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Erin Burnett Outfront
Conflicting Reports on Mubarak's Health; Eunuchs in Washington; Rubio out of the Running?; No Charges for Killer of Suspected Molester; President Obama Speaks at G20 Summit
Aired June 19, 2012 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ERIN BURNETT, HOST: OUTFRONT next breaking news, reports earlier today that Hosni Mubarak was clinically dead. Meanwhile look at this, Tahrir Square filled with protesters. This is not filed tape. This is live, 2:00 a.m. in Cairo, Egypt on the edge.
And the president about to speak in just a few moments live on the crisis in the Euro zone. We're going to bring that to you when he begins and Jamie Dimon back to Capitol Hill today. This session much more intense than last time, let's go OUTFRONT.
Good evening. I'm Erin Burnett.
OUTFRONT tonight breaking news, Egyptian state media reporting that former Egyptian President Hosni Mubarak has been declared clinically dead. Mubarak's lawyer and the military contradict those reports though saying that he's in a coma. Ivan Watson is in Cairo live tonight. Ivan, what a day it has been there. What are your sources telling you?
IVAN WATSON, CNN CORRESPONDENT: Good evening, Erin. Well again, these conflicting reports, where we have state media on the one hand saying that Hosni Mubarak is clinically dead, the 84-year-old former president who ruled this country for nearly 30 years. And then we have the Supreme Council of the Armed Forces which took over after he was ousted a year-and-a-half ago saying no, he's not dead. He's in critical condition. He suffered a heart attack and a stroke and has been choppered to a hospital from the prison where he has been held since he was convicted of being an accomplice to deaths of hundreds of protesters here in Tahrir Square and in other Egyptian cities a year- and-a-half ago -- Erin.
BURNETT: And Ivan, Tahrir Square obviously tonight people are still there gathering through the day as both sides in the contested presidential election declared victory. How on the edge is the situation?
WATSON: I don't think it's on the edge, but there's clearly a political power struggle under way. And there have been seismic political changes here in the last week. You just had presidential elections, the final results have not been announced yet. The people who gathered here are supporters of the Muslim Brotherhood candidate, Mohamed Morsi, who has claimed victory with 52 percent of the vote. His claims -- those claims are being challenged by the other candidate, Ahmed Shafik, who is Mubarak's hand-picked prime minister. Meanwhile, the generals who have been running the show here have made a power play. They have dissolved the parliament within the last week. They have instituted basically martial law saying military officers can arrest civilians and try them before military tribunals and they've seized many of the powers by a decree Sunday night while the votes were still being counted, many of the powers that used to be held by the president, all of this being done in a constitutional vacuum.
There is no constitution now, and the crowds that are still here are chanting "no to military rule." They don't give a damn about Hosni Mubarak. They want power to be handed over from the generals to their man, the Muslim Brotherhood candidate, who they hope -- they think was elected president -- Erin.
BURNETT: All right, Ivan Watson, thank you very much, reporting live from Cairo tonight.
And our other top story, eunuch (ph) reforms of American banks. The frustration of Barney Frank, the co-author of the financial reform in this country, was palpable today when he got his five minutes of questions to JPMorgan Chase CEO Jamie Dimon over Dimon's multibillion dollar trade losses. We boiled the exchange so you can get the whole five minutes in summary to this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You said you have a fortress (ph) balance sheet. That assumes there is something special about your -- the way you are that made us have to worry less. But we can't assume that's going to be the case for every financial institution.
UNIDENTIFIED MALE: But I also said it would be solidly profitable this quarter. So relative to --
UNIDENTIFIED MALE: That's not the question, Mr. Dimon.
(CROSSTALK)
UNIDENTIFIED MALE: Please don't filibuster. But let me ask you now. I'm sorry, Mr. Chairman, I ask specific questions, Mr. Dimon well knows what we're talking about. Is there a danger that this kind of activity in a financial institution, an (INAUDIBLE) institution with less of a strong balance sheet might cause some problems?
UNIDENTIFIED MALE: I don't know, but I think you should all take comfort in the fact that all-American banks are better capitalized. The system is far stronger today.
UNIDENTIFIED MALE: I appreciate that, Mr. Dimon. That wasn't the question I asked. The commodities futures trading commission budget was 200 million for the year. It's been proposed to cut it, the president has proposed to raise it to 308, not -- seem to be a huge sum. Do you think at the level of 180 million that's -- you can get smart regulation out of the CFTC? UNIDENTIFIED MALE: I have never looked at the CFTC's budgets; I don't know what they need and so it would be almost impossible for me to comment on it.
UNIDENTIFIED MALE: Well, I'm disappointed.
(END VIDEO CLIP)
BURNETT: Here we are. Now just for the count, 699 days since the financial reform bill called Dodd/Frank was signed into law. And you know what? We still don't actually know what should be in the 848 pages of the bill. There are still a lot of blanks. Lobbyists are still fighting. There are unanswered questions, like things that got JPMorgan in trouble, derivatives, the financial tools that are supposed to hedge risk, but did not succeed in the financial crisis.
They were responsible for the crisis the country had. According to a monthly report by the law firm Davis Polk (ph), only about half of the rules that actually would regulate derivatives in the Dodd/Frank bill have even been finalized. That means regulators don't know the rules. They didn't even have the authority to look into JPMorgan's trade book. And as we've been saying on this show, JPMorgan, America's biggest bank is a lot bigger and more complicated than it was before.
Its assets are 49 percent bigger than before the financial crisis ironically thanks to Washington and regulators who pushed Jamie Dimon to buy Washington Mutual and Bear Stearns to save the financial system. OUTFRONT "Strike Team" member John Paul DeJoria, the founder and CEO of Paul Mitchell (INAUDIBLE) is with us -- great to see you John Paul. This is just amazing, 700 days after Dodd/Frank was passed. You may love the bill or loathe the bill. But this is insane failure that we still don't -- it's still -- the lines aren't even filled in.
JOHN PAUL DEJORIA, FOUNDER, CEO OF PAUL MITCHELL: Total insanity. In fact, when you look at regulations, federal government, why don't you regulate yourself first? There are too many regulations. Last administration, we got into a war, because we were told things that weren't true. This administration, hey, no more lobbyists, no more pork barrel spending. Why don't you regulate what our presidents are saying and make sure they're saying the truth before you start regulating more regulations on American business? It just doesn't seem right. And then you can't even come up with an answer.
BURNETT: And then here we are in a situation where I mean, a lot of people have come out and supported Jamie Dimon that it was a mistake. But perhaps a mistake made because he successfully fought financial reform.
DEJORIA: Yes.
BURNETT: And his bank is too big to manage.
DEJORIA: Interesting, isn't it? When this first came out, their stock was at $40 a share. It went down to $30 a share. Now it's back up to about $35 a share going back up towards 40. But I checked with my financial people. The dividend, was it affected at all by this -- absolutely not. People make mistakes in business. Just like our government has made some pretty big boo-boos, both administrations, none in particular, OK?
BURNETT: Right.
DEJORIA: However, we make mistakes. We correct the mistakes. They made a boo-boo, but at least the guy stepped to the front and said I am the CEO, I'll take responsibility even though he didn't make the actual decision where the money was invested. I feel that give the guy a break. He made a mistake. Let them learn from their mistake. No dividends were affected whatsoever. And they can make up for it here in the months to come like any business would.
BURNETT: Right. Now, I mean -- I like how you're an optimist. I'm sort of just in the camp of hey, I'm glad the mistake wasn't so much bigger --
(CROSSTALK)
BURNETT: -- and then it would have hurt things.
DEJORIA: Really.
BURNETT: But when you say he took responsibility, I wanted to play you another back and forth between him and Barney Frank and here it is.
DEJORIA: Sure.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Will the clawbacks for compensation -- is your compensation on the table for consideration of clawbacks?
UNIDENTIFIED MALE: All of the -- this whole act will be reviewed by the board.
UNIDENTIFIED MALE: Yours specific -- specific question --
UNIDENTIFIED MALE: My compensation is 100 percent up to my board.
UNIDENTIFIED MALE: Is it under --
(CROSSTALK)
UNIDENTIFIED MALE: Mr. Dimon you said there would be clawbacks for people responsible. Is your compensation in the pot that's going to be considered for that?
UNIDENTIFIED MALE: They will do what they see is appropriate. I can't tell my board what to do.
(END VIDEO CLIP)
BURNETT: OK. But can he tell his board, I should be held responsible? I should have a clawback? I mean, isn't it sort of ridiculous not to?
DEJORIA: Exactly. Yes, he can. John Paul Mitchell Systems is private. And I own the majority of the company. The last three years, we are very profitable and we grew every year. I told my board, if I did a good job, give me a $1 raise, that's it, period. Leave the rest of the money in the company so we can have more affordable products, not big price increases. You sure can.
What he should say is I'm paid a fortune. Guys, if you think me taking responsibility screwed things up a bit, give me little to no raise or little to no bonus. I'm making a fortune anyway guys.
BURNETT: Right.
DEJORIA: Let me be the fall guy and act accordingly financially (ph). That's what he should do.
BURNETT: That seems like the right thing to do.
DEJORIA: That's America.
BURNETT: Right. Say don't give me a bonus --
DEJORIA: No --
BURNETT: -- because I was responsible.
DEJORIA: That's America.
BURNETT: I'm sorry. I messed up.
DEJORIA: Exactly.
BURNETT: I'm going to put my money where my mouth is.
DEJORIA: Or at least reduce it. That's the American way.
BURNETT: Right. All right --
DEJORIA: That's what America is looking for.
BURNETT: All right, John Paul DeJoria thank you very much.
DEJORIA: You bet you.
BURNETT: We appreciate it. And OUTFRONT just moments away from the president's address to the nation. That's going to be live in a moment. Plus, Mitt Romney made a surprise announcement just a few moments ago about Marco Rubio.
And a grand jury decided whether a father will be tried for murder. The dead person was a man that he discovered inside his house sexually abusing his daughter. Does it add up?
(COMMERCIAL BREAK)
BURNETT: Our second story OUTFRONT, the changing story on Marco Rubio for vice president. "ABC News" reported this morning that the charismatic young senator from Florida wasn't actually even being vetted for Romney's VP slot. Now anybody who has been, I don't know, par taken of any sort of taste of cable news over the past year would know that that is a shocking revelation. But a Romney adviser confirmed the story to "The Washington Post" saying Rubio was not being, quote, "seriously considered". But Mitt Romney himself made three stops on his bus tour today, Press Corps in tow. He did not comment on this. He did not comment on Rubio for 12 hours and then he did.
(BEGIN VIDEO CLIP)
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: The story was entirely false. Marco Rubio is being thoroughly vetted as part of our process.
(END VIDEO CLIP)
BURNETT: John Avlon, Reihan Salam and Roland Martin. Now Reihan, why did he take 12 hours to say that?
REIHAN SALAM, CNN CONTRIBUTOR: That's a good question. I'm not sure why, but what I will say --
BURNETT: I love you, Reihan, for just saying you know what -- you can just come up with some excuse, you say no I don't know. That's ridiculous.
SALAM: Look because I mean you know it's a campaign. There are a lot of moving pieces. But I do think that even if he is saying that he's vetting Rubio, I think there's a very good reason not to vet Rubio and it's this. This election is either going to hang on the southwest as the swing region or the Midwest as the swing region. And I think that right now, it would make a lot more sense for Mitt Romney to pick someone like a Tim Pawlenty rather than a Marco Rubio. You don't necessarily acknowledge that at this phase and fair enough. But I think that it's quite sensible for them not to be vetting Rubio at this stage.
JOHN AVLON, CNN CONTRIBUTOR: I do know why he waited 12 hours and cleaned it up.
BURNETT: Why?
AVLON: Because he was trying to clean up a political mess, because someone told the truth, and it was a necessary insult and it was causing real problems for the campaign. This is political --
BURNETT: So you think he really isn't vetting Rubio --
AVLON: Rule number one, everybody lies. This is that going down. And this is absolutely trying to clean up a political mess in public after 12 hours because it was an unnecessary insult to the Latino community, to Senator Rubio and to the state of Florida, frankly.
BURNETT: Roland --
ROLAND MARTIN, CNN CONTRIBUTOR: No, it's not. No, it's not.
UNIDENTIFIED MALE: Thank you, Roland.
MARTIN: No, can we stop sitting here playing this game? You know Erin, I just finished interviewing Ice-T for my TV One (ph) show, so let me go a little hip-hop. Romney got played. That's exactly what happened here. He got played.
He should have stuck to his original script, and that was I am not commenting on our VP search. Two people know exactly who is getting vetted. Here is the problem now. Every day between now and when he chooses his VP nominee, he's going to get the question are you also vetting Chris Christie? Are you also vetting this person? Are you vetting this person --
BURNETT: Oh, yes, he set a bad precedent --
MARTIN: He should have never walked into this, and he should have simply said, I am the candidate. I make the call, simple as that. I'm not addressing this issue.
(CROSSTALK)
AVLON: But Roland, you know as well as I do, you got two senior staffers, not just ABC, but then reaffirming to "The Washington Post" something as controversial as this on the day that Rubio's book launches, that's an intentional shot. That's a problem of controlling leaks inside your own campaign.
MARTIN: OK.
BURNETT: But doesn't that --
(CROSSTALK)
BURNETT: -- the Romney campaign.
AVLON: Sure it does --
BURNETT: It's supposed to be so you know --
(CROSSTALK)
BURNETT: -- perfect on this front.
AVLON: Well there is a practical reason also not to diss (ph) Marco Rubio because frankly he would be a good pick. I think he would be a very strong pick, not only bring Florida, generational gap, necessary outreach to the Latino community which feels deeply snubbed, but could also bring some other states in the mix. So look, I don't know that it will be Marco Rubio. But not saying he's -- the consideration set is an unnecessary insult (INAUDIBLE) far more damage --
MARTIN: But Marco Rubio himself has said multiple times Erin that he was not going to be the VP nominee. He didn't want to be, so fine. Stick with his word in it. All I'm simply saying is --
UNIDENTIFIED MALE: You don't believe that --
MARTIN: -- you have now opened this box. And it's not some kind of insult to the entire Latino community because he wasn't considering Senator Marco Rubio. He's one guy who is a junior senator, please stop --
BURNETT: Let me read a quote from a member of my "Strike Team", Reihan, Carlos Sierra (ph), former campaign manager for Buddy Roemer for president.
SALAM: OK.
BURNETT: Quote "Romney can spend all the money his Hispanic strategists tell him to, but they're taking him for a ride because there is nothing he can do to get the Hispanic vote this cycle."
SALAM: Well here's how I see it --
BURNETT: In that case, forget Marco Rubio --
SALAM: If you look at the number of --
BURNETT: That's not going to do it for you.
SALAM: If you look at the number of states where the Latino share of the electorate is bigger than 10 percent, it's not a very big number of states. A number of those states that are swing states are small Colorado, Nevada and Florida are swing states. And Florida --
(CROSSTALK)
SALAM: -- the Latino community there -- it's not a swing state -- not this time around. So when you look at Florida, that's a state that's moving in the GOP column pretty comfortably, so Colorado and Nevada are the states. Together they have 15 electoral votes. Think about Michigan --
BURNETT: Right.
SALAM: -- Wisconsin, Pennsylvania, Ohio. Those are the states that are going to determine who gets elected president. And those are not states in which the Latino vote is going to be critical this time around.
BURNETT: So Roland, should he put another guy who looks and sounds a lot like him, good looking, thin, tall, white guy as his VP then --
MARTIN: No. Here's the deal.
BURNETT: -- from one of those states? Nobody is -- OK, tell me, please. Raise your hand if you voted in 2008 because of Joe Biden. No. If you're going to vote for the presidential ticket, you're voting --
SALAM: Joe Biden disagrees with you --
MARTIN: You're voting for the person -- you're voting for the person at the top of the ticket. That's like saying that the GOP is considering Allen West. Somehow black folks are going to be saying oh, my goodness, let's run for the Republican side.
(CROSSTALK)
AVLON: That's exactly right. That's important. The VP picks the first presidential decision a nominee makes and it does say a lot about their values, about what they're thinking about balancing their profile. Some VP picks do make a huge difference. Lyndon Johnson in 1960 got JFK elected to the presidency. Sarah Palin hurt John McCain dramatically with independent voters, something that conservatives are belatedly coming to recognize --
BURNETT: Chris Christie could be his fighter, his boxer.
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED MALE: I agree.
(CROSSTALK)
SALAM: I think it could also make a difference in Pennsylvania with suburban voters throughout the Northeast. I think that you know --
(CROSSTALK)
SALAM: -- move the needle, but I do think that the idea is that certain vice presidential picks can reinforce a narrative about the candidate at the top of the ticket, as Roland suggests.
BURNETT: Yes.
SALAM: And the thing is that do you go Midwest, blue-collar with someone like a Tim Pawlenty or do you go for young, Latino and go got Marco Rubio --
(CROSSTALK)
MARTIN: You vote for somebody --
(CROSSTALK)
MARTIN: You vote for somebody who is going to be able to tell your message on the stump, regardless of who they are. Not this nonsensical thing -- just like it's also insulting to say that Sarah Palin has somehow discounted all women on the Republican side. That's nonsense. You pick the best person for it, regardless of Latino or white or black or female.
BURNETT: All right. Thank you very much.
SALAM: Thank you.
BURNETT: Still ahead North America no longer home to a very telling measure, the rise of Asia and what it means to America's not- so-rich and does it add up? A man discovers his daughter being sexual assaulted. He attacked the man doing it and the man died. The father could now be charged with murder -- the grand jury's verdict, next.
(COMMERCIAL BREAK)
BURNETT: A new report shows us where the world's millionaires live. And for the first time, most don't live in North America. They live in Asia. To be exact, 3,370,000 millionaires call Asia home, 20,000 more than in North America, a big victory for China, right? Well not so fast because, you know, if you look at it North America includes Canada, there are a lot of countries in Asia. And if you break it down country by country, the U.S. is still number one followed actually by Japan and Asia, and then by Germany.
The report comes from Capgemini (ph) and RBC Wealth Management. And you may be saying well just how many millionaires are there around the world? Well that's our number tonight, 11 million. To be exact it is a far cry from one percent of the population. It's actually .0016 percent of the world's population. Not quite as catchy as one percent.
Well a Texas father who says he discovered a man trying to molest his 5-year-old daughter and in a fit of rage beat him to death will not face charges for the killing. The grand jury met today and declined to return an indictment against the father in the death of 47-year-old Jesus Mora Flores (ph). The father had told police he heard his daughter scream, he went into the house and caught the man trying to molest her. He admits hitting the man. He says he didn't mean to kill him. Martin Savidge joins us with the latest, and Martin, what was the specific reason why the grand jury just declined to charge the father at all?
MARTIN SAVIDGE, CNN CORRESPONDENT: Well, the specific reason is that they basically determined this was a case of self defense. It was a father that was defending his daughter. Clearly they found -- he found a molester in the act. He alleges that this molester was attacking his daughter and the only way to stop it was to drag him off and then in a fit of rage he beat him. What's interesting here is the DA in this case said that she has never seen a circumstance where the evidence was so clear-cut. Here's how she described the evidence.
(BEGIN VIDEO CLIP)
HEATHER MCMINN, LAVACA COUNTY DISTRICT ATTORNEY: A substantial amount of evidence showed that the witness statements and the father's statement and what the father had observed was, in fact, what had happened that day. The 5-year-old victim had sustained some physical injuries that were noted by the same nurse and were absolutely consistent with all of the witness statements.
(END VIDEO CLIP)
SAVIDGE: And the father was extremely remorseful in the 911- call. Again, no charges, and most people understand why.
BURNETT: That's certainly the truth. Thanks very much to Martin Savidge there.
The president is about to speak live. We're going to be bringing you his prime time address in just a moment.
(COMMERCIAL BREAK)
BURNETT: Welcome back to the second half of OUTFRONT. We start with stories we care about. We focus on our own reporting from the front lines.
Well, there are conflicting reports tonight surrounding the health of Hosni Mubarak, the 84-year-old ex-Egyptian dictator.
Egyptian state news said Mubarak is clinically dead. Mubarak's lawyer told CNN he's in a coma. He's not dead as reported. Earlier today, Mubarak suffered a stroke and cardiac arrest.
Meanwhile, thousands of demonstrators returned to Tahrir Square tonight to protest the military's power grab. Both presidential candidates are claiming victory in the historic election. Tahrir Square is still full tonight.
And the meeting between Attorney General Eric Holder and House Oversight Committee Chairman Darrell Issa ended without them resolving their dispute. Issa asked Holder for more documents relating to the botched firearm sting dubbed Operation Fast and Furious. After the meeting, Issa said Holder failed to provide the documents he wanted, which means for now the committee will continue with its plans to hold a contempt vote against Holder tomorrow.
Well, after two days, formal talks between Iran and the six world powers have concluded for now. They agreed to have lower level officials meet on July 3rd to go through technical issues. We watched the press conference after the meeting.
E.U. foreign policy chief, Catherine Ashton, said after the tough and frank talks, it's clear there are still significant gaps between the substance of the two positions.
And a new study is shedding some light on just how overweight Americans are. According to the London School of Hygiene and Tropical Medicine -- what are you saying about us, London? If every country had the obesity levels of the United States -- holy cow, the increase in weight would be equivalent to adding an extra 935 million people to the global population. We've got 7 billion now. That's another billion. That's incredible. Right now, North Americans account for 34 percent of the world's body mass. It looks like we'd be the legs on the body.
All right. It's been 320 since the U.S. lost its top credit rating. What are we doing to get it back?
Investors are hoping the Fed is going to bail us out yet again. Stocks up a percent on hopes tomorrow, Ben Bernanke may come out and say, hey, I'm going to do more even though the last time I did something it didn't work so much.
All right. Well, we are expecting President Obama to begin speaking at any moment. He is in Mexico for the G20 Summit, where the main focus for the past two days has been the crisis in Europe, sluggish global economy. He met with European leaders. He also met with Chinese President Hu Jintao, who by the way, he's number trading partner is Europe.
And the president is going to wrap-up his visit with a press conference any moment now. We're going to bring that to you live. Literally, he could be coming up to the podium any moment. So, we're monitoring that.
In the mean time, let's bring in John Avlon and David Frum.
Let me start with you, David Frum. It's interesting. We got about a 24-hour warning that the president was going to be giving this prime time address to the country. And we're still not exactly sure what in detail he's going to go into.
I mean, is this something that he would have written before? I mean, how -- usual or unusual is this?
DAVID FRUM, CNN CONTRIBUTOR: It's kind of unusual to book time when you don't know exactly how things are going to go, which makes me think they had a fair idea of how things were going to go. They -- there may be some formalities, but whatever is about to be discussed must have been negotiated in advance.
Here's the thing that I would be -- I'll be curious to hear. If I were -- I assume what's going on at this conference, it's a game of everybody -- either beg or bully Angela Merkel into bailing out the other European countries.
If one were Angela Merkel, you presume her answer to that would be, OK, Mr. President, what are you putting into the pot? If your economy is on the line too, will you make through the IMF or some other arrangement some kind of American contribution? And that will be an interesting question to think about during the remarks today.
BURNETT: Interesting. I bet you're right. We have put a lot into the IMF. And I don't know that Europe helped us during our crisis. I'm sure they wanted to. I mean, everyone, I'm being a little tongue in cheek, but still.
The Fed has the spigots open to Europe already, John Avlon, but there must be some sort of an announcement that they're going to work together, right?
AVLON: Well, one would hope. I mean, this is a precarious moment in the history of globalization.
BURNETT: Yes.
AVLON: Right now, the G-20 meeting, all these leaders realize they need to stabilize the ship of state not only in their own countries and their own economies, but collectively. Because if any of them falls, the contagion could be dramatic. And the illusion that contagion doesn't occur we now realize is fundamentally false.
The question will be what sort of leadership role is President Obama going to be trying to articulate to the American people tonight in his statement? Is he going to be announcing some sort of breakthrough? How is he going to be establishing America's role in helping solve the global problem when it can't be solved by America alone?
BURNETT: David Frum, this is a really tough spot he's in, right? He doesn't want to take too much of a leadership position, because the United States doesn't want to be -- the people don't want to be bailing out Europe. But yet, what Angela Merkel does could determine whether or not President Obama gets re-elected.
FRUM: Well, my joke of the season has been, there's only one swing state that counts in 2012, and it's Germany.
But, look, here's where John Avlon makes a very important point. When you say how does the mechanism of contagion work? Spain, which is the next country on the firing line after Greece, and a much bigger economy than Greece -- Spain was the largest issuer of asset-backed securities of any European country except the Netherlands, which is an international banking center.
But the Spanish-backed securities are domestic. Spain issued way more than France and Germany combined. What that means is that every Spaniard who has a debt to a credit card company, a car loan, a mortgage, a debt that is owed in euros, that debt is contained probably, in some bond, owned by somebody else, maybe half a world away, New Zealand or Brazil.
And if Spain stops using the euro and starts using the new peseta, all of those bonds and portfolios all over the planet take a nasty hit and could be -- for example, the portfolio that guarantees one's own retirement or one's own insurance.
BURNETT: Yes. I mean, it is pretty amazing when you think about -- if you have a money market, anybody, if you have money, John, in your bank, money market fund, 15 percent of that money could be in Europe right now. You don't know it. I mean, it is inextricably tied to this country.
AVLON: That's right. I mean, this is -- AIG with sovereign states. It really does illustrate what an extraordinary moment this is. And to David's point, the fact the finance ministers in foreign nations have such dramatic impact and political fortune as the president cannot be in their entire control, that's an extraordinary sign of the changes that globalization has brought, really.
BURNETT: All right. I want to bring in Wolf Blitzer, who's with us as well.
Now, Wolf, I mean, this really is a tough moment, a challenge for the president in terms of how to walk this, because he's got to look like he's in control as the biggest and most important economy of the world, but he doesn't want to look like he's sort of bailing out Europe or, you know, politically looking in bed with Europe.
WOLF BLITZER, CNN ANCHOR: Well, everything is going to be seen within the context at least here in the United States of the presidential election. And there's no doubt, the president is walking a delicate tight rope right now. He's got to deal with the crisis in the eurozone. That's obvious.
And I'm sure his opening statement, he'll restate how things are at least moving a bit in the right direction following the Greek elections over the weekend. He's going to open with that opening statement, but then he's going to take questions. And I suspect there will be several questions, (a), on what's going on in Syria right now, the tension between the U.S. and Russia over Syria. There will also be questions on Egypt right now.
BURNETT: Right.
BLITZER: The conflicting reports as you have been noting, Hosni Mubarak, is he dead, clinically dead, in a coma, what's going on there and this huge demonstrations that have emerged today in Tahrir Square, given the election results are officially supposed to be announced on Thursday.
So you've got the economic crisis, you've got Syria, you've got Egypt, and you've got a presidential election. I'm sure the American reporters who are going to be asking questions following the president's opening statement at the conclusion of this G20 summit, they've got some good questions.
And typically at these G20s, G8s, the host -- the country -- the various leaders do have a little one-on-one news conference with the traveling press corps. This is the president's opportunity to answer a few questions. And he's doing it in prime time here in the United States, on the East Coast, at least.
BURNETT: Right.
BLITZER: I think Los Cabos is Rocky Mountain Time, two hours behind the East Coast out in Mexico.
BURNETT: Yes. And that's where Brianna Keilar is.
Brianna, what are you hearing the president will say? Obviously, we're still awaiting when he'll come up to the podium. But is the speech itself, comments, mostly focused on the economy G20, will he talk about Syria or Egypt?
BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Yes, his comments will be focused mainly on the eurozone crisis, no doubt because of questions he'll be talking about Syria. But the communique of the G20 leaders just came out. This is sort of the wrap-up for the summit, their goals, putting everything together.
And really the headline is what some of the eurozone leaders are here for, the 17 eurozone nations here at the summit, saying that against the background of renewed market tensions, euro area members of the G20 will take all necessary measures to safeguard the integrity and stability of the area.
So, this is them saying we are going to do something, we're going to find a solution. And that really speaks a lot to what President Obama came here to the summit to communicate to these leaders. Not just President Obama, but other G20 leaders. Get it done. That was really their message.
There was a lot of pressure on European leaders here at this summit. And we're expecting President Obama to kind of reference what is said in this communique, Erin, to say that eurozone leaders understand they have to do something. And that's sort of his diplomatic way of another little push.
BURNETT: Right. I mean, I'm sure -- you know, to our viewers, he's going to try to do that. The problem, of course, anybody watching the euro crisis, they have said repeatedly they're going to take necessary measures and haven't done that.
So, I mean, John Avlon, that is a big problem. Angela Merkel can say that, but it's not actually happening. And everybody can see that the rhetoric is in direct conflict with the reality right now.
AVLON: Absolutely. A communique is not a solution. I mean, this is not a time for sort of, you know, further study and vague directives. This is a time where people are looking for action, for real commitment. If there is anything less, a communique about good intentions going forward, it's going to fall flat.
BURNETT: And, David Frum, the other challenges, as Wolf said, even in the question and answer session with reporters, if he's asked about Syria, everyone was looking today at the pictures of the president and Vladimir Putin. Putin today commented on Syria. It seems to be, look, no one has -- here's what he said. "No one has the right to decide who should be in power and who should step aside."
So really flying in the face, obviously, of the president's position or the U.S. position that Bashar al-Assad has lost his legitimacy.
FRUM: Right. Well, from Vladimir Putin's point of view, once you allow the population of a country to decide who should rule it, I mean, that's a principle that has some pretty ugly implications. You can see why he would take that view. No one has the right to decide, except the person who holds the power. BURNETT: Yes. And I -- I heard your -- I heard your chuckle as you said that.
But, Wolf, this is going to be an interesting question, whether someone will say -- ask the president, did you have a direct conversation with Vladimir Putin about how you're not on the same page, or sort of who controls that relationship between the U.S. and Russia? OK.
BLITZER: They clearly are not on the same page as far as Syria is concerned. That was obvious yesterday when they had that meeting and this is the first meeting that the president has had with Putin since he resumed his presidency, he had been prime minister in a few years. Now, he's president once again.
And by all accounts on this one issue of Syria, there are strong disagreements between Russia and the United States. There's no doubt about that. And the Russians continuing, even as we speak right now, to provide military assistance to Bashar al Assad's regime, also making it clear, no one should interfere in what Putin calls the domestic affairs of a sovereign, independent country like Syria. He just said a little while ago in his wrap-up news conference which just wrapped up in Los Cabos.
He said it's the fundamental position that no one has the right to decide for others who should be in power, who should step aside. He acknowledged part of the Syrian people represented the armed opposition that wants Assad to go. But he also said this is not all the people.
So clearly, the U.S. position, the Obama administration's position, is Bashar al Assad must go. There can be no future in Syria with Bashar al Assad remaining in power.
I suspect there will be some questions on Syria, but I also suspect there will be some questions on Egypt. And, Erin, let's not forget, the United States still providing Egypt with $1.3 billion a year in military assistance, and U.S. officials are looking -- are looking at that crowd at Tahrir Square right now, mostly supporters of the Muslim Brotherhood. They're looking at what's going on and they're deeply concerned.
BURNETT: Yes, well, that kind of -- I think there is no other word for it -- if there is not a democratic solution, Egypt's hypocrisy is something he's going to have to answer to.
Brianna, what backdoor meetings or behind closed door meetings has the president had there? Has had anything else with Vladimir Putin, maybe developments on Syria that we may not be aware of or something to do with Egypt? What have you heard?
KEILAR: Well, I think what's interesting is that the meeting with Vladimir Putin went for so long, about two hours. And certainly, you're not getting the whole story when you hear the readout from the meeting.
BURNETT: Right.
KEILAR: But talking to some White House officials, they insist, even though there is this chasm, it appears, between the stances of Vladimir Putin and President Obama, they say there is a middle ground. And they say over time there are implemental movements. That if you were to look at this in say, time, obviously, these things don't happen immediately, they do believe that Russia can be moved at some point.
But the question obviously is what does this look like? You're even getting mixed signals. I mean, you heard Vladimir Putin say pretty adamantly that he stands by his fundamental position on this. But according to a "Reuters" report, Prime Minister David Cameron of Britain said his understanding is very different, that Putin actually does not believe that anymore that Assad has to stay.
So obviously, there appear to be some different interpretations of that that we're trying to figure out. But it's really this question of what exactly would the commonalities on this be, because we heard Putin say that yesterday. That he thinks some commonalities can be found. We just don't have details on it.
BURNETT: This is tough. When you think about these issues, David Frum, that are out there -- so he'll give his speech. But, again, it seems it's going to be almost impossible. In fact, I would say it is impossible for him to give a real answer to the European crisis that's going to satisfy the world and the markets -- Syria, Egypt, similarly.
Why would you choose to take reporter questions in prime time when you don't have solid, great, strong answers to the tough questions?
FRUM: Well, he may feel he does. The president has a high opinion of his abilities to speak to a group. He may have -- he may have some news. He also -- President Obama actually has been very sparing with press conferences.
And he may be just ramping up his exposure in a controlled environment. And that would be a welcome thing. The president should take questions from the press.
BURNETT: All right. And, Wolf, do you think a lot of this is sort of, look, I'm happy to take the time in the evening, the American people are watching, it's political season. Like or loathe the questions, I want the exposure?
BLITZER: You know, there's -- I think to a certain degree, this puts him on the international stage, and it gives him this platform with all these world leaders, and politically, I'm sure some of his advisers believe this is going to help him, show that the office of the presidency, if you will, there is no doubt that this often -- oftentimes helps an incumbent president seek -- get himself re- elected.
One of the things that I noticed, Erin, in the statement that was put out just a little while ago, the joint U.S./E.U. statement, the European Union statement. Here are the words that began. You may hear this from the president at his opening statement momentarily.
The transatlantic relationship is the world's largest economic relationship, accounting for half of global economic output, and nearly $1 trillion in goods and services trade and supporting millions of jobs on both sides of the Atlantic.
The key words: millions of jobs on both sides of the Atlantic. I suspect we'll hear the president say in his opening remarks that what he's doing at Los Cabos right now with his G20 is helping to create jobs, to strengthen the U.S. economy. He's working for the American people on this international -- in this international forum to do what needs to be done.
And I suspect that will come through in his opening statement. We'll see how much -- how many of the -- how many questions he takes, first of all, from reporters, three, four or five questions from the American reporters who have assembled there. And we'll see what subjects come up in this news conference.
But there's no doubt that the president will try to explain to the American audience who will be watching that this is important work to strengthen this U.S. economy, and that so much is at stake for American jobs.
Here is the president right now.
OBAMA: Since this is my last visit to Mexico during President Calderon's time in office, I want to say how much I valued Felipe's friendship and the progress that we have made over the past several years. And building on the spirit here at Los Cabos, I'm absolutely confident that the deep ties between our countries will only grow stronger in the years to come.
Now, over the past three years, these G-20 summits have allowed our nations to pull the global economy back from a freefall, and put us back on a path of recovery and growth. In the United States, our businesses have created jobs for 27 months in a row, more than 4 million jobs, in all. And our highest priority continues to be putting people back to work even faster.
Today, we recognize that there are a wide range of threats to ongoing global economic recovery and growth. But the one that's received the most focus, obviously, and that is having a significant impact in the United States as well as globally, is the situation in Europe.
As our largest trading partner, slower growth in Europe means slower growth in American jobs. So we have a profound interest in seeing Europe prosper. That's why I've been consulting closely with my European counterparts during this crisis, as we have done here at Los Cabos.
I do think it's important to note, however, that most leaders of the eurozone economies are not part of the G-20. The challenges facing Europe will not be solved by the G-20 or by the United States. The solutions will be debated and decided appropriately by the leaders and the people of Europe.
So this has been an opportunity for us to hear from European leaders on the progress they're making and on their next steps, especially in the wake of the election in Greece and because they're heading into the E.U. summit later this month.
It's also been a chance for the international community, including the United States, the largest economy in the world, and with our own record of responding to financial crises, to stress the importance of decisive action at this moment.
Now, markets around the world as well as governments have been asking if Europe is ready to do what is necessary to hold the eurozone together. Over the last two days, European leaders here in Cabos have made it clear that they understand the stakes and they pledged to take the actions needed to address this crisis and restore confidence, stability and growth.
Let me just be a little more specific. First, our friends in Europe clearly grasp the seriousness of the situation and are moving forward with a heightened sense of urgency. I welcome the important steps that they have already taken to promote growth, financial stability and fiscal responsibility.
I'm very pleased that the European leaders here said they will take all necessary measures to safeguard the integrity and stability of the eurozone to improve the functioning of the financial markets. This will contribute toward breaking the feedback loop between sovereigns and banks and make sovereign borrowing costs sustainable.
I also welcome the adoption of the fiscal compact and its ongoing implementation, assessed on a structural basis, together with a growth strategy which includes structural reforms. G-20 leaders all supported Europe working in partnership with the next Greek government to ensure they remain on the path to reform and sustainability within the eurozone.
Another positive step forward was the eurozone's commitment to work on a more integrated financial architecture, including banking supervision, resolution and recapitalization, as well as deposit insurance.
Also, in the coming days, Spain will lay out the details of its financial support request for its banks' restructuring agency, providing clarity to reassure markets on the form and the amount and the structure of support to be approved at the earliest time.
It's also positive that the eurozone will pursue structural reforms to strengthen competitiveness in deficit countries and to promote demand and growth in surplus countries to reduce imbalances within the euro area.
And finally, I welcome the fact that Europe is determined to move forward quickly on measures to support growth and investment, including by completing the European single market and making better use of European funds.
Of course, Europe is not, as I said, the only source of concern when it comes to global growth. The G-20 also agreed that reversing the economic slowdown demands a renewed focus on growth and job creation. As the world's largest economy, the best thing the United States can do is to create jobs and growth in the short term, even as we continue to put our fiscal house in order over the long term.
And as part of that effort, we made significant progress in advancing our trade agenda. This is an essential to promoting growth, innovation and jobs in the United States. Here in Los Cabos, we announced important steps towards closer integration with three of our major trading partners.
Both Mexico and Canada have been invited to join the Trans- Pacific partnership negotiations, which is an ambitious 21st century trade agreement that will now include 11 countries. And this agreement includes enormous opportunities to boost trade in one of the world's fastest growing regions.
Even as we build this new framework for trade in the Asia Pacific, we're also working to expand our trade with Europe. So today the United States and the European Union agreed to take the next step in our work towards the possible launching of negotiations on an agreement to strengthen our already very deep trade and investment partnership.
In addition, and in keeping with our commitments at the last G-20 in Cannes, we agreed that countries should not intervene to hold their currencies at undervalued levels and that countries with large surpluses and export oriented economies needed to continue to boost demand. So, in closing, I'd note that, with Mexico's leadership, we continue to make progress across a range of challenges that are vital to our shared prosperity, from food security to green economic growth that combats climate change, from financial education and protection for consumers to combating corruption that stifles economic growth and in strengthening financial regulation to creating a more level playing field.
All of this happened, in large part, because of the leadership of President Calderon. I want to thank him and I want to thank my fellow leaders for their partnership as we work very hard to create jobs and opportunity that all of our citizens deserve.
So, with that, I'm going to start with Ben Feller (ph) of AP.
QUESTION: Thank you very much, mr. President. We're all hearing a lot of encouraging promises about what Europe plans to do. But can you assure us that those actions, if they're able to come together on them, will actually do anything to create jobs in America this year? And if Europe is not able to rally in a big way pretty quickly, do you think that will cost you the election?
Well, first of all, I think that what I've heard from European leaders during the course of these discussions is they understand the stakes, they understand why it's important for them to take bold and decisive action, and I'm confident they can meet those tests.
Now, I always show great sympathy for my European friends, because they don't have to deal with one Congress, they have to deal with 17 parliaments, if you're talking about the eurozone. If you're talking about the European Union, you're talking about 27. And that means that sometimes, even after they've conceived of approaches to deal with the crisis, they have to work through all the politics to get it done.
And markets are a lot more impatient. And so what I've encouraged them to do is to lay out a framework for where they want to go in increasing European integration, in resolving the financial pressures that are on sovereign countries.
Even if they can't achieve all of it in one fell swoop, I think if people have a sense of where they're going, that can provide confidence and break the fever because, you know, if you think about Europe, look, this remains one of the wealthiest most productive regions of the world.
Europe continues to have enormous strengths a very well educated productive workforce. They have, you know, some of the biggest, best- run companies in the world. They have trading relationships around the world.
And all these problems that they're facing right now are entirely solvable, but the markets, when they start seating potential uncertainty, show a lot more risk aversion, and you can start getting into a negative cycle. And what we have to do is to create a positive cycle where people become more confident, the markets settle down and they have the time and the space to execute the kinds of structural reforms that not only Europe but all of us are having to go through in balancing the need for growth, but also dealing with issues like debt and deficits.
And I'm confident that over the next several weeks Europe will paint a picture of where we need to go, take some immediate steps that are required to give them that time and space and, based on the conversations that I've had here today and the conversations I've had over the last several months, I'm confident that they are very much committed to the European project.
Now, all this affects the United States. Europe, as a whole, is our largest trading partner. And if fewer folks are buying stuff in Paris or Berlin, that means that we're selling less stuff made in Pittsburgh or Cleveland.
But I think there are a couple of things that we've already done that help the financial regulatory reforms that we've passed, means that our banks are better capitalized. That means that our supervision and our mechanisms for looking at trouble spots in our financial system are superior to what they were back in 2008.
That's an important difference. But there's still some more things we can do. And the most important thing we can do is something that I've already talked about. If Congress would act on a jobs plan that independent economists say would put us on the path of creating an extra million jobs on top of the ones that have already been created, putting teachers back in the classroom, putting construction workers back on the job, rebuilding infrastructure that badly needs to be rebuilt.
All those things can make a significant difference. And given that we don't have full control over what happens in Europe or the pace at which things happen in Europe, let's make sure that we're doing those things that we do have control over and that are good policy anyway.
QUESTION: (Inaudible).
You know, the -- I think it's fair to say that any -- all of these issues, economic issues, will potentially have some impact on the election. But that's not my biggest concern right now.
My biggest concern is the same concern I've had over the last three-and-a-half years, which is, folks who are out of work or underemployed or unable to pay the bills, what steps are we taking to potentially put them in a stronger position?
And I've consistently believed that if we take the right policy steps, if we're doing the right thing, then the politics will follow. And my mind hasn't changed on that.
Jeff Mason (ph), Reuters. Where's Jeff?
QUESTION: Right here. Thank you, sir.
My question is about Syria. Did President Putin of Russia indicate any desire on Russia's part for Assad to step down or to leave power? And did you make any tangible progress in your meetings with him or with Chinese President Hu in finding a way to stop the bloodshed there? Thank you.
Right. Well, these were major topics of conversations in both meetings. And anybody who has seen scenes of what's happening in Syria I think recognizes that the violence is completely out of hand, that civilians are being targeted, and that Assad has lost legitimacy.
And, you know, when you massacre your own citizens in the ways that we've seen, it is impossible to conceive of an orderly political transition that leaves Assad in power.
Now, that doesn't mean that that process of political transition is easy. And there's no doubt that Russia, which historically has had a relationship with Syria, as well as China, which is generally wary of commenting on what it considers to be the internal affairs of other countries, are and have been more resistant to applying the kind of pressure that is necessary to achieve that political transition. We had a very candid conversation. I wouldn't suggest that at this point the United States and the rest of the international community are aligned with Russia and China in their positions.
But I do think they recognize the grave dangers of all-out civil war. I do not think they condone the massacres that we've witnessed. And I think they believe that everybody would be better served if Syria had a mechanism for ceasing the violence and creating a legitimate government.
You know, what I've said to them is that it's important for the world community to work with the United Nations and Kofi Annan on what a political transition would look like.
And my hope is, is that we can have those conversations in the coming week or two. And that we can present to the world but, most importantly, to the Syrian people, a pathway, whereby this conflict can be resolved.
But I don't think it would be fair to say that the Russians and the Chinese are signed on at this point. I think what is fair to say is that they recognize that the current situation is grave. It does not serve their interests. It certainly does not serve the interests of the Syrian people.
And where we agree is that if we can help the Syrian people find a path to a resolution, all of us would be better off.
But it's my personal belief, and I shared this with them, that I don't see a scenario in which Assad stays and violence is reduced. He had an opportunity with the Annan plan. They did not fulfill their side of the deal.
Instead, we saw escalation, and murder of innocent women and children. And at this point we have the international monitors that were sent in having to leave because of this violence that's being perpetrated.
And although you'll hear sometimes from some commentators that the opposition has engaged in violence as well, and obviously there's evidence of that, I think it's also fair to say that those haunting images that we saw in places like Holm (ph) were the direct results of decisions made by the Syrian government. And ultimately Mr. Asaad is responsible.
QUESTION: (OFF-MIC).
We had an intensive conversation about it. If you're asking me whether they signed on to that proposition, I don't think it would be fair to say that they are there yet. But my - I'm going to keep on making the argument. And my expectation is - is that at some point there's a recognition that it's hard to envision a better future for Syria while Asaad is still there. Jill Madigal (ph)?
QUESTION: Thank you, Mr. President. One of Mitt Romney's economic advisers recently wrote in a German publication that your recommendations to Europe and to Germany in particular reveal ignorance of the causes of the crisis, and he said that they have the same flaws as your own economic policies. I wanted to get your response to that.
And also, to follow up on Ben's question, Europe has been kicking the can down the road for years. So why are you any more convinced that we won't see another three-month fix emerge out of Brussels at the end of the month?
Well, first of all, with respect to Mr. Romney's advisers, I suggest you go talk to Mr. Romney about his advisers. I would point out that we have one president at a time and one administration at a time. And I think traditionally the notion has been that America's political differences end at the water's edge.
I'd also suggest that he may not be familiar with what our suggestions to the Germans have been. And I think sometimes back home there is a desire to superimpose whatever ideological arguments are taking place back home onto a very complicated situation in Europe.
The situation in Europe is a combination of things. You've got situations where some countries did have undisciplined fiscal practices, public debt. You have some countries like Spain whose problems actually arose out of housing speculation and problems in the private sector that didn't have to do with public debt.
I think that there's no doubt that all the countries in Europe at this point recognize the need for growth strategies inside of Europe that are consistent with fiscal consolidation plans. And by the way, that's exactly what I think the United States should be thinking about.
The essence of the plan that I presented back in September was how do we increase growth and jobs now, while providing clarity in terms of how we reduce our deficit and our debt medium and long term. And I think that's right recipe generally, not just for us but across the board.
You had a second question. What was it?
QUESTION: (OFF-MIC).
Why am I confident? Well, look. I don't want to sound Pollyannish here. Resolving the issues in Europe is difficult. As I said, there are a lot of players involved. There are a lot of complexities to the problems because we're talking about the problems of a bunch of different countries at this point.
Changing market psychology is very difficult, but the tools are available. The sense of urgency among the leaders is clear. And so what we have to do is combine that sense of urgency with the tools that are available and bridge them in a timely fashion that can provide markets confidence. And, you know, I think that can be done.
You know, hopefully -- sjust to give an example, when Spain clarifies exactly how it intends to draw down and utilize dollars - or not dollars, but euros to recapitalize its banking system, given that it has already got support from other European countries, given that the resources are available, what's missing right now is just a sense of specifics and the path whereby that takes place.
When markets see that, that can help build confidence and reverse psychology. So there are going to be a range of steps that they can take. None of them are going to be a silver bullet that solves this thing entirely over the next week or two weeks or two months.
But each step points to the fact that Europe is moving towards further interrogation rather than break-up, and that these problems can be resolved, and points to the underlying strength in Europe's economies.
These are not countries that somehow at their core are unproductive or dysfunctional. These are advanced economies with extraordinarily productive people. They've got a particular challenge that has to do with a currency union that didn't have all the best bells and whistles of a fiscal or a monetary union. And they're catching up now to some of those needs.
And they just need the time and the space to do it. In the meantime, they've got to send a strong signal to the market. And I'm confident they can do that. All right?
Thank you very much, everybody.
BLITZER: So there he is, the president of the United States, making an -- opening statement, suggesting that he's optimistic, he's convinced the Europeans know what they're doing. They will eventually do the right thing in terms of strengthening their economy and that the United States believes that this will be moving in the right direction. Which will have a positive benefit for the United States as well in terms of creating jobs.
On Syria, the president making it clear Bashar al-Assad must go, but Russia and China are not yet, he said, not yet, on that page. He thinks that maybe slowly but surely they eventually will come around to the conclusion that the United States has and so many other countries in the region have, that Bashar al-Assad can no longer stay in power, there will not be a peaceful situation in Syria as long as he does remain in power.
We're going to have extensive live coverage coming up right now. Much more coming up on "ANDERSON COOPER 360."
