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Investors Brace for Open After Record-Breaking Plunge; Clock Ticking on Trump Decision to Release Democratic Memo; Interview with Representative Denny Heck; NYT: Trump Lawyers Worry Mueller Could Catch Him Lying; FBI, DOJ Reviewing Democrats Rebuttal To GOP Memo; Dow Set To Open After Worst Single-Day Point Fall Ever. Aired 9-9:30a ET
Aired February 6, 2018 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00] ERICA HILL, CNN ANCHOR: Here to talk us through it all, CNN chief business correspondent Christine Romans. Also with us, CNN political analyst, Eliana Johnson.
Christine, as we look at this, there's a lot of concern. We are 30 minutes out. Futures were really trending rather low to put it mildly. How concerned should we be?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Look, it's going to be an ugly selloff. We saw yesterday's big selloff spill around the world. You saw European and Asian markets fell very sharply and so there's a feeling of fear that is in these markets right now. And the feeling is, this is a correction. The market is having a correction, the first one since the end of 2015, a long overdue correction is what this looks like and what this feels like.
Let's look at yesterday first of all. The worst point yesterday, the Dow was down 1600 points. It's hard to even say those numbers. 1600 points. It closed out about 1100, the worst point decline in history.
But remember the market has gone up, up, up. So percentagewise this wasn't even in the top 20. But look, the biggest single-day point drop ever in the Dow Jones Industrial Average, but not even among the top 20 percentage declines, about 4.5 percent. That still hurts, though. And that's money out of the stock market, that's money out of your 401(k), at least paper money out of your 401(k), although I'm recommending people don't do anything here. You should be adjusting your 401(k) based on your time to retirement and what kind of asset allocation you need to have, not on one-day market moves because you tend to make mistakes when you're doing one-day market moves.
Here is why the Dow is falling here. Wage inflation concerns. On Friday we saw wage inflation of about 2.9 percent and that strong jobs report, that spooked the market. There are worries that the Fed will have to raise interest rates to cool down potentially an overheating market. And the bond market has been selling off. We saw a 10-year note rates hit a four-year high approaching, you know, 2.8 percent late last week.
So this is also a bond market story. And what do I mean by that? I mean the stock market is correcting. The economy is still doing very well. In fact, it's so strong potentially, the economy, that there are risks of it overheating. So you're seeing this disconnect now.
ROMANS: Between the economy and the stock market.
HILL: And those are the parts we don't always talk about. When we're touting a strong economy, we don't throw in that warning unless you're Christine Romans because you do. We don't always throw in the warning of, hey, there could be a correction here.
And Eliana, when we look at this, obviously a lot of blowback that we haven't heard from the president yet because the president was so quick and has been so quick to tout a strong market and to take credit for it. We know that when it goes the other way, most politicians are reluctant to do the same to own that downturn.
Could this be, though, a missed opportunity for the president? Because he could come out and say, to Christine's point, we were working towards this. It just shows how healthy we are, Eliana?
ELIANA JOHNSON, CNN POLITICAL ANALYST: You know, it's dangerous I think for a president -- the president taking so much credit for the strong economy, and so many factors go into the economy and we've seen the president -- it's been a great pride of his presidency. And you're right. I do think we could have seen him come out and offer a steady hand. And he -- you know, we saw him at the rally in Ohio yesterday. And he could have said the economy has been so robust that we were due for some kind of course correction.
But I don't think the president really has mastered the art of that kind of subtle or supple messaging. Instead, he -- we saw him sort of lash out at the critics and though he is quick to take credit for the economy, he, of course, doesn't like being blamed when it takes a turn for the worse.
HILL: In terms of that, Christine, as the discussion continues today, the headlines are obviously drawing people in. The numbers are drawing people in. Is enough of the conversation happening, though, around those little tidbits?
ROMANS: Well, you know, what's interesting about the president's position, that he's used the stock market really as a popularity contest almost, that he's used this as a gauge of popularity for him, almost as if the polls are not showing the favorability that he thinks the stock market is giving him. So that's the risk to him in using the stock market really, and taking credit for it.
I have seen the White House start to change the language. Right? You heard the vice president say that there are ebbs and flows. They're very proud of the stock market gains under this president. But it does ebb and flow. And you just heard Sarah Huckabee Sanders say it's the long-term fundamentals of the economy that we're focused on. So that's the kind of language you typically hear from a White House. It will be interesting to see if the president mimics that language, too.
HILL: Christine Romans, Eliana Johnson, thank you both. Well, the president, while he may be weighing what to say about the
stock market, he's also of course dealing with this latest memo. He now has five days to decide whether he will fight the release of a Democratic memo or give it his blessing. That memo which disputes the GOP allegations that the FBI abused surveillance laws. This as White House lawyers are urging President Trump not to sit down with Special Counsel Robert Mueller over concerns he could get caught lying.
Well, CNN's Abby Phillip is at the White House with more on that. A lot to unpack this morning.
ABBY PHILLIP, CNN WHITE HOUSE CORRESPONDENT: That's right, Erica, good morning.
[09:05:01] President Trump is now in possession of that Democratic memo. And as he is deliberating on what to do with it, there are accusations swirling from Democrats that the president or the White House might decide to redact things for political purposes.
Now the president has five days to determine whether to block the release of the memo or to ask for certain redactions perhaps for national security reasons. We also know the Department of Justice and the FBI will be looking at it for those reasons as well. But this morning White House press secretary Sarah Huckabee Sanders put out a statement emphasizing that the president is going to approach this in the same way that he approached the GOP memo that was released last week.
She said, "As stated many times, the administration will follow the same processes and procedure with this memoranda from the minority as it did last week when it received the memorandum from the majority." So the White House wanting to make sure that it's pretty clear that the president is going to give it a process -- a procedural look. But at the same time last week we also know that the president made up his mind about what to do with the Republican memo without having even read it at all -- Erica.
HILL: It's a little interesting to see what happens with that.
Abby Phillip at the White House for us. Abby, thank you.
I want to bring in now Democratic Congressman Denny Heck of Washington state who is on the House Intel Committee.
Sir, good to have you with us. Your fellow Intel Committee member Mike Quigley said he's not confident that the president will decide to release this memo. If he does not, as we know, you can put this to a full House vote to release the memo. Are you confident the votes would be there?
REP. DENNY HECK (D), INTELLIGENCE COMMITTEE: Well, if Republicans were to follow through on their rhetoric and their supposed commitment to transparency, I'm confident. And certainly that's what the Republican members of the Intelligence Committee did yesterday. But that presupposes that the president won't release it. And that is a question that remains to be answered. HILL: Do you believe he will?
HECK: I don't know. There's nothing about this president much that surprises me anymore. About the only consistency I find in his record is that when somebody questions him or challenges him, it's attack, attack, attack. It's ad hominem. It's personal.
You saw the name-calling he engaged in this week with respect to the ranking member Adam Schiff of the Intelligence Committee. So if he reads this memorandum and it says things about him that he doesn't like, I guess when pushed to the wall, I would predict that he would either redact it or refuse to release it.
But I frankly, Erica, think there would be an enormous political price to be paid if he refuses to reveal to the American public the whole story.
HILL: Well, and we should point out, too, that you also said last week telling "The Seattle Times" that we are inching towards a constitutional crisis in terms of the GOP memo. There have been a number of folks who have said this is a legitimate concern as we are looking at potentially more memos as we heard from Devin Nunes, and there are concerns over not only intelligence gathering, intelligence sharing, how other countries are looking at this. Even national security have said it's at risk with the release of these memos. Is it a slippery slope?
HECK: I think the slippery slope is for the president, this White House and the Republican majority to take their eye off the ball and to remember that what this is really about is getting at Russian interference in the 2016 presidential election. Interference which, by the way, Erica, we are now all know and have documented has continued in other Western democracies. Even as we stand here and speak it continues in Mexico with their impending national elections.
The midterm is upon us and we're behind the curve here in terms of preparing ourselves for continued Russian interference. That's what I'm especially concerned about. That's the slippery slope we're sliding down at a very high rate of speed.
HILL: In terms of being behind the curve, do you believe anything or do you know of anything that has been done to address that?
HECK: Well, a year ago January, last month, then Secretary of Homeland Security Jeh Johnson added elections IT systems to critical infrastructures for national security purposes. I know that state election officials and county election officials throughout the country are very concerned, but above and beyond that, I don't think anywhere near enough has been done to protect ourselves against this going into either the midterm or the 2020 presidential election for that matter.
Let's just put this in big context, Erica. I'm old enough to remember having lived through the Cold War at which the time it was basically a great conflict between the forces of capitalism and communism. We've kind of transitioned beyond that. And now basically what we have is a great global war between the values of Western democracies in which we conduct free, open, fair elections, in which we have confidence in the outcome, and the forces of autocracy and kleptocracy, which is what Vladimir Putin is all about.
HILL: We are going to have to move on to another topic because we're short on time. I know a number of people, though, obviously, are very much concerned about what will happen in 2018 in terms of security of a vote. When we look at what is happening in Washington, as we know, a fifth CR is going to be voted on which would fund the government through March 23rd as well as a full year of Defense spending.
[09:10:08] Will you vote yes on that?
HECK: So we have not yet been privy to the details of it. I'm encouraged by some of the discussion I hear around the capital today with respect to an eventual outcome, either today or tomorrow. Basically, though, I'm kind of like most Americans. I'd sure like for us to get into a habit of actually adopting budgets and appropriations bills that last longer than our household laundry cycle.
And that's exactly what we've been doing here of late. I think all Americans hope that for their government because they know that's no way to run a railroad, no way to run a business and certainly no way to run a government.
HILL: Well, we will see if that changes. I do want to get your reaction to this before we let you go, sir. The president yesterday in Ohio making some comments about Democrats saying they are un- American. I want to play that for you.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Even on positive news, really positive news like that, they were like death and un-American. Un-American. Somebody said treasonous. I mean, yes, I guess. Why not? You know?
TRUMP: Can we call that treason? Why not? I mean, they certainly didn't seem to love our country very much.
(END VIDEO CLIP)
HILL: What are your thoughts on those comments from the president?
HECK: So, Erica, this president again seems to have precisely one play in his playbook and it is attack, attack, attack anybody that doesn't agree with him. For him to suggest that any member of Congress, whether they're a Democrat or a Republican, or liberal or conservative, because they don't agree with him is either un-American or treasonous is, of course, simply not the case.
I dare say, love to see him make that assertion to the face of Seth Moulton, for example, a member of Congress from Massachusetts who served four tours in the Middle East. But you know as well, Erica, it was "The Washington Post" I think that recently went back and calculated this president gave misleading or false statements 2,001 times in calendar year 2017 alone. Almost 5.6 a day. And frankly, I'm just going to chalk this up to one of the 5.6 he made yesterday.
HILL: Congressman Denny Heck, thanks for your time this morning.
HECK: You're welcome.
HILL: "The New York Times" reporting the president's lawyers are worried about an interview with the special counsel. Why? Why? They're worried the president could get caught lying to Robert Mueller.
Plus bracing for the market open, following a record breaking plunge. We're all over that.
ERICA HILL, CNN ANCHOR: A new report claims White House lawyers are warning the president not to meet with Special Counsel Robert Mueller. Sources tell "The New York Times" those lawyers are worried President Trump may be caught lying.
I want to bring in my panel to react. CNN political commentators, Symone Sanders and Steve Cortes. Good to have both of you with us here. So, in terms of this, Steve, we know the president as recently as last month saying he's looking forward to speaking with Robert Mueller. Now his attorney is cautioning against it.
The president has said repeatedly he has nothing to hide. He wants to move this forward, wants to get it over with. Does it have your scratching your head at all that now attorneys are saying we're not sure we want the president sitting down with Robert Mueller?
STEVE CORTES, CNN POLITICAL COMMENTATOR: No, it doesn't because I think they both makes sense. It makes sense that the president wants to tell his story because there is nothing to hide. There was no collusion. This is a collusion delusion.
And so, I get that from his perspective that he wants to have this investigation reach a conclusion as fast as possible, but I also understand his lawyers. I'm not a lawyer, but I think any lawyer worth his or her salt will not submit their client to unnecessary investigations or to unnecessary interviews.
And in this case, I would point out, by the way, that Robert Mueller is part of the Justice Department. The Justice Department answers to the president.
SYMONE SANDERS, CNN POLITICAL COMMENTATOR: Hoe, that is rich. That is rich.
CORTES: That's the way our laws work. The way our constitution works. SANDERS: Erica, if I may.
HILL: Let him finish.
CORTES: If it is truly necessary he be interviewed, then I would tell the special counsel they need to pursue legal means to make that happen, to enforce --
HILL: Wait, so you want them to subpoena the president?
CORTES: Well, whatever legal means they need to do. Yes, I like them to try, by the way. By the way, there's a lot of case law, a lot of precedent where they would fail because executive privilege is real and there's a reason for it, not just for this executive but every chief executive. The president has an incredibly important job and his job is not to be answering necessarily every inquiry from my prosecutor who wants to interview him.
HILL: Symone, I'll let you jump in. That could be a risk, Steve, from both sides to push it all the way to a subpoena because nobody knows what would happen in the end. Symone, go ahead.
SANDERS: Absolutely. So, look, Erica, I just want to make one thing very clear. The Department of Justice particularly the attorney general is not the president's attorney. That's why the White House has White House counsel. The Department of Justice are the people's attorney.
They are there to protect and defend the constitution. They do not swear oath to the president of the United States. They swear oath to the Constitution. That's important here because the Department of Justice is doing what they think is in the best interest of the Constitution, of the American people.
So, therefore, it is well within their purview to do whatever they believe is important, particularly the special counsel's office to get to the bottom of and end this investigation.
The president's lawyers reportedly saying that they do not want him to be interviewed by the special counsel smacks of they don't want the president to walk in there and lie and perjure himself.
I just wonder what is the difference between the president being so willing to sit down maybe a month ago or a year ago? And then his attorneys not wanting him to sit down at all today. Where there's smoke, there's fire. And I think it's rich of Steve to suggest otherwise.
[09:20:07] Lastly, we don't know if there's not any collusion. We only know what we know. We have no idea to know what Special Counsel Robert Mueller knows. So, again, it is very rich and extremely egregious for anyone to suggest that there is absolutely no collusion because you just don't know. You asserted yourself that you're not an attorney. Neither am I. We need to wait for the investigation and the facts. CORTES: Well, I know this. We've had an investigation going on about a year and a half, and there's utterly no evidence of any collusion. Why? Because there wasn't any collusion.
SANDERS: Well, we also don't have the investigation.
CORTES: The Russians did not elect Donald Trump president of the United States, it was factory workers and coal miners and cops in states like Wisconsin and Ohio and Michigan, they elected Donald Trump, not the Russians. It's time to end this silliness and get back to the business of restoring --
SANDERS: And no one suggested that --
HILL: -- the fact that that's the talking point you pass out this morning is very telling. I think folks should let this investigation work itself out. No one is saying the Russians elected Donald Trump. The fact that's what you're offering up is extremely telling.
HILL: I will say on this one point you're both correct. We don't know what's in the investigation. We don't what they have found and it's not over yet. Until those two things happen, and one has to happen first, we are where we are.
Let's move on to another topic. I want to get your take on a couple of other things happening today. When we look at the memo, because now we're looking at the release of the Democratic memo, which is now in the hands of the president after the Intel Committee voted unanimously.
Steve, you were a big supporter of releasing the Nunes memo. Looks like we lost Steve. So, Symone, I'm going to toss this one to you. When it comes to this memo, there's a lot of political capital that being used here and serious concerns raised.
And we discussed yesterday about the impact these memos could have when it comes to national security, when it comes to information sharing, even allies, even the way at how this is playing out. Is it smart to use up that political capital for this instance, Symone?
SANDERS: You know, look, I would love nothing more to make sure we're protecting the men and women that are serving us at home and abroad, protect the identities and valuable intelligence work that has been done.
But Erica, the facts are that the Republicans went ahead and released this very inflammatory memo, and in the interest of transparency, it only makes sense to release the Democratic memo.
I am finding comfort in the fact that the Democratic lawmakers have noted that they want to work with the proper intelligence officials to redact any information that could be sensitive or dangerous, something that did not happen with the Republican memo.
HILL: Steve, you were a big supporter of releasing that Republican memo. Do you want to see the Democratic one out there as well?
CORTES: I do. Listen, I think sunlight is the best disinfectant. The more information, the better. As a matter of fact, I would like the president to declassify as much as is practicable, to declassify the underlying documents as well.
I think the more we know about this situation as American people, I'd like the government to treat us like adults, not treat us like children and know that we can analyze partisan memos from both Republicans and Democrats, know that they're partisan and judge them accordingly.
The more information we know here, I think the better. I think unfortunately, too, what we're going to find out more and more as we peel back this onion is that the Obama Justice Department, the Obama FBI at the highest levels were incredibly politicized and were really weaponized to use in a political campaign against Donald Trump and that's a dangerous precedent for America.
SANDERS: Erica, I have to laugh because we didn't even know Donald Trump or his campaign was under investigation.
HILL: We've got to go guys. Symone Sanders, Steve Cortes, appreciate it. Thank you both.
Moments from now the opening bell on Wall Street. If futures are any indication, it could be a bit of a wild ride today -- Christine Romans.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Maybe even a few hundred points off the Dow at the open. It's been a couple days where you've seen all the year's gains evaporate. You've seen a quarter of the Trump rally disappear. A lot of volatility and fear back on Wall Street.
Right now, we are looking at Dow futures about 241 points lower, that would suggest a five or 600-point decline in the Dow in the open if it lasts over the next 6 minutes or so. It looks like it will.
The concern here quite frankly is that inflation might be coming back. You saw wage numbers on Friday that were very strong and that suggests that maybe the economy is getting a little too hot and the fed will start raising interest rates more aggressively.
All these things feeding into a bond market and stock market moving wildly. We'll have the opening bell for you right after the break.
HILL: Just under a minute now until the opening bell on Wall Street. A selloff that started 11 days ago and led to yesterday's historic drop in the Dow is on track to continue.
Joining me again to make sense of it all, chief business correspondent, Christine Romans, along with CNN economic analyst, Rana Foroohar and Stephen Moore. As we look at all of this, there's been a lot of talk as we're all trying to figure out exactly where the Dow is going to open. There's also this talk of a correction. You say we should focusing on the magic number.
ROMANS: Yes, the magic number here is 390. If the Dow Jones Industrial Average falls 390 points that would be fulfilling a correction. What's a correction? It's a technical term where market falls 10 percent from its recent high. Corrections are supposed to be healthy for a stock market. We haven't had --
STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Doesn't feel healthy.
ROMANS: I know. We haven't had it in so long. Absolutely. So, I think you'll see several hundred points off the Dow here when we finally start seeing the numbers come up. Yesterday was pretty ugly, 1,100 Dow points lost yesterday.