News Brief: Stock Markets Drop, Democrats' Counter Memo

Feb 6, 2018
Originally published on February 6, 2018 9:21 am
Copyright 2018 NPR. To see more, visit http://www.npr.org/.

STEVE INSKEEP, HOST:

Up until just the other day, the stock market had been on a roll.

RACHEL MARTIN, HOST:

Yeah, we're talking about record highs. And President Trump has been taking credit.

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PRESIDENT DONALD TRUMP: You're going to see numbers that get even better. The stock market has added more than $8 trillion in new wealth.

MARTIN: So that was just last week, and then things changed. Yesterday, stocks went off a cliff, making it the worst day in six years. And although this isn't like the market tanking like it did in 2008, it is enough to make plenty of investors nervous, if not panicky, even. So why the sell-off, and what does it mean for you?

INSKEEP: Let's pose those questions to NPR's senior business editor, Uri Berliner, who's in our studios.

Uri, good morning.

URI BERLINER, BYLINE: Good morning, Steve.

INSKEEP: Also, NPR White House correspondent Scott Horsley is on the line.

Scott, good morning to you.

SCOTT HORSLEY, BYLINE: Good morning.

INSKEEP: Uri, how bad was it really yesterday?

BERLINER: Oh, it was bad. It started out bad, and then it got even worse. Around 3 o'clock, it was really stomach-churning. The Dow fell about 700 points, and it seemed like there was no bottom at all. It was one of those really panicky, nerve-wracking days in the market. Now, it recovered a little bit, but when it was all over, the Dow was down 1,175 points. That's the biggest one-day point loss ever.

INSKEEP: Now let's put that in perspective because 10 years ago, 20 years ago, an 1,100 point drop would be an unimaginable crash of the market.

BERLINER: Correct. Right. So this downturn was more than 4 percent, which is really bad, but nothing close to the worst day ever. In 1987, the Dow, for example, lost 22 percent.

INSKEEP: Oh, because there's so many more points on the market now, so it's a less percentage - a fewer percentage point drop.

BERLINER: Exactly. And January, the Dow was over 26,000.

INSKEEP: So what's going wrong with the economy, if anything?

BERLINER: That's a really good - I don't know if anything is going wrong with the economy. Normally, when there's a stock market crash or a downturn, there - it's connected to a real-life economic event. Obviously, the housing collapse - stocks tanked then, and then...

INSKEEP: A decade ago, yeah.

BERLINER: Yeah. And then in 2011, the U.S. credit rating was downgraded. Stocks fell sharply. Now, if anything, it may be that investors feel the stock - the economy is getting too strong, that wages are starting to rise, that inflation is picking up and that the Federal Reserve will start doing something more to rein that in, or the interest rates are going to be rising, and borrowing costs are going to be too high.

INSKEEP: Oh, which causes investors to want to put their money in different places.

BERLINER: Yeah.

INSKEEP: Scott Horsley's been listening along. And Scott, we heard President Trump bragging about the stock market going up. What's he saying now that it's going down?

HORSLEY: Not very much, Steve. You know, in previous trips to factories around the country, talking with workers, the president has been joking with them about their 401(k)s, saying they all look like investing geniuses. But yesterday, he was touring an Ohio factory to tout the recent tax cuts, and he said nothing at all about the stock market. A spokeswoman later issued a statement saying the president's focused on long-term fundamentals like jobs and wages. And for a long time, you know, we've had a rising stock market and kind of stagnant wage growth. For the president, it's not necessarily politically bad to see the reverse for a little while. To the extent that investors are spooked by rising wages, you know, there're a lot more wage earners out there in the country than there are stockholders.

INSKEEP: Uri, granting that were not financial advisers, what should people think who have their retirement money in those 401(k)s or similar plans?

BERLINER: Well, if you've had your money in a retirement plan or a brokerage account for years, you know, you're still pretty far ahead. We've had a really long bull market. Since 2009, stocks have been on this sort of relentless climb. You know, we've had some bad days lately, but that doesn't change the big picture.

INSKEEP: OK, let's move on now, Uri. Thanks very much.

BERLINER: You're welcome.

INSKEEP: That's NPR's early - Uri Berliner, who is in early today. Anyway, possibly never in history has so much been said by so many about a memo - actually, two memos. Yesterday, the House intelligence committee voted unanimously to release a classified memo prepared this time by the Democrats.

MARTIN: Yeah, this is a point-by-point rebuttal of the memo that was put together by Republican chairman of the House intel committee Devin Nunes. Nunes is a Trump ally who stepped back from the committee's Russia investigation but then kept investigating what he sees as political bias at the FBI. His memo suggests that when the FBI sought a warrant to track a former Trump campaign aide that it relied on that dossier that was linked to Hillary Clinton's campaign. And on Friday, the president declassified that memo.

INSKEEP: And Scott Horsley is still with us to talk this through. Now, Scott, I'm remembering we talked about the Republican memo for many days before knowing what was really in it. We found out that, actually, we knew approximately what was in it. What is known about the Democratic memo in advance?

HORSLEY: Well, this memo is designed to fill in what the Democrats see as gaps or inaccuracies in the Nunes memo, and that would presumably include what other evidence the FBI relied on in seeking authority to conduct surveillance on that former Trump campaign adviser Carter Page beyond the politically charged Steele dossier. We know that the memo, composed by Adam Schiff, the ranking Democrat on the intelligence committee, is more detailed than the Nunes memo. It's more than twice as long, and it perhaps makes more reference to the underlying classified information that the FBI compiled, information which Congressman Schiff read and which Nunes did not.

INSKEEP: But now it is up to President Trump to decide whether this memo gets out to the public.

HORSLEY: That's right. The president has not said how he'll handle this, although a spokesman says the White House will conduct the same kind of review of the Schiff memo as it did of the Nunes memo. It's got five days to do that. The president did issue a sort of ad hominem Twitter attack on Congressman Schiff yesterday. He assigned Schiff a pejorative nickname, and called him a liar and a leaker, although he offered no substantiation for those accusations. Schiff has taken an additional step that Congressman Nunes did not. He has also asked the FBI and the Department of Justice to review his memo before it's made public.

INSKEEP: Can I just ask, Scott Horsley, Republicans and Democrats alike seem willing or eager to get this Democratic memo out. If the president doesn't allow it, can Congress override him?

HORSLEY: There is a procedure in which the House can vote in closed session to override the president's decision. It's not clear that the Republican-controlled House of Representatives would actually be willing to go that far. But as you mentioned, House Speaker Paul Ryan has said he supports the release of this memo, and the intelligence committee, which voted yesterday to make it public, did so on a unanimous, bipartisan basis.

INSKEEP: We are learning so much about the checks and balances and the intricacies of Washington. Isn't this the first time these rules have been used at all, or among the first times?

HORSLEY: This is all pretty arcane stuff - yeah, rarely used procedures.

INSKEEP: Scott, thanks very much.

HORSLEY: You're welcome.

INSKEEP: That's NPR White House correspondent Scott Horsley.

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INSKEEP: All right, this is one of those stories where you just say what the news is, and it seems so improbable. SpaceX will launch a rocket today carrying a sports car and a crash dummy named Starman.

MARTIN: Yeah, this is really happening. It was dreamed up by SpaceX CEO Elon Musk. He's like the real-life version of Tony Stark from "Iron Man." The rocket - it's a great name. It's called Falcon Heavy. It is more than 200 feet tall with 27 engines. And right now, it is sitting on a launchpad at the Kennedy Space Center in Florida. So what's the mission, and what's with that cargo?

INSKEEP: NPR's Nell Greenfieldboyce is on top of the story.

Hi there, Nell.

NELL GREENFIELDBOYCE, BYLINE: Hello.

INSKEEP: Falcon Heavy doesn't sound like a good name - like, just heavy. It could crash.

MARTIN: No, it sounds tough.

GREENFIELDBOYCE: Yeah, but the falcon heart...

INSKEEP: OK, that's true.

MARTIN: Yeah.

GREENFIELDBOYCE: Falcon's like Millennium Falcon from "Star Wars." C'mon.

MARTIN: Right, right.

INSKEEP: (Laughter) OK, fine, I'll get in the spirit of things. What is the plan for this rocket?

GREENFIELDBOYCE: Well, SpaceX was founded by Elon Musk, and Elon Musk's attitude is, space flight is never going to become common and ordinary unless it becomes cheap. So his whole thing is making rockets cheaper by making them reusable. And he's been building up his rocket company, and the Falcon Heavy is their latest offering. It is a powerful rocket. It's going to be more powerful than anything in history except for the famous Saturn V moon rocket.

INSKEEP: Oh, wow.

GREENFIELDBOYCE: ...Which hasn't flown since the 1970s. And so this thing is going to launch, or it's going to be a spectacular failure, but either way, everybody in the space community is watching this thing.

INSKEEP: Is this the heavy part? They want to be able to get a big payload into space.

GREENFIELDBOYCE: That's right. They want to lift something heavy up. So this thing is going to be able to carry up twice as much payload in terms of mass to orbit as its nearest competitor. And it's going to do it for, like, a third of the price.

INSKEEP: OK, so you're going to make things cheap. That's part of his vision. What's the rest of it? What does he want the world to - how does he want the universe to change? Let's put it that way.

GREENFIELDBOYCE: He wants humans to be a multiplanet species. He wants to put people on Mars. He is not kidding. Periodically, he updates people on his big Mars colonization plans, which involve his plans for an even bigger rocket he wants to build.

INSKEEP: So there's really a car in this rocket.

GREENFIELDBOYCE: It is his car, yes. At first, when Elon Musk...

MARTIN: It's his car?

GREENFIELDBOYCE: Yes. It's his cherry-red Tesla Roadster.

MARTIN: Wow.

GREENFIELDBOYCE: ...Built by his other company, an electric car company. And when first - when he first announced this, people didn't know if he was joking or not. But if you look at the license granted by the Federal Aviation Administration, it does list his car as the payload.

INSKEEP: (Laughter).

GREENFIELDBOYCE: Because normally, on a test flight, you put some sort of dummy payload, just some sort of mass thing, a bunch of metal that's heavy.

MARTIN: Seems like an unnecessary sacrifice, his car.

GREENFIELDBOYCE: He said he just didn't want it to be boring. He wants it to be exciting.

MARTIN: (Laughter).

INSKEEP: OK. Do - you mentioned a license. Do you need, like, a license plate for a car in space? You know, can you drive that thing in space? Self-driving car, I suppose...

GREENFIELDBOYCE: It's got, like, a mannequin in it that is wearing SpaceX's spacesuit that they hope to launch astronauts in, so it's going to be, like - it's going to look like someone cruising through space in a red convertible.

INSKEEP: So when you say a multiplanetary species - so the goal is to be able to lift payloads heavy enough that people, with all of their baggage, accoutrements or whatever, can go to Mars, live somewhere else. Is that it?

GREENFIELDBOYCE: That's the goal.

MARTIN: And our cars - we could take our cars.

INSKEEP: Exactly - go driving on the red planet. Nell, thank you very much, really appreciate it.

GREENFIELDBOYCE: Thank you.

INSKEEP: That's NPR's Nell Greenfieldboyce.

(SOUNDBITE OF STAN FOREBEE'S "STARTING AGAIN") Transcript provided by NPR, Copyright NPR.