British Inquiry Blames Russian President for Assassination of Litvinenko; Volatility Continues in World Markets
BECKY ANDERSON, HOST: Sign off from the top? Well, an inquiry in the UK finds that the Russian president probably approved the operation to kill former spy Alexander Litvinenko. We're live next in London, and in Moscow where those findings are making big waves. Also ahead, ripple effect. Record low oil prices have global ramifications, and that's not all that is worrying investors. A check of the global markets for you coming up. And bracing for a blizzard. A severe winter storm warning in the eastern U.S. and it's got it on edge. We'll cross to Washington to see how preparations there are coming along.</s>ANNOUNCER: Live from CNN Abu Dhabi, this is Connect the World with Becky Anderson.</s>ANDERSON: Well, a very good evening. Just after 8:00 here in the UAE. Stunning new revelations about the poisoning of a former Russian spy who died in London more than nine years ago. A British investigation has concluded that President Vladimir Putin probably approved the 2006 operation to kill Alexander Litvinenko. Now he was a former Russian security agent who came in Britain in 2000 after becoming a whistle blower on the FSB. The FSB, of course, succeeded the infamous Russian spy service the KGB. Well, Litvinenko was poisoned with a rare radioactive substance he claimed while meeting former Russian operatives in a London hotel. CNN's Nic Robertson has more on his death and the evidence that led to Thursday's inquiry report.</s>NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: When this picture was taken, 20th of November, 2006, Alexander Litvinenko knew he was dying. Even claiming he knew who had killed him with the rare radioactive poison polonium 210, authorizing this statement on his death.</s>ROBIN TAM, LAWYER TO LITVINENKO INQUIRY: You may succeed in silencing one man, but the howl of protest from around the world will reverberate, Mr. Putin, in your ears for the rest of your life.</s>ROBERTSON: The former KGB spy-turned British agent had fled Russia in 2000, and was increasingly critical of President Vladimir Putin. He said Russia orchestrated apartment bombings that killed hundreds and led to Russia's invasion of Chechnya. In the days before he died, he told police he suspected the poison had been planted in tea he drank here three weeks earlier, in the upmarket central London Millennium Hotel. He told police he was having a business meeting with two Russians, his former KGB associate, Andrei Lugovoi and Dmitry Kovtun. Hotel security cameras caught vital moments. Minutes apart, both Lugovoi and Kovtun visit reception, then the lobby bathroom. Traces of the poison polonium 210 were later found in the bathroom, on the chairs where the three met, and in the teapot Litvinenko drank from. So serious the evidence and allegations the British government opened an inquiry. Putin was robust in his denials of involvement.</s>VLADIMIR PUTIN, RUSSIAN PRESIDENT (through translator): Alexander Litvinenko was fired from security forces where he served in convoy; ministry of the interior didn't possess any secrets.</s>ROBERTSON: Denials escalated to tit for tat expulsion of diplomats. When Russia refused extradition of Lugovoi to face trial in the U.K. both Lugovoi and Kovtun deny allegations and Russia refuses to extradite them.</s>ANDREI LUGOVOI, INVESTIGATED ON LITVINENKO'S DEATH (through translator): Regarding my position on traces of polonium, I think these questions should be addressed to U.K. security services as they had direct involvement in whatever was going on around Litvinenko.</s>ROBERTSON: It is a denial the British police say doesn't stand up against the huge weight of evidence they have and until both Lugovoi and Kovtun stand trial in the U.K. Litvinenko's murder remains an open case. Nic Robertson, CNN, London.</s>ANDERSON: Well, Matthew Chance is in Moscow for you this evening. Matthew, what is the response from Russian authorities?</s>MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Well, there's been a very dismissive response. First of all, the Russian foreign ministry has said that this cast a shadow effectively over the relationship between Britain and Russia. There's been a denial again from the prime suspect in the case, Andre Lugovoi, who is accused categorically in the report of carrying off the poisoning along with his colleague Dmitry Kovtun saying that this is a politically motivated hearing in Britain. And there's been reaction finally this evening from the Kremlin as well saying that this report may poison the relationship between Britain and Russia. So there is a lot of concern here in Russia that the British government may take steps that could spark off what they would see spark off a further diplomatic row between these two countries.</s>ANDERSON: What sort of steps, Matthew?</s>CHANCE: Well, already Teresa May, who is the British home secretary, has announced a couple of measures matches that have been put in place, the issuing of arrest warrants by Interpol for the two prime suspects, Dmitry Kovtun and Andrei Lugovoi. Also, and this is new, financial sanctions against those two individuals, including freezing their assets. So it's not altogether clear what assets either of those prime suspects have in the United Kingdom that could be frozen by the British government. You know, but the British government has a real problem on its hands. It has to balance the need to respond to this report, which was categorical in pointing the finger of blame at Vladimir Putin and his underlings, with the need to maintain a working relationship with Russia. It's engaged with Russia on all sorts of issues on all sorts of issues, not least trying to find a solution to the conflict in Syria. And it doesn't want to the need to continue engaging with Russia it doesn't come up with an answer with the conflict in Syria, and it doesn't want to isolate the country necessarily at a time when it's already pretty isolated and it's in the process of being brought in from the cold.</s>ANDERSON: Matthew Chance is in Moscow for you on what is our top story today. Thank you, Matthew. Well, we've seen extreme volatility in financial markets this week, haven't we, oil prices continue to hover near their lowest levels in more than a decade. Asian stock markets closed firmly in the red on Thursday. U.S. stocks, though, are bouncing back at this point. About six minutes past 11:00 in New York. The Dow Jones up about 1 percent, 168-odd points higher. That market was some 400 odd points lower at one stage yesterday, closing down about 250 points. Our CNNMoney chief business correspondent Christine Romans following developments for you from New York. And a better day. But that doesn't mean these markets are out of the wood by any stretch, correct?</s>CHRISTINE ROMANS, CNN CORRESPONDENT: No, Becky, you're right. I mean, look, we're taking this day by day here because it is a very dangerous situation with all the fear. You know, you know that markets behave on a spectrum of fear and greed, right? And right now fear is firmly, firmly the emotion that is driving sentiment around the world. Asian stocks down sharply, European stocks trying to buck that. The U.S., thankfully, and Europe sort of breaking with the trend from overnight. But mostly you've seen these markets when one moves violently lower, the rest of them go down with them. This sell-off has really reverberated around the world this year. I want to show you the countries that are in a bear market, that are down 20 percent from their peak. I got a map with these red markings that show you where there are bear markets around the world. And they are spreading from Canada to the U.K., France, Germany, China, Japan. And when you look at -- add onto those the yellow countries that have a 10 percent correction, you can see there aren't very many major markets that are immune to all of this selling. Really fear around the world. Some of the best known stocks, some of the most widely known stocks -- Walmart, Goldman Sachs, Apple, Disney all of them in a bear market or worse here. So, the feeling is -- and as you know it's slowing China, it's a crash in oil markets and concern about what that's going to mean for the U.S. economy, a U.S. economy that is still relatively stable and strong compared to the rest of the world. What these markets are telling you is there is a fear that there could maybe be a recession at some point, that the ill winds blowing around the world and the crash in oil is going to mean something dire for the U.S. But as of now, the U.S. economy is still holding in there. That's why you tend to see these little bounces where people say, wait a minute. If there is a recession, is this too much built in here? Maybe this is a buying opportunity.</s>ANDERSON: Yeah, this is interesting, isn't it? It was a rosier picture in Europe after European Central Bank president Mario Draghi hinted the possibility pumping more money into the system earlier. Let's just have a listen to what he said.</s>MARIO DRAGHI, EUROPEAN CENTRAL BANK COMMISSIONER: We have the power, the willingness and the determination to act. There are no limits to how far we are willing to deploy our instruments within our mandate to achieve our objective of the rate of inflation which is below or close to 2 percent.</s>ANDERSON: And to a certain extent, it's what he said around that, which was pretty gloomy. He had a fairly negative outlook. And we are hearing similar gloomy predictions from politicians and business leaders, Christine, meeting in Davos for WEF, or the World Economc Forum. Though the U.S. increased interest rates late last year, did the Fed jump the gun, do you think? And might we see that rate rise reversed if there's no sign of life in these global markets: oils, equities, commodities, any time soon?</s>ROMANS: It's interesting, because is the Fed responding to global markets? Is the Fed responding to the internals of the U.S. economy. And so far, the stock market has been leading the doom and gloom in the U.S., but not the economic indicators, really. So, the question is -- you know, there's an old saying on Wall Street, right, the stock market has predicted nine of the past five recessions meaning that sometimes the stock market gets out ahead of itself. It is a leading indicator, but sometimes it does get out ahead of itself. What Janet Yellen and her team are looking at are wage growth, anecdotally at least you've been hearing from sectors and companies and economies that are -- and people in this country, CEOs in this country who have been saying that they're having to pay up for top talent. And you're seeing wages rise from Walmart to restaurants to retailers in this country. So wages are definitely starting to rise. If, the U.S. labor market, and if the core of the U.S. economy can basically shrug off all the concerns coming out of China and oil, then you have a pretty decent chance for the Fed to stay on course here for this year and not have to reverse its rate hike that happened in December.</s>ANDERSON: Yes, fascinating, isn't it? All right, we're just under 16,000 on the Dow Jones Industrial average, viewers, hold on to your hats and your funds, as it were, at the moment, because things are going to be choppy, I'm sure. The falling price of oil doesn't only have business ramifications, it will also have major geopolitical impact. Take the war in Syria. The savage conflict that started five years ago as a civil war soon morphed into one involving almost all major powers today. Another round of U.S. peace talks set to start next week, but with four days left to go, a lot is still unknown.</s>ANDERSON: It's a war everyone agrees must be stopped, but nobody agrees on how. Twice, international peace talks have failed, and already it's not looking like third time lucky.</s>STAFFAN DE MISTURA, UN SPECIAL ENVOY FOR SYRIA: There is still a lot of work to be done. What we want to ensure is that this time it would not be like Geneva II. A serious talk about peace and not talk about (inaudible).</s>ANDERSON: But days to go, the United Nations still hasn't issued invitations, saying it's up to major powers like Russia and the U.S. both supporting different sides to agree on who is attending. But despite a last minute meeting, there's still no clarity. In particular, a new Saudi-backed opposition council says it won't accept any other opposition groups attending.</s>RIAD HIJAB, HEAD HIGH COMMITTEE OF NEGOTIATION (through translator): There will be no negotiation in any way whatsoever if there is any addition. We will not go to negotiate. This thing is settled and we will not succumb to pressure.</s>ANDERSON: So who might be at the table? Well, the negotiations are UN- mediated, bringing together the Syrian government and the deeply divided opposition. That includes political and fighting groups backed by Saudi Arabia, Turkey, and France; and veteran secular dissidents who oppose Assad and Islamist rebels. Major world powers like Russia, the U.S., Saudi Arabia, Turkey and Iran will also attend. Everyone agrees that terror groups like ISIS and al Nusra have no part to play despite their huge influence on the battlefield. And just to illustrate how complex and delicate this all is, for some, even the presence of one of the strongest rebel militia is problematic.</s>ANDERSON: Well, having shocked the world by parading prisons as human shields last year as you've just seen there. The Army of Islam is among those Saudi Arabia wants to send to the talks. In a war where human rights groups say all sides are committing atrocities, if a guest list is finally agreed on, there are sure to be some difficult compromises involved. We will await to see what happens. The date was January 25th, those talks to begin, so let's see whether we actually get a table full of participants. Still to come, an act of defiance through art. We're going to me tell you why Syrian artists are making models of some of the landmarks destroyed in the conflict. Oil prices, as we've been talking, have stabilized somewhat after the beating they've taken this week. We're going to talk about the impact that is having with our emerging markets editor and my colleague John Defterios in about 20 minutes from now. Taking a very short break. Back after this.