• With: KT McFarland

    This is a rush transcript from "Your World," March 18, 2014. This copy may not be in its final form and may be updated.

    NEIL CAVUTO: It's time for KT McFarland on this.

    Because, KT, a lot I want to get into with you, but this -- this is dragging on a while here.

    KT MCFARLAND, FORMER DEPUTY ASSISTANT SECRETARY OF DEFENSE: Yes.

    CAVUTO: And it's call -- bringing into a question who knew what and when? Was this a terrorist act? A whole different ball game now.

    MCFARLAND: Or the fact that nobody has claimed credit for it, you have to wonder, is it a terrorist attack that is not quite finished yet?

    CAVUTO: Well, that's interesting. That's interesting.

    (CROSSTALK)

    MCFARLAND: What I look at it, though, is you don't -- we don't know right now. We have eliminated a few possibilities, but even more possibilities have sort of presented themselves.

    I look at it and say, don't think about, what do we know, what do we not know? Think about it from the bad guy's perspective. What do they now know about us? What have they seen in the reaction of the last week that tells them things?

    They have learned that Third World aircraft -- airliners and aircraft don't have the security we do. They have learned that despite the Interpol database, a lot of people don't even look at it. They have learned that people still can get on airplanes paying cash, buying the ticket at the last minute, and buying a one-way ticket.

    That was all the stuff that the September 11 hijackers did when they hijacked our plane however many years ago. So I think that you look at all this, and then have to say and, no, wait a minute, is the A-team really investigating this? It took a week for the United States to get involved. The lead country was Malaysia. They're not the A-team.

    So, I think what this does is to say, maybe terrorists cause this and maybe they didn't, but bad guys are looking at this and saying, I see their loophole, I see their vulnerabilities, I see their weaknesses, and we know that terrorists are just consumed with using the international air system for their evil deeds.

    CAVUTO: What's interesting when you say is, even if this wasn't a terrorist act, per se, terrorists are learning that there are big old gaps certainly abroad in these various countries...

    MCFARLAND: Right.

    CAVUTO: ... and how they -- they supervise this sort of stuff. So that's just a treasure trove of information.

    MCFARLAND: It's a treasure trove that they wouldn't have found out any other way.

    Look, we think that there are eyes in the sky everywhere, everybody sees everything all the time. What we have now determined is that the United States does have eyes in the sky, but we're not looking south. We may be looking at China and Russia and North Korea. Is anybody looking south? Are the Chinese looking south? Maybe, but they are not sharing.

    CAVUTO: Yes.

    Real quickly, I know I follow the markets, to my own detriment, but they have been rising through all this bellicose talk, and Crimea practically rejoining the Soviet Union -- the old Soviet Union, Russia. I got...

    (CROSSTALK)

    MCFARLAND: The new Soviet Union.

    (LAUGHTER)

    CAVUTO: Right, the new Soviet Union.

    Why is that? I mean, obviously, they are either not too worried or they don't think this is going to heat up.

    MCFARLAND: Yes.

    CAVUTO: Are they just whistling past their own graveyard?

    MCFARLAND: No, I mean, what's the response here? I mean, nobody is going to scramble the jets over Ukraine.

    It's of interest to us, but not of American vital national interest.

    CAVUTO: Well, they seem to be dismissing these sanctions as well.

    MCFARLAND: Oh, the sanctions are nothing more than just -- you know, just a little scold. And Putin is looking at this and saying, "I'm the bully on the playground. I'm just going to steal your lunch money until somebody stops me."

    And this is certainly not going to stop him. It's a price he's very happy to pay to reassemble the new Soviet Union.

    CAVUTO: Even if it hurts a lot of his fellow oligarchs?

    MCFARLAND: Oh, come on, Neil. They took that money out of their bottom -- they may be billionaires, but they took that money out of the banks last week when they thought there were going to be sanctions against them.

    And so maybe they don't get visas. Huh. Guess what? No summer in the Hamptons. Guess they will have to spend the summer in Sochi instead.

    CAVUTO: Where it's warm, I understand.

    (LAUGHTER)

    CAVUTO: All right, KT, thank you very much.

    MCFARLAND: Thank you.