tv Early Start With John Berman and Christine Romans CNN August 25, 2015 1:00am-2:01am PDT
breaking overnight. china's markets plunging after the dow suffered its biggest one day drop. will stocks continue to slide or finally find stable footing. joe biden could be one step closer to entering the presidential race with new words of encouragement from the white house. jeb bush campaigning on the border, but he may have found himself wading into new controversy. welcome to "early start."
i'm alison kosik. >> i'm christine romans. so nice to have you here. it is tuesday, august 25th. the dow, this is unbelievable, the dow down more than 1,000 points. this chart is unbelievable. ten minutes, it fell 1,000 points. stocks recovered some before closing down 600 points. investors in an absolute panic. selling risky assets. trading was the heaviest in four years and trading some of america's most widely held stocks was frenzy. bank of america, apple, microsoft and general electric saw the most action. u.s. stock futures are up significantly. european stocks are climbing. asia still looks like it is in trouble. look at shanghai's benchmark
down 8%, alison, for the second day in a row. wiping out trillions of dollars in value. fears about china's weakness are sending investors into panic mode. i want to bring in andrew stevens in hong kong. the selloff, andrew, the futures are pointing to signs of life in the u.s., but not the story in china. >> reporter: absolutely. this is the key point that investors are now making the distinction with what is happening in china and the rest of the world on the equity markets. china is a law unto itself. this is a bigger fall than yesterday. what's happening is the government is not stepping in to help these investors out. they are letting events take their course. it is a blood bath for investors
in shanghai. we have seen this throughout the summer. a steady fall in shanghai stocks. people were hoping the government would step in and they have failed them. now one other thing which is important, christine. a lot of research notes coming out here in hong kong from the big banks and research houses. the theme is don't panic on the chinese economy. yes, that was a terrible amount on manufacturing, but the other signs are not as weak as people are thinking. if it was, there is still fire power in beijing to turn things around. beijing is showing no signs of panicking about restoring economic growth at this stage. >> that is the tricky thing. if the government does big measures to save the stock market, it is a sign that things are worse. now the government reacts is
critical here. >> reporter: absolutely. there is this disconnect. it is important to note this disconnect between what the markets are going on and the real economy. investors rode a massive bubble for 16 months. that all ended in mid-june. now it is deflatindeflating. there's not a great correlation there, christine. yes, if the government stepped in the stock market, it would be seen as a sign that they want to show control. by the mere fact they are not having to do big major stimulus packages right now means they have fire power left and they are not overtly worried at the moment. >> andrew stevens in hong kong on the great fall. that move is continuing this morning. thank you. with the fall of the dow comes an avalanche of political
finger pointing. the republican presidential candidates blaming plunging markets from the spending policies. listen to donald trump sounding a warning we heard from him before. >> i have been telling everybody for a long time china is taking our jobs and taking our money. be careful. they will bring us down. you have to know what you are doing. we have nobody who has a clue. >> carly fiorina blames the market slide on the federal reserve for the easy money policies. and new jersey governor chris christie says it is the government blame for borrowing and spending too much. and scott walker wants a stronger message. >> to cancel the state visit he is providing for the head of
chin china. why would we give that state visit to a country that doesn't share our values and our allegiance? i call on others to ask the president of the united states to say we're not going to have that state visit. >> on the democratic side, this tweet from bernie sanders. he says we need banks that invest in the job creating economy. we don't need more speculation with the american economy hanging in the balance. so far, no comment on the market jitters from jeb bush or hillary clinton. will he or won't he? the intrigue building on capitol hill as joe biden ponders a run for the presidency. another sign he is serious about mounting a political challenge to hillary clinton. we get more from cnn's joe johns. >> reporter: after lunch with the president on monday, the
buzz about the vice president's campaign options picked up after josh earnest seemingly went out of his way to praise biden. >> the president has indicated his view that the decision he made, i dpguess seven years ago to add joe biden to his ticket was the smartest move he ever made. that gives you the view of the president's view of the vice president's aptitude for the job. >> reporter: just last night, meeting with key former obama officials at his residence at the naval observatory. the message is he has not made a decision about running for president in any speculation to the contrary is false. still, a democratic source
telling cnn, the vice president is leaning more toward running than not running. one plan is to have him announce his intentions the first week of october and the run-up to the first democratic debate. biden has been making a few subtle moves. he just brought on kate bettingfield who has worked at the white house and motion picture association of america and in john edwards campaign in 2008. he met with senator warren who is an endorsement of progressives over the weekend. >> joe johns, thank you. jeb bush making a trip to the texas/mexico border. bush defending the term of anchor babies says he was referring to birth tourism which applies more to asians than
hispanics. >> i was talking about the case of fraud committed where there are organized efforts and more related to asian people coming into our country and having children in that organized effort taking advantage of a noble concept which is birthright citizenship. i support the 14th amendment. nothing about what i said should be viewed as derogatory. >> bush also took direct aim at donald trump. cnn's polo sandoval has more. >> reporter: this morning, bush is back on the campaign trail after the stop here in texas. this is the heart of the immigration debate that continues to intensify. yesterday, we noticed a different jeb bush. he was feisty and a really higher level of energy.
he used that new tone to take direct jabs at one of his main opponents here. donald trump. take a listen. >> what i say is mr. trump's plans are not grounded and conservative principles. it would cost hundreds of millions of dollars. >> reporter: and bush also going on to say before he can explore an idea of granting legal citizenship to the estimated 11 million undocumented people in the country, the key would be to secure the communities that dot that international boundary with texas and california. that is a measure and propose that will may not be taken very well by some of the gop base. >> polo, thank you. new information about the man accused of attempting the attack on the paris train taken down by hero passengers. what we are learning new about the suspect right after the break.
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anti terror police have until tonight to question ayoub el khazzani. raising concerns about train safety here on american soil and across europe. let's go live to paris and bring in senior correspondent jim bittermann. jim, what are we learning about the investigation? >> reporter: we are learning a lot about the investigation. we are awaiting the latest. the prosecutor has until this evening to bring el khazzani before a judge or release him. we expect that we will hear what the charges may be during a news conference this morning or today here. i would like to bring in the
picture, alison, the president of the research center for internal security. alison just raised the question, what can be done to protect the train stations after something took place on friday. what could you do? >> it's a major issue. france is experimenting the new kind of terrorism which never hit us before. this kind is young guys using handguns and being like you americans called active shooters. it is difficult to protect all of the public places. the issue is not only about trains, but restaurants and movie theaters and stadiums. you know the thing that has to change is the mindset. one of the first things to be done is to allow all law
enforcement officers to carry guns even off duty. it would allow in a blink of an eye to carry a gun without working, but going back home and being at the restaurant with their wives or relatives and being ready for any immediate response. the question is immediate response. when there is an attack, if the police comes two minutes after, the difference is 50 people killed. we will not be lucky as friday or last april when the terrorists which were willing to attack two churches with an ak-47, shot himself. one day, the luck will turn and we have to be ready. >> you mentioned before that the mindset has to change about young people taking action. >> what may be very confusing for you americans is that in france, in sixth grade, all young frenchmen received the visit of a police officer which
explains to these young frenchmen year after year under no circumstances, you have to take action on your own. you have to call the police. you have to wait for the help of the government. the fact you have to take your own faith into your life is completely new. it is very good. the mindset will change. we owe that to the braveness of the young american soldiers on friday. it is a big game changer in the french mentality. >> reporter: thank you for being with us. alison, back to you. >> interesting to hear the difference. jim, thanks. sweeping changes in store for the municipal court system in ferguson, missouri. the judge ordering all of the arrest warrants before january 15th, 2015 voided. the reforms is part of an effort to rebuild trust in ferguson after the justice department found both discriminated against
african-americans. damaging testimony for the defense at the prep school rape trial in new hampshire. several current and former students testified that owen had sex with a teenage girl, now accusing him of rape. his former roommate said he claimed he took the girl's virg virginity. it stemmed from a rape competition. a fraternity at old dominion university suspended for displaying banners with lewd comments for incoming freshman. the banners read "freshman daughter drop off" and "go ahead and drop off mom too." the suspension will remain in effect pending the investigation. firefighters in washington having a hard time gaining ground on the largest wildfire
to hit the state. take a look at the plains. look at the thick smoke. the complex fire here scorching over 250,000 acres so far. fire officials say the blaze is only 10% contained. people in eight communities now ordered to evacuate their homes. it has been so tough for them. for more on the wildfires and the forecast, let's get to meteorologist pedram javaheri. >> good news when it comes to the weather pattern across the northwest, this storm system entering the picture. this will drop in coastal washington and oregon and assess the trend for a pattern shift in the coming days where the potential exists for not two, but three days of rainfall. look at seattle. temperature trend warms up quickly and back down into the 70s. in fact, multiple days where rain showers are a possibility.
notice the six-to-ten day outlook for rainfall. a temperature trend looking to be on the cooler side. speaking of the cooler side, cincinnati out to nashville this morning, 13 to 14 degrees cooler than it was this time yesterday. a sign of things to come for people. the temperature trend is a cooler one. minimal. o 1 or 2 degrees cooler. the eastern side of the country should be in the 70s. back to you. >> thanks, pedram. north and south korea reaching a deal, but will the peace last? we are live after the break.
welcome back. 24 minutes past the hour. north and south korea reaching agreement to ease escalating tensions. north korea expressing regret for the recent provocations and the south will turn off the blaring messages. we get the latest from cnn's kathy novak live from seoul. looks like they found an off-ramp. >> reporter: they have. the speakers are off. that was key, christine, to amend the north koreans. we know how the broadcasts were angering kim jong-un.
we know south korea demanded an apology from north korea. they were able to find this middle ground in this key phrase of expressing regret. it is significant that north korea would express regret. it doesn't apologize over anything. certainly here in south korea, it is being spun by the government as an apology. we heard the key negotiator saying the north has apologized for the injuries for the two south korean soldiers in the land mine attack. for north korea, it used the language and not actually accept responsibility for planting those land mines. it seems that both sides can go back to their respective camps and say they got what they wanted and crucially they have been able to diffuse the tensions we know north korea and south korea and united states were taking seriously. >> kathy novak in seoul, thank
you. isis accelerating destruction of priceless antiquities in syria. in the last week, the terrorists razed a temperature the in palmyra. it is a loss to future and heritage learning. and another possible chemical attack in northern syria last week left dozens of people, many children, with symptoms consistent with chemical exposure. 26 minutes past the hour. happening now, china's stock market is plunging again. it's another devastating drop rocking markets around the world. the dow dropping 1,000 points in just ten minutes. we will tell you about that next. but it doesn't cover everything.
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markets around the world rattled this morning. china's stocks plunging overnight following the dow's epic one-day drop. 1,000 points in ten minutes. will markets slide or find stable ground? live team coverage begins right now. and welcome back to "early start." i'm alison kosik. >> what a day. i'm christine romans. i'm glad you are here. 30 minutes past the hour. all eyes on the stock market. the dow sinking more than 1,000 points at the open. the largest-point loss ever
during a trading day. stocks stabilized some closing down 600 points. stocks and commodities were down and trading was the heaviest in four years. some of the most widely held stocks were frenzied. bank of america and apple and general electric and microsoft seeing the most action. today, u.s. stocks look ready for a comeback. dow futures up 3%. european stocks rallying. it is not the case where the selloff started. in asia, the selloff is there. look at shanghai's benchmark index down almost 8% for the second day in a row. the index has fallen 40% since june and rattling global markets. fears of the weakness in china's economy is putting fear in the market. i want to bring in andrew
stevens in hong kong. andrew, two very different stories. european stocks are rallying. u.s. stock futures are perking up, but the selloff continued in asia. >> reporter: good morning, christine. the selloff continued in asia. it was more of a selective selloff. that is important to notice. it was shanghai's bigger fall. 7.6% versus 8.5%. no doubt panic ruling in shanghai. japan also down today. that was a big fall in japan and surprisingly big fall considering if you look around the rest of the region, considering hong kong. the australia market was up, but tokyo is still down. the fear is there a global slowdown in japan is a big exporter would be hit by that. what we are seeing, christine, this is becoming confined once
again to shanghai and the shanghai index, specifically. investors are being burned badly. they are not reacting specifically to bad news from the chinese economy. there is a big disconnect with what happens in the markets in shanghai and the real economy. no sign of government intervention which suggests this selloff will continue. >> andrew, a lot of discussion of what kind of pressure this puts on the united states and the federal reserve in particular. the independent monetary policy setting body that a lot of people would think the interest rates would raise soon. what are the rumbling about whether the federal reserve has stepped back and allowed the china's story to play back and raise rates? >> reporter: the majority is the fed will stay on hold on this, christine. there's just not enough upside
for janet yellen to pull the trigger begin that china is the second biggest economy. export for the u.s. and europe and other countries. every country in the world exports and significantly to china. yes, there is a slowdown in china. not a lot of clarity as to how bad it is at the moment. not as bad as the numbers last week. it is still saying nonetheless, there is no hurry for janet yellen to pull the trigger. you know, anything to get rid of some of this uncertainty. >> andrew stevens this morning. a lot of the brokerage notes noting the u.s. economy is growing. will the fed be ready to raise rates? andrew, thank you. so china's economy and financial situation is a cause
of panic. another contributor is oil prices. they are bouncing back, but below $40 for the first time since 2009. that's because supply continues to boom while slowing growth in asia and elsewhere hits demand. i want to bring in john victor in abu dhabi. we have seen the bounceback in oil prices. where do you think oil prices are held right now? >> reporter: a slight comeback on oil prices. with the exception of china and japan, this will provide some relief to the oil market. alison, the downward pressure will continue. this will provide relief at the gas pump in the united states. it will cause panic in oklahoma and texas and south dakota. we basically were spoiled by
chinese demand with 9% to 10% growth sucking in all of the oil. daily demand for oil is 90 million barrels. china takes in 10 million barrels of that. china slows down and japan slows down, this keeps pressure on prices. at the same time, we have the global fight for market share. starting with the opec meeting last year. the shale producers in the united states is resilient. jobs are being cut and rigs are going down, but production is held steady. citigroup put out a note with prices around $39 a barrel today, we could see $32.50 a barrel before the end of 2015. >> as we see this pressure, what do you think? can we draw parallels to the 2009 financial crisis or the
1998-1999 asian crisis? >> reporter: i think we should start looking into that concern. we have seen $1 trillion come from the emerging markets in the last 13 months. you have to go back to 2008-2009 to see that. the emerging markets were drivers of the growth. at the same time, oil has gone down. so has a full range of commodities which have dropped 17% in price since the start of the year and are in a bear market in the last 12 months. this will put a lot of pressure on economies in southeast asia and latin america. this is not the 1998-1999 asian crisis. we have to keep an eye on it. the capitals leading the economies with the concern of the u.s. federal reserve will raise rates. it is on the edge. >> it certainly is.
john, thank you. the presidential candidates have an opinions when it comes to the cause of the global market slide. republicans blaming everything from the federal reserve a and wall street elites and spending policies of the obama administration. here is donald trump. >> i have been telling everybody for a long time china is taking our jobs and taking our money. be careful. they will bring us down. you have to know what you are doing. we have nobody that has a clue. >> former ceo carly fiorina blames the market slide on the federal reserve for the easy money policies. chris christie says it is the obama administration's fault for spending too much. and scott walker wants a strong message sent to china. >> i called on the president of the united states to cancel the state visit he is providing for
the head of china not because of what they have done to devalue the currency. why would we give that state visit to a country that doesn't share our values and allegiance. i call on others to ask the president of the united states to say we will not have that state visit. >> this tweet from bernie sanders. he said we need banks that invest in the job creating economy. so far, no comment on market jitters from jeb bush or hillary clinton. the intrigue building on capitol hill as joe biden ponders a run for the white house. the vice president scheduled to meet with democratic fund-raisers after labor day. another sign he is serious for challenging hillary clinton for the nomination. we get more from correspondent joe johns. >> reporter: after the white house lunch with president obama
on monday, the buzz about the vice president's campaign actions picked up in tempo after white house press secretary josh earnest went out of his way to praise biden. >> the president has indicated his view that the decision that he made, i guess, seven years ago now, to add joe biden to the ticket as his running mate was the smartest decision he made in politics. that gives you some sense of the president's view of vice president biden's aptitude or the top job. >> reporter: the vice president making a series of moves. including scheduling meetings with supporters and donors and meeting with the former obama officials at his residence at the u.s. naval observatory. the message from the vice president's office is he has not made a decision about running for president in any speculation to the contrary is false.
a democratic source telling cnn the vice president is leaning toward running than not running. one issue discussed is to have him announce his intentions the first week of october and the run-up to the first democratic debate. biden has been making subtle moves. he brought on kate beddingfield. she worked at the white house and motion picture association of america and in john edwards' campaign in 2008. biden over the weekend meeting with elizabeth warren. she is a favorite of progressives which would be useful for anyone seeking the nomination. >> joe johns, thanks for that. it is turning out to be an interesting political season. new information this morning about the suspect in the paris train attack taken down by hero passengers. we are learning about the alleged gunman next.
anti-terror police have until tonight to finish questioning ayoub el khazzani. the suspected gunman on the high speed train terror in france. this is raising concerns about train safety here on american soil and across europe. i want to bring in senior correspondent jim bittermann. good morning, jim.
>> reporter: good morning, christine. the question of safety is on a lot of people's minds this morning after what was a lucky break on friday when the three americans stopped el khazzani from committing some kind of terrorist act on board that train. we are waiting to hear what the prosecutor has to say. what kind of charge levelled general him. they can question him for 96 hours without bringing any kind of charge. at that point, they have to make the decision to let him go, which will not happen, or charge him with something. we will know later in the day what the charges will be. the question of safety is something that is on everybody's mind. there are thousands of train stations and millions each day ride trains across this country and europe. how do you provide security for everyone? it is a problematic question.
>> thank you, jim. sweeping changes in store for the municipal court system in ferguson, missouri. among the most significant, a judge ordering all arrest warrants issued before january 1st, 2015, voided. the reforms are part of an effort to build trust in the police and court system in ferguson after the justice department found both discriminated against african-americans. the racing world is mourning the death of justin wilson. he was hit by debris at a crash at the pocono race way. he died from his injuries on monday. he was 37 years old. >> so sad. north and south korea reaching a deal to avert war, but will the peace last? we're live after the break. ♪ look how beautiful it is... honey, we need to talk. we do? i took the trash out.
i know - and thank you so much for that. i think we should get a medicare supplement insurance plan. right now? whether you're new to medicare or not, you may know it only covers about 80% of your part b medical expenses. it's up to you to pay the difference. so think about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they help cover some of what medicare doesn't pay. i did a little research. with a medicare supplement plan, you'll be able to stay with your doctor... oh you know i love that guy. mmmmhmmm. these types of plans let you visit any doctor or hospital that accepts medicare patients. and, there are no networks. is this a one-size fits all kind of thing? no. there are lots of plan options. it all depends on what we need. and how much we want to spend. call now to request your free [decision guide]. it could help you find an aarp medicare supplement plan that's right for you.
what happens when we travel? the plans go with us. anywhere in the country. i like that. you know what else? unitedhealthcare insurance company has years and years of experience. what do you say? i'm in. join the millions already enrolled in the only medicare supplement insurance... plans endorsed by aarp. remember, all medicare supplement plans help cover some of what medicare doesn't pay. and could really save you in out-of-pocket medical costs. you'll be able to choose your own doctor or hospital as long as they accept medicare patients. and with these plans, there could be low or no copays. you do your push-ups today? prepare to be amazed. don't wait. call today to request your free [decision guide], and find the aarp medicare supplement plan to go the distance with you. go long.
but for how long? >> reporter: that is the case, alison. it was a situation that the united states and the south korea were taking seriously. we saw north korea doubling frontline artillery. we saw 70% of the submarines away from the bases. we are hearing from the u.s. intelligence there was a possibility that north korea was planning a scud missile launch. these threats were taken seriously and tensions needed to be eased. everyone needed to step back. both sides are able to say that they got what they wanted. crucially, the propaganda broadcasts are off. they are not being broadcast across the border any more. in change, what south korea gets is express of regret over land mine explosions that badly injured two of its soldiers. north korea was able to frame this in a way that it did not necessarily have to take responsibility for planting the land mines.
it hasn't exactly apologized, but expressed regret. south korea is taking that as an apology. everyone can calm down a bit. it is still a tense time of year. the u.s. and south korea military drills are ongoing. we will watch to see if everyone does step back and tensions ease. >> everybody on edge. kathy novak from seoul. thank you. on edge here, frankly, because it was an ugly day. stocks crumbled 1,000 points in ten minutes. closing 600 points lower. the federal reserve is watching. something that matters everyone next.
in europe, stocks are bouncing back. u.s. stocks also look ready to climate the open. dow futures up 3%. the dow plunged more than 1,000 points in the first ten minutes of trading. they recovered. at one point, bouncing from the bottom some 800 points. some stocks turned positive. then the close down almost 600 points. yesterday was the heaviest trading volume in almost four years and some of the widely held stocks. bank of america ended down 5%. apple saw three times the typical amount of trade. general electric and microsoft and intel wildly bought and sold. the big question is what now? what does this selloff mean for the looming interest rate hike. now thanks to china's market crash and concerns, the first
interest rate hike in almost a decade may happen in december or march. yesterday, atlanta fed president dennis lockhart said the rate hike will happen this year. >> everyone placing bets. "early start" continuing right now. >> breaking overnight. china's markets plunge again after the dow horror show yesterday. down 1,000 points in ten minutes. will stocks continue to slide or will they find stable footing? live team coverage breaking it down. joe biden could be one step closer to entering the presidential race with new words of encouragement from the white house. jeb bush campaigning on the border, but he may have found himself wading into new controversy this morning. >> good morning. welcome to "early start." i'm alison kosik.
>> i'm christine romans. it is tuesday, august 25th. 5:00 a.m. in the east. let's start with markets. yesterday was horrific. a plunge for the dow jones industrial average. down more than 1,000 points in the first ten minutes. the largest-point loss ever in a trading day. at one point, the dow was down 102 points. stocks were actually higher. by the close, down almost 600 points. investors selling risky assets like stocks and commodities and moving into government bonds. trading was the heaviest in four years. trading some of america's widely held stocks. bank of america, apple, ge and microsoft. stocks look ready for a comeback. european stocks are higher. but where the selloff started in asia, another ugly performance. shanghai's benchmark index down 8% for the second day in a row. it has fallen