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Global Markets Plunge, U.S. Braces for Volatile Day; NYT: Lawyers Urge Trump to Refuse Interview with Mueller; Will Trump Release Dems' Memo? Aired 7-7:30a ET
Aired February 6, 2018 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL KRISTOL, EDITOR, "THE WEEKLY STANDARD": I think Donald Trump -- it's hard for Trump to insist on standards that he himself can't meet. He has aides that will try to do so. But the Trump administration is about Trump.
[07:00:10] ALISYN CAMEROTA, CNN ANCHOR: Thank you both very much.
OK. Thanks to our international viewers. For you CNN "NEWSROOM" is next. For our U.S. viewers, NEW DAY continues right now.
ANNOUNCER: This is CNN breaking news.
CAMEROTA: OK. Good morning, everyone. Welcome to your NEW DAY. Chris is off. John Berman joins me. We have had a day of breaking news.
JOHN BERMAN, CNN ANCHOR: Indeed we have. Good morning.
CAMEROTA: Good morning. We start there again. All eyes on Wall Street today. Trading will begin in about two and a half hours. Investors are on edge after yesterday's largest single-day point drop for the Dow. Asian and European markets are rattled by the steep losses on Wall Street. U.S. markets have now erased this year's gains in just two days.
BERMAN: So we've been watching the numbers come in all morning, and signs point to an ugly open. One big question: how will the president handle this? For a year, he took credit for the markets nearly every day. He wanted to own the gains. Will he own the losses, especially if they continue today.
Let's get right to our chief business correspondent star, Christine Romans, with a look at where the numbers are -- Romans.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: And it's a global selloff, you guys. The stock market selloff is not over. Look at Asia here, the plunge rippling around the world on Wall Street. Asia markets all closed lower.
This is Europe. Europe has been worsening here. And Dow futures are swinging wildly. They're now down 356 points. They had been down as much as 700 and they were higher. So there's no way to predict what's going to happen at the opening bell when it rings. Let's look at what happened yesterday. The Dow lost more than 1,800
points over two days. Monday, brutal. Shedding a record 1,175 points. That's 4.6 percent. It's the worst one-day point loss in history, you guys, but it's not even one of the top 20 percentage losses. That's important to note.
The Dow is now down here about 8.5 percent from its most recent high. Eight and a half percent. That's just within what we call a market correction, about 10 percent.
So what's going on here? A couple of things here. Most notably the trigger, I think, was the Friday jobs report. Strong and strong wage growth. Wage inflation is great for workers but bad for corporate profits. And as inflation picks up too quickly, the Federal Reserve may need to raise interest rates faster than planned.
And the biggest thing here to talk about is the bond yield. A selloff in the bond market. Bond yields move opposite to price. They hit a four-year high on Friday. As yields go up, bonds offer better returns, making them much more attractive to investors than risky stocks. So the bond market melt-up here is what a lot of people are talking about.
Now even if stocks drop again today, I want to be clear here. There's no -- I don't know where my countdown has gone. There's no chance of a crash or a panic. Conditions are still good. The economy is strong. The job market is strong.
Ironically, what you have here is a condition where Wall Street and Main Street are now a little bit disconnected.
CAMEROTA: It sure looks like that.
ROMANS: You've got things doing really well in the economy, but the stock market is worried about that overheating.
CAMEROTA: And so does the stock market then have a ripple effect on the economy where it could do something negative?
ROMANS: It could. But I think what's really most important to note here is this market has been going up, up, up. You're still up 33 percent since the election.
Now a quarter of the Trump bump has been wiped away in the past couple of days, but you're still up 33 percent since the election. What I think people are coming to grips with here is that we're in a new era, an era of rising interest rates, not this era of artificially low interest rates, kept low by the Fed.
Now you're going to see interest rates start to rise, and you're going to see, you know, Wall Street and Main Street reacting differently as it -- as it really should.
Yesterday I don't know how much to quantify the computers, because when you have a big move in the bond market, sometimes you have computer programs that trigger selling in the stock market. That could be happening here, too.
There are also derivatives and derivatives of derivatives. We have people selling instruments against volatility and selling -- you know, shorting the stock market through different derivative instruments. That's at play here, as well.
BERMAN: It's very interesting. Over the last year, some of the stock market increase has been due to expectation of the tax cut that the president helped pass and the president took credit for that every day.
But this drop is sort of a reaction to the tax cut, as well. It's investors and companies seeing what is -- I don't want to say negative effect but an adverse effect or a side effect of the tax cut they're getting.
ROMANS: Stimulus. Stimulus from the tax cut that could filter into a very strong, maybe already overheating economy and cause the Fed to have to raise interest rates and cause trouble in the bond market.
BERMAN: We're also young, all three of us...
CAMEROTA: Thank you.
BERMAN: ... that we barely remember inflation at all, right? Periods of very high inflation.
BERMAN: But inflation can be a concern not just for companies but across the board.
ROMANS: It's not high yet, though. I mean, we're coming from zero inflation to a little bit inflation. So let's keep that in perspective. But it's been so long with no inflation in such low rates that it's been almost artificial. Jerome Powell, the new Fed chief, started on the job yesterday. He's got a real tough job ahead of him here if this economy really does start to -- to overheat.
CAMEROTA: Do you want to look at the Dow futures right now? Do you do it second by second? Are you monitoring these things.
ROMANS: I do look at them 374 right now. S&P futures are down more than a percent. Look, percentage is really important here. Because in 1987 when we were all, you know, in...
[07:05:12] ROMANS: ... in diapers, the percentage drop for the S&P was something like 22 percent.
ROMANS: A 4 percent move is a very big deal, no question. But we have gone up for so long this is maybe getting back to some reality here. Another risk here, the president takes credit for the market so much,
I want to see what his language is going to be like today. This is why presidents don't take credit for stock markets going up, because then you own it when they go down.
BERMAN: He'll find a way to take credit for something today. I think the question is what it is. We will see.
CAMEROTA: Thank you very much.
All right. So now to our other top story. According to "The New York Times," President Trump's lawyers want him to refuse an interview request from Robert Mueller's team. "The Times" reports that they are concerned that the president could get caught lying to investigators. This follows CNN reporting that the president's attorneys argue Mueller's team has not met the threshold for a face-to-face interview.
CNN's Abby Phillip is live at the White House with more on this. Good morning, Abby.
ABBY PHILLIP, CNN CORRESPONDENT: Good morning, Alisyn.
Well, the White House confirmed this morning that that Democratic memo is now in President Trump's hands. He now has five days to decide what he's going to do with it. Will he block it or redact it or perhaps release it as he did with the GOP memo?
And all of this coming as we are also learning through 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.
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES: 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 remarkable comments coming at exactly the same time that President Trump actually needs Democratic votes to help him get a spending bill through Congress and also to deal with the immigration issue. Now President Trump has a couple of immigration-related agenda items
on his plate today. He's going to be hosting a law enforcement round table about the MS-13 gang, but also he's going to be signing a national security memorandum establishing new vetting procedures for immigrants and visitors coming into the United States -- Alisyn and John.
CAMEROTA: OK, Abby, thank you very much.
Let's discuss it all with CNN political analyst David Gregory and CNN Politics reporter and editor at large, Chris Cillizza. Great to see both of you.
So David Gregory, the lawyers, the president's lawyers are understandably concerned that the president might be charged if he says something untruthful to investigators, so they are trying to keep him from talking to Mueller's team. What happens now?
[07:10:15] DAVID GREGORY, CNN POLITICAL ANALYST: Well, we'll see. I mean, it depends how hard Mueller's team pushes. The president is on record saying that he looks forward to speaking to him, to answering all of his questions.
This is obviously a negotiation, as Ken Cuccinelli said in last hour, between the president's lawyers and between his special counsel office, the president, meanwhile, is engaged with help from Republicans on Capitol Hill in working overtime to delegitimize this investigation, or to try to poison the well here about anything that they might find or conclude.
But you know, I think we may very well see the president answering questions in the end, but I think his lawyers are right to be very worried about the potential to put him in legal jeopardy. And remember, so much of what we've seen in this investigation, outside of the underlying contact -- conduct, rather, that sparked it, was how much the president has brought on himself by firing Jim Comey, by overreacting to revelations, by going on the attack. He has really made this bigger than it ever was.
BERMAN: How do you think the president likes his executive time this morning if he's reading the papers and watching TV and seeing that his lawyers are afraid he'll get caught lying. His lawyers are fighting not to have him talk to Special Counsel Robert Mueller's team, because they're afraid he will get caught lying.
Chris Cillizza, it is such an interesting place we're in this morning.
CHRIS CILLIZZA, CNN POLITICS CORRESPONDENT AND EDITOR AT LARGE: It's totally fascinating. I think the lawyers are right, John. We've seen when he has been deposed in the past, obviously not in this setting, but in past cases he has been caught not telling the truth or being forced to acknowledge he had not told the truth or exaggerated significantly in the past.
So if you are one of his lawyers, all you need to do is look at those past cases and say this could get dicey, particularly given the stakes. But what do we know about the president? Does not like to be managed and certainly does not like to be told not to do something. It's a sure recipe to get him to do something.
I think it's a question of how much power do his lawyers have over him? I think David is right. This is a negotiation. This is not a final decision on whether or not he will talk and in what form.
But we know that this president does not react well when people who he sees as working solely for him do not do sort of the appropriate amount of praise of him.
CAMEROTA: Politically speaking, David, there was once a time where people might ask, "Oh, what is the president hiding" if he refused that.
But because he is so against this investigation, because he thinks that it's so tainted and has telegraphed that a million different ways, he probably politically -- I mean, at least with his supporters, obviously can survive saying "I'm not going to take part in this."
GREGORY: I think so. I think it depends what we -- where we get and whether they are going to compel him to testify, whether they feel that they need him to -- not to testify but to answer questions. It wouldn't necessarily be under oath, of course. They could subpoena him at some port -- at some point. We just don't know at this stage.
But you have to make it very clear that the president has, I think, succeeded in what he has set out to do.
GREGORY: To undermine this investigation, to attack it at all fronts and to, with the benefit of some of his political allies, made the case that this is a garbage in, garbage out investigation, that you can't trust why they're investigating or what they'll conclude because there was original sin in how they began it. That is what the attack on the FBI and the Justice Department is about.
But you do have to wonder why the president is acting this way. What does he have to -- have to hide that he'd fire Jim Comey, that he wants to undermine Rod Rosenstein, the deputy attorney general, that he was mad at the attorney general for not protecting him more. These things start to add up. And the behavior, certainly in the mind of investigators and the special counsel, has to have them thinking, in addition to what they're actually finding through investigation, that something is amiss here.
BERMAN: So look, David and Alisyn, I think you bring up the key point here, it's fascinating to me that the White House thinks they've softened the ground enough that they can survive politically the president refusing to testify or at least fighting over it. It shows they think that they're winning to an extent this political battle, at least with the people they need to.
Chris Cillizza, let's get to the other political debate of the week, which is the Democratic memo in response to this Nunes memo alleging FBI abuses in the early stages of the Russian investigation is now on the president's desk. The president gets to decide, at least in the short term, if this goes public quickly. What kind of pressure do you think he faces here?
CILLIZZA: OK. Normal political standards, John, I think it's very difficult for him not to release the memo. We saw it voted out unanimously from the House Intelligence Committee, because if transparency is good for the goose, then transparency is theoretically good for the gander.
[07:15:14] But Donald Trump's calculation, we all knew Donald Trump was making the memo, the Nunes memo public, because it reinforced what he thinks. Right? He believes -- and he has said this -- he believes in a deep-state conspiracy embedded with the FBI that has worked -- has worked and continues to work to undermine him.
The Democratic memo presumably does not do that. And so it is a test of are you willing to do things that are not sort of directly supportive of your own personal belief system?
Again, a normal politician would do this, because he or she would understand that, by not doing it, you look like a hypocrite. You look like you're the only -- you're only willing to listen to and release information that supports your point of view.
I think he'll do it, but I just -- you know, again, I say this, like, 25 times a day, but predicting what Donald Trump is going to do based on the way in which politicians who have had offices like his before would do is just -- it's not terribly instructive.
CAMEROTA: I think is the word you're looking for.
CAMEROTA: David, so we have Congressman Adam Schiff on, who obviously is spearheading this rebuttal.
BERMAN: And is actually pretty tall.
CAMEROTA: I'm going to ask him how tall he is when he's here. But in any event, we have him on. Because then, if the president doesn't release this memo, then what? It could go to a House -- a full House vote. But the point is we're in uncharted territory here.
GREGORY: We are. And Paul Ryan the House speaker, has said that the Democratic memo should be released, maybe he'd be able to -- as the full House could do, release the memo and let this debate continue in a way that's not completely one-sided.
But the bigger issue here is the damage that's been done to the FBI. People I talk to who are inside and formerly with the FBI think that this has all set the FBI back by years to its reputation, to its effectiveness. And Americans have to live with that, with these attacks on the FBI, which is not perfect. And obviously, they have to get to the bottom of in terms of how the investigation was done, but there's something much bigger than the release of this memo that's at stake here.
BERMAN: All right. Chris, David, thank you so much for being with us this morning.
Now that the Democratic rebuttal is on the president's desk, do Democrats think the president will let it go public? We will discuss with a key member of the House Intelligence Committee next.
BERMAN: President Trump now has five days to decide if he will declassify the Democratic rebuttal to the Republican memo. The House Intelligence Committee voted unanimously to make the Democratic memo public.
Joining me now is Democratic congressman Jim Himes of Connecticut.
Congressman, thanks so much for joining us. If you were a betting man, do you think the president will allow this memo to go public?
REP. JIM HIMES (D), CONNECTICUT: I'll tell you, I've never seen this president participate in an effort that did anything other than make him look good. So you know, you've got -- as you pointed out, Speaker Ryan saying it should be out there.
But I guess I would bet against the White House saying what it said with the Republican memo, which was 100 percent it's going out. I think we're going to see some noise. I think we're going to see some obstacles.
BERMAN: Does this memo make him look bad? Is that what you're suggesting?
HIMES: Well, he'll perceive it that way. Because this memo, of course, is a point by point refutation of the Republican memo.
I would point out, John, though, that what is happening here is really not, you know, who wins the argument of fact. In some ways, it doesn't really matter all that much whether the Democratic memo gets out or not.
The truth is that every lawyer out there who's not four whiskeys into cocktail hour looked at the Nunes memo, considered this == and this is not just lawyers, this is national security people -- and said there's absolutely nothing there.
However, it served its purpose. Because now there's a meaningful percentage -- it's not a huge percentage -- but there's a meaningful percentage of the American people running around saying, "Gosh, that FBI, I'm not sure they're on the up and up. Gosh, this president. There's some question about, you know, whether there was some political bias in the investigation."
Facts aren't going to change that. And it's a terrible, terrible thing, because there was a time when people stood up for facts and what was true.
BERMAN: So you say there is nothing there. What the Republican authors of the memo -- and I've heard Devin Nunes speak out extensively on other networks, he says what the memo shows is that the Steele dossier, there were political motivations behind it. And the FISA court was not told. The FISA court was not told that the Steele dossier was funded with Democratic National Committee money and Clinton campaign money.
Is that -- in a vacuum, isolated issue here, is that true that the FISA courts were not told that?
HIMES: I don't believe the FISA judge was told that it was paid for with Clinton money. The FISA judge -- and I'm being real careful here, because it hasn't been declassified -- when the memo comes out, there will be no doubt that the judge understood that this had come out of a politically biased and politically adverse individual.
And remember, the question is not whether the source is bias. John, there are sources and there are informants all over every single day. Not a single one of them is unbiased. It is the job of the judge to determine whether the bias that the informant or the source brings to a particular process has, in any way, affected the veracity, the trueness of what is being offered to the judge. That's getting lost here.
What matters is not the underlying bias. There are no people out there who are not biased in one way or another. What matters is what was said and shown to the judge, was it true?
BERMAN: You're making the legal argument here, which if you look at the case law, is true. This deals with informants. I mean, Christopher Steele in this case is really an informant, and the judge has to determine the reliability of the informant; and in many cases, the informants are paid.
[6:25:06] And the issue is would the judge care about who the informant was paid by? There is a difference, I will say, in the minds of some between saying he was politically motivated and motivated by money from the Clinton campaign. Again, that may be a political argument, not a legal argument.
If I can move on to other subjects, though, we are hearing overnight from "The New York Times" that the president's lawyers are suggesting that he will not testify, he will not speak to Robert Mueller's investigators.
Last week CNN reported that they felt they hadn't met the standard to have the president sit down and talk to them. What do you make of it?
HIMES: Well, let's clear aside, again, all the political B.S. around this. If I were the president's lawyer, I would be horrified at the prospect that this undisciplined, "say what I want in the moment," don't be honest every other sentence I say, I would be horrified by the prospect of putting Donald Trump in front of an experienced questioner, in front of an experienced prosecutor. So that's what's happening.
What's puzzling to me, John, is two things. No. 1, this is going to set up a serious -- maybe constitutional crisis is too strong of a word, every other past president that has been asked to testify in front of an investigation has. So this raises a huge issue.
Secondly, my God, this is a man who from moment one has said this is all a big hoax. There's nothing there. The Democrats are making this up. Mr. President, if that is true, there is absolutely no risk to you sitting with Mueller's investigation and telling the truth.
BERMAN: All right. I want to move on to one last point here, and this isn't so much having anything to do with the investigation. It does have to do with the president's words and an accusation he made against you and your fellow Democrats for how you behaved during the State of the Union address. This came during his speech he gave in Ohio yesterday.
Let's listen to the president.
(BEGIN VIDEO CLIP)
TRUMP: 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: So the president of the United States called Democratic members of Congress treasonous, un-American and suggested that you don't love the country very much.
HIMES: You know, John, it is yet the latest installment of this president taking our democracy and our country into the gutter. There are Nicaraguan dictators, there are Asian dictators who would be embarrassed to call their political opponents, because they happen to disagree politically, treasonous or un-American. It's quite frankly pathetic.
Now, John, I also need to note, this is a long tradition. And lots of Democrats applauded at lots of things. but eight years ago my very first speech with the brand-new President Obama, a Republican stood up and shouted, "You lie." I would suggest that standing up and shouting, "You lie" is a little bit less dignified, a little less thoughtful than people not applauding for things that they disagree with.
But the larger point here, John, is that this president and in that moment dragged this country deep into the mud of autocracy and dictatorship, as opposed to the kind of democracy that, whether you watch FOX News or Rachel Maddow, you ought to aspire this country to have.
BERMAN: Congressman Jim Himes, we watch NEW DAY. Thank appreciate you being with us. Thank you very much, sir.
HIMES: Thank you, John.
CAMEROTA: OK. As we've been discussing, Republicans wanted the Nunes memo released. Do they feel the same way about the Democratic rebuttal? We ask Republican Congressman Chris Collins that and more next.