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Stock Market Drops; Storm Strikes East Coast; Trump Draws Hard Line; Mulvaney's Previous Comments. Aired 6:30-7a ET

Aired December 18, 2018 - 06:30   ET

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


(COMMERCIAL BREAK)

[06:30:27] ALISYN CAMEROTA, CNN ANCHOR: All right, all eyes on the stock market after the U.S. stock market sank deeper into negative territory on these deepening concerns about the economy on Monday.

So let's bring in chief business correspondent Christine Romans to tell us how the futures are looking.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Look, there's a lot of terrible comparisons about just how bad the stock market has been recently. Yesterday a 2 percent decline for the Dow. That was more than 500 points. And when you look at stocks for the month, usually we have what's called a Santa Claus rally. Ho, ho, no. This has been a rare, terrible December. In fact, so terrible for the Dow and the S&P, you haven't seen numbers like this since the Great Depression. And we're on track for the worst quarter since 2008. So those were terrible times in the economy.

So what is the market doing in December? This acceleration of losses here? When you put it in context, this will be the first down year likely in a decade since back in the terrible days of 2008. There were a couple of years where we saw just small gains in 2011 and 2015 when the stock market was, you know, having some pullbacks and some struggles with growth expectations, but investors are used to winning in the stock market the past decade. Last year, 22 percent return for the S&P 500. This year will likely be a negative return.

So after that big selloff yesterday in the United States, you saw Asia close lower, but then Europe has now turned slightly higher and futures in the U.S. are up a little bit. So you're going to see a bit of a bounce. It won't take very much out of what has been the bite of December.

And what's going on here? You have the feeling that the sugar rush from tax cuts will fade next year, the feeling that interest rates are rising. This is a strong economy. The Fed is raising rates to make sure it doesn't overheat. We will have a Fed meeting tomorrow. That will be critical. If the Fed raises interest rates one more time, it suggests it could stall next year. That could maybe give some lift under the stock market. But for the month, I really want to point out again these numbers here for the month. This is a terrible month for stock market investors. We have about three hours to the opening bell. Haven't heard from the president on the stock market yet, but

certainly he has used the stock market as a personal popularity poll. It must gal him to see these sorts of numbers, guys.

JOHN BERMAN, CNN ANCHOR: And the sentence, worst December since the Great Depression. I bet you he doesn't like that either.

ROMANS: Not good.

BERMAN: All right, Romans, thanks very much.

Ho, ho, no.

CAMEROTA: No. I like that.

BERMAN: All right, two Chicago police officers struck and killed by a train last night. This is horrible. Officers Conrad Gray and Eduardo Marmolejo, they were responding to a spots fired call at the city's south side. As they searched the area, they were hit by a Metro train traveling between 60 and 70 miles per hour. Both Gray and Marmolejo, they were fathers to young families. They lost their lives just a week before Christmas. Our thoughts are with them.

CAMEROTA: President Trump looking to take one giant leap forward for mankind today by signing a memo establishing a military space command. Vice President Mike Pence is visiting the Kennedy Space Center and that's where the latest SpaceX rocket is expected to take fight. So a Defense official tells CNN that Defense Secretary Jim Mattis is expected to pass on to the president two nominees to lead this space force operation. No word yet on a price tag for this potential arm of the military.

BERMAN: Speaking of James Mattis and Mike Pence, they'll remember this, this dance from the 1990s --

CAMEROTA: It's so good.

BERMAN: I pulled a muscle in my back just watching.

Actor Alfonso Ribeiro, best known as Carlton from "The Fresh Prince of Bel-Air," is suing the creators of the game "Fortnite" for featuring the signature Carlton dance without his permission. How dare they? Here is Carlton split with the game. Judge for yourself if they are the same. The lawsuit claims Epic Games has unfairly profited by selling the dance as an in-game purchase under the name "Fresh." Ribeiro is also suing the makers of NBA 2K for similar reasons. No comment yet from Epic Games.

CAMEROTA: Well, see, I think I was doing that dance in the '80s. So I think Carlton might have stolen it from me.

BERMAN: You owe him money.

CAMEROTA: No, he stole it from me.

BERMAN: You didn't do it first. CAMEROTA: I think so.

BERMAN: It's his like -- it's really hard. I'm not saying you're not flexible, but that takes a lot of skill.

CAMEROTA: Well, I'm not talking about like jumping up on the sofa, but that move of the arms, I think I was doing that --

BERMAN: Shall we show you -- show you one more time?

CAMEROTA: I'm just going to get -- no, just kidding. We don't have time. Sorry, John.

BERMAN: That's right. We have to get to break.

CAMEROTA: We have to get to weather.

BERMAN: Advertising. Got to make the money.

CAMEROTA: We have to get to the weather.

A major storm is heading for the East Coast. It's bringing heavy rain and possible flooding. It is set to strike at the peak of Christmas travel.

Let's get to meteorologist Chad Myers, who I know can do the Carlton.

Hi, Chad.

CHAD MYERS, AMS METEOROLOGIST: And now I have Tom Jones stuck in my head. Thank you very much.

[06:35:00] Yes, so here we go. It will be warming up and it will be getting wetter across the East Coast again this week. Wilmington, North Carolina, has already picked up 100 inches of rain this year. Their normal is like 52. So temperatures are warming, but so is the rainfall. It's coming in.

This weather is brought to you by the Shark Ion Robot Cleaning System. One dock, two Sharks.

So, here it comes. It's coming across Texas, all the way by Thursday and Friday into Georgia, and then by the weekend, Friday and Saturday, on up into the Northeast. Now, it does turn into winter. Our days get longer starting on Sunday into Monday. But that's just something we have to look forward to. The rest is this.

Look, more rain. For Wilmington, they could pick up four more inches. That would be 104 inches for the year. How about that.

New York City, warm but wet. Temperatures there are going to be in the 30s, 40s and 50s. The chance of a white Christmas going down and down. But you're telling me there's a chance. On Christmas morning it will be 30 in the city. I don't expect any precip, but we can always hope.

BERMAN: We can always hope. So there's a chance. Chad Myers, thank you very much.

MYERS: You bet.

BERMAN: A chance for snow, maybe not a chance to keep the government running past Saturday. Four days until a partial government shutdown unless lawmakers take action, but do Republicans even know what the president plans to do about it? Plus, what it means for you. That's next.

(COMMERCIAL BREAK)

[06:40:37] CAMEROTA: Only four days left until funding runs out for several major federal agencies and parts of the government will shut down. The president wants $5 billion to fund his border wall. Democrats say that's a nonstarter. So, where are we?

Joining us now, our CNN political analysts, Brian Karem and John Avalon.

Great to have you both in studio.

So, Brian, yesterday there was some talk that Mitch McConnell was going to introduce some sort of spending bill and it was going to have some kind of increase for border security and then it just never happened. So it's hard to know --

BRIAN KAREM, CNN POLITICAL ANALYST: Shock.

CAMEROTA: Where the president and Congress are on -- it's hard to see how this is averted by Friday.

KAREM: Well, it is hard to see how it's going to be averted on Friday. And you go back to the Chuck Schumer and Nancy Pelosi appearance in the White House that was in the Oval when they had the tussle with the president, you can see where everyone's at. It's at a dead standstill. So I don't think that there's going to be much head -- you know, headway made.

However, it is the president of the United States and things can change. And as long as he can claim a victory, at some point in time, we'll see what happens. But as it sits now, no, I think it's -- they're at a deadlock and they're going to continue to be at a deadlock.

John.

JOHN AVLON, CNN POLITICAL ANALYST: But a deadlock almost overstates it. I mean if you look at -- talk to members of the United States Senate, you get a giant shrug emoji for --

BERMAN: Well, let's -- I could play the -- I could play the shrug emoji for you.

AVLON: Oh, good.

BERMAN: You know, Cajun style.

AVLON: Oh, my favorite.

BERMAN: Here's -- here's Republican Senator John Kennedy from the state of Louisiana.

(BEGIN VIDEO CLIP)

SEN. JOHN KENNEDY (R), LOUISIANA: If the White House has a plan, they're keeping it to themselves.

We've been through this experience with shutting down government. Now, if the president feels strongly about it, he's got to do what he's got to do, but I just don't see the end game.

(END VIDEO CLIP)

BERMAN: That's your shrug emoji.

AVLON: That's a Cajun flavored shrug emoji. And other senators repeating him. But John Cornyn, majority whip, telling "The Washington Post," if there's a plan to avoid a shutdown, I'm not aware of it.

KAREM: Neither is the president.

AVLON: That's a cry for help. There's no -- if he had a plan, we'd hear about it. I mean, because he can't keep a secret. He'd be out there telling what it is.

AVLON: Yes.

KAREM: But the bottom line, you take a look at it and the scary part of it is, the people who elected Trump, remember, some of the reason why he got the vote was drain the swamp. Well, he's a swamp creature. It's not being drained. And the -- a lot of voters are tired of the head lock and the gridlock and they want movement. So they're not moved by ideology, they're moved by results and we're getting no results.

CAMEROTA: But they don't want movement in the wrong direction.

KAREM: No, no, of course.

CAMEROTA: In other words, you know --

BERMAN: (INAUDIBLE) --

CAMEROTA: Right. What they consider to be the wrong direction. And so I think that they would rather have the government shut down. And I think that President Trump knows his base and knows that they would much rather have the government shut down than --

KAREM: (INAUDIBLE) --

CAMEROTA: Than compromise on the will. KAREM: Well, I think there are far more many people who don't want

that shutdown. I agree with you, he is appealing to his base, but far more of us don't want to see that. And that's where it's going to hurt him. He can't make a deal.

AVLON: Yes, look, the base may like it and the border patrol said they stand by him --

KAREM: Right.

AVLON: But the problem is, he doesn't have the votes. He doesn't have the votes in the house. There's not an off ramp that Senate Republicans could point to. So he actually doesn't have the leverage. He can -- he can grandstand this, but, again, the optics of being at Mar-a-Lago for Christmas shutdown aren't great, especially if you're not going to get what you want come January.

BERMAN: Now, you don't have the votes, my favorite "Hamilton" song, but lousy for a lot of families just a few days before Christmas.

And to Brian's point, the president says he's the guy who can make deals. He is -- you know, he does say he can make deals.

KAREM: The art of the deal.

BERMAN: And he says it would be different than in the past. He used to not like shutdowns.

CAMEROTA: Oh, he used to feel very strongly.

KAREM: Let's go back a few years.

CAMEROTA: Let's get into our time machine, shall we, everyone.

KAREM: The way back machine.

CAMEROTA: This is from 2013, one of his appearances on "Fox and Friends."

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: In 25 years, in 50 years, in 100 years from now, when the government is -- you know, they talk about the government shutdown, they're going to be talking about the president of the United States. Who was the president at that time? They're not going to be talking who the head of the House was, the head of the Senate.

They're not going to be talking about Boehner and Reid and all -- they're going to be talking about President Obama and what a disaster the administration was.

(END VIDEO CLIP)

CAMEROTA: Because of the shutdown.

AVLON: That's just a delicious little mantaj (ph) that was put together.

Look, but what's serious about it and makes this situation even more stupid is Republicans have unified control of government, right? We've had government shutdowns in the recent past, you know, Democratic president, Republicans in Congress, real impasse. You've got Ted Cruz trying to do a flaking move on Obamacare this last time around. You've got to call in a hostage negotiator to get it done. It's usually against the wishes, by the way, of Senate leadership, who always say, everything's fine, keep calm until you go over the cliff.

[06:45:07] In this case, you've got Republican control of government and that very selfsame Donald Trump, saying who -- the president will be judged harshly, is in the same position except with even less of an excuse.

KAREM: And he'll be at Mar-a-Lago as it goes down. So that's the sad part of it. And it -- you know -- they say there's a tweet for every occasion, but when you take a look at Donald Trump, the hypocrisy of this statement just goes to the very core of what the man is all about.

CAMEROTA: But there's one theory that this is actually a strategy, which is leave the mess for Nancy Pelosi come January. So kick the can down the road. So let the government shut down on Friday. It's Christmas. And then January 3rd starts and Nancy Pelosi has to figure this out.

KAREM: Well, that's a calculated risk and a gamble because at the end of the day, you know, 2020 looms large and the Republicans who are still in control of the Senate don't want to lose control of the Senate and they want to make some headway come, you know, in 2020 in the House of Representatives and they'd also, I'm sure, would love to win the presidency back.

And all of these risks that they're taking over a shutdown endanger those efforts in 2020. So it's not very farsighted to think that. In fact, it's very short sighted and narrow minded and will cause a great deal of problems for this country. Take a look at where the stock market is. It's not good.

BERMAN: I'd also say, these are real people who will not get their paychecks.

KAREM: Exactly.

BERMAN: Real, middle class people who work for the government who will not get their paychecks during the Christmas season.

CAMEROTA: I think 400,000 or so.

BERMAN: And to quote Christine Romans, ho, ho, no. I mean that's really not great for these families.

AVLON: No. NO.

BERMAN: And if it happens, if it shuts down Friday night to Saturday, it won't reopen until after the new year. It won't reopen till after --

KAREM: No, you're absolutely right. And there are 80,000 in the two counties that we cover, Montgomery and Prince George's County. It will be devastating in Maryland, devastating to the economies in those two counties because there are 80,000 people who work for the federal government in just those two counties.

AVLON: Right. You can govern or you can grandstand. And the president's got the opportunity and the obligation to make a deal. Or we go off the cliff and we've got a shutdown at Christmas and all those families suffer.

CAMEROTA: Are we talking Mick Mulvaney?

BERMAN: Let's do it.

AVLON: Let's do it.

KAREM: Oh, Major Mick.

CAMEROTA: Mick Mulvaney, the new acting chief of staff. He had -- we heard a little clip yesterday of some -- back when he was not a fan of Donald Trump and he was speaking truth then and he has come around to become a fan of the president it sounds like. But back in 2016 he was on a radio show and there's new sound of him thinking that actually Donald Trump's qualities were disqualifying. Here's this.

(BEGIN VIDEO CLIP)

MICK MULVANEY: Should either of these people be role models for my 16- year-old triplets? No. In an ordinary universe would both of these people's past activities disqualify them from serving for office? Yes. But that's not the world we live in today. The world we live in today is either him or her. And for me that's still an easy choice.

(END VIDEO CLIP)

BERMAN: First of all, we should note, that's from the "K Files." So if you said something ever out loud, know that the "K File" will find it.

CAMEROTA: Will find it.

BERMAN: It's out there.

AVLON: "K File" strikes again.

BERMAN: Also, Mick Mulvaney's got triplets. I didn't know that.

CAMEROTA: I didn't know that. That, to me, was the headline.

BERMAN: (INAUDIBLE). You break out in hives. (INAUDIBLE), oh --

CAMEROTA: (INAUDIBLE) twins. That was the headline.

KAREM: Yes, that --

BERMAN: I once saw a triple stroller on a running path and almost had a heart attack.

CAMEROTA: And you fainted.

Well, and Nick Ayers has triplets, too, OK, and that was disqualifying for him for the chief of staff.

AVLON: It's very efficient for people in politics.

CAMEROTA: I didn't know that Mick Mulvaney had triplets.

BERMAN: I feel as if we may have taken this segment somewhere where we didn't intend.

CAMEROTA: I know.

AVLON: Yes. But, I think, you know, given his real angst about the world his triplets would live in with the choice between Donald Trump and Hillary Clinton, he clearly has gotten over that moral quandary. He is all in on the Thump train despite not believing him to be a particularly good person, quote/unquote.

BERMAN: Look --

KAREM: Well, he's the guy who sticks his -- I mean, Mick Mulvaney, when he's been up in the press briefing room and briefed us, he reminds me of a used car salesman. I mean he's got something to sell us.

But right now -- right now Mick Mulvaney is the kid with all his fingers in the dike. I mean he's trying to hold back a flood because the president can't get people to work for him. And that issue speaks to why we have Mick. He's one of the few people who has stuck around who will work for the man.

BERMAN: Well, reporting on this is that the president wanted to have a chief of staff because he was sick of people saying that he couldn't hire someone. Let me just read his statement just so people know what Mulvaney is saying. This is from his office. This is old news. These comments were made in 2016 when he was a congressman and had yet to meet the president. Congressman Mulvaney continued to support then candidate Trump throughout the election and his support for President Trump has never wavered while serving within the administration. He both likes and respects the president and likes working for him.

CAMEROTA: OK. That's good.

KAREM: Oh, wow.

AVLON: Except the definition of old news would be, it had been out there before.

KAREM: Yes, that's --

AVLON: So, anyway, good luck to the new pairing off the Oval Office, while he also runs OMB and the Consumer Protection Bureau.

BERMAN: All right, John, thank you very much.

Happy holidays.

CAMEROTA: Thank you, guys.

KAREM: Hey, Merry Christmas to all of you. Good to see you.

CAMEROTA: You too.

All right, so there's this heart-stopping video that we have to show you. This toddler goes running into the street. He is saved, we're happy to say.

BERMAN: Oh, my gosh.

CAMEROTA: But how it all happened we have for you ahead on NEW DAY.

BERMAN: Even the ball was saved.

(COMMERCIAL BREAK)

[06:53:39] BERMAN: Late night comics making jokes, poking fun at the president and all the looming investigations. Here are your late night laughs.

(BEGIN VIDEO CLIP)

STEPHEN COLBERT, HOST, "THE LATE SHOW WITH STEPHEN COLBERT": At this point, Trump faces 17 investigations, a legal assault unlike anything previously seen by any president. That's quite a distinction for Trump. No other president has had more big, beautiful investigations, OK? And they're naturals, OK, fellas? I'm telling you, if I had a dollar for everything I'm being investigated for, you'd never know because I won't show you my tax returns.

JIMMY KIMMEL, HOST, "JIMMY KIMMEL LIVE": Trump is so frustrated right now he wants to build that wall just to bang his head against it.

TREVOR NOAH, HOST, "THE DAILY SHOW": When you think about it, Trump's White House is exactly like the club, all right, you always wonder when the cops are going to shut it down, it's full of weirdo Russians, there's never enough women and when the lights come on everyone wonders why they didn't leave sooner. They're like, why did we stay so long?

COLBERT: Getting fired for ethics violations in the Trump administration is like being fired from the Rockettes for kicking. In fact, they do it in unison. All the ethics violations are in unison.

(END VIDEO CLIP)

BERMAN: He can actually --

CAMEROTA: He is dancing.

BERMAN: Kick pretty high. He's got a pretty high kick. That's impressive.

CAMEROTA: Yes. Yes. He's limber.

BERMAN: He must do yoga.

[06:55:02] CAMEROTA: We're going to institute dancing on our show.

BERMAN: Absolutely.

CAMEROTA: At 8:45, stay tuned for that.

BERMAN: You can dance if you want to.

CAMEROTA: Oh, I like that.

President Trump's former national security adviser, Michael Flynn, will be sentenced today for lying to the FBI. What will he say in court?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's no question that Flynn was trying to deceive the FBI.

UNIDENTIFIED MALE: What is he trying to protect?

UNIDENTIFIED MALE: He's not covering up anything, he simply got it wrong.

UNIDENTIFIED MALE: I think he's going to be hammered by the judge.

UNIDENTIFIED MALE: The Russians were targeting Instagram. That was where the voters were.

UNIDENTIFIED MALE: The primary objective, to sew doubt, discord, and discontent has continued and will continue.

SEN. CHUCK SCHUMER (D), MINORITY LEADER: Leader Pelosi and I have still not heard from the White House.

UNIDENTIFIED MALE: I fail to see where the logic would be in just punting it down the field.

SEN. JOHN KENNEDY (R), LOUISIANA: I think we ought to all try to sit down and work this out. If the White House has a plan, they're keeping it to themselves.

(END VIDEO CLIP)

ANNOUNCER: This is NEW DAY with Alisyn Camerota and John Berman.

[07:00:01] BERMAN: Good morning. Welcome to your NEW DAY.

In just a couple hours, former National Security Adviser Michael Flynn will be sentenced for lying to the FBI.