
Alison Kosik down at the market again.
Alison, the futures at the open today pointed to this wild open. Just tell us what it was like there at 10:00 a.m., when the market was up 400 points.
KOSIK: Oh, everybody was excited about that.
I was down here doing a report during the opening bell. And it was a frantic pace, everybody running around as usual. But it was especially frantic. But it was different than yesterday, because it wasn't a tense environment, because those futures were in the green.
There was a little disappointment, though, because we all thought that futures would open 600 points higher. They didn't to that. They opened about, you know, 100, moved up 200, 300, 400. But, as the day has gone on, you have seen the -- I have seen the faces sort of get longer and longer and -- and more serious as everybody realized this rally just wouldn't hold.
It wasn't a rally with conviction, with confidence. That's what was lacking today, John.
BERMAN: And, Rana, talk to me about market psychology, because when you have something like this happen, what you have what was expected to be a rebound and a big one turn into a 200-point loss, how does that affect sentiment?
And, again, everyone is saying the U.S. economy is strong here, things will be OK. But do investors now have to come to grips with the notion that this correction is here, it's going to stick, and it's, what, like 12 or 13 percent down right now; 20 percent would be a bear market. It's creeping ever closer to bear market.
FOROOHAR: It is. It is.
I think what investors absolutely have to get ready for is more volatility. Already this year, you have seen more than all of last year. And, frankly, over the last few years, we have been in kind of a genetically modified recovery. It's been modified by the Fed, which has dumped $4 trillion into markets, kept interest rates low for a historically long period of time. That's changing. Markets know that.
And when you combine that with China, when you combine that with a weak Europe, and a U.S. recovery that is still not really great, you get a worrisome situation.
BERMAN: So, this is happening in China. A lot of this, most of this is happening in China. Explain to me, explain to our viewers who are sitting there going, well, why does that matter to me, why does matter to an American company if China is having all these problems with its market and maybe its economy?
FOROOHAR: Couple of reasons.
China has represented the largest share of global growth in the last 10 years. That's basically the role the U.S. used to play. China plays that role now. Also, U.S. companies get about a third of all their profits from the international markets, of which China is the largest emerging market.
So when there is a dip in China, it's a big deal. It also has a big knock-on effect in other countries. So there are entire parts of the world, West Africa, Latin America, Brazile, Russia, that are dependent on Chinese energy demand. When that goes down, they tank, too.
BERMAN: When you see all this red, is it time to think about this being a buying opportunity? I know a lot of people bragging overnight. I saw it, because they go, oh, we bought in, we put a whole lot of money in the market, because they were expecting this big rebound. Is it still the buying opportunity they thought?
FOROOHAR: I think it is depending on what kind of stocks you're talking about.
I still think that U.S. blue chips, solid U.S. blue chips with good international exposure are a safe place to be. I'll tell you, what you shouldn't do is be as volatile as the markets. This is not an opportunity to go out and do massive change-ups in your portfolio. Buy and hold smart stocks. Stick in index funds and wait. And buckle your seat belt, because it's going to be several more months of this, I predict.
BERMAN: And by Tums.
BERMAN: Rana Foroohar, Alison Kosik in the market, thank you, guys, both so much. Not the day we expected at all.
So, the markets remain complicated and wild, to say the least? You know what else is getting a lot more complicated? The fight for the Democratic nomination. That is our politics lead today.
Challenging Hillary Clinton is something Joe Biden would never dream of doing without the blessing of his boss, President Obama, but now that he has it, according to a senior Democratic source, the only thing stopping Biden from stopping Clinton's march to the nomination is, well, everything else, money, super PAC, staff, a slogan, all the nuts and bolts and infrastructure of a presidential campaign.
Let's go now to CNN senior Washington correspondent Joe Johns.
Joe, the vice president reportedly had a meeting last night with two longtime Obama aides, yet another sign that he is getting closer to a possible Clinton challenge.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Another sign that he has a lot to think about, John, along with his day job. We heard just today that the vice president will go to bat tomorrow to try to lobby members of the Democratic National Committee to support the Iran nuclear deal.
The vice president traveling in the Midwest today, as deliberations over his future buzzed in the background.
JOHNS: (voice-over): Paying his respects, Vice President Biden in Cleveland today for the funeral of longtime Democratic Congressman Louis Stokes. Not a word of politics spoken on this trip. But the unspoken fact was that Biden was making an appearance in one of three critical swing states where he outperformed Hillary Clinton in theoretical matchups against Republican front-runner Donald Trump.
Florida is another such swing state where a recent Quinnipiac poll showed he would win while Clinton would lose. And Biden has a trip planned to the Sunshine State, too. Invitations are already out for a September 2 visit to Miami at a fund-raiser for Democratic Senator Bill Nelson, who said in an interview with Florida station WTSP that a Biden run is contingent on the strength of the Democratic front- runner.
SEN. BILL NELSON (D), FLORIDA: My sense is that Vice President Biden will take a look at it, but that he won't get in the race unless Hillary gets in trouble. JOHNS: But polls of Democratic primary voters still show Hillary
Clinton with big leads. And there is also a gender question. Democratic insiders say one problem for Biden is that his jumping into the race could be seen as a slap in the face to Democratic supporters and fund-raisers, who are focused on electing the first woman president.
The vice president's exploratory meetings with senior Democrats are expected to continue over the next weeks. Last night, he met with Obama administration heavyweights Bob Bauer and Anita Dunn, he the former White House counsel, she the former communications director.
A senior Democratic source tells CNN President Obama gave Biden his blessing to run on Monday. In the coming days and weeks, Biden is also expected to meet with fund-raisers, donors and others before he makes a decision. His wife, Jill, said to be conflicted, according to one source, with a characteristic reticence of a political spouse about making the jump into a national campaign.
Friends and former aides of Biden say running for president is still an open question because his family is still in mourning after the death of his son in May. Sources have said Biden have privately expressed concern not about Hillary Clinton's e-mail problems, but more about her ability to promote the issue of income equality in the campaign.
JOHNS: And one reality check for Joe Biden as his deliberations continue, a new Suffolk University poll showing Hillary Clinton up big in the state of Iowa with 54 percent support, Bernie Sanders at second with 20 percent, and Joe Biden at third with 11 -- John.
BERMAN: All right, Joe Johns at the White House, where a lot of people want to live in about 18 months. Thanks so much, Joe.
I want to talk to one of the Democrats organizing a potential Biden bid, Steve Schale. He's a draft Biden adviser.
Steve, thank you so much for being with us.
I'm not sure there is much subtle about Joe Biden. So, this meeting with Elizabeth Warren, the lunch with the president, the dinner with advisers last night, this is no mere trial balloon. This is a big freaking trial balloon.
So, as you sit here with me this afternoon, do you think he's doing it? Do you think he's getting in?
STEVE SCHALE, DEMOCRATIC STRATEGIST: Well, listen, it's hard for me to say. But I can say he's doing everything that a candidate would do to get ready to potentially run.
I thought about running for the legislature one time. And what do you do is, you go meet with your boss, make sure he's OK with it. You go meet with friends and make sure they would help you. And you go meet with opinion leaders to see if they would support you.
So he's going through all the mechanics that somebody who would go through the process of considering running for president would do.
BERMAN: And this is more than he was doing a few weeks ago, now that he's reaching out to fund-raisers, now that he's reaching out to strategists. This is a step ahead of just the mere discussions with friends and family members, where he was.
Let me ask you, Steve. How much of this is about Hillary Clinton?
SCHALE: Well, listen, for me, it's about Joe Biden.
I think that, first of all, Joe Biden is -- my friend Josh Earnest said he was arguably the most consequential vice president we have had in a long time, if not ever. He's probably as prepared as anybody to care for the Obama legacy. And, frankly, too -- I live in the swing state of Florida. If you look at the way that Democrats have struggled with working-class, working white voters primarily, I think Joe Biden is a guy who comes from that world.
He was a middle-class guy growing you up. He's never lost his roots. And I think it gives us a chance to talk to some voters in the general election that we have struggled with the last few cycles.
BERMAN: Steve, I want to play some sound from John Podesta. John Podesta, you know, is the campaign of Hillary Clinton's campaign, a former counselor to President Obama. He did an interview last night to a Las Vegas PBS station. This is what he had to say comparing Joe Biden and Hillary Clinton.
(BEGIN VIDEO CLIP)
JOHN PODESTA, CLINTON CAMPAIGN CHAIRMAN: The reason I support Hillary is because I think she's the best person most able to do the job.
QUESTION: Better than the vice president?
PODESTA: If I wouldn't -- if I thought the vice president was better than Hillary Clinton, then I wouldn't be working for Hillary Clinton.
(END VIDEO CLIP)
SCHALE: Well, obviously, I have nothing but respect for Mr. Podesta and for Secretary Clinton. If she's our nominee, I will support her wholeheartedly.
But Joe Biden, besides again being sort of arguably the most consequential vice president in history, if not recent history, his fingerprints have been on pretty much every major foreign policy and domestic issue over the last 40 years. So it's hard to argue that a guy who is as experienced as he is and the issues that he's faced isn't the most qualified and certainly the most experienced in the race at this point, potentially in the race at this point.
BERMAN: All right, Steve Schale, maybe you're about to get a lot busier. Thanks so much for your time. Really appreciate it.
SCHALE: Thanks, John. Enjoyed it, bud.
BERMAN: All right, on the other side, Donald Trump taking on everyone today, from Jeb Bush to Lindsey Graham, even FOX News. Now one of his rivals has had it, calling Trump a -- quote -- "complete idiot," not a partial idiot, a complete idiot.
[16:17:07] BERMAN: Welcome back to THE LEAD.
More now on our politics lead: it is Donald Trump versus the world. But instead of just seven evil exes, yes, that is fortuitous Scott Pilgrim reference, the Republican frontrunner has battled or is battling with virtually everyone available, from Lindsey Graham to Rick Perry to Scott Walker to Marco Rubio to John McCain to FOX News to Jeb Bush -- especially Jeb Bush.
But now, the former Florida governor and everyone else, including FOX News, is pushing back.
I want to get right to CNN national political reporter Sara Murray.
Sara, it seems people are fighting with Donald Trump today and by people I mean everyone.
SARA MURRAY, CNN NATIONAL POLITICAL REPORTER: John, I feel like Donald Trump is really on the war path today. And in a few short hours, he can vent all that frustration here on the stump in Iowa. But for now, he's taking it out on Twitter. Let's take a look.
Another day, another Twitter tirade from Donald Trump. The GOP front runner taking aim at Jeb Bush, calling him a mess, all because of this defense of his use of the term "anchor babies".
JEB BUSH (R), PRESIDENTIAL CANDIDATE: What I was talking about is the specific case of fraud being committed where there's organized efforts. Frankly, it's more related to Asian people come into our country, having children, taking advantage of a noble concept which is birthright citizenship.
MURRAY: Trump didn't hold back on Twitter, saying Bush's comment was a clumsy move to get out of his "anchor babies" dilemma, adding, "Asians are very offended that Jeb said anchor babies apply to them."
On the trail today, Bush needling Trump as a candidate full of fury but light on substance. BUSH: There are a lot of good talkers running for president and one
in particular I'm thinking of.
BUSH: Look, talking is good. It's important to be able to communicate. I get that. But I think it's more important to solve problems now.
MURRAY: The latest exchange, a signal of how the battle for the Republican nomination is quickly coming down to a war of words between the two top candidates. But Bush wasn't Trump's only target. Last night, he bashed President Obama's plans to host a state dinner for the president of China saying if he were in the White House --
DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: I would not be throwing him a dinner. We'd have this conversation -- I'd get him a McDonald's hamburger. We'll give him a state dipper. What he's done is sucked all of you're jobs and he sucked all the money right out of our country.
MURRAY: Even refusing to rule out a trade war with the world's second largest economy.
TRUMP: You have to do that. And then you bring it back to normal. You have no choice.
MURRAY: Trump rounding his latest takedowns by reigniting his grudge against FOX News anchor Megyn Kelly, retweeting someone who called her a bimbo, and saying, "I liked the Kelly File much better without Megyn Kelly.
[16:20:00] Perhaps she could take another 11-day unscheduled vacation."
FOX News CEO Roger Ailes calling on Trump to apologize today, saying, "Donald Trump surprise and unprovoked attack on Megyn Kelly during her show last night is as unacceptable as it is disturbing."
MURRAY: Now, Donald Trump did get a little bit of good news today. A new Monmouth University poll in South Carolina shows him drawing support from 30 percent of likely Republican primary goers there. Ben Carson is in not very close second with 15 percent support.
Trump will travel to the Palmetto State later on this week, but for now, we are awaiting him here in Iowa.
Back to you, John.
BERMAN: All right. Sara Murray, in Iowa.
We will, of course, look at that speech tonight when it happens. Thank you so much, Sara.
I want to talk all this over with CNN political commentators S.E. Cupp and Dan Pfeiffer.
Guys, you know, Sara just talked about the South Carolina poll showing Donald Trump beating the field there, by a lot. He's at 30 percent. Lindsey Graham, by the way, who's a sitting senator in South Carolina, is down at 4 percent. So, Trump is beating him by 26 points right now.
However, on "AT THIS HOUR" earlier today on CNN, Lindsey Graham, he sort of teed off on Donald Trump to my friend Kate Bolduan. Listen to what he said.
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: There is a dark side of politics that Mr. Trump is appealing to. Demagoguing immigrants, he's not the first guy do this and he won't be the last. And there is always a market for it. But it's not sustainable. It will ruin our party. If he becomes the nominee, we'll get killed.
Come to South Carolina and I will beat his brains out. I know my state. This is a silly season in politics.
(END VIDEO CLIP)
BERMAN: Come to South Carolina, I'll beat his brains out. That is the kind of uplifts rhetoric we need in this campaign.
S.E., he also basically said if Donald Trump becomes the nominee, we're through, the Republican Party is through. Are those the stakes here?
S.E. CUPP, CNN POLITICAL COMMENTATOR: Yes. I mean I'm glad to hear people like Lindsey Graham finally taking the gloves off. And George Pataki has been much on the same line.
For until now, it seems as if we've been treating Trump like he's a rational entity and trying to rationally argue against him. All this time, there has been a drunk batter at the plate and we've been talking about his un-tucked jersey. The problem isn't his un-tucked jersey, it's that he's drunk at the plate.
Trump's problem isn't that he's not conservative enough, or inconsistent, is that he 's incomprehensible. The problem is we can't pull together two cogent policy points from what little policy he's given us. And so, the candidates, Jeb Bush to Marco Rubio to Scott Walker and everyone else in between, needs to finally calling it out like it is and stop tiptoeing around Trump just because he's tapped in to some kind of populist, frustrated contingent of American voters.
BERMAN: So, let me read you then, because Jeb Bush is taking a different tack right now. He just put an essay on his campaign Web site and in at the talks about Donald Trump. But he speaks more rationally or more delicately than Lindsey Graham. He says, "Donald Trump has staked his presidential campaign primarily
on the issue of illegal immigration. But rather than offering serious solutions to the national problem, Mr. Trump is pushing a plan that is not conservative, wildly unrealistic and not reflective of our values."
So, Dan Pfeiffer, take off your Democratic hat, and put on your strategist, impartial observer hat. Which strategy is better, the Lindsey Graham "I'll beat his brains out", or Donald Trump -- or Jeb Bush saying his immigration plan is not conservative?
DAN PFEIFFER, CNN POLITICAL COMMENTATOR: Well, I don't think Donald Trump cares a ton what Lindsey Graham has to say. I don't think Lindsey Graham will beat Donald Trump's brains in South Carolina. He's an asterisk in a poll of his own state.
Jeb Bush, he has to do something. He's losing in all the three major states. His campaign is struggling. They cut salaries last night.
And so, the question is, should he fight Donald Trump? Maybe. But Donald Trump is a bulldog. Jeb Bush is a Chihuahua.
And I don't know that in 2015, an essay is the best way to win a political fight.
CUPP: No one is scared of an essay.
PFEIFFER: It's like the Federalist papers.
BERMAN: I'm not sure that's the Federalist papers, but we'll let history judge the essay on the Jeb Bush Web site before we make our claim on that.
S.E., you know, Donald Trump in his tweets, we saw it in Sara Murray's piece, talking once again about Megyn Kelly. A lot of people thought the last time he went after Megyn Kelly would be his undoing if it wasn't the McCain comments or the comments about immigrants being rapist. But now, he's going after her again.
The question is, why? Does it help, hurt, or is this just more of the same?
CUPP: I don't know. I mean, I don't know why. It doesn't make a whole lot of sense.
And I think FOX is realizing finally that while maybe they thought they could treat him rationally and they had come to some sort of agreement after the last time and they were going to see a softer Trump. Here you go again. Trump for no reason completely unprovoked comes out and starts tweeting at Megyn Kelly that he didn't miss her.
[16:25:00] I mean, it's just -- it's bizarre behavior and we need to stop rationalizing it, we Republicans, we the media, we voters, as populism, as, well, he's not politically correct. This is not, you know, political incorrectness. This is just rude blurting that doesn't really move any conversation forward on either side of the aisle.
BERMAN: All right. Dan, I want to ask you one question about Joe Biden and Hillary Clinton. You worked in the White House. You worked for President Obama. You are from Delaware, Dan.
PFEIFFER: That is true.
BERMAN: And so, at one time a constituent of Joe Biden.
So, like, many other Democrats, must be conflicted right now as you're watching what is going on. And what is going on, you know, is first class trial balloon. More than a balloon. I supposed like a rocket ship, a trial rocket ship being launched by the Biden people that your trends in friends in the White House are not just allowing but to a certain extent welcoming, it feels like.
Am I right?
PFEIFFER: Well, I think there is no question that every Democrat, particularly those who know both Secretary Clinton and Vice President Biden are going to be conflicted by this. You care a lot about both people. You think both would be great candidates. And that's going to be hard. But that's what primaries are about. But I do think --
BERMAN: Every parent says they love their kids equally. Not all of them do. You know, I think --
PFEIFFER: Do you have two kids, John?
BERMAN: I love them equally.
This is a case, Dan, where I believe that people in the White House are going to have to make a choice and are choosing as we speak.
PFEIFFER: Well, I think people in the larger Obama world or outside the White House may have to choose whether they get involved in the campaign between the two. I do think whether the vice president runs, our nominee, whether it's the vice president or Secretary Clinton, we'll be stronger because of it.
But that's a personal decision the vice president has to make and he has every right do that. He's more than earned it. He'd be a very formidable candidate and he's going to make a personal decision about what's best for himself, his family, and whether he thinks this is a right thing for him to do.
And if he does, there will be Obama people working for Secretary Clinton. Obama people working for Vice President Biden, and that will be good. That's how primaries work.
CUPP: You know, John, I actually think this is a trial Hindenburg, except I don't think it's going to crash. I think it's actually going to go all the way.
BERMAN: Dan Pfeiffer, S.E. Cupp, great to have you today. Thank you so much. A lot of fun.
Coming up, a warning from the FBI to law enforcement across the country about a growing trend. American women being recruited to join ISIS terrorists both overseas and in the U.S.
Plus, a new concern for police who say criminals are now transporting drugs and guns by drone and the biggest challenge, how to stop it.