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Global Markets Plunge, U.S. Braces for Volatile Day; NYT: Lawyers Urge Trump to Refuse Interview with Mueller. Aired 6-6:30a ET
Aired February 6, 2018 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is CNN breaking news.
ALISYN CAMEROTA, CNN ANCHOR: All right. We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Tuesday, February 6, 6 a.m. here in New York. Chris is off. This morning John Berman joins me.
[05:59:39] Great to have you here.
JOHN BERMAN, CNN ANCHOR: Grab your wallets this morning.
CAMEROTA: Will do. We begin with breaking news. Asian and European markets rattled by the steep losses on Wall Street. The Dow suffering its worst percentage decline in more than six years and the largest single-day point drop ever. U.S. markets have now erased this year's gains in just the past two days.
BERMAN: We've been watching all the numbers come in, and all signs point to a rocky day when U.S. markets open in just a few hours. One big question is how will President Trump handle this? He bragged all over the markets when it was booming, taking credit for nearly every day of gains. He wanted to own the gains, so will he own the losses, especially if they continue today?
Our Christine Romans joins us now with the very latest. What are we seeing, Christine?
CHRISTINE ROMANS, CNN CORRESPONDENT: Well, we're seeing the stock market selloff not over here. You've got global markets continuing the decline. The plunge really rippling around the world.
Look at Asia here? Asia markets closed lower, a lot lower. Europe all lower and Dow futures are swinging wildly, John. They fell as much as 700 points. Then they're down 100 points. Then they're up 200. Then they're down again. So there's really no way to know what's going to happen at the opening bell.
Now, the Dow has lost more than 1,800 points, 1,800 points over two days. That is brutal selling. Shedding a record 1,175 points; that's 4.6 percent. It's the worst one-day point loss in history. But guys, it's not even one of the top 20 percentage losses. Five percent is a big percentage loss, but it's not even in the record books here.
Now the Dow is down about 8.5 percent from its most recent high. That's important. That's just within reach of what we call a market correction. A 10 percent drop. So what's going on here?
A couple of things here. The trigger was actually the jobs report on Friday, particularly this wage growth, 2.9 percent. Inflation is great for workers, but it's bad for corporate profits. And if inflation picks up too fast, the Federal Reserve may need to raise interest rates faster than planned.
And all of this playing out in the bond market. The biggest concern here is this huge selloff in the bond market. Bond yields move opposite to price, and they hit a four-year high on Friday. As yields go up, bonds offer better returns, and they are much more attractive to investors than risky stocks.
Now, even if stocks drop again today, I want to be really careful about the language here. There's no chance of a crash or a panic here. Conditions are still good. The economy is strong. The job market is robust, and corporate earnings are on the rise. Ironically, it's the fact that the market is so -- the economy is so strong that's spooking bond market investors. They think it might be overheating.
CAMEROTA: I know. We're living in upside-down world. And you've done a great job of explaining it. But the idea that people making more money is bad for the stock market is -- you know, it's counterintuitive.
ROMANS: We've had no inflation in this economic expansion. We've had no inflation. And that's something that has worried economists. It's worried workers, but now it's coming back in. But that wage inflation is starting to come back in.
And the bond market, we've had low interest rates for so long, that period of low interest rates looks like it's over now. Interest rates are going more reasonable -- back to normal, going up. And that's why you're seeing just all of this uncertainty happening in the stock market.
BERMAN: We haven't had to deal with inflation for a long, long time, but inflation can be a problem. You know, some inflation is OK. A lot of inflation, it hurts corporate profits, you know, and it hurts consumers, as well. And that's what you're seeing a little bit of the fear seep in here.
JOHN AVLON, CNN POLITICAL ANALYST: But just fear. I mean, this is just the very hint of new inflation. Inflation has bedeviled presidents, particularly in the mid-1970s and destroys political careers. We haven't seen anything like it in a long time. The fact we're getting a glimmer of it and we had that kind of reaction yesterday, I think, is really destabilizing for markets and particularly for Donald Trump. You live by the markets, you die by the markets.
BERMAN: We actually have some sound of him living by the markets right now. Again, it's unusual for a president to take so much credit in stock market gain, but this is President Trump. Let's listen.
(BEGIN VIDEO CLIP) DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: The stock market has smashed one record after another, gaining $8 trillion and more in value in just this short period of time.
The United States is doing fantastically well, better than we've done in decades. The stock markets are incredible.
You're seeing what's happening with the stock market. People are appreciating what we're doing.
The stock market is way up again today. And we're setting a record literally all the time. And I'm telling you, we have a long way to go. And had the other side gotten in, the market would have gone down 50 percent from where it was.
(END VIDEO CLIP)
ROMANS: There's a reason why presidents don't take credit or blame for what's happened in the stock market, because it can turn on them like a dime; and they don't really have control over the day to day stock market. In fact, I think presidents get too much credit and too much blame for the economy, as well. That, you know, they campaign on it and they live on it.
The president in jobs numbers when they were really good a few years ago they didn't believe them. You know, he said they were made up, and they were really 42 percent unemployment rate. Right now, he believes them and takes credit for them.
Will the tone change from the White House? I think you started to see that a little bit yesterday. You had Mike Pence, the vice president, say you know, these things ebb and flow, but we're really proud of the stock market gains we've seen. And Sarah Huckabee Sanders said it's the long-term health of the American economy and the foundation that's important. That's usually what presidents say. That's not what this president has ever said.
CAMEROTA: And so, you know, the law of unintended consequences always at play, and so the president often touts the tax cut plan that, you know, he helped usher through, obviously. And so do we think that that's at work here? I mean, all the talk of people getting bonuses and what you just reported on the wage growth, so is this an unintended consequence?
[06:05:15] AVLON: There are signs to that. Alan Greenspan, former Fed chair, yesterday saying that, look, the tax cut may have overheated an already strong economy, the ballooning deficit and debt, a real problem, ends up fueling fears of inflation.
So yes, there is a chance that those tax cuts ended up creating the conditions for this. Probably won't hear the president take credit for that, though. I'm going to guess.
ROMANS: Republicans always talk about cutting deficits, right, and national debt. And the interesting thing is that you've got an economy that's roaring and then you've got tax cuts that were rolled in there. You know, when you want to talk about cutting deficits and cutting the national debt, you do that when the economy is roaring. You know?
CAMEROTA: In other words, that you shouldn't stimulate the economy when it's roaring.
ROMANS: We did need corporate tax reform. The corporate tax rate of 35 percent advertised was just stupid. I mean, every CEO, it will tell you that. But this timing is what is something that's pretty interesting.
AVLON: It's doubly ironic, too, because the president campaigned on taking care of Main Street more than Wall Street. But the Wall Street on record since his election has been extraordinary. So he's hung his hat on that. And at the same time, Republicans fell into line of abandoned concerns about deficits and debt. That's a really toxic combination.
AVLON: The deficit projection for the year is double from what it was last year. So a trillion dollars for this year, 513 billion last year. Again, you don't usually stimulate an already hot economy. And people think counterintuitively, like how can an economy be too good? GDP growth. How?
ROMANS: How can an economy be too good? When it starts generating inflation, eating into corporate profits, slowing -- you know, slowing economic growth.
You know, this morning Greg Valieur (ph) said something so interesting to me. He said that the president's talking about three and four and five percent GDP growth. And he said, unless we get more legal immigrants, we're not going to have workers to be able to generate that GDP growth. The biggest stumbling block in the American economy right now happens to be a lack of workers. And that's not something you're hearing -- you're hearing about either. So there's a lot going on here that I think that are concerning investors.
AVLON: I think Christine is floating, she's floating a grand bargain on immigration. Oh, probably not going to happen, but it should.
CAMEROTA: No, but I mean such a great point. I think that that is something that's really -- that's ironic, and that is something that we really need to talk about.
So for people watching out there, I know that you're, you know, obviously suggesting everybody remain calm, cool and collected.
CAMEROTA: What does it mean for people? If they're not in the stock market, does this mean anything to them?
ROMANS: Look, in my experience, these are the worst cases to tweaking your 401(k) or buying or selling stocks. Because chances are, you're going to make a mistake. You are not smarter than all the people who are out there in the stock market. There's another market professional. There's an old phrase: don't just stand there, do something.
Well, on Wall Street there's a phrase, don't just do something, stand there; because you're probably going to make a mistake if you're -- if you're buying or selling stocks right now. Make sure you know, if you're really close to retirement, you should not have everything in the stock market. If you're young -- the younger you are, the more working years you have, you can be loaded up on stocks. Just make sure you have a good balance of everything. Know your asset allocation, your risk tolerance and rebalance at least twice a year.
AVLON: And fear is the worst counselor.
BERMAN: All right, guys. Don't go far. Again, we're watching these mornings coming in all morning long. Things have been changing all over the place. Stay tuned.
Now our other top story. President Trump's lawyers reportedly want him to refuse an interview request from the special counsel, Robert Mueller. "The New York Times" says that the president's lawyers are concerned he could get caught lying to investigators. This follows CNN reporting from last week that the president's argue that the Mueller team has not met the threshold for a face to face interview.
CNN's Abby Phillip live at the White House with the very latest -- Abby.
ABBY PHILLIP, CNN CORRESPONDENT: Well, good morning, John. That Democratic memo, a sort of rebuttal of the Republican memo on the Russian investigation is now in President Trump's hands. He has about five days to decide what to do with it, whether he will release it or redact it in some form or block it.
And this, as we are now learning through some new reports, that the president and his legal team may not be on the same page about whether or not he should sit down with Special Counsel Robert Mueller.
PHILLIP (voice-over): Lawyers for President Trump are urging him not to agree to an interview with Special Counsel Robert Mueller, partially out of concern that the president, who has a history of making false statements and contradicting himself, may incriminate himself with investigators, according to "The New York Times."
But Mr. Trump has insisted that he's eager to speak with Mueller.
TRUMP: There's been no collusion whatsoever. There's no obstruction whatsoever. And I'm looking forward to it. I have to say, subject to my lawyers and all of that, but I would love to do it.
PHILLIP: CNN reported last week that Mr. Trump's attorneys are arguing that Mueller's team has not met the high threshold they believe is necessary to interview a president in person. The Russia probe hanging over the administration as the president decides whether or not to publicly release the Democratic memo unanimously approved by the House Intelligence Committee last night.
UNIDENTIFIED MALE: Do you support the release of the Democrats' memo, President Trump?
PHILLIP: The Democratic rebuttal challenges the accuracy of the declassified GOP memo, crafted by committee chairman Devin Nunes that accuses the FBI of surveillance abuses.
[06:10:09] REP. ADAM SCHIFF (D-CA), RANKING MEMBER, INTELLIGENCE COMMITTEE: We want to make sure that the White House does not redact our memo for political purposes, and obviously, that's a deep concern.
PHILLIP: The president attacking ranking member Democrat Adam Schiff ahead of Monday's vote, calling him one of the biggest liars and leakers in Washington but praising Nunes as a great American hero.
And during a speech in Ohio, Mr. Trump gloating about Nunes's memo, which he falsely claims vindicates him in the Russia investigation.
TRUMP: Oh, did we catch them in the act? They are very embarrassed. They never thought they were going to get caught. We caught them. They're like the great sleuth.
PHILLIP: Democrat Mike Quigley continuing to press Nunes about whether his staff coordinated with the White House in drafting the GOP memo.
REP. MIKE QUIGLEY (D), ILLINOIS: I was the only member he wouldn't answer questions for. So besides having my feelings hurt, he didn't answer the question.
PHILLIP: Nunes refusing to answer questions from CNN...
UNIDENTIFIED MALE: Did you vote to release the Democratic memo?
REP. DEVIN NUNES (R-CA), CHAIRMAN, INTELLIGENCE COMMITTEE: We don't talk about what we do in committee.
PHILLIP: ... before again appearing on FOX News to tout his memo.
NUNES: Political dirt was used by the FBI, and they knew it was political dirt to open a counterintelligence investigation into the other campaign. That's what people -- I just can't believe that people on the other side are not furious about this.
PHILLIP: President Trump also raising eyebrows with this rebuke of Democrats for not applauding during his State of the Union speech.
TRUMP: They were like death and un-American, un-American. Somebody said treasonous. I mean, yes, I guess, why not? Can we call that treason? Why not? I mean, they certainly didn't seem to love our country very much.
PHILLIP: Well, those extraordinary comments coming at a really bad time for the president when he really might need Democratic votes to get a spending Bill through Congress and also to deal with the issue of immigration. On the president's schedule today, there are a couple of immigration-related events. He has a law enforcement round table on the issue of the Central American gang MS-13, and then he's going to be signing a national security memorandum establishing a vetting center for immigrants coming into the United States, Alisyn.
CAMEROTA: Abby, thank you very much for all of that reporting.
So the Democratic rebuttal memo is now on the president's desk. What happens if he decides not to release it to the public? We take that up next.
[06:16:22] BERMAN: President Trump's lawyers are urging him to refuse to do an interview with Special Counsel Robert Mueller's team over concerns, they say, that it will incriminate himself through false statements. That is according to "New York Times." This, of course, follows CNN reporting from last week that the president's attorneys argue that the special counsel has not met the threshold for a face- to-face interview.
Joining us now, CNN political analysts David Gregory and John Avlon.
David, you know, first to you, one could look at the last few weeks all, again, as a pretext not to do an interview with the special counsel. The White House obviously making a legal decision here and a political decision that they don't lose politically by fighting this fight. Explain.
DAVID GREGORY, CNN POLITICAL ANALYST: Well, I think the president has, at all turns, resisted this investigation, tried to delegitimize the investigation. He has said he wants to talk to the special prosecutor, but I think he's in a position now where he thinks he's muddied the investigation up enough to at least keep his core supporters in his corner on all of this. I don't think that helps him as Mueller bares down and finds whatever he's going to find.
But, you know, the president, for all of his bluster -- and there's so much of that. And how he says he wants to sit down with Mueller's team -- I think recognizes, as his lawyers do, that he would not fare well in that kind of setting facing direct questions about his involvement in trying to resist and obstruct this investigation, potentially, legally. So I think at this point it's probably the best take for him to not sit down unless he feels he's absolutely got to.
AVLON: Yes, but let's just reality check on two things.
This is a president who, when asked earlier today, said 100 percent he wanted to do it. Utterly confident. We're now acknowledging, the president's lawyers are acknowledging that that was pure bluster designed to create a sense of confidence where there was none.
Second, the president's lawyers are saying he should not testify, not because he's -- this is all blown out of proportion, but because they're afraid he will lie under oath. They don't trust him to be interviewed with lawyers without creating more problems for himself. That itself is both pathetic and unpresidential.
CAMEROTA: And so listen. CNN had this reporting that they also were arguing that it doesn't meet -- doesn't meet the threshold. I'll just read what CNN's reporting was from January 31. "Trump's attorneys are arguing that Special Counsel Robert Mueller's team has not met the high threshold they believe is needed to interview a president in person, according to sources familiar with the ongoing deliberations."
So, David, as we all remember, Bill Clinton didn't at first agree to an interview with the special counsel and then he was subpoenaed. And so that could play out here, but then that opens a whole other can of worms.
CAMEROTA: And then it could be the Supreme Court deciding things. But you know, listen, I mean, you think normally, OK, when the normal laws of gravity apply, politically that would be unwise. What is the president hiding?
But, you know, as you know, President Trump has been sort of Teflon to his base that he'll spin it in a way that it doesn't mean that he's hiding something. It's unfair.
GREGORY: Right. And I think, you know, that the legal part will play itself out. This president is using the Clinton playbook in terms of going after the special prosecutor and whether this has gone too far afield as an investigation.
But let's just remember: whatever the president has tried to do on this Nunes memo, to argue that this was kind of -- that an investigation where there was garbage in and you got garbage out. There are Republicans, even those who were involved in drafting this partisan memo, that indicate this is not really a statement about the Mueller investigation. This is about this particular process before the FISA court with regard to Carter Page. It's much larger than that.
[06:20:10] And the second point is -- let's also remember, and this is probably what his lawyers are worried about, and boy, they should be. Just look at President Trump as a private citizen and his record in being deposed. I mean, I just can't imagine any lawyer would want him to sit and answer questions under oath or in any way that could be...
BERMAN: Hang on one second. Hang on one second. Because David brought up the memo because I want to move on to that subject, because we're in an interesting point right now, which is that the House Intelligence Committee voted unanimously to open up this memo, send it to the president for him to declassify.
It's now on the president's desk, John. He's got to decide whether or not he is going to release this Democratic memo which provides a very different argument that he doesn't want people to see. AVLON: You know, but let's take everyone at their word about wanting
more transparency. There's no reason to believe the president is going to go out of his way to sign this. He doesn't want transparency. He wants that other narrative out there.
But there's sort of a catch here, where he can't just indefinitely refuse it. The House Intelligence Committee voted unanimously to release it. It would be better for the country to release it. There's no reason to believe the president will do that.
CAMEROTA: He doesn't seem inclined to do what Adam Schiff is saying at the moment, David.
CAMEROTA: He -- I mean, he's picked this fight with Adam Schiff. Adam Schiff has returned fire.
So, if the president does not release it, then it goes to the full House and then it could be released, if they choose to do it?
GREGORY: Well, again, I don't have confidence in anybody doing that. I mean, what they've done and what the House speaker has done is open the door to such partisanship on this investigation, which has been there all along which is why there's value in a special prosecutor as opposed to a political process in this investigation.
But the whole thing is absurd and the president talking about Democrats being treasonous because they didn't applaud for him during the State of the Union. Some point even the president's core supporters has to make an assessment about the president of the United States who is so weak and so whiny, instead of -- I thought he was strong. I thought he attacked other people who had low energy. What is the insecurity all about? It's one thing to be on the offense, and that is his right and he's certainly done that. But this incredible insecurity is not good from the office.
BERMAN: Watch your twitter feed over the next few hours, David.
GREGORY: I'm not doing that.
BERMAN: Because you brought up -- you brought up something the president said yesterday right now, which is the type of thing I don't think we can grade on the curve. Let's listen to what the president said yesterday when he was in Ohio.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNTIED: You're up there. You've got half the room going totally crazy, wild. They loved everything. They want to do something great for our country.
And you have the other side 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? Can we call that treason? Why not? I mean, they certainly didn't seem to love our country very much.
(END VIDEO CLIP)
BERMAN: You know, John Avlon, as I said, there are going to be people who say, "Oh it's just the president, and he's joking."
BERMAN: You can't be graded on a curve here. When a president calls something treason, it's outrageous?
AVLON: It is outrageous. And we shouldn't get down to it by saying, that's just Trump being Trump. Words have meanings. Treason is the most serious civic sin there is. It is a crime.
And to say all of a sudden that Democrats, the political opposition, is treasonous for the crime of not applauding you during a State of the Union, is just nuts. And un-American itself is also something we shouldn't gloss over. You know, the only thing that's un-American to me is people who call other Americans un-American. And the president using these phrases so casually in rallies is a total departure from our past traditions; and we cannot get numbed into forgetting that.
GREGORY: And let me just add, I think that part of the problem for Trump supporters, even if they make fair criticisms about the media, about Democrats who oppose the president, there's a willingness to compartmentalize this president and to simply willfully disregard comments like this, behavior like this. Some of his attacks, which they don't support, but they're willing to say, "Yes, but." And it's just important to take the president in full when you're evaluating him.
CAMEROTA: Well, I mean, listen, having spoken to many, many of them, they feel that the policy is more important than the words. And so, yes, they admit they can compartmentalize and that they do so because they believe in the regulation rollbacks. They believe in the tax cuts. They believe in the Supreme Court pick. And so you're absolutely right. I mean, they admit that they -- that they're doing that. And, you know, obviously, we just all talk about whether or not there's ever a tipping point for people in the middle.
BERMAN: All right, guys. We'll talk more much about this as the morning continues.
Vice President Mike Pence heading the U.S. delegation to the winter Olympics. Will he meet with North Korean officials while there? We have a live report from South Korea next.
[06:29:15] CAMEROTA: Vice President Mike Pence arriving in Japan any moment before then heading to South Korea for the Winter Olympics. Before leaving, the vice president became the second Trump administration official to signal a willingness to meet with North Korean officials.
CNN's Ivan Watson is live in PyeongChang, South Korea, with more. What's the latest, Ivan?
IVAN WATSON, CNN CORRESPONDENT: That's right. Vice President Pence is supposed to be leading the U.S. delegation here at the opening ceremonies of the upcoming Winter Olympics, but he is also bringing a tough message for North Korea. Take a listen to what he had to say at Elmendorf Air Force Base in Alaska.
(BEGIN VIDEO CLIP)
MIKE PENCE (R), VICE PRESIDENT OF THE UNITED STATES: We're traveling to the Olympics to make sure that North Korea doesn't use the powerful symbolism and the backdrop of the Winter Olympics to paper over the truth about their regime.