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New Controversy in Trump's White House; Impressive Presidential Speech Moves Market; Big Dreams but Questionable Resources; Europe's Coming Election; A Luxury Travel. Aired 3-4a ET

Aired March 2, 2017 - 03:00   ET



[03:00:00] ANNOUNCER: This is CNN breaking news.

ROSEMARY CHURCH, CNN ANCHOR: Hello, and welcome to our viewers here in the United States and all around the world. I'm Rosemary Church.

CYRIL VANIER, CNN ANCHOR: And I'm Cyril Vanier. U.S. Attorney General Jeff Sessions finds himself at the center of the latest Trump administration controversy over campaign contacts with Russia.

CHURCH: Justice Department official say Sessions met twice with Russia's U.S. ambassador last year, but that's not exactly what he told senators during his confirmation hearing.


SEN. AL FRANKEN, (D) MINNESOTA: And if there is any evidence that anyone affiliated with the Trump campaign communicated with the Russian government in the course of this campaign, what will you do?

JEFF SESSIONS, U.S. ATTORNEY GENERAL: Senator Franken, I'm not aware of any of those activities. I have been called a surrogate at a time or two in that campaign, and I did not have communications with the Russians.


VANIER: Sessions now says "I never met with Russian officials to discuss issues of the campaign, I have no idea what this allegation is about, it is false."

CHURCH: CNN spoke with Washington Post reporter Greg Miller, who helped break the story.


GREG MILLER, WASHINGTON POST CORRESPONDENT: It is true that senators do routinely meet with ambassadors. We reach out to all 26 members and heard back from at least 19 of them, and at last count, Sessions is the only one to have met with the Russian ambassador.

I mean, you're talking about a meeting that happened in the middle of an unprecedented attack by the Russian government, an alleged attack but its intelligence services on the United States election, on the 2016 presidential race. The decision to meet with the ambassador in that moment and then failed to remember that several months later is really problematic.


CHURCH: House Democratic Leader Nancy Pelosi is among those calling for Sessions to step down. She tweeted this. "Attorney General Sessions is not fit to serve as the top law enforcement officer of our country and must resign."

VANIER: All this comes as the top democrats and republicans on the House Intelligence Committee have agreed on parameters for their probe of Russian meddling.

Investigation will cover what cyber activity Russia used, whether Russia had links to political campaign, how the U.S. government responded, and whether anyone leaked classified information.

CHURCH: So let's bring in James Davis, he is the dean of the school of economics and political science at the University of San Gallen in Switzerland. Thank you, sir, for being with us. So, we have learned from Justice Department officials.


CHURCH: That Jeff Sessions spoke two times last year with Russia's ambassador to the U.S. but didn't disclose this during his Senate confirmation hearing for attorney general. He denies any wrongdoing. So what should happen next? Should he resign or simply recuse himself for any investigation into alleged ties between Russia and Trump campaign officials?

DAVIS: Well, listen. Senator Sessions in his confirmation hearings took an oath to tell the truth, the whole truth and nothing but the truth. These allegations suggest that at least we did not get the whole truth. So the question is, what do we do moving forward.

The Justice Department is investigating the ties between members of the Trump campaign and agents of the government that has declared itself to be hostile to the United States. And it seems difficult to understand how the attorney general could supervise an investigation in which he himself is a subject. So I think at a minimum, he has to recuse himself.

CHURCH: Right. So where does this leave the debate over whether a special prosecutor should be appointed to head up the investigation into alleged Russian interference and contacts. And that has been debated for some days now.

DAVIS: Right. I mean, a special prosecutor would of course be the way to go if one had a sense that the agents of the Justice Department were not able to conduct an investigation free from political manipulation or control. So far I don't think we've gotten to that point, but that would be the

logical next step. If the attorney general refuses to recuse himself from this camp or from this investigation, I think members of the Congress will have to demand that we have the appointment of a special prosecutor.

CHURCH: Now the White House says this is all about the democrats attacking the Trump administration because of the success of the president's Tuesday address. Is this a case of sour grapes and playing politics? Or is there much more to this, do you think?

DAVIS: Well, look, this administration has inflicted a number of wounds on itself. It seems to me that if you're trying to move a positive agenda forward, the last thing you want to do is pick a fight with the intelligence agencies by telling them un-American or partisan, by picking a fight with the press and calling the press the enemy of the American people.

[03:05:13] All the while, knowing that there is some question out there about what kinds of contacts there were between the campaign and the Russians. I think we need to put this in that larger context.

We have a -- we've already seen the firing of the national security adviser because of contacts with the Russians. We have reports of numerous contacts. So this is just one of many. This is not a political witch-hunt. This is a self-inflicted wound by the Trump administration, and they've done a very poor job of handling it to date.

CHURCH: And with the early departure of former National Security Adviser Michael Flynn on day 24 of his tenure with the Trump administration, and now this issue with Attorney General Jeff Sessions, what are the optics here, and what's the likely impact on the Trump presidency.

Because we're seeing no matter the chaos linked with the rolling out of the travel ban the markets are very happy with the presidency. It doesn't seem to matter what happens, does it?

DAVIS: Well, the markets are happy because the president is promising deregulation and some people seem to think that that's going to lead to an uptick in economic activity. But the problem facing the president is not an economic one right now, it's a political one.

And if we have a steady flow of information suggesting that the campaign and now the administration has not been honest with the American people, has not been honest with the Justice Department, has not been honest with the FBI, has not been honest with the Congress, this crisis is going to continue to unfold. If I were the president, I would want to get out ahead of this.

CHURCH: All right. James Davis, thank you so much for your perspective on this. I appreciate it.

VANIER: So once again, is the perception in the U.S. at least that Moscow is playing a central role in what is front page news here in the U.S.

Let's get the reaction in Moscow. Matthew Chance is with us. Matthew, to date, what has Moscow said about the Trump/Russia connection and the allegations?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, so I think they're watching the political theater playing out in Washington with quite a degree of alarm and concern. Because they, first of all have denied that they've had any involvement in manipulating the U.S. political process.

They deny, of course in talking about Kremlin officials now, deny that they have coordinated inappropriately with any members of the Trump administration or before that, the Trump campaign, but they are looking at this crisis effectively in the United States and worrying about what it means for U.S. policy towards Russia.

Of course the Kremlin had been expecting President Trump to come into office with sympathetic views towards Russia. But because of the way that the Russia issue has become so toxic now in American politics, that's raised alarm bells, Russians are concerned, Russian government officials are concerned that this is going to have a really discernible impact on the policy of the United States towards Russia and is going to be a much, much harder than it would otherwise because of internal political considerations.

So, again, they've denied any involvement in this. They're saying this is essentially an anti-Russian witch-hunt, an attempt to cast Russia in a bad light.

VANIER: Matthew, you've been observing the developing, the nascent relationship I should say between the Trump White House and Moscow since before Trump was, Mr. Trump was inaugurated. Big picture. Are you getting a sense of how this is affecting the U.S./Russia relationship?

CHANCE: I think we all are, in the sense that Donald Trump spoke repeatedly during his campaign about building a better relationship with Russia. He spoke about doing a deal with Russia over Syria and in the fight against international terrorism.

He spoke about the potential of recognizing Crimea, which Russia annexed in 2014 as being a legitimate part of Russia. He criticized NATO and NATO expansion. And all of this was music to the ears of the Kremlin, as I say, they were expecting or hoping that Donald Trump when he became president would be able to follow through some of these policy goals that he set out. Or at least some of these sentiments that he set out in terms of policy.

But that hasn't been the case at all. Particularly over the last couple of weeks. We're seeing much tougher rhetoric coming from various Trump officials, particularly the U.N. ambassador of the United States, the Security Council, when it comes to Crimea and Ukraine.

[03:09:54] And you know, the idea that the Trump administration was going to be able to turn around the relationship with Russia has basically been lost for a couple of reasons. First, because of that toxic environment in political -- in the political process, political situation in Russia.

But also because I think it's becoming increasingly apparent to the Trump administration that Russia and the United States do not share a similar outlook when it comes to all of these big issues of international diplomacy.

VANIER: All right. Matthew Chance, in Moscow, thank you very much.

CHURCH: Well, President Trump's Tuesday speech to Congress is inspiring confidence from Capitol Hill to Wall Street. The Dow soared into record territory Wednesday, topping the 21,000 mark.

VANIER: But a surging stock market won't pay the bills for President Trump's ambitious agenda.

Here's CNN's Jeff Zeleny.

JEFF ZELENY, CNN SENIOR WASHINGTON CORRESPONDENT: As President Trump basked in the glow of his big speech to congress.




ZELENY: The hard work of turning those promises into reality was the first order of business today at the White House, with the president sitting down for lunch with republican congressional leaders.


TRUMP: We're just here to start the process. It begins as of now. And we think we're going to have tremendous success.


ZELENY: Yet, tremendous success depends not only on Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan but on persuading the party's rank and file to pay for his agenda. The president delayed again today the signing of a travel ban to replace the one blocked in the courts.

CNN has learned the Secretary of State, Defense Secretary, and National Security Adviser are all pushing for Iraq to be removed from the list of majority-Muslim countries included in the ban. But in most of his primetime address, the president struck a more optimistic note.


TRUMP: A new national pride is sweeping across our nation.

(END VIDEO CLIP) ZELENY: But it remains an open question whether it was a lasting

pivot or a one-night performance after a rough start to his presidency. In either case, his wish list is an expensive and complicated one, even among republicans, not to mention democrats who are largely resisting the Trump agenda. From health care.


TRUMP: We should ensure that Americans with preexisting conditions have access to coverage and that we have a stable transition for Americans currently enrolled in the health care exchanges.


ZELENY: To tax reform.

TRUMP: It had been a big, big cut. At the same time, we will provide massive tax relief for the middle class.

ZELENY: To infrastructure.

TRUMP: To launch our national rebuilding, I will be asking Congress to approve legislation that produces a $1 trillion investment in infrastructure of the United States.



ZELENY: After the speech, Speaker Ryan offered praise but walked away when asked about the price tag.

PAUL RYAN, UNITED STATES SPEAKER OF THE HOUSE: I thought he did a great job.

ZELENY: Did he answer questions how he would pay for things tonight?


ZELENY: So Speaker Ryan not answering our question, how much this will cost. But several fiscal conservatives are raising the question, how much will all of the president's agenda items actually tack onto the federal budget.

Now deficit spending no longer in vogue like it was some decades ago, this is all a key part of the question of how much the president will have to push to get his agenda enacted.

Jeff Zeleny, CNN, the White House.

VANIER: All right. Stay with us. We're going to have to take a quick break, we've got a lot more when we come back.

CHURCH: The U.S. Attorney General at the center of controversy over contacts with the Russian ambassador during the presidential campaign. More on that, still to come. [03:15:00] (COMMERCIAL BREAK)

PATRICK SNELL, CNN WORLD SPORT REPORTER: Hi there, I'm Patrick Snell with your CNN World Sport headline.

Starting off with the dramatic news that came after Barcelona's 6-1 La Liga win over Sporting Gijon. At the end of the season, Luis Enrique, the club's future successful manager will step down from his post. This after three seasons in charge at the camp.

The 46-year-old Enrique won the Champions League as part of the travel in his first year and led them to domestic double last season but they're on the verge of elimination from the Champion's League after losing 4-nil to Paris Saint Germaine the first leg of the round of 16.

But Barca have returned to the top of La Liga after thrashing of Honka with Real Madrid sport dropping two points at home to Las Palmas, returning to the Catalans to the summit. It could have been worse for Real, though.

They had Gareth Bale at center before they fell 3-1 behind. Two late goals from you know who, Cristiano Reynaldo saving them a point.

It's been well over a month since than Roger Federer's memorable of the open triumph down at Melbourne. But a nasty shock to the system for him, for the 35-year-old in his first tournament since Melbourne as he suffers a really, really unwanted defeat in the second round in Dubai against the Russian qualifier Evgeny Donskoy. The world number 116, incredibly saving three match points in the second set. He also was down 5-2 in the third, then he was 5-1 down in the third set break for the jubilee.

That's a look at your CNN World Sport headlines. Thanks for joining us. I'm Patrick Snell.

VANIER: We continue to follow breaking news out of Washington where U.S. Attorney General Jeff Sessions had said he never met with any Russian officials to discuss the 2016 presidential campaign.

CHURCH: But the Justice Department says Sessions met twice last year with Russia's U.S. ambassador when he was a top Trump campaign adviser. Sessions failed to mention those contacts during his Senate confirmation hearing. A growing number of democrats are calling on Sessions to resign.

VANIER: We're joined now by Lanhee Chen, who joins me from Mountain View, California. He's a former public policy director for Mitt Romney. Lanhee, first of all, I'd like your reaction on what we're learning, that the Attorney General, Jeff Sessions, gave information during his confirmation hearings, both orally and in writing that directly contradict the facts.

He said he had had no contact with anyone connected to the Russian government. It turns out he has met the Russian ambassador to the U.S. twice while he was a Trump campaign surrogate. LANHEE CHEN, CNN POLITICAL COMMENTATOR: Well, it may technically be

the case, and I think this is what the attorney general is saying, that he was meeting with the ambassador in his capacity as a senator, as a member of the Armed Services Committee, but more broadly, obviously, there is a concern about why the meetings weren't disclosed, even if they were taken in that capacity.

I do think it's the case here, although it's not that unusual for officials to meet with officials from other governments. In fact, when I led the policy team for Governor Romney, we took meetings with several foreign governments who are interested in U.S. policy, but the broader question here, obviously, is why those meetings were not disclosed and the content and subject matter of those meetings.

VANIER: And especially given the context. I mean, the first of those two meetings, at least two meetings took place in July during the Republican National Convention, already at the time Russian alleged meddling in the U.S. election was a talking point. It was already something that was in the public domain.

CHEN: And it is a broader concern here in the United States regarding the Trump administration, questions about their policy toward Russia and whether in fact as Senator Graham and Senator McCain made the contention tonight at a CNN town hall that the president in his administration have a soft spot, so to speak, for Russia.

I think obviously, all of this taken as a whole should be concerning. Maybe the news in and of itself may not be as big a concern, but obviously if you put it together with everything there are clearly calls for further investigations.

[03:19:58] VANIER: Right, and a couple of early reactions at this point, the first one I want to read to you is the one from a White House official who says, "This is the latest attack against the Trump administration by partisan democrats. General Sessions met with the ambassador in an official capacity as a member of the Senate Armed Services Committee, which is entirely consistent with his testimony." Do you think that defense holds water?

CHEN: The issue that you see here is that the Trump administration has repeatedly tried to turn this into an issue of partisanship. They have said that the whole Russia line of attack is one that's being pursued out of partisanship.

My own view is that they would be much better off if they simply said, look, we don't think there's anything here, but we invite Congress to investigate, with the knowledge that Congress is currently controlled by republicans, and those investigations in all likelihood would give them some political cover at the very least.

But that's not where they are. So, it is an interesting response. I do think at some point they're going to have to assess whether it's sustainable for the long run.

VANIER: What's most striking to me is that he was asked in writing, this is Jeff Sessions, during his confirmation process, whether he had had contact with anyone connected to any part of the Russian government. His answer in writing was one word. No.

CHEN: The confirmation process is designed to elicit information of this sort, information obviously that in an ideal situation, the candidate for that office would be completely transparent and honest about.

We'll have to see where this goes, though, Cyril. The reality is that the Sessions team and the Trump administration has their response, which is to say these meetings were held in official capacity. The ultimate question on whether that holds water I think will be up to the American people. And whether the American people feel that explanation is sufficient.

VANIER: Just as a political analyst, you saw what happened with General Flynn when it became clear that he had lied to the vice president about -- to the vice president about the contents of his conversation with the Russian ambassador.

Politically speaking, do you think Jeff Sessions can stay in office, stay in his position as attorney general seeing as how this story is going?

CHEN: Well, the Flynn situation, you know, obviously misleading the vice presidents was a problem within the administration. It was something that required President Trump to act. This situation is a little bit different, and potentially more problematic. Because it implicates the relationship between the Trump administration and the Congress.

The Congress has an oversight authority. It's their job to make sure that the administration is following the law. And when it's not, it's also Congress's job to call them out on it. So this potentially has greater significance because of the implications for the relationship between the presidency and the Congress.

VANIER: Lanhee Chen, former public policy director for Mitt Romney, thank you for joining us on the show.

CHEN: Thank you, Cyril.

CHURCH: We shift to Europe now. In voting in the French presidential election is more than seven weeks away. But dramatic twist could seriously undermine some of the candidates.

In the next few hours, far right politician Marine Le Pen will face a vote in the European parliament where she could lose her immunity from prosecution. Le Pen is under investigation for posting graphic images of ISIS executions.

VANIER: One of her rivals, conservative candidate Francois Fillon is facing his own criminal investigation. His wife and two adult children allegedly got 1 million euros for jobs they did not do. Fillon is vowing to stay in the race.

(BEGIN VIDEO CLIP) FRANCOIS FILLON, FRENCH PRESIDENTIAL CANDIDATE: I will not give in. I will not resign. I will not withdraw. I will go to the end, because that is democracy, which is being defied.


CHURCH: The one candidate who may benefit most from the turmoil is Emmanuel Macron. Recent polls gave the former economy minister an edge in a two-way match up against Le Pen.

VANIER: Now British lawmakers dealt a blow to Prime Minister Theresa May's Brexit plan. On Wednesday, the House of Lords voted in favor of an amendment to May's Brexit bill. It calls for European nationals legally living in Britain to be guaranteed the same status after the U.K. leaves the European Union.

DIANNE HAYTER, BRITISH SPOKESWOMAN, LABOUR PARTY: Amendment 9b is to ensure that the rights E.U. systems here would add have we remained in the E.U. that those should stay the same on exit day. Because these people need to know now, now in two years' time or even 12 months' time. They simply can't put their lives on hold.

I now want to say to the government, you can't do negotiations with people's futures. They're too precious to be used as bargaining chips.


CHURCH: The amended bill now has to go back to the House of Commons. That could push back the March 31st deadline to trigger article 50, the formal start of the Brexit process.

[03:25:05] Well, the accountants blamed for the stunning Oscars mix-up won't be handing out Academy Awards envelopes in the future. Brian Cullinan and Martha Ruiz will no longer work the ceremony, but they will keep their jobs at PricewaterhouseCoopers, the firm that manages the award ballots.

VANIER: Cullinan gave the wrong -- gave the wrong envelope to the presenters, and "La La Land" was mistakenly named best picture. It's still a mystery how the cards were mixed and why it took more than two minutes to fix the mistake and declare "Moonlight" the actual winner.

CHURCH: That is such a public mistake, isn't it? And it's hard to -- yes.


VANIER: I mean, we'll recover it, and you know, what do you do? It was cringe worthy.

CHURCH: Very, and we're still talking about it, right? Well, Oprah Winfrey is signaling she may be open to running for U.S. president one day.

VANIER: The former talk show host has long dismissed this idea, but apparently Donald Trump's has her rethinking the bid for the White House.


OPRAH WINFREY, TALK SHOW HOST: Never considered the question, even a possibility. I just thought, oh. Oh.

UNIDENTIFIED MALE: Right. It's clear that you don't need government experience to be elected president of the United States.

WINFREY: That's what I thought. And I thought oh, gee, I don't have the experience. I don't know enough. I don't know. Now I'm thinking, oh. Oh.





VANIER: Just like that.

CHURCH: Few people thinking that.

VANIER: Yes. Of course she's no stranger to the political arena. She often addressed political issues on her show and supported Barack Obama and Hillary Clinton during their campaigns.

All right. Stay with us, we'll have a lot more on our breaking news this hour, including the legal implications of the attorney general's contacts with Russia.

CHURCH: And a record setting response on Wall Street. Ahead, how President Trump affects the markets. Back in a moment.


UNIDENTIFIED MALE: This is CNN breaking news.

CHURCH: A very warm welcome back to our viewers here in the United States and around the world. I'm Rosemary Church.

VANIER: And I'm Cyril Vanier.

A growing number of democrats are calling for U.S. Attorney General Jeff Sessions to resign.

CHURCH: The one time Trump campaign adviser met twice with Russia's U.S. ambassador last year but failed to disclose those contacts during his confirmation hearing in January.


FRANKEN: And if there is any evidence that anyone affiliated with the Trump campaign communicated with the Russian government in the course of this campaign, what will you do?

SESSIONS: Senator Franken, I'm not aware of any of those activities. I have been called a surrogate at a time or two in that campaign, and I did not have communications with the Russians.


VANIER: Sessions issued a statement late Wednesday saying "I never met with any Russian officials to discuss issues of the campaign. I have no idea what this allegation is about, it is false."

CHURCH: Earlier, CNN's senior legal analyst Jeffrey Toobin talked about the legal implications of this news about the attorney general.

VANIER: He says the first step will be finding out whether it was just an honest mistake or deliberate lie.


JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: As a legal matter what we need to determine or what the authorities need to determine is whether he didn't tell the truth because he made a mistake or because he lied. And legally, there's a world of difference between the two.

But, you know, based on what the Washington Post said and based on Evan's reporting, we know there were at least two meetings, one, a group meeting with the Russian ambassador and the other, a meeting in Sessions' office, which is unusual for a senator to meet with an ambassador in those sorts of circumstances.

I mean, it's not unprecedented, but it is an unusual thing, and for him then to say I did not have communications with the Russians is simply false.

Now the explanation that is putting -- that's being put out by the Justice Department is that he met with the ambassador as a member of the Foreign Relations Committee, not as the leading senatorial surrogate for, for the Trump campaign. I mean, that's the kind of meta physical distinction that I'm not sure exists in the real world, but certainly, it is something that merits investigation.

I'm not here to convict or accuse Jeff Sessions of anything. But any reasonable prosecutor would say these are statements that need to be investigated by an independent prosecutor.


VANIER: Now Wall Street has welcomed President Trump's address to Congress with record-breaking numbers. The Dow soared more than 300 points to close above 21,000 for the first time ever on Wednesday.

CHURCH: That milestone comes just 24 trading days after the Dow hit 20,000.

Richard Quest gives us his take on the market's reaction. RICHARD QUEST, CNN HOST: The market opened straight into record

territory and never looked back. Again and over 303 points, but it wasn't just that, it went right through 21,000, over to 21,115. A 1.5 percent rise in a day, at a time when everybody had been perhaps expecting the market was going to take a breather, having had so many gains and so many records in a row.

The reason is very, very simple. Donald Trump's speech to Congress. That address gave people the hope that the expectations will come to fruition. A trillion dollars in infrastructure spending, a tax reform, which eventually will arrive. And greater deregulation, which the president can do without congressional approval.

Put it all together, from what I've been hearing in the market, most traders seem to be believe the rally has legs and still has got further to go. Of course, if the expectations don't arrive, well then it's a different matter. But for the time being, I would describe this market as quietly confident in the direction of travel.

Richard Quest, CNN, New York.

CHURCH: And for more perspective on the market reaction, Michael Hewson joins us now from London, he is a chief market analyst for CMC Markets. Thanks so much for being with us.


[03:34:56] CHURCH: So, the Dow in record territory, crossing the 21,000 mark. What's behind the soaring Dow do you think, and just how sustainable is this?

HEWSON: Well, I think on every level, momentum is everything. And what I would say is I'm calling this the FOMO trade, fear of missing out, essentially, in the wake of that speech by President Trump, I think investors are jumping on the bandwagon and basically trying to get ahead of the projected infrastructure spending boom, the building of the wall, you know, investment in railways. Investment in airports.

But there's one other thing as well. You're also getting a little bit of an improvement in the global economy. And I think, against that backdrop, and the prospect as well, that the Federal Reserve feels confident enough to start talking about multiple rate rises, and ultimately, what you've got is you've got markets, investors coming out of bond markets and putting their money to work in equity markets.

Now, as Richard Quest quite rightly said, ultimately, this is based on a promise, and if that promise proves to be, shall we say, fall short, then ultimately, we could well see this rally unravel, but at the moment, momentum is everything. We've broken higher.

The likelihood is that we're probably going to maintain that momentum unless something prompts us to, prompts it to falter and the Federal Reserve may well have a part to play in that.

CHURCH: All right, so what would it take to burst the bubble? I mean, the early departure of President Trump's national security adviser, the chaos surrounding the roll out of the Trump administration's travel ban, the destabilizing daily tweets from the president appeared have had no negative impact on the markets, clear joy about the Trump presidency. So what does that signal to you?

HEWSON: It signals to me that ultimately, investors are looking at this through rose-tinted glasses, but I think there is a concern, and what struck me over the past week or so, Rosemary, is the fact that the Federal Reserve has virtually done a full reverse on the prospect of a potential March rate rise. They've really ramped up expectations.

A week ago, we were talking about a 36 percent possibility that the fed was going to go in March. Now I think the fed is behind the curve on this. And you know, I've said so on a number of occasions. They've switched tax so very, very quickly.

If they now don't go and raise rates in March, then ultimately, the market could take fright in that. Because we've gone from 36 percent probability to 86 percent probability in five working days. So the fed has really ramped up expectations here, they now need to deliver.

CHURCH: All right. And what impact might this new scandal surrounding Attorney General Jeff Sessions have on the market, if any, given previous scandals and chaos have appeared have no negative impact.

HEWSON: I think given the previous scandal, the way the market shrugged them off. I think they're looking through the political turmoil surrounding the Trump administration is really what I would call growing pains of someone who really isn't a career politician and is a little bit fumbling around in the dark. So, I don't expect that to have any negative effects on the markets at this point in time.

CHURCH: All right. Michael Hewson, thank you so much. We'll see if it continues to rise.

HEWSON: Thank you.

CHURCH: Many thanks.

HEWSON We will see. Thank you.

VANIER: And people in the Midwestern U.S. are starting to clean up after more than two dozen tornados tore through the region. More on the severe weather when we come back.


CHURCH: CNN is learning more about the weapon capabilities of ISIS, and it comes after our Arwa Damon spent a harrowing day trapped in Mosul.

VANIER: On November 4th, CNN correspondent Arwa Damon and cameraman Brice Laine entered Mosul with advanced units. The Iraqi army looking to liberate the city from ISIS. Their convoy was ambushed, and they spent 28 hours under siege.

Two months later, they returned in this excerpt from their special report, return to Mosul. Iraqi soldiers unearthed a surprising find.

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: We've always wondered how ISIS had so much ammunition in Mosul. And it's obvious when you see the weapons factories they had everywhere. They were making everything from scratch. Mortars, rockets. In one factory, they even had fake Humvees out of wood that they were using as decoys.

It almost feels like it should be some sort of crafts workshop. There's a childish feel to everything, but that is also what makes it all the more sinister.

ISIS had even begun building its own planes. Planes not designed to land anywhere, but instead to be flying suicide bombs. They found this inside the industrial zone in one of the areas used for manufacturing, along with some manuals. It is fairly crudely put together.

But this would take a certain level of expertise, creativity and ingenuity. They've cobbled together all sorts of different parts and even used glue to try to fix some of the wires into place.

VANIER: Return to Mosul, a CNN special report with Arwa Damon airs several times this weekend. See it on Saturday at noon in Hong Kong or later at 3 p.m. in London right here on CNN.

CHURCH: More than two dozen tornados ripped through eight U.S. states Tuesday and Wednesday. This is video of one of them south of Nashville, Tennessee barreling toward a building.

VANIER: Storms killed at least three people and left cars scattered on highways. The twisters also tore through homes, and the National Weather Service reported hail throughout the region.

CHURCH: Well, for more on the severe weather across the U.S. this winter, our meteorologist Pedram Javaheri joins us now from the CNN weather center. And of course, it's just been extraordinary, the weather conditions, to see this.

PEDRAM JAVAHERI, CNN METEOROLOGIST: Yes, it certainly has. You know, and we're talking about the heart of winter, seeing this pattern as well, which is really all the more remarkable when you think about what's happening right now, the above-average temperatures have been in place, record heat in place as well.

And we had a pretty persistent front here square across parts of the U.S. spawn some 900, almost 900 severe weather reports, 27 of which were related to tornados. You think that number is small and you think about the month of February, that is about an entire month's worth of tornados coming down in one event.

But it has just been an incredible pace of tornados so far in 2017, where in January we saw 141 of them in the United States. Thirty is what is normal, it's almost 400 percent of normal.

[03:45:00] In February, we tallied 65. Twenty nine is what is normal. About 200 percent of normal. So yes, we've had a pretty historic week here. The most tornados in the first two months of the year going back for the last 17 years.

And record temperatures in place as well. This is again in the heart of winter, 85 record temperatures have been set across the United States, about 1200 record low temperatures. And 8 to 1 ratio approximately, again, coming in the coldest time of the year.

The pattern changes a little bit. We get a little shift in the pattern over the next couple of days, so we will feel like winter for at least a brief period. Look at the northeastern United States, it was 80 degrees Fahrenheit in Washington, D.C. on Wednesday. Going for 49 today in New York. Record temperatures of 70 dropping down into the 40s as well.

But again, look what happens here, we get a shot of winter. Temperatures come down to 16 degrees on Saturday night into Sunday morning and climb right back up to well above average for later next week.

So, very quick pace here in what is happening across parts of the country. But we want to take you out towards areas of Peru. Because we know around Peru it is a very wet climate.

If you take a look at rainfall amounts typically upwards of 8 inches or about 200 millimeters every single month of the year, but what has occurred the last 24 or so hours pretty impressive. I share with you some footage some dramatic video coming out of northern Peru.

Look at this landslide caught on tape. Good reason for that highway to be shut down because officials have seen rainfall amounts over the past several amounts that have really been what is about 30 years, the highest amount they've seen in 30 years come down across this region.

So of course a lot of the areas has been destabilize, a lot of the landscape jeopardized as well. And then you see some of the rivers bursting their banks. The streams are also overflowing, we know so far in 2017, about a quarter million people in Peru have been displaced because of these floods. Twenty six people have lost their lives as well.

So, pretty devastating scenario across portions of Peru. And you take a look just in the past seven days alone, the rainfall amounts we're talking four to eight inches or so. About 250 millimeters in a few spots across northern Peru have come down. Again this is a seven-day period. Almost all of 2017 has been a saggy one. And much like parts of California, parts of Peru dealing with a lot of rainfall, as well, guys.

CHURCH: Unbelievable images there.


CHURCH: Thanks so much, Pedram. I appreciate it.

JAVAHERI: Thank you, guys.

VANIER: And take a look of this spectacular footage of Italy's Mt. Etna, Pedram. Would it like was roared back to life this week with a bright orange river of lava, the video was captured using a drone.

CHURCH: The mountain is the highest volcano in Europe and one of the most active in the world. It's been quiet for the past two years, the last major eruption was 25 years ago, incredible image there.

We'll have a very short break. We'll be back in a moment.


JAVAHERI: March is starting very differently than what January and February brought across parts of the western U.S. It is mild, it is dry across California. We haven't seen that since at least late last year. And the pattern across parts of the eastern United States it is beginning to shift and become more wintry. Believe it or not in nature as well.

But here's the frontal boundary responsible for some very active weather in the last couple of days. In fact, the last 48 hours, almost 900 severe weather reports almost exclusively in the strong wind department. But notice we had 27 reports of tornados. Some were fatal unfortunately across this region.

The trend now goes back into a winter-like regime. In New York, it was 20s earlier in the week. Look at this. Saturday, minus 1, that's the high temperature after being into the 20s, about 21 degrees just a couple of days ago.

And even places like Charlotte, and North Carolina, Atlanta, Georgia, the temps will stay mild across that region. Generally into the teens, and of course days are getting longer here to support more daylight to work with as well.

Chicago, 3 degrees, some welcome snow showers in the forecast, have not seen that so far in 2017. And a couple shots of cold air, but look how quickly it wants to be spring again into early next week where more mild temps are expected to return across the region.

Here we to the south, around Kingston, Jamaica, 30 degrees, Cartagena, going with 32, Caracas at 31 with dry conditions expected. And we'll take you down into South America and heave you with these conditions.

CHURCH: Welcome back, everyone. Well, ride sharing giant Uber is facing another P.R. disaster. CEO Travis Kalanick already a controversial figure, was caught on dash cam video arguing with one of his drivers. Here's that footage published by Bloomberg.


UNIDENTIFIED MALE: I lost $97,000 because of you. I bankrupt because of you.


UNIDENTIFIED MALE: Yes, yes. You keep changing me every day.


UNIDENTIFIED MALE: You keep changing...

KALANICK: Hold on a second, what have I changed about black?

UNIDENTIFIED MALE: Huh? You changed the whole business.

KALANICK: What, what?

UNIDENTIFIED MALE: You dropped the prices.

KALANICK: On black.

UNIDENTIFIED MALE: Yes, you did (muted) with $20, (muted) $20. How much is the mile now 275?

KALANICK: You know what?


KALANICK: Some people don't like to take responsibility for (muted). They blame everything on somebody else. Good luck!

UNIDENTIFIED MALE: But why you (Inaudible).

KALANICK: Good luck.

UNIDENTIFIED MALE: Good luck to you, too.


VANIER: So, Kalanick promptly apologized after that in an e-mail to his employees, and he wrote to say that "I am ashamed is an extreme understatement. I must fundamentally change as a leader and grow up."

CHURCH: Wow. Well, there has been reaction to the video and Kalanick's apology thousands of miles away at a tech show in Spain.

VANIER: Our Samuel Burke has that for us now from Barcelona.

SAMUEL BURKE, CNN BUSINESS CORRESPONDENT: Well, this is actually one of the biggest tech shows on earth. So I spoke to one of the top P.R. people for one of the biggest tech companies out there who is attending the show, and they told me, "Samuel, let's be honest. Plenty of high-powered Silicon Valley CEO's speak this way, but only in private." They would never go and speak to their lower-level employees frankly, in an environment where they could be recorded.

So, Travis Kalanick, the CEO of Uber, who has an estimated $6.3 billion net worth frankly does not have the luxury of talking to somebody this way, especially to an employee who is only trying to voice criticism, which quite frankly, many people agree with.

Now I would say this could not come at a worse time for Uber, except that I already said that last week. Keep in mind, this is the third P.R. nightmare that Uber has had in the past few months, starting with the Trump travel ban, which whether fairly or not, they were perceived as being too close to.

Then they had a former female employee making very serious allegations about sexual harassment at that company. And that the company they didn't help her and, in fact, blamed her, she said. And now they have this issue caught on tape, with just that first crisis alone, the Trump travel ban and the hash tag delete Uber, they lost 200,000 users Uber. No company no matter how big it is can afford to lose that many users with just one crisis, much less three.

CHURCH: All right, Samuel Burke there. Saudi Arabia's king is on a nine-day trip to Indonesia.

VANIER: And it's safe to say he does not like to pack light.

CNN's Jonathan Mann explains.

JONATHAN MANN, CNN INTERNATIONAL CORRESPONDENT: Arriving in style. Saudi Arabia's King Salman landed in Indonesia Wednesday. An escalator lowered the 81-year-old monarch to the tarmac, bringing new meaning to the phrase luxury travel. The king also brings an epic entourage of 1500 people, including 800 delegates, 25 princes and 10 ministers according to the Jakarta Post.

[03:55:05] Along with more than 500 tons of luggage and cargo. Two Mercedes Benz Limousines and two electric elevators. The king also brought his own elevator on a 2015 trip to France which he used to get down to the beach. A move that prompted an outcry from many locals.

But outside Jakarta, crowds of flag-waving school children cheered the king where as he arrived in the pouring rain at the presidential palace where he was greeted by a marching band and a mounted honored guard with a 21-gun salute.

It's the first visit by a Saudi monarch to the world's most populist Muslin nation in nearly 50 years, and security is tight with 10,000 Indonesian police officers on alert according to local media. While the trip is lavish, Indonesia's president calls it historic, adding he hopes it will lead to closer economic ties between the two countries.

Jonathan Mann, CNN.

CHURCH: And thanks so much for watching CNN newsroom. Early Start is next for our viewers here in the United States.

VANIER: And for everyone else, stay tuned for more news with Max Foster in London. Stay with CNN.

CHURCH: Have a great day!


MAX FOSTER, CNN HOST: Russia and the Trump administration. A new report draws a direct line between one of the top people in the U.S. present administration and the Kremlin. Details and reaction ahead. Drama developing, as well in the French presidential race as the

leading candidates deal with their own dilemmas. It could be open further independent hopeful Emmanuel Macron.

[04:00:04] Plus, we take you to the violent frontlines of the drug war in the Philippines where more than 7,000 people have said to have been killed in just eight months.