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Inside Politics

Dow Tumbles After Record 1000 Point Gain; NYT: 2020 Bid May not Be Easy For Sen. Bernie Sanders; Trump: "Everybody" Wants Defense Secretary Job. Aired 12:30-1p ET

Aired December 27, 2018 - 12:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[12:31:53] NIA-MALIKA HENDERSON,CNN ANCHOR: What the markets give they can take away. Wall Street hitting a brick wall today after yesterday's record breaking gains, the market -- the major U.S. stock index is all falling. The Dow is down as much as 500 points earlier.

We've got CNN Business Correspondent, Alison Kosik joining me now from the New York stock exchange. Alison, it feels like we're seeing a -- these huge market swings nearly every day this month. What are investors telling you about these swings?

ALISON KOSIK, CNN CORRESSPONDENT: Nia, you're right about that. If you look just at the month of December, there have been 18 trading sessions and in 11 of those trading sessions, the Dow has made a triple-digit move. So you're right about that volatility.

As far as the volatility today, we're seeing the downward move of 421 points on the Dow. Not unusual after you saw that huge spike in the Dow yesterday of a 1,000 points by the close of the sessions. So, volatility obviously going both ways.

Now, what you're seeing right now are this end of the year gyrations. They're especially gyrating because of how it's been over the past few months. Stocks themselves have endured huge losses. You look at the Dow losing 4500 points since its peak in October. The S&P 500 and the NASDAQ entering bear market territory. That's a 25 percent drop from a recent high.

So when you saw those gains happened yesterday, investors saw them too. So what you're seeing happen today, investors pretty much taking profits off the table out of those gains.

One other factor in the mix. Earnings season right around the corner, there is some nervousness going into earning season and you may see the volatility continue for the next three weeks, a week start getting those company earnings because investors are curious to hear what the guidance is that these companies have specially when it pertains to the trade and tariff situation between the U.S. and China and how that may be affecting their earnings. Nia.

HENDERSON: Alison, thanks so much for that. One of the biggest political questions right now is this. Will the turmoil on Wall Street affect the real economy on Main Street? The answer will have major ramifications for President Trump 's reelection campaign. Here's CNN Chief Business Correspondent Christine Romans.

CHRISTINE ROMANS, CNN CHIEF CORRESPONDENT: Nia, for 10 years with little exceptions, stocks went up, up, up. This right now is what the end of 10 years of easy money bull market looks like. It's unpredictable, messy, overdone sell offs and false rebounds. Anything could happen as we close out the year.

Now the White House tried a new approach to reassure investors, the Chairman of the Council of Economic Advisors, Kevin Hassett, told reporters the Fed Chief's job is 100 percent safe. White House aides are exploring having the President and the Fed Chief meet face-to-face sometime early next year to talk about the economy, to talk about the President's concerns. The President's criticism of the Fed chief has been relentless. He blames rising interest rates for market volatility.

And don't forget the trade war, that's liable to keep markets on edge, Nia. The Chinese foreign ministry said the U.S. team will head to China early next year for talks in person ahead of that March trade deadline. But bottom line for investors, the comparisons for the year are not pretty.

[12:35:04] The worst returns for stock investors in a decade, on pace for the worst December since the depression and the worst month overall since 2008 when the economy was in a free fall. Nia.

HENDERSON: Shannon, one of the things we often heard from this president, he would ask folks at a rally how are your 401(k) is doing?

SHANNON PETTYPIECE, WHITE HOUSE CORRESPONDENT, BLOOMBERG: Yes, he had a line where someone came up to him in event and said my wife thinks I'm such a genius.

HENDERSON: Right.

PETTYPIECE: Because our 401(k) is up so much. And, you know, things is also he was at -- it was like a whole line. It was a whole part of his routine. So this kind of knocks the legs out of that. I mean, yesterday's rally, I'm sure he was feeling good about but on Wall Street that's typically what is called a dead cat bounce after a huge drop. You have a little spike and then you come back down again.

And for a White House that's transitioning into 2020 mode, and believe me, they are clearly thinking about reelection at this point as much as all of us feel like we're still recovering from 2016. This is very much on their mind. The economy is so much of what's holding up his approval rating.

HENDERSON: Right.

PETTYPIECE: And not only the approval rating for the public but support for members in Congress.

HENDERSON: And Michael, when you said yesterday (ph) when the president wasn't near his phone and tweeting that you did see this 1,000 point rally in stock market? MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: Right, I mean, probably had little to do as your report suggested, there's other factors going on here.

HENDERSON: Right.

SHEAR: Investors are worried about other things than just what comes out of Trump's Twitter. But it was kind of funny that, yes, he left the country and was in the air and wasn't tweeting. Everything went up and then he came back and everything's back down again.

I mean, I suspect that one of the things that the President and his team are going to try to do is figure out how to ride out the low moments like this, you know, distraction which is something that they're very good at. And then claim credit when things bounce back up. And if there really is, this kind of volatility, that's what's going to -- that'll be the definition of politics in -- you know, in this town for the next several weeks as they try to claim credit when it goes up and deflect blame when it goes down.

HENDERSON: That sounds like what the President does very well. Up next, some not so nice words for a Democrat flirting with running for president.

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[12:41:41] HENDERSON: Topping our political radar today, a Federal Judge says the government shut down won't slow down a court case over the President's asylum restrictions. Judge Randolph Moss dismissed the Justice Department request to pause the case and move back deadlines because part of the Federal government is closed. Moss sided government staffing plans that keep the immigration courts working through a shut down as well as customs and border predictions and ice.

A Republican take on the invisible 2020 primary and the pair of Texas Democrats flirting with running for president. Jeff Roe who ran Ted Cruz's failed presidential campaign says, Beto O'Rourke is at the front of the field. Julian Castro on the other hand is "pound cake:". We're not sure what he means either.

Roe predicts that Castro will be out by August and they'll recruit him to run against Republican Senator Cornyn in 2020.

New complains today from a U.S. official in the middle of the crisis on the southern border. A U.S. official describes the influx of migrants there as a nosebleed that doesn't stop and complained to CNN that facilities are overcrowded and understaffed. Lawmakers say, they want to investigate border facilities after a child died in U.S. government custody on Christmas Eve.

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REP-ELECT XOCHITL TORRES SMALL (D), NEW MEXICO: Two children have died in the district that I will soon be representing. And it's important for all of us to take ownership of this issue and fix it so that it doesn't happen again. I would like to invite Secretary Nielsen to come to my district to evaluate the medical conditions of these holding cells so that we can work together to fix what we can control.

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HENDERSON: So we're going to go right to 2020. We heard there from shade offered up for Julian Castro who will likely to run in 2020. Hot off the presses now, a story in your paper, Shear, about Bernie Sanders. Here is like he quote and this is from J. Mart, this is about Bernie Sanders. "It's not a given that I'm going to support Bernie just because I did before. There are going to be plenty of people to look at and listen to. I'm currently open at this point and I think the majority of people are. This is a Lucy Flores, a Former Nevada assembly woman who previously endorsed Mr. Sanders. He was hot stuff, right, and 2016 might not be so hot anymore.

SHEAR: Well look, I mean, there's sort of two things going on, right? On the one hand, he was hot because Bernie Sanders represented a kind of part of the Democratic Party that hadn't had a champion at that time. That's the sort of ultra left.

The ultra left has got more champions now. There are lots of people out there. They're all probably going to run for president and they're all going to have to cram onto that debate stage and they -- and many of them take many of the same positions that he took.

The other thing about Bernie Sanders is that he had this platform. He was about as high in visibility at the end of the 2016 campaign as you can imagine and he sort of has disappeared, right? I mean he hasn't really taken up that mantle and sort of made himself in Congress or sort of more broadly in the American political system into that kind of indispensable kind of leader of that movement. And I think for both of those reasons, it may well be hard for him to sort of recapture that. And that's what Jonathan Martin and our paper were trying to kind of point out that that's may be missing for him.

[12:45:04] HENDERSON: Yes and a lot of folks obviously met in the Senate who were vying for a lot of that energy obviously that Bernie had in 2016, Elizabeth Warren among them, Kamala Harris, Cory Booker, all of those folks in the Senate with Bernie Sanders.

MATT VISER, NATIONAL POLITICAL REPORTER, THE WASHINGTON POST: And -- I mean I think part of Bernie Sanders rise is was not Hillary Clinton. And I think in that primary, you had two people to choose from basically. And I think that's going to be much different this time. And Michael hit upon it where you have Elizabeth Warren now soaking up some of that energy, Sherrod brown, even Beto O'Rourke.

HENDERSON: Yes.

VISER: You know, people are looking at as a potential sort of progressive. And in some ways, Bernie can claim that he's moved the party. He's changed the discussion among Democrats, super -- having a super pack aligned with you has political risks now because of Bernie Sanders and him sort of pointing that out. And there's a big imprint that he's had on the process, but ironically he's not necessarily the one that they carry that forward.

HENDERSON: Yes it's going to be possible.

PHIL MATTINGLY, CNN CONGRESSIONAL CORRESPONDENT: Jim Webb would like a word about your binary choice, 2016, thank you very much

VISER: Martin O'Malley too.

HENDERSON: All right. Up next, the President says, everyone -- everybody wants the defense secretary job and he means everyone.

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[12:50:33] HENDERSON: The President who says he hires the best people is in need of a new defense secretary. Jim Mattis exits the administration in just a few days. But while President Trump was in Iraq without his current defense secretary, the President says he doesn't expect to struggle finding a replacement.

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DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Everybody, everybody, so many people want to be -- who wouldn't want to be secretary of defense. Even these folks would like to be secretary of defense. Who wouldn't want to be? Yes, he's looking at me and he said, well, I would like it now.

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HENDERSON: And Shannon, is there an actual short list at all for people who want to replace Mattis at this point?

PETTYPIECE: Well, I mean, who wouldn't want to be attorney general.

HENDERSON: Right, right, right.

PETTYPIECE: Who wouldn't want to be chief of staff? We've been through this exercise a lot. It seems like recently, you know, where you have Chris Christie turning down the chief of staff. Nick Ayers, up and coming Republican Party turning down chief of staff. So who wants to be defense secretary? I'm sure there are many people who do and I'm sure there are many people who would take a pass, especially after seeing the situation with Mattis.

The President does not seem in a rush to replace Shanahan who is acting in there right now. He feels very confident in that position. But I do believe the White House has had some time to think about this because all I know while this resignation of Mattis came as a surprise to a lot of people, a few weeks before this, there was already talk in the White House about who a replacement could be. Someone floated Lindsey Graham's name out there. So I think the wheels were turning and discussions were already taking place.

HENDERSON: And this has been a constant question for this White House replacement and here is how the president talked often about replacing people in the White House. (BEGIN VIDEO CLIP)

TRUMP: Many, many people want every single job. And I read where O.G., maybe people don't want to work for Trump. And believe me, everybody wants to work in the White House. They all want a piece of the oval office.

We have many people lined up for every single position. Any position, everybody wants to work in this White House. We are a hot country. This is a hot White House.

A lot of people that Chuck and Nancy know very well who wanted and I think people you'd like. We have a lot of people that want the job of chief of staff.

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HENDERSON: Shear, I think that was your question that prompted a fantastic, "We are a hot country, this is a hot White House."

SHEAR: Well done Shear.

HENDERSON: Yes, well done.

SHEAR: Very well done.

HENDERSON: It's a hot question.

SHEAR: It was a -- yes. Look, I mean, the problem for this administration is that the President is known for not only kind of being a demanding boss and as many Presidents are known for. But for attacking the very people who are working for him and that makes it harder for people to want to sacrifice and do the things that it entails both in terms of financial sacrifice and personal sacrifice and family issues.

When you see, you know, Rex Tillerson was repeatedly attacked. Jeff Sessions was as attorney general was regularly undermined and attacked but all of the stories about the President not being happy with John Kelly as chief of staff. It makes it hard. And I think he is undoubtedly right that there are still nonetheless people who recognize that there's not very many opportunities you get to be a senior government official in one of the jobs either in the White House or at a place like the Pentagon. And so there will be people that would want to take the job but they will have to think long and hard about what that entails and specifically working for him.

MATTINGLY: Yes, there was one thing I was struck by in the Jim Mattis resignation letter which I have seen there's a lot of things you can be struck by on that. But the one -- the point where he makes you deserve somebody to be your secretary who's ideologically aligned with you, right?

HENDERSON: Right.

VISER: And you listen to some of the names on Capitol Hill, people are very hot and Heather Wilson, who is currently the Secretary of the Air Force. You hear Jim Talent, the former Senator. These are not necessarily people that are ideologically aligned with the President. They would be excellent nominees. I think most Republicans and Democrats resides in Capitol Hill. And so the question becomes, does he go for a name? Does he go for somebody that Republicans on Capitol Hill are recommending to him, or does he recall that the Republican in Capitol Hill largely diverge from it?

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SHEAR: You know, they're not -- or some of those people sort of more aligned with traditional Republican orthodoxy when it comes to foreign policy, but they're radically opposed to the kind of isolationism that the President has espoused for -- during the campaign and for much of the first two years.

So it's not entirely clear that somebody -- that picking somebody like, you know, it would be a -- somebody that'd be willing to put in place his foreign policy. And if you pick somebody who is willing to put in place Trump's foreign policy, can they get through it.

HENDERSON: And that quickly more turnover perhaps expected obviously, these slots had to get filled but maybe other people lead (ph) as well.

[12:55:05] VISER: Right. And that defense secretary position though, I think that Mattis' exit since shatters around the Republican Party. And I think President Trump risks sort of losing some of the support that he has on the Hill among Senate Republicans especially, if he doesn't pick the right person for that job.

HENDERSON: Yes. And can he find somebody who is aligned with him, we'll have to see. Thanks for joining us on inside politics. Dana Bash picks up our coverage right after a quick break.

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