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Trump Defends 2016 Hush Money Payments; Trump and Giuliani Discuss Manafort Pardon; Australia PM Says He Won't Contest Leadership Vote; Violence against Rohingya; China Hit with New U.S. Tariffs amid Trade Talks; Wall Street Marks Longest Bull Market in U.S. History; Powerful Hurricane Closing in on Hawaii. Aired 12-1a ET

Aired August 23, 2018 - 00:00   ET




JOHN VAUSE, CNN ANCHOR (voice-over): This is CNN NEWSROOM live from Los Angeles. Ahead this hour, the world according to Donald J. Trump. Truth is not truth. Now crimes are not crimes. But reality bites. And two of the president's closest aides are now preparing for prison time.

Australia's prime minister could soon be forced out in a party room vote, marking a decade since the leader served out a full three-year term.

And they were promised a safe and dignified return but the Rohingya refugees heading home to Myanmar have been victims of beating, torture and imprisonment.

Hello and welcome to our viewers all around the world. I'm John Vause. NEWSROOM L.A. starts right now.


VAUSE: We begin in Washington, where the personal attorney of the President of the United States, Rudy Giuliani, recently said truth is not truth. From the president himself, crime isn't crime.

Mr. Trump tweeted on Wednesday that his former attorney, Michael Cohen, pleaded guilty to two counts of campaign finance violations and another crime.

It is all part of the pushback from the White House to minimize the fallout from Cohen's claim, made under oath in federal court that he was by Donald Trump directed to pay hush money to two women alleged extramarital affairs.


AINSLEY EARHARDT, FOX NEWS ANCHOR: Did you know about the payments?

TRUMP: Later on I knew. Later on. But you have to understand, what he did and they weren't taken out of campaign finance, that's a big thing. That's a much bigger thing. Did they come out of the campaign?

They didn't come out of the campaign. They came from me.


VAUSE: OK. Joining me now Democratic strategist Caroline Heldman and Republican strategist Charles Moran.

Thank you for coming in. What a day. Let's pick up from the president on what he knew and when he knew it, about the hush money paid to these women. We heard him saying he found out about it later on. Let's go back to April on board Air Force One. This is what he told reporters.


UNIDENTIFIED FEMALE: Mr. President, did you know about the $130,000 payment to Stormy Daniels?


UNIDENTIFIED FEMALE: Then why did Michael Cohen make those if there was no truth to her allegations?

TRUMP: Well, you'll have to ask Michael Cohen. Michael is my attorney and you'll have to ask Michael Cohen.

UNIDENTIFIED FEMALE: Do you know where he got the money to make that payment?

TRUMP: No. I don't know.


VAUSE: OK. For everyone playing along at home, first he didn't know nothing about it. But wait. There is more because there is a recorded conversation between Michael Cohen and Donald Trump released last month. It was recorded in September 2016 when Trump was still a candidate.


MICHAEL COHEN, FORMER TRUMP ATTORNEY: When it comes time for the financing, which will be --

TRUMP: Listen, what financing?

COHEN: We'll have to pay this --

TRUMP: Cash?

COHEN: No, no, no. I got this. No, no, no.


VAUSE: Later on, knew nothing about it; that recording was actually before the payment was made.

Charles, is the president a liar?

Does he have trouble recalling past events?

Is there some kind of issue here that Article 25 of the Constitution should be evoked?

What is going on with the president?

CHARLES MORAN, REPUBLICAN STRATEGIST: I think President Trump has done a decent job compartmentalizing the different parts of his life. He had Michael Cohen on retainer as his personal attorney handling a lot of these personal affairs that would potentially distract him from his job running the Trump Organization, from running for president.

So you know, there are a lot of people in the professional world who do have personal attorneys who are tasked with arranging these types of things and who make, you know, make the -- who cleaned things up.


MORAN: So the timeline here, we could sit here and play clips from when did you know and when did you not know. But the role that Michael Cohen played is quite common in a lot of places throughout business. And Michael Cohen was doing the job that Donald Trump paid him to do.

VAUSE: So Caroline, what I think Charles is saying is the president had so many affairs with so many women that he lost track of them and just let his personal attorney take care of everything?

Is that the best he got (INAUDIBLE)?

MORAN: Yes. But that's the point.


CAROLINE HELDMAN, DEMOCRATIC STRATEGIST: But he also handled this. And it is a felony. Michael Cohen admitted to a felony. The difference between a campaign finance violation being a civil claim and being a felony or criminal claim is intent.

And Michael Cohen under oath said that there was intent. So the president is a co-conspirator to a felony crime.



MORAN: -- campaign finance issue which I don't personally believe it as I work in this field. It is more like a jaywalking.

HELDMAN: Why did Michael Cohen under oath admit to that?

(CROSSTALK) MORAN: He admitted to something that --

VAUSE: What it now seems the president is trying to do with this latest interview on FOX News is drawing some distinction between paying the hush money out of his own pocket or paying the hush money from the campaign finance till.


MORAN: Because one is illegal and the other one is not.


MORAN: If you look at the situation with John Edwards a couple years ago, when there was something similar to this, there is a difference between what your personal money is going for and what your campaign money is coming for.


MORAN: As an individual, he can do this.

HELDMAN: I would say that John Edwards was actually tried, right?

Now he was acquitted. So you are suggesting that Donald Trump should be tried. I agree.


MORAN: You know, Caroline, that's not at all --

HELDMAN: You brought up John Edward. You want to compare him.

MORAN: -- campaign finance law. The money did not come from the campaign account. It is not against the law. It is just simply not.

HELDMAN: It is for the benefit of the campaign. So you're an expert in this.

What are in-kind contributions?


MORAN: If it comes from the candidate and the money is his, the it is legal.

HELDMAN: Not if you don't report it, Charles.


MORAN: They will file an amendment, just like Barack Obama did.


HELDMAN: Apples and oranges.


VAUSE: That was part of a Trump tweet. He has been supporting the convicted tax cheat and bank fraudster and felon, Paul Manafort, as a good guy. But the tax cheat and campaign finance violator, Michael Cohen, he's the worst guy in the world. This is the tweet.

"Michael Cohen pleaded guilty to two counts of campaign finance violations, that and another crime. Yes, they are. President Obama had a big campaign finance violation and it was easily settled."

OK. So Caroline, this is totally out of context here. The Obama reference was the Obama campaign was fined back in 2013 to failing to report donations in the final weeks of the campaign.

What's interesting is that the -- basically the problem was discovered by the Obama campaign and reported. And the reason why the fine was so big is because they had raised so much money.

HELDMAN: Correct. And it is apples and oranges. What happened was his campaign actually made that mistake. It is important to note that Donald Trump's campaign also made that mistake in 2016. It is not uncommon.

You are in the world of campaign finance. You know that's why you have a team of lawyers. And in the final, especially final weeks of a campaign, you have a lot of money coming in. So you are possibly going to make these mistakes.

But at the end of the day, this is totally different than what we're talking about with Donald Trump.


HELDMAN: We're talking about him being involved directly. It is a completely different story.

MORAN: It does not come down to intent. What happened here was Michael Cohen was making these arrangements. The money was coming from Donald Trump. It was coming from his personally. There was no campaign finance violation here. What comes here is it was Donald Trump's money that was being spent.

HELDMAN: Why would Michael Cohen admit that?

MORAN: I don't know why.


HELDMAN: Why would he do that?


MORAN: Michael Cohen is the one being investigated here.

VAUSE: Clearly Trump knew about it at that time. If you listen to the audio recording that Cohen made secretly, Trump knew this was going to happen.

MORAN: We don't know what Donald Trump --


MORAN: None of us know, did Michael Cohen present a memo, saying these are the --

HELDMAN: We heard the audiotape of it.


MORAN: We heard an agreement. But we didn't hear the before and after.

VAUSE: Let's go back to the audio clip because this is crucial.

Did he know about it?

And did he deliberately go out and lie about it?

The question of honesty is now a big one for this White House.

Here we go. Let's play it.


MICHAEL COHEN, FORMER TRUMP ATTORNEY: When it comes time for the financing, which will be --

TRUMP: Listen, what financing?

COHEN: We'll have to pay this --

TRUMP: Cash?

COHEN: No, no, no. I got this. No, no, no.


VAUSE: So they're talking about cash or a check for finance, to pay all this money. He knew about it.

MORAN: They were talking about the method of transferring money, yes.

VAUSE: Yes, to pay for the $130,000 for Stormy Daniels to keep her quiet.

MORAN: We're going back to the intent here. What Donald Trump did was not illegal. This was his own money.


VAUSE: Let's get to the question of did he lie, because that's a question of honesty.

MORAN: But that's not what he's being tried for.


VAUSE: Should the President of the United States be honest?

That's a question which was put to Sarah Sanders during the White House briefing.


UNIDENTIFIED MALE: Is the president now planning on or intent on pardoning Paul Manafort?

SARAH SANDERS, WHITE HOUSE PRESS SECRETARY: The Manafort case doesn't have anything to do with the president.

UNIDENTIFIED FEMALE: Does he rule it out? (INAUDIBLE) --


SANDERS: I'm not aware of any conversations regarding that at all.

UNIDENTIFIED MALE: Is Mr. Manafort a simple candidate for a presidential pardon?

SANDERS: Once again, that's not something that has been up for discussion. I don't have anything for you.


VAUSE: Sarah Sanders refused to say whether or not the president has never lied to the American public, just stated he did nothing wrong.

Let's talk about Manafort for a while because this is now a big issue for the Republicans, who have been very, very quiet on Manafort and Cohen and whether or not, if a pardon is issued to Manafort, because the president is not ruling it out, Caroline, what happens then?

HELDMAN: I don't think he's going to pardon Manafort anytime before the midterm elections. It's obviously signaling with his tweets that that is his intention. Manafort took the fall for him. He is not doing what Cohen did. He will repay him at some point.

Before the midterm elections, I think it will do too much damage to the already weakened party at this point, so I would anticipate it would happen after the election.

VAUSE: We just heard Sarah Sanders there saying there's been no discussion about this. "The New York Times" is quoting Rudy Giuliani and a conversation he had with President Trump. Mr. Giuliani said the two discussed the political fall-out should Mr. Trump grant a pardon to Mr. Manafort.

"Yesterday's plea and Manafort's conviction, none of it had to do with collusion, none of it had to do with obstruction," Giuliani said. He really believes Manafort has been treated horribly. So, Charles, clearly at a political level there is a discussion about

a pardon going on, if Rudy Giuliani is to be believed.

MORAN: I would assume that the conversation may have happened in either a formal briefing or maybe informal conversations, you know, with the president and his advisors. I'm sure the president is trying to look at all of the options.

But again the -- we haven't gotten to the end of this story yet. I mean, we don't know how he's going to be charged, how he's going to be -- what he's going to be sentenced to, if he's going to be sentenced to anything. We're not at the point of talking about it.

VAUSE: He's facing 80 years in jail.

MORAN: That is what he's facing.


VAUSE: -- Caroline, the point of a pardon, which is a very broad power of the presidency, you know, it's in spirit, it is meant to be correcting a wrong, to righting an injustice.

How does Paul Manafort fit into that?

HELDMAN: Well, I think in the mind of Donald Trump, he stuck by him and so this is the best way to repay him.

VAUSE: Objectively, how does Manafort fit?


HELDMAN: It doesn't. It's, at some level, maybe moral or unethical to be pardoning someone who's covering for you and potentially a felonious --


MORAN: Wait a second. The last piece of this is I don't think that Manafort should be pardoned because he broke the law for being a tax cheat. And that's what he's in jail for.


MORAN: And he shouldn't be pardoned for breaking the law.

VAUSE: We all have agreement. It's agreement.

Charles and Caroline, see you next hour. Thank you.

Well, Australia's Liberal Party is in the middle of a leadership crisis. Prime Minister Malcolm Turnbull says he's not stepping down, at least not yet. Within the last hour or so, Mr. Turnbull announced his party will hold a leadership vote on Friday. He says if the party MPs decide he should go, he won't contest that decision. Mr. Turnbull survived a challenge on Tuesday from Peter Dutton, the

home affairs minister, who resigned after the vote but now claims he had enough support to win the leadership. But some say he's not even eligible to sit in parliament. The prime minister says he's been witnessing madness, as members of his own party try to force him out.


MALCOLM TURNBULL, AUSTRALIAN PRIME MINISTER: The reality is that a minority in the party room, supported by others outside the parliament, have sought to bully, intimidate others into making this change of leadership that they're seeking.


VAUSE: Joining us now as we try and work out exactly what is going on, Rodney Tiffen, the emeritus professor of political science at the University of Sydney.

Thank you for being with us, sir. If we look at what's happening right now, how it's all playing out, the reality is that within Australian politics, no prime minister has managed to serve out a full three-year term since John Howard back in 2007.

What is the end result of this political turmoil, which is on both sides of politics, and what is driving it?

RODNEY TIFFEN, UNIVERSITY OF SYDNEY: Well, one outcome is public disaffection, alienation from the political process because people are sick of these parties fighting within themselves.

I think what's driving this one is a lot of personal revenge from the leader that Turnbull displaced, Tony Abbott, plus a feeling inside the Liberal Party that he's not really one of us, that he's not a conservative at heart, that he's sort of, I think, in the U.S. they used to have the expression RINO, Republican in name only.

Well, that's what the Liberal Party thinks about Malcolm Turnbull, parts of the Liberal Party do.

VAUSE: The thing about the Peter --


VAUSE: -- Dutton, who is leading the charge against Turnbull, he's the public face of it. But he gets his support from the hard right territory of the Liberal Party. You would call them the dries back in the day of Andrew Peacock and John Howard.

And that is basically Tony Abbott country, the former prime minister, who was forced out of the leadership by Malcolm Turnbull.

How much of a role is Abbott playing in all of this?

TIFFEN: Oh, I think he's been central. I mean, he's bent on revenge ever since he was defeated. And that's the nature of these leadership coups. They create such bad blood internally and people are looking for revenge.

And Abbott has been central in stirring up trouble whenever he can against Turnbull. And he's had some allies in the media, in the Murdoch tabloid press and some commercial talk radio and so forth, where, you know, in a very partisan way. That's sort of been unusual in Australian politics before.

VAUSE: Turnbull replaced Abbott. He went on to have this very narrow election win. He's been sort of -- he's had this majority of one seat for some time in the lower house, which effectively he's been able to do nothing. He has got none of his agenda through. He's seen as pretty ineffective. That's seen his popularity fall among the electorate.

Was his leadership pretty much on life support the moment he had that pretty awful result at the election?

TIFFEN: Well, he has gotten some legislation through. His problem, in a way, actually isn't the state of the house except that in that he is very vulnerable to threats by Liberals to cross the floor.

What we've seen, especially on issues of global warming, these constant retreats by him. And after he was defeated by Abbott for the leadership in 2009, he's been determined to stave off any coup from the right wing. Ironically, now, that's what happened. The one thing he spent years trying to avoid has now come to pass.

VAUSE: Rodney, it is fascinating times in Australian politics. They seem to be fascinating times on a fairly regular basis. Thank you for being with us. Most appreciated.

TIFFEN: My pleasure.

Well, for the first time in almost a year, ISIS has released what it claims is a message from leader Abu Baker al-Baghdadi. The audio recording runs just under an hour. The man who is speaking admits ISIS fighters are losing ground, calling it a test from Allah. He urged his followers to carry out attacks with bombs, knives and cars.

Baghdadi has made only one public appearance. That was in 2014 in Mosul. He is believed to have been wounded in an airstrike last year and is now thought to be hiding along the Iraqi-Syrian border. CNN's Sam Kiley live in Abu Dhabi with us now for more on this.

I guess, you know, there has been a lot of reports, mostly, I guess, from the Russians and others that Baghdadi had died. Obviously, he got better.

But, you know, what is his situation?

What is his, I guess, his health?

And why do they believe this is, in fact, him with this audio recording?

SAM KILEY, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, I mean, the short answer is nobody has any idea whether or not this is really a genuine recording. It hasn't really had the in-depth analysis that the CIA and others would apply in terms of trying to do voice recognition.

What we do know is this is somebody claiming to be Baghdadi and trying to rally the troops. This is his appearance in Mosul, which is the biggest city the so-called Islamic State was ever to claim ownership of.

Now that city was liberated and largely destroyed in that process over the last nine months or so. And then followed up with Raqqa, therefore driving the so-called Islamic State away from the idea that they are anything more now than an idea, that their claim to having a caliphate controlled territory, to be an opponent or a rival, a dominant rival over Al Qaeda, which is an international idea, not yet any kind of territorial integrity owned by Al Qaeda, that gave the so- called Islamic State their USP. That was taken away by the international coalition that destroyed that caliphate.

But there are estimated to be some 30,000 supporters of the so-called Islamic State still at large in Iraq and Syria. And this appeal is really, to them, and, I think, very interestingly, internationally, in this tape a person claiming to be Baghdadi, for example, exalts people called lone wolves around the world, still trying to call for those attacks we have seen so dangerously --


KILEY: -- deployed and with such tragic results, across Europe in particular.

So I think this is really a sign of an attempt by the so-called Islamic State during the Eid celebrations to remind Sunni Muslims that they exist and that the idea is, perhaps, still worth fighting for.

VAUSE: Sam, thank you. We appreciate the update. Sam Kiley there live in Abu Dhabi.

We'll take a short break. When we come back, there is a damning new report, allegations that Myanmar authorities imprisoned and tortured returning Rohingya refugees. We'll speak to the executive director of Human Rights Watch in a moment.




VAUSE: A year since they were forced to flee a military crackdown in Myanmar, hundreds of thousands of Rohingya refugees living in camps in neighboring Bangladesh have celebrated the Muslim holiday of Eid al- Fitr, many praying for better lives, maybe even a chance to go home.

But according to Human Rights Watch, those who have made the journey back to Myanmar have been the victims of government-ordered imprisonment, torture and persecution, despite being guaranteed a safe and dignified return.


VAUSE: Brad Adams is the executive director of Human Right. He joins us now from Berkeley, California.

Brad, thank you for taking the time to be with us. With this report, you specifically look at six Rohingya men and boys who made this trip back to Rakhine state in Myanmar. They were in Bangladesh. Once they got across the border, they were sent to jail and after that they were used as props for government propaganda.

What else happened to them?

BRAD ADAMS, HUMAN RIGHTS WATCH: Yes. It is pretty distressing. These people went back because the conditions in the camps are terrible. They're hungry; many people in the camps are struggling to survive.

So they went back to collect fishing equipment and other things they thought they could bring back to Bangladesh to make a living. And while they were there, they were arrested and accused of being terrorists.

This happened on multiple occasions. So these six people were arrested in different times, different locations by different units. But they all shared the same fate, which was being badly beaten, including being burned, punched, kicked and dragged.

And then to add insult to injury, they were brought in front of the international media in June by the Burmese authorities, who tried to say that people were now coming back from Bangladesh voluntarily because it was safe. They had done it of their own volition and put them on display as if they were happy returnees.

And when the cameras disappeared, these people all fled back to Bangladesh.

VAUSE: Just a little more from your report, what happened to one of these teenagers there, a 17-year-old boy called Ramut (ph) was held by border police. This is what he says.

"They burned a plastic bag and let the hot plastic drip onto my body. They also took a heated iron bar and branded my legs, pressed burning cigarettes to my skin, poured hot wax from a burning candle on my skin, scratched my body with blade and hit me with rod and sticks."

Yes. And what you have been saying and what this young man says --


VAUSE: -- it flies directly in the face of that deal that Myanmar had made, agreeing to a safe return. Your report says it is a farce. This is what you found.

"Despite Myanmar's rhetoric guaranteeing a safe and dignified return, the reality is that Rohingya will go back and still face the persecution and abuses they were forced to flee."

So I mean, if you look at all this, in other words, not much has changed in the space of a year.

ADAMS: No. Very little has changed. The Burmese authorities, whether it is the army or Aung San Suu Kyi, deny any atrocities. They deny human rights abuses.

The one case in which they felt in any way accountable was the case where Reuters published evidence of a massacre and a mass grave. The government said they prosecuted 10 soldiers but they also prosecuted the two Reuters journalists, who are still in prison awaiting trial and facing up to 14 years in prison.

The authorities have done nothing to create conditions that would make the Rohingya want to return. We have them in the camps regularly and we have not met Rohingya who want to go back because they are afraid of exactly what happened to these six people.

VAUSE: And when we're talking about the authorities, we're talking about the de facto leader of Myanmar, Aung San Suu Kyi. She's been roundly condemned. She will soon be the second person in 200 years stripped of a Freedom of Edinburgh award. That will be the seventh international award which has been revoked.

Despite all that, she continues to deny what her military is doing. And it seems she can't even say the word "Rohingya." Here she is. Listen to this.


AUNG SAN SUU KYI, BURMESE POLITICIAN: The danger of terrorist activities, which was initial cause of events leading to the humanitarian crisis in Rakhine, remains real and present today.

Unless the security challenges addressed, the risk of intercommunal violence will remain. It is a threat that could have grave consequences, not just for Myanmar but also for other countries in our region and beyond.


VAUSE: Yes. I just wonder about Aung San Suu Kyi because, is she actually in a position to take a stronger stand?

Could she actually make a real difference?

Or is her position so tenuous that, if she speaks out, the military will just take over again?

ADAMS: Well, the military have everything they want. So they have no incentive to stage a coup even though there are diplomats who say -- defend her by saying she has to avoid a coup because, I mean, they have never really had it better.

They were isolated. They were considered to be pariahs and their behavior in Rakhine state toward Rohingyas is leading to sanctions in some cases. But still, they are able to travel the world and they meet other militaries.

I think her speech is really scandalous. She basically is hiding behind the fake threat of terrorism, which doesn't really exist in Burma. Yes, there was an attack by militants but only a few members of the border guards were injured or killed.

And in retaliation, we have thousands and probably tens of thousands of Rohingya that were killed, over 800,000 who were forced into Bangladesh as refugees. She actually called them "internally displaced persons" in that very same speech you just showed, instead of calling them refugees, giving them the dignity they deserve as a people who have a (INAUDIBLE) persecution.

And she could really change the course of things in Burma. She is still the most popular person in the country. She has great authority, political authority. I would say her moral authority has certainly diminished.

My plea to her to would be, Kofi Annan died last and he led an advisory commission that she appointed. He was a friend of hers. If she would simply read the very good document he wrote, which is a road map for peace and stability and rights in Burma, things could be much better in the country. She owes that obviously to the Rohingya but maybe she doesn't care about the Rohingya. She can care about the legacy of her friend, Kofi Annan.

VAUSE: And we're out of time but this is the woman who was, you know, years ago described in terms of the Nelson Mandela of Asia. It certainly seems maybe that is not the case. Brad, thanks.

ADAMS: No, her star has fallen.



VAUSE: We'll take a short break here. When we come back, the trade war is heating up with new sanctions from the U.S. on Chinese exports. And there is no indication from Donald Trump when or if this dispute will come to an end.

Plus it was a down day on Wall Street. But investors saw a silver lining and then made history. We'll explain after the break.


[00:30:00] VAUSE: Welcome back, everybody. You're watching CNN NEWSROOM, live from Los Angeles. I'm John Vause with the headlines this hour.

Australia's Prime Minister, Malcolm Turnbull, says he's not stepping down, at least not today. Mr. Turnbull's party will hold a leadership vote on Friday. And he says if the vote does not go his way, he won't contest it. But, he says a key challenger, Former House Affair -- Home Affairs Minister, Peter Dutton, may not be eligible to even sit in parliament.

Donald Trump is brushing aside claims for his former lawyer that he brought the payment to keep alleged affairs, quiet, during the 2016 presidential campaign. Mr. Trump says the payments were not illegal because the money came from him.

But he also says he didn't know about the payments until later on, which contradicts to his earlier statements.

New U.S. tariffs on nearly 300 Chinese products have just gone into effect. And for the second time, China is responding with more tariffs of its own. The tit for tat now affects a total of $50 billion worth of goods on both sides.

And China and the U.S. have been meeting in Washington to find a way to work through some of their trade differences. The U.S. president, though, has said he doesn't think a whole lot will come from the talks.


SARAH HUCKABEE SANDERS, WHITE HOUSE PRESS SECRETARY: Certainly, what we'd like to see is better trade deals for the United States. The President wants to see free, fair and more reciprocal trade between other countries, particularly with China, and we're going to continue in those conversations.


VAUSE: CNN's is live with us, this hour, in Beijing. So, Steven, that's the view from the White House. What about Beijing? How do they see these talks? Is there much more optimism from there?

STEVEN JIANG, CNN INTERNATIONAL SENIOR PRODUCER: Well, John, we haven't heard much about these latest talks but what we have just heard from the government is, they are confirming their retaliatory tariffs on $16 billion of U.S. products are now in effect.

So really, there is no end in sight. And, you know, we've been talking to people about the impact of these tariffs and there has been, really, an impact in the sense, like I was talking to an American executive in-charge of buying Chinese products for his U.S. clients.

He said to me, interestingly, even though his products are not directly hit by these tariffs, he's feeling the pain as well because of the fast rising shipping costs. He says as many manufacturers in southern China and their U.S. clients trying to rush out the products before the latest tariffs that shippers are now jacking up the prices and the space on container ships is tight.

So he is already a victim, even though his products are not on these lists. But on the other side of the coin, we have been talking to soy bean farmers in north to eastern China. They are actually happy about the situation because as U.S. soy beans being hit by 25 percent tariffs, now, they are getting government subsidies to grow more soy beans.

Then they are also expecting their soybean to have a good price in the market here because of the (INAUDIBLE) so, you know, there are winners and losers. But the one thing we are sure is, there is no end in sight. Neither side is backing down.

Even though these talks are going on, as I mentioned Mr. Trump, himself, has said he doesn't expect -- he doesn't expect much out of these talks. And the Chinese are probably feeling the same way because they cannot afford to make too many concessions in the current environment. John?

VAUSE: So it continues. Steven, thank you. Steven Jiang, live for us, in Beijing.

Wall Street has been celebrating a milestone, the longest-running bull market in U.S. history, or maybe not. Economists put the exact start date as March 9th, 2009. That was the end of the great recession. U.S. financial markets have been slowly moving upwards ever since.

[00:35:00] For the record, that's 3,453 days and there's no sign it will end any time soon or maybe there is. The more the economy remains strong, there are the problems of inflation, trade wars, tariffs, rising interest rates and of course, political turmoil.

Actor, comedian and economist, Ben Stein, joins us. Here now, for more to explain all this. So glad you're here. Thank you.

BEN STEIN, ACTOR: I'm honored to be here. Thank you very much.

VAUSE: Do you like the carrot cake we just made?

STEIN: Your wife made a delicious carrot cake. It is in the dressing room. And I invite everyone in the world to come get some.

VAUSE: OK. Let's talk about -- let's talk money. Let's put this in civil terms that I understand, so if someone invested in $1,000 at the beginning of this bull market in 2009, reinvested the dividends every year, they now have just over $5,000, which turned about 19 percent a year, which is pretty good. But this has been called the most unloved bull market in history. Why is that?

STEIN: Because it has gone up in fits and starts. It has some big, big, big upward days and it had some days that have gone down a lot, and had some days when it's been flat. As we economists say, monotonic upward movement. And an interesting fact about investments, if you missed the big days, you miss everything.

So that when you get into the stock market, you cannot pick and choose the days you're going to be in. You just have to stay in it. If you -- if you -- if you missed the days that it's up three or four percent, in one day, which is a very rare day, but it is a wonderful day when that happens, then you are really missing out.

So, it's unloved because people don't understand how to invest properly.

VAUSE: OK. Well, when we're talking investing, we're talking about $18 trillion in wealth over this bull run which has been created.

STEIN: That's a lot of money.

VAUSE: It's a lot of money. Only you're going to a small number of people.

STEIN: That's not true.

VAUSE: OK. Well, let's talk about this because this study found the top 10 percent earning roughly 84 percent of the value of the shares.

STEIN: You know, that's not true because an awful lot of the money that's invested in the stock market is in pension funds and those are pension funds for teachers, trash collectors, truck drivers, taxi drivers, even agricultural workers.

So everybody gets a bit -- gets a dip, the bread and the gravy, in some way. Now, in terms of direct ownership, not enough people own stock, and that's a problem.

And something that's an astonishing problem in this day where (INAUDIBLE) gender roles, is that women are much, much less likely than men to be in the stock market. And that's a real tragedy because that is a very big way towards gender equality, is them, having more money.

VAUSE: One thing which is also -- tell me about it. One thing which is surprising is how many people have taken time to argue about, is this the longest bull run in history or is it not. A market research firm tweeted this.

The only way this is the longest bull market on record is if you, one, call the 19 percent decline in 1990, a bear market. Two, don't call the 19 percent decline in 1998, a bear market. And three, don't call the 19 percent decline in 2011 a bear market nonsensical.

Then if you go by trading days, as opposed to calendar days, you know, the milestone isn't reached until the last day of August, something (INAUDIBLE) with the actual start date. Bull market actually begins when the market reclaims its old high, not when its bottomed. But this mentioned the bull market began March 2013. You know, this goes on and on and on.


STEIN: Who cares? It's been a very, very good time to be in stock. And it's been engineered that way by the Federal Reserve because the main issue for investors is, do you buy stocks or do you buy bonds. And since it's a Federal Reserve, they've been keeping return on bonds very, very low.

They're more or less squeezing all the toothpaste in the tube into the stock market. And that will someday end when bond yields are allowed to rise, then the bull market is going to be something we all look back on with great, great glee and hope it comes again. But as long as the feds are keeping the interest rates low, the market is a golden place to be.

VAUSE: So, essentially, when you're looking at how much longer we've got of the gravy train, how much longer, you know, the stocks will continue to rise. It's -- you know, the economic fundamentals are strong, right?

STEIN: Very, very, very strong.

VAUSE: So these are the things that matter, not the politics, right?


VAUSE: Not what's happening in the White House, not the Cohen stuff --

STEIN: Couldn't care less, couldn't care less. It has no bearing on it whatsoever. Accounts are earnings and interest rates. And that's it. And earnings are way -- earnings are way, way, way up, fantastically up. And interest rates are quite low, still. Even though they were higher, they were quite lower, still.

VAUSE: We were just talking about new tariffs being slapped on Chinese exports by the U.S. global trade war potential, you know, the rising interest (INAUDIBLE) does that stuff matter?

STEIN: It matters but not very much. The U.S. is not a huge exporting country unlike, say, England or Germany. The U.S. is not largely independent on exports so, it doesn't really matter to us that much if our exports are trimmed. We're very different from most countries in that regard.

[00:40:08] VAUSE: OK. Finally, who gets the credit? Does Obama get the credit? Does Donald Trump get the credit? Do they have to share?

STEIN: I'd say Bush 43, Obama and Mr. Trump all get the credit because Mr. Bush stepped in and kept the banks from all collapsing. Mr. Obama kept the low interest rates and kept feeding the economy with deficits, and Mr. Trump is continuing to feed the economy with deficits.

The problem with that is, we've now got a $21 trillion deficit. You're a much younger man than I am, you may live to see a default. And I don't think I will. But somebody's going to live to see a default.

VAUSE: Wow. The bull run born of quantitative easing, I guess.


VAUSE: Stein, pleasure.

STEIN: Pleasure for me, too. Thank you. Thank you for the cake. VAUSE: You're welcome. Coming up here, Hurricane Lane, the impact is already being felt on Hawaii Islands at this hour. The store shelves have been empty and emergency preparations are under way.


VAUSE: Hawaii is braced for a powerful hurricane that's closing in on the island. Hurricane Lane is now a Category 4 with the same winds of 250 kilometers an hour. The (INAUDIBLE) are already being felt on the big island. It's expected to bring heavy rain, wind and possible flooding. Most of the preparations have been underway. Residents, stocking up on supplies and schools have been closed.

OK, let's check in with meteorologist Pedram Javaheri of the national weather forecast --weather center with all the forecast. I'm so tongue-tied tonight. It's been one of those nights. I'd say words in the wrong order, they keep coming up. But, you know, let's find out. Tell us what's going on a little bit with this storm. I mean, this has potential and be quite dangerous.

PEDRAM JAVAHERI, CNN INTERNATIONAL METEOROLOGIST: It does, absolutely. You know, it's rather unusual too, John, as I'm sure you're aware when it comes to hurricanes coming into this close proximity to the Hawaiian Island of this magnitude, specially -- Look at this satellite imagery from space of laying over the past

several hours. As impressive as they come, when you talk about organizations, symmetry, and, of course, sheer strength of this single storm. And then you look at weather history here, across the Hawaiian Islands, only two hurricanes have ever made landfall across the island, that was Iniki in '92, Dot in '59.

Guess where they both crossed? Right there, across Hawaii. And of course, we know this system headed towards the north and the west, so we're going to watch that carefully here. And here's what it looks like on satellite imagery, weakened a little bit in the last several hours.

The latest update, down to 230 kilometers per hour, still a healthy Category 4, still gusting over 280, but certainly, the hurricane center is taking us very seriously with hurricane warnings just about across every single island.

But we do know for sure it will head to the north and then make a sharp turn towards the west. That's pretty much the only area of certainty in the forecast. We know it will weaken, but the timing on when it makes that turn is critical.

And as John said, of course, this happens, I'd say a few hours later, and that could be a severe impact across portions of (INAUDIBLE) high up towards Maui, even around Oaho, and notice the significant guidance on the model's wanting to make that turn, a few outliners wanting to bring it in towards the coastal communities.

And John, heavy rainfall is the name of the game with this system, and unfortunately, it's the water element, not the wind element that's the most deadly with this tropical system to watch. [00:45:16] VAUSE: First, it was the volcano. Now, it's the hurricane, Pedram, thank you. Yes, OK. And thank you for watching CNN NEWSROOM, live from Los Angeles. I'm John Vause. Stay with us. "WORLD SPORT" is next. You're watching CNN.



Stock Markets; Malcolm Turnbull; President Trump; hush money; China; tariffs; bull market; Hurricane Lane; Hawaii>