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Stocks Rise As Trade Negotiations Continue; Russia Warning over Diplomats; Repeal of Second Amendment; Mistake at AT&T Trial; Trump talking with Porter. Aired 9:30-10a ET
Aired March 27, 2018 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:31:37] JOHN BERMAN, CNN ANCHOR: All right, the markets are open after a crazy day yesterday. Christine Romans here with me. Alison Kosik down at the New York Stock Exchange.
Alison, what are you seeing?
ALISON KOSIK, CNN CORRESPONDENT: Definitely feeling investors exuberant at this point. That's after we saw the Dow made a literal u turn yesterday jumping 669 points after losing more than 1,000 last week. This after reports that the U.S. and China are negotiating on trade.
But don't be fooled here because worries about trade policy are still simmering in the background here on Wall Street because it's not a done deal yet. There's a lot of uncertainty. And what really seems to be happening here, as I talked to a lot of traders, is right when you see the market gain traction, like we saw yesterday, like we are seeing today with the Dow up a bit, up 50 points, once we see that stocks are gaining traction, they kind of lose their footing again. So you're not seeing investors just get complacent just yet. That's why we're expected to see more of these wild swings, more of the volatility. Don't be surprised to see those triple digit swings as time goes on.
What's next on Wall Street's plate? The jobs report. And you're going to see investors not just looking at the number of jobs created in March, they're going to be looking for that wage growth because now that attention turns to whether we're seeing a spike in inflation. And then the question becomes, can companies, John, absorb that inflation because of an expected windfall from tax reform to certainly keep those wages elevated, but also not pass along those higher costs to consumers.
BERMAN: Christine Romans, a little more circumspect it seems that traders are these day about the notion of a trade war.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Well, look, I mean they've changed their mind every day based on the headline risk, and that's -- and that's the honest to God truth. We've been saying at CNN Money, you know, they're living and dying by the trade headlines. Last week it was all-out trade war with China. This week the feeling is it couldn't possibly be all-out trade war. They're talking to each other. And it's not good for the United States or the Chinese to have a trade war here.
So interesting, John, the timing here is awkward and interesting because the United States this week has to borrow $300 billion, the most since the financial crisis in 2008. The United States borrowing $300 billion. As it auctions off those securities, who is the logical market to buy those? The Chinese. So we are here negotiating with the Chinese over tariffs and trade disputes, at the very same time the Chinese are essentially among our bankers.
BERMAN: And, look, the first part of that I don't want people to lose sight of. The United States has to borrow $300 billion, the most since 2008. Why?
ROMANS: Because of tax cuts. The economy's doing very well, but the president and Congress passed those huge tax cuts. So there's less money coming into the federal coffers because we're still spending the same amount and even more. That means the government has to go asking for money.
BERMAN: And the tax cut may be spurring the economy. You may argue that's a good thing. But there is no arguing right now that it is causing the government a need to borrow more money.
ROMANS: At the very same time we're in negotiations with the Chinese over trade. It's fascinating.
BERMAN: All right, Christine Romans, Alisyn Kosik, down on the floor, thank you all very much.
Russia with a warning to those who kick their diplomats to the curb. Hear what they plan to do next.
[09:38:40] BERMAN: All right, more than 100 Russian diplomats have been expelled from countries all around the world. And that number is growing this morning. All this in response to the nerve agent poisoning of a Russian double agent and his daughter living in the United Kingdom. The U.S. sending out 60 diplomats alone.
Joining me now, senior diplomatic correspondent Michelle Kosinski, here with me in New York.
The whole world making a statement here.
MICHELLE KOSINSKI, CNN SENIOR DIPLOMATIC CORRESPONDENT: Well, yes, I mean it's a big chunk of the world. These are U.S. allies. The count now is 25, when you include Ireland, which we just heard this morning had jumped on board, and including the U.K. and the U.S. So 25 countries is substantial.
I mean each country, for the most part, is just expelling one or two. So you have to do a lot of comparison to see the scope of this and to see that the U.S. has expelled 60, which is nearly triple the number that the U.K. has expelled, and the crime happened on U.K. soil, that's pretty impressive for the U.S. to do, especially when you see how this could have gone. I mean this administration could have done nothing, and there were some indications that that could have happened since only days prior the president flat out ignored his national security team's advice not to congratulate, in big capital letters, Vladimir Putin on his election win. And Trump decided to do that.
So there was some that thought that the U.S. would not be on board with this and maybe that is why this story leaked out because somebody on the inside of these conversations wanted the world to know that his national security team was recommending that he do something. Maybe in the off chance that he did not really want to. But, he did.
[09:40:18] BERMAN: And leaking to force the action that they wanted to see. Any sign that the Trump administration will go any further than this?
KOSINSKI: There is. And I think they want to put it out there as a warning because in the usual U.S.-Russia tit for tat, you have Russia now saying, oh, really, you know, very boldly, almost boasting, like, we're going to do this to you now, ha-ha. But the administration was very quick to say, if Russia does retaliate, we could well take more action.
You know in these -- in terms of the election meddling, which is a separate issue from this, we did see the administration only weeks ago issue sanctions for some people, some Putin insiders as well. So I think that, too, is an indication that if this goes further, the administration is not really all that shy anymore from taking action where many feel it really hurts Putin, and that is in the money bags.
BERMAN: Michelle Kosinski, great to have you here with us in New York. Thanks so much for being here.
BERMAN: The question now is how will Russia respond. Let's go to Moscow. Phil Black is there.
PHIL BLACK, CNN CORRESPONDENT: Yes, John, how many will be expelled in return? That's a key question really going forward. Russia has only said that the Russian response would be reciprocal. So, one for one, tit for tat, that's what we can expect.
Vladimir Putin is supposed to be the man who actually does make the final decision in terms of how many, whether or not Russia simply meets the same number of expulsions, or perhaps goes further and escalates this crisis to an even higher degree. But when he will do so is unclear because he's a busy man dealing, at the same time, with a domestic tragedy, a shopping mall fire in Siberia that's killed more than 60 people, mostly children. That's where he is today, offering condolences, also trying to calm locals who are very angry that this fire has taken place.
Tomorrow has been declared a national day of mourning here in Russia as well. So it's unclear if he will announce a response while also dealing with this national tragedy. And, indeed, Russian officials who have been very angry towards the U.S. and western countries over these expulsions, they've also criticized them for their timing, for announcing these expulsions while at the same time, often on the same day, offering condolences for the shopping mall fire at the same time, John.
BERMAN: It's interesting, Phil, I have Michelle Kosinski here and I was talking about the fact that the whole world was reacting. She pointed out it's really only 25 countries and where are we on some of the more powerful nations like China?
BLACK: So China has offered some statements on this. In fact, it's foreign ministry spokesman addressed this today during a press conference. And it's not clear who she was talking about when she asked the countries to, quote, abandon a Cold War mentality. She went on to say, relevant countries should avoid taking any actions that would aggravate the conflict and work together to preserve peace and stability of the international community. China makes the point that it's opposed to the use of chemical weapons, but at the same time it seems to be urging all relevant parties to talk this through in a peaceful, calm way, to try and stop this from escalating further, John.
BERMAN: All right, Phil Black for us in Moscow. Phil, thank you very much.
This morning the world is asking a question, who was on that train in China? We're talking about what's been called the mystery train in China. We are now told it's extremely or highly likely that Kim Jong- un, the leader of North Korea, on board there. The private train, which closely resembles one used to transport North Korean leaders, was spotted leaving a Chinese train station earlier. If it is Kim Jong-un, it would mark the first time he has left North Korea since taking power in 2011. It comes as he prepares to meet with the South Korean President Moon and eventually perhaps President Trump.
It has been almost two years since he died. Now we're learning new details about just what was inside the blood. Blood tests coming in from Prince.
[09:48:41] BERMAN: All right, a new report out from the Associated Press on the toxicology findings from the autopsy of Prince. It shows he had an exceedingly high amount of the drug fentanyl in his body when he died. Experts say even for somebody who was in chronic pain, the amount is very high and likely the cause of death. Information released six weeks after his death showed an accidental overdose of fentanyl. The drug is a synthetic opioid 50 times more powerful than heroin. The lead prosecutor in the county where Prince died said he's reviewing whether to charge anyone in the near future.
So, repeal the Second Amendment. That would be a controversial call from anyone, even more so when it comes from a retired Supreme Court justice. In a "New York Times" op-ed, retired Justice John Paul Stevens says the Second Amendment should go. This is having political ripple effects all over the country.
Ariane De Vogue outside the Supreme Court.
An interesting read this morning, Ariane.
ARIANE DE VOGUE, CNN SUPREME COURT REPORTER: Right. Well, retired Justice John Paul Stevens, he's 97 years old. He's written this op-ed. And he thinks that it should be repealed. He was clearly moved by the Parkland shootings, as well as the demonstrations across the country.
But, John, there's a back story here. Of course, in 2008, the Supreme Court came out with this landmark opinion. And it says that individuals have a right to bear arms. Stevens was in dissent and he clearly thinks that that opinion was wrongly decided.
[09:50:04] And then he writes today in this op-ed, overturning that decision via constitutional amendment to get rid of the Second Amendment would be simple and would do more to weaken the NRA's ability to stymie legislative debate.
But here's the one problem, John. Justice Stevens writes that it would be simple. It wouldn't be simple. It would be a tough thing to do, for starters. You'd have to get both the Senate and the House with a two- thirds majority. But it's interesting to see that this justice is retired from the bench, he's still weighing in, John.
BERMAN: No, it's interesting. And gun rights advocates will say, look, they want to repeal the Second Amendment. This is just what we've been warning all along. And it will be interesting to see how it plays politically, particularly with Democratic primaries coming up.
Ariane De Vogue, thank you all very much.
Next hour, court will be back in session in the government's lawsuit to block the merger of AT&T and Time Warner. The public will not be allowed in the courtroom today. This after some drama yesterday when the government's key witness almost did not take the stand.
Our justice correspondent Jessica Schneider joins us with the latest.
JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well, John, the arguments this morning will unfold in that closed courtroom. They'll be addressing issues of confidentiality, essentially the business secrets that just can't be disclosed publicly.
But the government today is still questioning its key witness here, Warren Schlichting. He's an executive at Sling TV. Sling TV is a skinny bundle service that offers live TV as an alternative to cable. Now, Schlichting was on the stand for a few hours yesterday. He testified that any merger between AT&T and Time Warner would disadvantage Sling. He says that AT&T could charge more for Time Warner programming. Time Warner programming includes HBO, as well as the Turner Networks, like CNN and TBS and TNT. So Schlichting said that any disadvantage, any higher cost to customers could cause those customers to actually jump from Sling TV to AT&T's streaming service, which is DirecTV Now. So that was a big concern for Schlichting.
But as it turns out, Schlichting almost didn't get the chance to take the stand. Of course he is a key witness for the government. It was disclosed first thing yesterday morning that Schlichting had actually obtained transcripts of the opening arguments, as well as the government's first witness. When the judge found this out, he stopped the proceedings and went behind closed doors to figure out exactly what to do. That's because witnesses are not allowed to get a preview of any of the court proceedings before they take the stand. The judge said it would give them an unfair advantage, might influence them. But, ultimately, the judge did allow Schlichting to take the stand.
So all of this drama unfolding amid intense interest in this case. Lines formed very early in the morning here. People lined up for hours. In fact, it is such an interesting case of intense interest to many people in this town that they actually, some law firms and some analysts, actually pay line sitters to sit here for hours before the court goes into session. They're paid $40 to $50 an hour.
So, John, a lot of interest in this case. Today we will see that testimony continue from Warren Schlichting. We're also expecting to hear John Martin. He's the CEO of Turner Networks. He will actually be a hostile witness for the government, trying to get some information from him about the negotiations here.
So, John, a lot of interest in this case, as is seen by the big bucks that some of these line holders make.
BERMAN: All right, Jessica Schneider for us in Washington, thanks very much.
The former boss of convicted sex abuser and former USA gymnastics doctor Larry Nassar is now scheduled to be arraigned later today on undisclosed charges. Of course, Nassar was sentenced to more than 100 years in prison for sexually abusing young girls over two decades. His boss was William Strampel. The charges against him have not been disclosed. But a letter from the vice president of Michigan State University says that Strampel failed to enforce clinical guidelines following an investigation into Nassar. And the school has begun the process of revoking Strampel's tenure.
Meanwhile, the FBI is investigating suspicious packages sent to the CIA and multiple military locations in the Washington, D.C. area. A law enforcement official tells CNN there were more than 10 devices, one of which contained explosive material but would not have been deadly had it went off -- had it gone off. All packages (INAUDIBLE) involving black powder but were rendered safe. No one was injured.
Just over a week after a fatal crash, Arizona has suspended Uber's self-driving program. The state's governor made the decision calling the accident disturbing and alarming. Uber says they pulled all autonomous vehicles off the road. Arizona has been a main location for autonomous vehicle testing since the state does not require a driver behind the wheel. [09:54:42] President Trump avoiding the cameras, staying silent when it comes to Stormy Daniels. How long can this last? Stay with us.
BERMAN: All right, good morning, everyone. I'm John Berman.
Welcome to the fourth straight day of no scheduled public events for President Trump. Four days it appears of no public comments on anything, including Stormy Daniels, whose interview with Anderson Cooper, the president reportedly did watch, and also privately dismissed.
On the subject of private conversations, one person the president is speaking with is raising some eyebrows, Rob Porter. The former top aide who was fired over domestic abuse allegations.
Our Kaitlan Collins at the White House.
And, Kaitlan, the president has been talking behind the scenes about the Stormy Daniels situation.
[09:59:59] KAITLAN COLLINS, CNN WHITE HOUSE REPORTER: He has, John. But what's surprising is, this is a president who typically says sometimes shocking things in public, but he's said nothing about stormy Daniels. The closest he's gotten to responding to her interview on "60 Minutes" was a tweet he had about fake news.