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Former President Jimmy Carter Undergoing Radiation; Markets Plummet on Growth Fears; Customers of Cheating Website Ashley Madison Exposed by Hack; North Korea Ratchets Up Tension with South Korea; Prep School Rape Trial Update. Aired 9:30-10a ET

Aired August 21, 2015 - 09:30   ET

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


[09:30:00] DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: It depends. You're planning in between each particular phase of the radiation. So it's a commonly done thing. But, you know, again, it is probably claustrophobic. And you've got to sit there for some time.

CAROL COSTELLO, CNN ANCHOR: Oh, my goodness. So I've heard from some people whose parents have gone through this, that it - that it can change your personality for a time.

GUPTA: Yes, you know, what - when you're thinking about radiation to the brain, you're thinking about oftentimes people will get radiation to the whole brain because you're basically trying to - you're assuming that there's cancerous cells in all these different areas of the brain. And that is the type of radiation that's most often associated with changes in personality, changes in mood. It could happen here as well, but the way this particular radiation works that President Carter was describing, it sort of takes all these beams and focuses them on these - this one area. The goal is to provide the most radiation to the areas of concern and the least to other areas. So it - you could still have side effects. People often feel very fatigued after this. But the personality changes may not be as significant as with the other type.

COSTELLO: I hope not. Dr. Sanjay Gupta, thanks so much. I appreciate it.

GUPTA: Thank you.

COSTELLO: And good morning. I'm Carol Costello. Thank you so much for joining me.

All right, you hear the opening bell. It's ringing on Wall Street. Investors are likely bracing for a rough ride. Concerns over growth have been pushing markets around the world lower today. Yesterday, the Dow wiped out every single gain it had made this year.

So, what lies ahead? To talk about that, I'm joined by chief business correspondent Christine Romans, Cristina Alesci is live at the New York Stock Exchange, and managing principle at Seventh Capital Investment, Monica Mehta, is also here.

So, Cristina, I want to start with you. What's the mood there?

CRISTINA ALESCI, CNN MONEY CORRESPONDENT: Looks like a continuation from yesterday. Lots of downward pressure. Gonna be ugly.

Carol, let me just put some more context around this. Yesterday that 2 percent drop was the biggest we've seen in about a year and a half. We're now below that 17,000 threshold, that psychological threshold. That we haven't reached in about a year. So clearly a lot of concerns here, mainly driven by the fact that emerging markets are really in disarray and that's causing oil to drop. That's putting pressure on the dollar upwards, actually. That could spell some trouble for U.S. businesses trying to sell their goods overseas.

So there is where the concern lies for a lot of investors. We'll have to see how this plays out. It's kind of too early to tell. But remember, keep in mind, we are still pretty high on a historical basis. We're still pretty close to record highs.

COSTELLO: OK. So I see Christine is nodding. Monica is nodding. So - thank you Cristina Alesci, by the way.

So, Christine, what's going on? Is the correction finally here?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Well, we - there hasn't been a, you know, there hasn't been a correction. That's 10 percent from peak to trough. We haven't had one in 1,400 days. I mean that's almost unheard of. The Dow now is 7 percent below its high set in May. And a lot of people are saying it's long overdue. There are a lot of reasons.

China had a number overnight that showed its manufacturing sector is slowing very quickly. You know, yesterday we talked about the Fed. The Fed is going to raise rates, but no one knows quite when. Maybe the Fed is going to hold off raising rates because it's worried about the global growth situation. That is causing a lot of problems in the market.

And then when you look at some of the high fliers this year, Carol, you look at Netflix yesterday got hit hard. You look at Disney. You look at the big media stocks. You look at Apple, for example, is down 15 percent from its peak.

COSTELLO: Twitter. Right.

ROMANS: Right. All those things that drove things up. All the darlings for investors have been hit a lot lately. So this is one of those reminders that stocks don't just go up, folks. Sometimes they go down too. And they're going down right now.

COSTELLO: So, Monica, I've been enjoying looking at my 401(k) lately, but not so much. I'm just not going to look at it. But should I buy since stocks area - stock prices are lore?

MONICA MEHTA, MANAGING PRINCIPLE, SEVENTH CAPITAL INVESTMENT: Yes, I actually think, especially with something like a 401(k) where you have a long hold, it's retirement, it's when people are panicking it's the right time to double down and buy a little bit more. But again, with the caveat that you're going to be able to sit on this for 10 or 20 years if you need to. COSTELLO: Yes.

MEHTA: Because, again, what's happening here is, while there's no new data that's causing all of this to happen, there's a global slowdown. China is seeing growth. That's the slowest it's seen in 25 years. All these emerging market economies are exporters to China. So when China's not doing good, they're not doing good.

COSTELLO: Yes.

MEHTA: And the S&P 500 is a global marketplace. Fifty percent of the profit and revenue for the Dow comes from all over the world. So we're so interconnected.

COSTELLO: OK. So let's just look at the bigger picture because we always - you told us, Christine, just the other day that our economy in the United States is getting better.

ROMANS: Yes.

COSTELLO: So what does this signal, this drop in the stock market?

ROMANS: So this signals that we're concerned about the rest of the world. If you think of the U.S., as Mohamed el Arian (ph), the legendary investor likes to say, the cleanest shirt, dirty shirt in the laundry, then you buy stocks here. I mean that's what you believe, right?

We know that interest rates are going to rise. That's going to take a little bit of the shine off the stock market because there will be other investments that will be a little more - a little more valuable.

[09:35:04] When we talk about the bigger picture, the bigger picture is also the oil story. Oil is tumbling. It's a crash in the oil market, Carol. That's going to mean lower gas prices for people all through the fall, which, on a paycheck to paycheck kitchen table economics, that means you're going to have more money to spend or save or pay down debt. So that's a good thing that probably people are going to feel into the fall.

COSTELLO: But as far as job creation goes, Monica, what does it mean for job creation?

MEHTA: Well, so while you've seen consumers actually spend all the savings they're getting from lower oil prices this year, you have not seen businesses invest really in anything. And that's been the problem. The low interest rates from the Fed, the whole idea behind it was, hey, we'll give you cheap money, businesses, go out there and invest and create jobs. And they really haven't been. They've been using the cheap money to merge and acquire and do all this financial engineering and so now -

ROMANS: Buy back their own stocks.

MEHTA: Buy back their own stock and that's - you know, you see the stock market go up and I think that's where you see frustration on main street because they're like, my life's not any better. And so now with oil prices going down, again, you're going to see more money to the consumer, but I think businesses are going to feel more shaky and that - that is a big problem in itself.

ROMANS: They're not raising wages. Job creation has been steady and solid for a couple - for several years now. Wages haven't gone up. So even though the job market is getting better, and it really is, there are - there - look, if you - if you have another job or you want to negotiate a raise, now is the time to try to do it because, you know, companies are trying to keep their top talent. However, wages have not been going up in general for most people and that's why people still feel a little unsteady about things.

COSTELLO: Gotcha. Christine Romans, Monica Mehta, thanks to both of you. I appreciate it.

ROMANS: You're welcome.

COSTELLO: Still to come in the NEWSROOM, this could be the worst day ever for 32 million paying customers of that website dedicated to extramarital affairs.

(COMMERCIAL BREAK)

[09:41:05] COSTELLO: Thirty-two million people revealed by the Ashley Madison hack. And that includes 15,000 government e-mail accounts. And while it's hard to feel sorry for cheaters, this document dump does - document dump, rather, brings up a lot of ethical questions. So let's talk about that with CNN's Laurie Segall.

Welcome, Laurie.

So you've been spending a lot of time on the dark web looking at these names.

LAURIE SEGALL, CNN MONEY TECH CORRESPONDENT: Yes.

COSTELLO: Creepy.

SEGALL: It is. And the scope is just enormous. So you're talking about millions and millions of people. And I'll say this, Carol, a lot of people say, well, we don't have that much sympathy for these - these folks. They're cheaters. But they're also victims of a massive data breach. Their information is out there. They, years and years down the road, could be victims of identity fraud. I - you know, this is something - and we're just at the beginning of it because the information has now gone from the dark web to the open web where everyone's plugging in e-mails, seeing if anyone they know is on there. And it's, you know, it's become almost a bit of a chase to find the cheaters. So it's raising a lot of ethical questions.

COSTELLO: Yes, and I'm not so sure, you know, God forbid if my husband was cheating on me and his name was exposed, I just don't think I'd never everybody to know. I wouldn't want it public for my sake, my family's sake. If I had children, that would concern me. SEGALL: You know, and you have to think about that. There was a

Twitter account for a while that was outing people and tagging the places they worked and putting pictures of them and when they signed up. And you really begin to wrap your head around this. And, you know, Twitter eventually suspended the account. But you have to think about the other victims here, which are the families. And it is interesting when you look at the breakdown. You know, there are something like 15,000 government e-mails on there. Now, we can't independently confirm that, obviously, but we have reason to want to look and see and understand, you know, what the people leading our country are doing. So you always - you wrestle with this fact of, do we look here? Do we not? Where do we draw the line? And I think a lot of people are asking that question.

COSTELLO: I know because - and I said, you're looking and there are some government workers' e-mail addresses, right, that were exposed.

SEGALL: Yes.

COSTELLO: But if they paid for this service with their own money and they didn't do anything illegal, then should the media release their name? It's something we wrestle with, right?

SEGALL: It's absolutely (INAUDIBLE).

COSTELLO: On the other hand, if somebody from the military is cheating and their name is exposed, you can't do that in the military. It's against the rules.

SEGALL: Yes, this is against their code of conduct.

COSTELLO: Right.

SEGALL: And you have them investigating now. But you look at people who are in very sensitive -- in Saudi Arabia, for example, you have e- mail addresses associated there where adultery is punishable in a different way. So, you know, you begin to wrap your head around, this could be a very good - very big deal. A lot of these profiles had sexual preferences. You could almost out someone for being gay in a place where homosexuality is illegal. So you have to begin to think about those things too.

And I'll say this, Carol, there was a second data dump yesterday. Now, this wasn't personal information. This was so much corporate information. We are literally looking straight inside of Ashley Madison and wondering, do you think this company could ever recover after this?

COSTELLO: I don't think so.

Laurie Segall, thanks so much.

SEGALL: Thank you.

COSTELLO: Still to come in the NEWSROOM, North Korea furious over insult blaring loudspeakers. It's now threatening military action against South Korea. Will the United States step in?

(COMMERCIAL BREAK)

[09:48:39] COSTELLO: North Korea issuing an ultimatum to South Korea: turn off a bank of loudspeakers blaring insults by tomorrow or face military action. But today's threat is just the latest in a string of escalating tensions.

Two weeks ago two South Korean soldiers were injured by land mines planted in the DMZ. When North Korea denied involvement, South Korea began blaring propaganda over those giant loud speakers. North Korea called the move a declaration of war and vowed indiscriminate strikes and by last night, both countries had exchanged artillery fire.

Which brings us to today when North Korea ordered its frontline troops to enter a wartime state, prompting South Korea to say it will retaliate if North Korea acts again.

CNN global affairs analyst and managing editor at Quartz, Bobby Ghosh is here to break it all down for us.

So it's just mind-boggling that North Korea would be so incensed by a bank of loud speakers.

BOBBY GHOSH, CNN GLOBAL AFFAIRS ANALYST: They're choosing to be incensed. North Korea is only incensed when it wants to be incensed. Basically the timing of this is not coincidental. This is the time when the United States and South Korea do their annual joint military exercises. That always gets the North Koreans very exercised. Around this time, they're always looking for an opportunity to show some sort of aggression.

[09:50:00] This seems to have gone a little far, this business of raising troops along the border to a state of heightened, almost warlike position. What you worry about in situations like this is not that the leader of North Korea or the leader of South Korea will do something stupid. You worry about one patrol commander, one tank commander, one commander of an artillery piece who gets a little overenthusiastic and misinterprets the signals they're getting from headquarters and presses the wrong button and starts shooting. That's what you worry about in these situations.

COSTELLO: And you're ultra worried about that because in Pyongyang, you said, there are these trucks going through the streets doing what?

GHOSH: That's right. There was a report that said that in Pyongyang there are trucks going around the city alerting the citizens that their country is nearly in a state of warlike preparation. What that means is that eventually the government in Pyongyang, the North Korean government, is going to need some sort of a victory to declare to its people.

Having told the people we're ready to go to war, you're going to need to say in a couple of days, we forced the other side to back down. That's what North Korea always needs. It needs an off-ramp, it needs to be given some sort of face-saving gesture that allows its own domestic propaganda machine to say we won, even though nothing really happened on the ground. That's what we've seen in the past.

COSTELLO: It sounds so stupid to ask you this, but is it possible that North Korea could fire a missile and hit the loud speakers?

GHOSH: Well, they're pretty big loud speakers. The fact that they haven't hit one yet would suggest that their targeting isn't terrific. I think they're going to require the South Koreans to switch the loud speakers off. Looks, these loud speaker wars are a relic of the Cold War. The Chinese and the Russians, Soviet Union, used to do this all the time. Both North Korea and South Korea used to trade loud speaker insults all the time. About 11 years ago they both switched them off. This is not new on that border.

It's just -- As I said at the beginning, North Korea chooses to be insulted or offended from time to time. This is grandstanding, but you worry -- there's reason to worry, even though it's mostly a sort of kabuki theater game, you really worry about one commander, one soldier at the front line doing the wrong thing.

COSTELLO: Bobby Gosh, many thanks. As always. I appreciate it.

Still to come in the NEWSROOM, an emotional end to week one of that prep school rape trial. What the defense lawyer said that left the accuser sobbing on the stand. Next.

(COMMERCIAL BREAK)

[09:56:38] COSTELLO: Now to that prestigious prep school at the forefront of a rape trial. Week one coming to an emotional end for the teenage girl accusing this upperclassman of sexual assault. The teenager breaking down on the stand as Owen Labrie's lawyer suggested she sent conflicting signals to his client. She replies, quote, "I was raped. I was violated in so many ways. Of course I was traumatized. I'm sorry, I'm sorry. I was traumatized in this re- telling." Court resumes next week. Labrie expected to take the stand. He's likely to tell jurors the pair never had intercourse and that he stopped things before they went too far.

Boris Sanchez has been following the trial. He has more for us this morning. Good morning.

BORIS SANCHEZ, CNN CORRESPONDENT: Good morning, Carol. That exchange, important to point out, came after very difficult, very graphic and detailed testimony. The defense pushing her to acknowledge that certain things happened between them in that encounter. She was very emotional throughout her testimony right up until the end of the cross-examination. She was crying. We also heard yesterday from the accuser's mom, a very close friend, and two nurses who met with her.

The first nurse saw her two days after the alleged incident. She works at St. Paul's school, and she -- the accuser allegedly went to go see the nurse to get emergency contraception. This testimony may be pivotal in the case. Listen to what the nurse says the accuser told her.

(BEGIN VIDEO CLIP) MARY MARZELLI, REGISTERED NURSE, ST. PAUL'S SCHOOL IN CONCORD HOSPITAL: She came to me and asked if she could speak to me privately, and so we went into an exam room, and she told me that she had had intercourse for the first time and it was unprotected and she was requesting Plan B.

UNIDENTIFIED FEMALE: Did you talk about whether the intercourse was consensual or not?

MARZELLI: Yes. I did ask her those questions, and she said that it was consensual, that it was not coerced. She appeared anxious. She was teary-eyed, worried, and nervous.

(END VIDEO CLIP)

SANCHEZ: As you heard, the accuser telling the nurse at St. Paul's that the sex was consensual and not coerced in any way. Very important to point out, the accuser said, as she was being cross- examined, that she said that because she wanted to move past the entire incident, that it made her feel uncomfortable and she felt rushed, so she wanted to get it out of the way.

Also keep in mind, her whole family was on campus. Her sister also a student at St. Paul's. It was her graduation so her whole family was there as this whole thing was unfolding. We heard from another nurse yesterday who took the rape kit from her four days after the incident and then next week we're set to hear from Owen Labrie himself. We can imagine very --

COSTELLO: But the important part of this is Owen Labrie says intercourse never took place, yet she went to the nurse to ask for emergency contraception.

SANCHEZ: Right. It's kind of a gray area, I'd say, because the second nurse that we heard from who took the rape kit acknowledged very graphic details, physical evidence, if you will, that honestly is vulgar for TV and there's still kind of a gray area in the testimony that the nurse gave and the testimony that the accuser gave. So I think we have to hear from Owen Labrie himself to see what he has to say about the incident to really kind of get down to what happened.

COSTELLO: Well, we'll hear next week. Right?

SANCHEZ: Yeah.

COSTELLO: All right. Boris Sanchez, many thanks.

The next hour of CNN NEWSROOM starts now.