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QUEST MEANS BUSINESS
Investors Punish Apple; Boeing, Coca-Cola Beat Expectations; NYC Labor Commission Approves $15 Per Hour Fast-Food Minimum Wage; China, US Dollar Weigh on Earnings; Greek Reforms; Trump to Tour US-Mexico Border; Trump Has Highest Unfavorability Ratings; New York Governor Joins Uber Debate; Uber's Impact on New York's Taxi Business; Uber Battle in New York City
Aired July 22, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:59:55] (NEW YORK STOCK EXCHANGE CLOSING BELL)
POPPY HARLOW, HOST: It is the second day of selling on Wall Street. It is Wednesday, the 22nd of July.
Tonight, Apple shares turn sour as investors are left wanting more.
And Donald Trump tells CNN, "I'm not worried about negative polling."
Also, Uber fights a backlash in the Big Apple.
I'm Poppy Harlow, and this is QUEST MEANS BUSINESS.
Good evening, welcome to the program. Tonight, investors lash out at corporate America, starting with the most valuable company of them all. In
the past 24 hours, Apple has seen more than $30 billion wiped off of its market value. Shares ended the day off 4.5 percent.
It is the single worst fall for Apple in a day in a year and a half, and the last time it happened, well, it was for pretty much the same
reason: investors unimpressed by sales of Apple's most popular device, the iPhone. Apple shares pushed the Dow into a straight day of losses, ending
down just about 70 points.
Investors took some comfort, though, in two other blue chip. Earnings from Coca-Cola and Boeing both beating Wall Street's expectations, although
Coca-Cola shares still closed the day lower.
Joining me now to talk about all of it, CNN Money's digital correspondent Paul La Monica. We've got to start with Apple, because I was
interested, when I saw the fall this morning -- when did this happen again? So, we looked back to when it happened again. It happened about 18 months
ago. And when it happened, I should note, Donald Trump tweeted about it.
PAUL LA MONICA, CNN MONEY DIGITAL CORRESPONDENT: He did, indeed.
HARLOW: Let's show you what Donald Trump tweeted. He tweeted, "I predicted Apple's stock fall based on their dumb refusal to give the option
of a larger iPhone screen like Samsung. I sold my Apple stock." Well, they did make a larger screen.
LA MONICA: They did eventually come out with the iPhone 6 and the 6- Plus. And Apple stock, despite the fall today, is up about 80 percent from when Trump said he sold it, so I'm sure he's going to take credit for the
LA MONICA: So, Tim Cook, thank The Donald for the success, even though today --
LA MONICA: -- Apple people are not as impressed.
HARLOW: But on a more serious note here, look, the company is worth about, as you wrote in your column today, $40 billion less than it was
yesterday. But you say, do not freak out.
LA MONICA: Yes, this --
HARLOW: This selling isn't really warranted, you don't think.
LA MONICA: I -- I'm not so sure it is. I mean, they missed the forecast for iPhone 6 sales, or iPhone sales, because they don't break it
down by the individual models per se. They still sold 47.5 million phones in a quarter. That is really amazing. And this company is minting money.
It now has --
LA MONICA: -- $203 billion in cash. Carl Icahn and a lot of other investors want to see them put more of that money to use, because a lot of
it is sitting --
LA MONICA: -- overseas.
HARLOW: Well --
LA MONICA: Ninety percent of it is in foreign subsidiaries.
HARLOW: And that begs the question, is tax policy going to change in this country so they bring more of it back? But also, do you think that
Apple, perhaps this is a call for them to be using that cash in a better way?
LA MONICA: I think Apple does already do a decent job of rewarding shareholders. You do have the stock buybacks, which are a topic of intense
debate. Are stock buybacks really the best use of cash? That's a good question.
Dividends, there's not as much debate there. People like getting that quarterly check, they can reinvest it in the stock or they can use it to
spend on something else, and Apple pays a healthy dividend.
But should Apple be doing more acquisitions? Perhaps. This is a company that now really relies on the iPhone, and that's why everyone hopes
that the Apple Watch is the next big hit. Maybe they're going to do a car, and that could be --
LA MONICA: -- something that transforms the company.
HARLOW: But they won't release those numbers on the watch, other than to say that it exceeded expectations.
LA MONICA: It's just too small. If they ever get to the point where the watch matters and really drives the bottom line --
LA MONICA: -- they will report it.
HARLOW: That's a good point.
LA MONICA: Apple does do a good job. They've got iPad sales in there. They've got Mac sales. The watch just isn't big enough yet. It's
HARLOW: It's an "other." Let's point out other really strong reports today. Coca-Cola, despite sort of headwinds of a big decline in Diet Coke
sales and concerns about a stronger dollar, they did really well. Boeing also --
LA MONICA: Yes.
HARLOW: -- are to the upside.
LA MONICA: Two quote-unquote "old companies" doing well. In the case of Coke, Diet Coke sales are continuing to plunge. Part of it, I think,
might be changing tastes and Americans have soured on diet drinks for health reasons.
But Coke's also really doing a good job promoting Coke Zero, which is a similar product, and volume for that brand has gone up pretty sharply.
But with Coke, the big story is that overall volume around the world is up. Investors seem to be --
LA MONICA: -- pleased with that, even though the stock did pull back at the end of the day.
HARLOW: Big customer for Coca-Cola, McDonald's. Earnings out tomorrow for McDonald's. This on the heels of a major vote here just in
the last few hours in New York City. The sort of Labor Commission here approving a $15 minimum wage for all fast-food workers. Now, it's not a
LA MONICA: No.
HARLOW: It has to get through the New York State legislature. That's going to be a big fight. But if this does past in New York, and this is
the trend we see across American cities, what does this do to a McDonald's, to a Burger King?
LA MONICA: Yes.
HARLOW: To those business models?
[16:04:56] LA MONICA: It could put pressure on their profits, because their expenses are going to go up. Obviously, there's a certain
element of this is more important for the franchisees, because remember, McDonald's already announced a pay raise for 90,000 --
LA MONICA: -- of its workers earlier this year. That only affects the company-owned restaurants. I think McDonald's realizes that there's a
lot of pressure, a lot of people thinking that wages should go up, that fast-food workers don't make enough.
So, the possibility of higher wages could hurt them in the short term, but maybe it gives them some longer-term good will. And remember, now they
have a former White House press secretary as their top spin doctor, so --
HARLOW: It's a good point.
LA MONICA: So I'm sure they're going to make the case that yes, we're trying to keep jobs growing in America and paying more people.
HARLOW: You can bet this is a question that'll be asked on the call tomorrow, no doubt.
LA MONICA: That and what about the food? Because that's the key.
HARLOW: There you go.
LA MONICA: Better food is going to drive that stock higher.
HARLOW: Paul La Monica, thank you so much as always.
LA MONICA: Thank you.
HARLOW: With earnings season in full swing, we're seeing two major factors weighing on results. First, China. Analysts at Cowen downgrading
Apple's stock, warning of a, quote, "demand reset" from China. And United Technologies warning slow growth in the country could damage its profits.
Second, the US dollar, which strengthened in the first six months of this year, that hurts US exporters by making their products appear more
expensive to overseas buyers. In an effort to keep share prices buoyant, companies have turned to share buyback programs, as Paul and I were just
talking about. Analysts warn those programs simply mask sluggish sales.
My next guest says US stocks could easily fall between 20 and 40 percent. He is a long-time bearish investor, Marc Faber, and he publishes
the aptly-named "Gloom, Boom, and Doom Report." But he smiles as he publishes that report.
HARLOW: Thank you for being with me, sir. Let's talk about why you think this is the moment for a correction, even when we see, as Paul just
pointed out, some very strong numbers from some big blue chips.
MARC FABER, EDITOR AND PUBLISHER, "THE GLOOM, BOOM, AND DOOM REPORT": Yes, but some numbers haven't been that great. And what has been happening
lately is that a lot of stocks have not reacted favorably to actually good numbers. You look at General Motors, it's down 20 percent already. And
the auto sales in the US were very good.
I believe that if you look at the world, there are some people who believe that the global economy is healing and will expand at an
But I can tell you living in Asia and observing especially the Asian economies and emerging markets in general, most emerging economies are
either not growing or slowing down very considerably, like China, where for the first time in many years in June, car sales were down, where freight
traffic is down.
And you only have to look at industrial commodity prices. They have tumbled. Collapsed. Usually this happens in a period of economic
weakness, not strength.
HARLOW: So, what about those, though, that point out, look, you cannot have sort of quarter-on-quarter, year-on-year ten percent growth in
China, right? Jamie Dimon talking about it in the JPMorgan conference call the other week, saying do not get too concerned about this. We still saw
China's numbers, if you take them at face value, coming in at 7 percent growth.
FABER: Yes, that is what they're telling you. Do you ever believe what governments are publishing?
FABER: You have to look at statistics that actually reflect the economic reality and the truth and not believe the Ministry of Truths in
HARLOW: Let's talk about Europe and Greece and the ECB.
HARLOW: You came out this week and you pointed to what you --
FABER: You want to change the subject.
HARLOW: Well, I don't want to change the subject, but I do want your take on this, and that is what you call Ponzi finance, in terms of the ECB
HARLOW: -- and the dealings with Greece. Explain.
FABER: Yes. Well, I think that Greece is in a very difficult position, and basically they have had austerity, their GDP is down more
than 25 percent over the last few years. But the debt has continued to expand, partly because of imprudent lenders, you understand?
The private sector would never have lent that kind of money to Greece. But the ECB and the EU and the IMF, they all lent that money. Now Greece
cannot pay, this we all know, and the IMF also says so. Greece needs a haircut according to the IMF of about 30 percent in their debts. I would
think that minimum 50 percent of Greek debts have to be written off.
[16:09:58] So, what happens is, the EU will lend the money so they can repay the IMF and the ECB. It's a complete joke.
HARLOW: So --
FABER: And the austerity that is being imposed on Greece will make matters even worse. Greece will stay in depression.
HARLOW: All right, we're out of time, but sir, I could talk to you all hour. Would love to have you back on again soon to talk about all of
it and more. Thank you very much, Marc Faber joining us this evening from Chicago.
Well, presidential candidate Donald Trump says he can and will change his tone if he is elected president. CNN's Anderson Cooper sits down with
Donald Trump and then joins us with highlights from his exclusive interview, next.
HARLOW: Donald Trump taking his headline-grabbing presidential campaign to the US border with Mexico. He will tour the border region to
cap off what has already been a week of astonishing publicity.
On Monday, Trump defended disparaging comments that he made about Senator John McCain's military service. Then on Tuesday, he gave out
Senator Lindsey Graham's cell phone number to the American public. Then on Wednesday, he went after another candidate, former Texas governor Rick
Perry, on Instagram, calling him a hypocrite.
Thursday, Trump is scheduled to go down to the border between the United States and Mexico and tour it with US Border Patrol agents. He says
the combative tone that he has shown in his campaign thus far can change if he is elected president and will change if he's elected.
Well, he leads the Republican party in some of the polls. He is also the most unfavorably-viewed of all of the GOP contenders among voters in
swing states. That's according to a new Quinnipiac University poll. CNN's Anderson Cooper sat down this afternoon with Donald Trump and has the
So, you asked him about the polls first and foremost. Because some are great for him and some are really bad.
ANDERSON COOPER, CNN ANCHOR, "ANDERSON COOPER 360": Without a doubt. This Washington Post/ABC News poll that came out on Monday was very
positive for Trump, it shows him way out in front in the Republican field. That was a poll among Republicans comparing him to the other Republican
candidates. As you know, there are many of them. And he had something well over 22 -- like 25 percent.
However, in this Quinnipiac poll, which is for the general election in three swing states, the unfavorable rating for him almost is 2 to 1 --
COOPER: -- which is actually very bad. Also bad numbers for Hillary Clinton, we should point out, in that same poll. I talked to Donald Trump
about this. He wasn't really all that happy to actually talk about the Quinnipiac poll. He said he hadn't even really seen it at that point, and
later on he discounted it. But here's part of what we said.
DONALD TRUMP, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, I mean, I've turned a lot of them around. As you know, in North Carolina, it was
negative, and now it's like tremendously positive.
And when people hear what I say about the vets and how strong my commitment is to the vets, they've been treated so badly, and to the
border, which is just horrible. Every time people listen to me, all of a sudden, it becomes very favorable. A good example would be North Carolina,
where it's so positive. I haven't seen that.
But I think generally speaking, we're doing very well, and certainly we're doing well in the ABC/Washington Post poll, and every other poll that
I've seen in the last couple of weeks.
COOPER: So, do you think you can turn around? Because a lot of people say, look, those kind of unfavorability ratings, that does not bode
well. You think you can turn that around?
TRUMP: I don't know. I mean, who knows? I'm doing this for the good of the country. Somebody has to do it. Politicians are never going to
turn this country around, our country's a mess. The politicians are going to destroy this country. They're weak and they're ineffective.
[16:15:07] COOPER: And we talk a lot about foreign policy as well. One of the things about Donald Trump, one of the criticisms of him by his
opponents is that he's big on -- he's obviously a great talker, he's very good at communicating, he doesn't give a lot of specifics.
So, I really tried to pin him down on foreign policy. He says he'll be tougher against ISIS than any other of the candidates out there. I
tried to pin him down specifically on what his policy is --
HARLOW: On how.
COOPER: -- on how. It basically boils down to, in his words, "bombing the hell out of ISIS," bombing oil fields in Iraq and in Syria,
sending in oil companies to take the oil from Iraq, and sending US troops to protect those oil fields.
HARLOW: But --
COOPER: I gave him facts about that, because every military expert I've talked to has said, basically, that's ridiculous.
COOPER: He pushes back very hard on that.
HARLOW: Well, he's also said in the past month that Lindsey Graham wants to bomb everything --
HARLOW: -- essentially. What about his tone? Because when you are president and diplomacy is key, tone is key. Interesting how he responded
to your question on that.
COOPER: Yes, and because the handing out of Lindsey Graham's cell phone number, the calling people idiots, calling them done, I said, look,
when you're president, are you going to be calling all your opponents -- because half to he country in US politics is generally not all that
favorable to whoever the sitting president is --
COOPER: -- based on politics. He said his tone would be different, that he's in this race right now, but as president, he would set a
different tone, that he would actually -- he actually believes he would be a uniter among the Democrats and the Republicans.
HARLOW: Not a divider?
HARLOW: All right, full interview tonight?
HARLOW: On your show, "Anderson Cooper 360," 8:00 Eastern. Also see him on cnn.com.
COOPER: Yes, we have it.
HARLOW: You can see all of it as well at AC 360. All right, Anderson, thank you very much.
Well, coming up next, Uber taking on New York's mayor, Bill de Blasio, in a battle for city streets, the ride service fighting back as City Hall
tries to limit the number of Uber drivers, next.
HARLOW: The governor of New York is wading into the battle over Uber's expansion in New York City. He is really in the thick of it right
now, mayor Bill de Blasio wanting to cap the number of Uber drivers, citing congestion and traffic concerns in this city.
New York governor, Andrew Cuomo, says the City Council vote on the issue should be delayed. And at the same time, Uber is waging an
absolutely enormous media campaign against the mayor's plan. As we showed you last week, Uber has even installed a "de Blasio mode" on the app. When
yo select it, you swipe over, all the cars disappear, and it tells you to e-mail the mayor's office.
Before Uber came to New York taxi owners paid as much as $1 million for a license to pick up passengers. Clare Sebastian took a spin around
New York City to see the financial fallout of all of it.
UNIDENTIFIED FEMALE: Taxi!
CLARE SEBASTIAN, CNN PRODUCER (voice-over): Every day, more than 400,000 people hail a yellow cab in New York City. Yet their dominance is
being tested. This year, the number of Uber cars on the roads overtook yellow taxis, and it's hitting the industry's most valuable asset.
SEBASTIAN (on camera): Medallions or licenses for cabs to operate were changing hands last spring for over $1 million. Over the past few
months, sale prices have dropped as low as $700,000.
[16:20:00] SEBASTIAN (voice-over): At one point, medallions were a better investment than gold. Prices went up around 50 percent in the five
years to May 2014. The recent drop has led to eight foreclosures on medallions since September, the first since 2011.
TODD HIGGINS, LAWYER: The data at this point is really tragic. Medallion prices in the past 16 months have really collapsed. Lenders are
going to have no choice but to begin foreclosing on those loans.
SEBASTIAN: Lawyer Todd Higgins, our first stop on this journey, represents four of those medallion lenders. His clients are currently
suing New York City.
HIGGINS: We're alleging that the city has failed to enforce the law. That law is that New York City taxicab's medallions have the exclusive
right to pick up people that are on the street ready to travel.
SEBASTIAN: Todd's arguing e-hails using apps like Uber are the same as regular street hails. We're heading downtown to speak to the city's
taxi commission, the other side of the lawsuit. They have a different view. Commissioner Meera Joshi says companies like Uber are healthy
MEERA JOSHI, NEW YORK CITY TAXI AND LIMOUSINE COMMISSIONER: Competition is welcome, it brings up service, and I think it'll sort of
help to stabilize the medallion value at a price that makes more sense for investors.
SEBASTIAN: It's not just investors facing losses. Drivers tell us apps like Uber and Lift are eating into fares.
SEBASTIAN (on camera): Have you lost business to Uber?
UNIDENTIFIED MALE: Yes, about 20 percent.
SEBASTIAN (voice-over): Add to that the cost of leasing the medallion, and some are even considering switching sides.
MUCTAR DIALLO, CAB DRIVER: If nothing changes, I'm going to give up the medallion and give the company back the medallion and go back to Uber.
SEBASTIAN: Medallions were introduced here in the 1930s to limit the number of cabs and protect demand. With new players on these streets, many
feel it's no longer working.
Clare Sebastian, CNN, New York.
HARLOW: CNN Money's Laurie Segall here with the latest, because this is evolving by the minute, this showdown between Uber and City Hall here in
New York City. A number of reports just crossing. What are they saying?
LAURIE SEGALL, CNN MONEY TECHNOLOGY CORRESPONDENT: They're basically saying that the city has decided to drop the cap for now and do a four-
month study to see what the effects of traffic and congestion are going to be.
And I've got to tell you, Poppy, I have a feeling this had something to do with Uber's very, very aggressive campaign against Mayor de Blasio
here in New York City. If you look at who is leading the campaign for Uber, it's Obama's former campaign manager, David Plouffe. They brought
And anywhere in New York City over the last couple of days, because obviously you can see, people -- really a lot of people did not want this
to go through, said we want our Uber drivers to be able to be on the roads.
SEGALL: And what he was doing was he was sending out ads, people at Uber were sending out ads all over, lots of mailings. You had Uber drivers
putting out rallies. So, the city was getting a lot of pressure to stand down, and you see the tension.
HARLOW: Well, it's interesting, because you've said, it's almost as if Uber were running for president.
HARLOW: You've got to really go to the political operative here who's leading them in a huge campaign, which they can afford. At the same time,
though, isn't this a sign of sort of Uber getting into the big leagues, the adult leagues?
HARLOW: The fights you have to fight when you're changing an entrenched industry.
SEGALL: You know, Uber, I always like to joke, has this very interesting Silicon Valley mentality. It asks for forgiveness, not
permission. Well, now it's a $40 billion company, and they've got -- they are responsible for hundreds of thousands of jobs.
But they're also having to face these hard questions. They're facing these regulatory issues not just here in New York City --
SEGALL: -- but all around the world. You have protests in Paris, you have fines in California. So now that they've kind of made their way to
the big leagues, people are saying we want you to have to play by the rules a little bit, and you're seeing that tension play out. And I think New
York City was a really good example that this is a microcosm for what's happening all around the world.
HARLOW: So, if indeed these reports are confirmed, if indeed New York is going to step back, do this four-month study, I wonder if you think New
York leads the way?
Because it seems like that often in big cities that make a big move, if New York does sort of put a cap on that or let them operate freely, that
effect, it's huge for the company on how it's going to be able to operate in every major American city, isn't it?
SEGALL: You never -- you're not going to be able to stop a company like Uber that is so big, but everybody's looking here in New York City to
see what happens, because this is one of their largest markets. I actually asked David Plouffe, who is at Uber, about this, and he said everybody will
have their eyes on what happens in New York City, and people will take this as an example.
So, I think when you have this aggressive campaign Uber's put out there and saying we're creating so many jobs you have to take this
seriously and you have to let us be on the streets, but let's work for ways -- look for ways to work together. I think that might be the outcome if
this, in fact, is true and they do kind of take a little bit of a step back.
HARLOW: What do you think -- I think we might have some of that sound, they'll let me know if we have it, that we can play from your
interview. Let's roll that so people can listen.
(BEGIN VIDEO CLIP)
[16:25:00] PHIL WALZAK, SENIOR ADVISOR, OFFICE OF NEW YORK MAYOR: There are a host of issues. Traffic congestion, we've talked about our
drivers being treated fairly, are consumers getting the right deal?
Let's take a breath. Let's just talk about capping for a short period of time the growth of new vehicles on our already congested and flooded
streets, to have that conversation.
DAVID PLOUFFE, SENIOR VICE PRESIDENT FOR POLICY AND STRATEGY, UBER: They want to cap our growth, I think, really, as an offering to the taxi
industry, who has showered them with a lot of campaign money. With a stroke of a pen, the mayor of New York City would be eliminating over
10,000 jobs. It's unbelievable.
(END VIDEO CLIP)
HARLOW: You can see how contentious it is.
HARLOW: But isn't this also really big for Uber's competitors, like Lift --
HARLOW: -- et cetera?
SEGALL: This would have a huge effect. Let's say that this cap went into place, and it wasn't just Uber speaking out against it. It was also a
company like Lift. Uber owns 90 percent of the market share here in New York City, Lift owns about 7 percent.
So, if everyone has to cap, Lift has no chance at competing against Uber. If they aren't allowed -- and what this legislation would do was it
would make it so it would be -- you'd have the same amount drivers, you can increase it by 1 percent, putting a cap on it.
So, they wouldn't be able to grow in a way that they could actually compete with a company like Uber. So, they were very against it, and
they've been very, very vocal. And you have all these drivers kind of coming out at these rallies and talking about how much Uber has meant to
them, how flexible their hours are, how it's changed their life.
So, it really has been a campaign that's more than just this big company coming in and strong-arming New York City.
HARLOW: It's the people.
SEGALL: But it's the people. And that's -- you can credit David Plouffe for doing this, but he's made sure and Uber has made sure that
people are hearing from the drivers.
HARLOW: Interesting grass roots, sort of a la Obama --
SEGALL: Yes, sure.
HARLOW: -- in 2008. We'll be watching. Laurie, thank you very much.
Coming up next, to Greece we go. Faced with opposition in his own party, Greek prime minister Alexis Tsipras is now relying on political
opponents to get his debt deal through parliament. We are live in Athens next.
HARLOW: Hello, I'm Poppy Harlow. Coming up on the next half hour of QUEST MEANS BUSINESS, Greece's parliament faces more protests and another
tough vote on reforms. And the founder of Wikipedia, Jimmy Wales, tells me why his new social network is about a lot more than just sharing photos.
Before that, though, this is CNN, and on this network, the news always comes first.
The shooter in last month's massacre at a church in South Carolina has been indicted on 33 counts by a federal jury in the United States.
Officials say Dylann Roof has confessed to killing 9 people in Charleston last month. US attorney general Loretta Lynch says the evidence suggests
it is appropriate to bring hate crime charges against him.
(BEGIN VIDEO CLIP)
LORETTA LYNCH, US ATTORNEY GENERAL: As you know, there is no specific domestic terrorism statute. However, hate crimes, as I've stated before,
are the original domestic terrorism, and we feel that the behavior that is alleged to have occurred here is archetypal behavior that fits the federal
hate crimes statutes and vindicates their purpose.
(END VIDEO CLIP)
[16:30:05] HARLOW: A suicide bomber has killed at least 15 people in northern Afghanistan. Police say the explosion went off at a busy market
near the border with Turkmenistan. Dozens were wounded, and the death toll could rise. Police believe the Taliban are to blame.
The United States says it has dealt a major blow to an al Qaeda offshoot in Syria. The Pentagon says Muhsin al-Fadhli was killed in a
drone strike earlier this month. He was the leader of the Khorasan group. While his group is not widely known, CNN terrorism analyst Paul Cruickshank
says his death is indeed significant.
PAUL CRUICKSHANK, CNN TERRORISM ANALYST: -- (Inaudible) a veteran al Qaeda operative al-Fadhli was in Afghanistan with bin Laden and it appears
he had prior of the 9/11 attacks. He was in Iran for a while but he moved to Syria in about 2013 to sort of build up the capability of this group.
And there's a lot of concern because this is a group which has very strong ties to Jabhat al-Nusra, the broader al Qaeda affiliates in Syria. And
this is a group which has made a lot of ground up in recent months, taking control as part of an Ezonist (ph) coalition of territory in Italy but also
strong in Aleppo.
HARLOW: Pages from what could be one of the earliest versions of the Quran has been discovered at a university in Britain. Researchers say radio
carbon testing proves that the pages date back to the time of the Prophet Mohammed in the early seventh century.
They were discovered mistakenly bound with parchment leaves from another Quran at the University of Birmingham. They were gathered in the 1920s by
an Iraqi-born priest who then settled in England.
Well support Alexis Tsipras is being put to the test as the Greek prime minister tries to get his debt deal through his Parliament. As we speak,
Greek lawmakers are debating whether to implement a new set of economic reforms needed to unlock the European bailout funding.
Alexis Tsipras is facing a mutiny within the ranks of his own party with some Syriza lawmakers set to vote against him.
Outside of Parliament, anti-austerity demonstrators have gathered voicing their opposition to the new reforms. Elinda Labropoukou joins us now live
from Athens via Skype. What is the latest at this hour?
ELINDA LABROPOUKOU, JOURNALIST: Well the debate in Parliament is still going on. They seem to be running a little late. We were expecting to be
a little bit closer to vote.
And it's a very heated debate because as you just said, Alexis Tsipras is facing a lot of opposition from within his own party in fact. It is the
part of his party that is described as the hard left. Some of these parliamentarians were the ones that wanted to see Greece leave the Eurozone
to begin with, and now they are saying that these measures are just too harsh and they're not willing to vote them in.
This is a crucial time for Alexis Tsipras, first of all because these prior actions that are being voted in today need to pass in order for the bailout
talks to begin.
We expect that this will happen but this is partly because he will have a lot of support from the opposition within his own party. Last week when
the first prior actions were voted in, he lost a large number - about a quarter - of his MPs. He got 123 MPs to support him from the 149. And
this is a crucial number because 120 MPs is a number during which he can have a minority - he can have - he can hold - a minority government.
But if he goes belong (ph) that threshold point, then it becomes very difficult for any leader to be able to keep his government together.
And this is what people in Greece are really looking at and everyone else taking an interest in Greek affairs. Because if Mr. Tsipras does not have
the support from his own party, it's going to be very difficult for him to get these measures and this bailout not just voted in but also implemented.
And this is exactly what he's taught his parliamentarians. He said, "You can't just hide behind my signature, you need to see where you stand," and
basically telling people that those who won't support him may just have to get out at some point.
HARLOW: Thank you very much for the latest live from Athens. We will keep you posted of course as this progresses through the evening.
Well it was another murky day for European stock markets. In Germany and the U.K. and France, all the indexes extended yesterday's losses dragged
down by weak tech earnings from the United States.
Auto sales are a very, very good indicator of economic strength because they are big ticket items. In the U.S., AutoNation is the single biggest
Strong sales of new and used vehicles and parts and service drove the company's $115 million profit in the second quarter. That is up 14 percent
from a year ago.
[16:35:03] Apparently though investors wanted a little bit more. AutoNation's stock fell nearly 3 percent on Wednesday with the broader
Joining me now Mike Jackson, the company's chairman, CEO and president, the man I've talked to many times over the years.
I'm so glad we're sitting where we are now and not where we were back during the financial crisis. Things have gotten so much better and you've
said that you expect new vehicle sales to surpass 17 million.
MIKE JACKSON, CHAIRMAN, CEO AND PRESIDENT, AUTONATION: Yes, I said that already last summer and people looked at me like I lost my mind. But the
underpinnings of the fundamentals are there. As you already alluded to, days we'll never forget - '08, '09, '10 -
JACKSON: We had a depression in autos. Car sales came to an absolute standstill. It (ph) pushed the average age of the vehicles on the road in
America out to 11.5 years, so there's genuine replacement need. We have fabulous financing because everybody saw during the great crisis people
made their car payments, had great new products from the manufactures and then lo and behold, gasoline prices had collapsed.
JACKSON: Which give people more purchasing power, and of this increase in sales for the industry plus 4.4 percent for the year all the way to 17
JACKSON: -- it's all trucks and luxury cars.
HARLOW: Well if we - and - look, those are more expensive - truck they're willing to buy when you've got gas where it is now. If we do hit the 17
million number, that's going to be a level not seen since 2001.
But I'm interested in -- you as a chief executive have to think of the potential downside. I mean, when you think about a China for example, a
really huge market for GM or a Ford or these companies trying to compete more in China. Are you worried about China in sales there?
JACKSON: Oh no, not at all. So we're a U.S.-based company, I'm --
HARLOW: But I mean for the industry.
JACKSON: -- I understand, I'm just saying -
JACKSON: -- my perspective - on U.S.-based company so my concern is always contagion from (ph) other markets.
JACKSON: So ironically the difficulties in China are very beneficial to us because we've been very short of premium luxury vehicles, particularly from
the Germans because they were shipping everything they could to China. Well now that China is a little bit wobbly and with the movement in
exchange rates, the number one attractive market in the world for the German manufacturers is the U.S.
So we have improved allocation from the German manufacturers and we've had more demand than supply for years. So for our little world -
JACKSON: -- it's been a plus.
HARLOW: That's fascinating. Do you want to (AUDIO GAP) talk to you about how Uber is changing the game. Uber's in the headlines today because of
the big fight with New York City and the mayor's office.
But, you know, when I look at how say a Mark Fields is operating Ford. You know, he talks about it as a mobility company now because they're looking
at what Uber's doing, causing - you know - one could argue in the future fewer young people to buy cars.
When you think of an Uber and how it's changing the industry, what does it tell you?
JACKSON: Well first I would say auto industry sales for trend are high 16, 17 million if you look at scrappage rate, replacement rate, household
formation and I don't think Uber fundamentally upsets that. You know, there's three trillion miles a year driven in the United States and Uber is
an infinitesimal fraction of that.
HARLOW: But that's now. What about ten years from now?
JACKSON: But I think sharing will become part of the marketplace - it has its role. I think it's going to be much more disruptive for someone like
the taxi industry. If I was selling taxis, I'd be switching my plan to sell more vehicles to Uber.
But as far as the total marketplace, I think it has a role but I don't think it fundamentally changes things.
HARLOW: I sort of buck the trend. I'm a millennial living in New York City who owns a car, which is like -
JACKSON: Well, there you are.
HARLOW: -- you know - there you go.
JACKSON: I'm not telling you -
HARLOW: I'm your key customer.
HARLOW: And, thank you so much, Mike. Nice to have you on the program -
JACKSON: Thank you.
HARLOW: -- by the way, we do have this news just in to us here at CNN that Uber and New York have indeed reached a deal. That means that New York
City will not cap Uber's growth in the city for now, for now. Uber in return agreeing to study worker driver protections, consumer issues,
accessibility to money and also to the MTA. So that's just in to us. More of that on CNNMoney.com.
All right, change the world just by surfing your social media accounts. You ever think you could do that? Coming up next, we're going to speak
with Wikipedia founder Jimmy Wales about his latest venture - a charitable social network. He is taking on Twitter head to head.
[16:41:33] HARLOW: Airbnb celebrating a thaw in relations between the United States and Cuba offering free accommodation for U.S. travelers that
are staying in Cuba this week. There is a catch - to get in on the deal you need to have your - have booked -- your Cuban break before Monday. So,
sorry, it's too late for some of you.
Cuba not just for tourists. As the economy opens up, business travelers will of course want to be there as well. In London Richard found out more
about how the (AUDIO GAP) firm is trying to grow that key market.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR AND REPORTER HOST OF "QUEST MEANS BUSINESS" SHOW: With the rise of digital technology comes the expansion of
pier to pier business. Everything is for hire - share your car, share your clothes, share your home.
Female: It's simple. Just enter where you want to go, the dates you want to be there and choose from thousands of places.
QUEST: Airbnb lets you rent out a room or the entire house to travelers. It provides a unique home-away-from-home experience.
The Silicon Valley startup began on three air mattresses in a San Francisco apartment. It's only seven years on and now they have worldwide operation
and they've welcomed their 40 millionth guests.
JAMES MCCLURE, AIRBNB U.K. AND IRELAND: We've more than a 190 countries in which you can stay live-in proxy. This summer we'll reach more than1.5
million listings around the world.
QUEST: Airbnb's James McClure is in charge of ensuring a great experience as he puts it for the guests and the host for the U.K. and Ireland.
MCCLURE: Some people maybe start thinking, `Well, does someone actually want to stay in my place. And it turns out that people actually want to
because they get to live like a local and understand a bit more of what it's like to be, you know, a real Londoner.
QUEST: Hackney is a hip, upward-coming area in London and it's most definitely not your typical tourist destination. However, Hackney-based
host Jemima Garthwick (ph) is booked out far into the future.
Tell me, what are guest allowed to do and what are they not?
JEMIMA GARTHWICK (PH), AIRBNB: Well they're allowed to use the kitchen as their own. In fact, this is the room where they mainly spend their time
QUEST: Jemima claims to have never had a bad experience with the renters.
GARTHWICK (PH): I've never had someone turn up and looked at them and thought `Mmm, actually I'd rather you aren't here.' That's never happened
to me. In fact, the opposite. People will replace toast that they've used even though that's not what I expect.
On an average week I will typically have four or five inquires and I would say three of them would go on and book at some point in the future.
QUEST: You're turning it into some sort of cottage industry quite literally.
GARTHWICK (PH): You get every type of traveler. I have some repeat business travelers. There's one guy in particularly and he just fell in
love with this place and feels really comfortable here.
QUEST: That's one avenue the company wants to expand upon - the business traveler.
MCCLURE: They have different needs. I mean, the irony is that Airbnb started out as a business travel product. The first-ever guests were
people coming in for a conference.
QUEST: The rental giant is now valued at around $25 billion which is more than Marriott Hotels and though it doesn't follow the same set of rules and
regulations as a hotel. Often illegal renting is taking place and some city governments and residents are up in arms.
They want it stopped says Paul Shamplina, founder of Landlord Action.
PAUL SHAMPLINA, FOUNDER, LANDLORD ACTION: We've seen a massive increase in the last 12 months, especially in London where landlords have been renting
to tenants and tenants are being sublet into properties and trying to increase income.
(Inaudible) open up a whole lot of problems where the middle user is not actually get the consent from the landlord.
QUEST: So what would you like to see?
SHAMPLINA: Well the person that owns the place has the authority to obviously use Airbnb, and Airbnb actually (AUDIO GAP) to actually find out
that whoever's putting their listing on their site has the authority to do that. The people with authority that they're actually looking to rent out
a property should be much more diligent with regards to their referencing and obviously, more importantly, make sure they have the right insurances
in place as well.
QUEST: Airbnb has got its insurances in place. They seem to be a bit one- sided.
MCCLURE: For the insurance like the host and the confidence that they have regardless of their situation, we have a $1 million guarantee for any
damages or liability that they may come across.
QUEST: So you're prepared to grant one half of the community guarantee or liability against the other half, but you're not prepared to grant the
other half against that half?
MCCLURE: For guests, we are there for them in every single situation. We're able to have a whole variety of aspects to help people get to a right
HARLOW: Well it is the hidden scourge plaguing cities all over America. Thousands of modern-day slaves forced to work in the sex industry against
their will. The National Human Trafficking Resource Center recorded almost 20,000 cases of human trafficking just between 2007 and 2014 with more than
5,000 of those cases logged last year alone.
Over 70 percent of human trafficking victims have been forced into the sex trade. The United Nations estimates around 2 and 1/2 people are trapped in
modern-day slavery around the world - 2 and 1/2 million people. Our next guest is part of a global initiative to stem that crisis and she joins me
now from - Emily Pasnak-Lapchick - did I say it correctly?
HARLOW: Joins me now to talk about - talk about - this problem. It's stunning when you look at these numbers. It's something actually I've been
talking to people about for a long time. It's happening in city - in states - like North Dakota.
EMILY PASNAK-LAPCHICK, END TRAFFICKING PROGRAM OFFICER, U.S. FUND FOR UNICEF: Yes.
HARLOW: With the oil fields there and so much money pouring into there. I think people think of human trafficking and they don't think of the United
States. Why is that wrong?
PASNAK-LAPCHICK: Absolutely. You know one of the main things that we try and communicate with audiences and we talk about this issue is that it's
not just an issue that's happening in other countries, but rather it's an issue that's been reported in all 50 U.S. states. And there are
particularly high rates in places like New York and Texas and Florida and California. And really helping people to understand that this is happening
right here in our own backyards. And that there's something they can do about it.
And when we look at the issue in the United States, while most victims of labor trafficking have been brought in from other countries, most victims
of sex trafficking are actually U.S. citizens.
So it's not only an issue that's affecting our own communities, but it's really coming from our own communities as well.
HARLOW: You are the end trafficking officer at the U.S. Fund for UNICEF. You have not only an eye on the problem but an eye in what the solution can
be. It's frustrating to see that it keeps happening. So many of those cases I mentioned logged last year alone. Are things getting any better,
and if so, what is effective?
PASNAK-LAPCHICK: Yes, so we do - we have seen a lot of progress over the last few years both on a legislative perspective but also in terms of
awareness. We've seen that more Americans are aware of the issue of trafficking but we also see that their view of it is often very narrow.
They're thinking of sex trafficking victims - young girls being trafficked where most victims are actually being trafficked into labor and agriculture
or travel sales crews for domestic servitude.
So we still have a lot of work to be done there, and on a legislative level we have basic laws in place but we still need to make sure that those laws
are being enforced.
HARLOW: So what can the legislature do? What can the Obama administration do in the remainder of its term? I know you guys as an organization are
non-partisan, you want support from both sides and everywhere you can get it, but what more can be done that just isn't?
PASNAK-LAPCHICK: Absolutely. Well we know that worldwide 5.5 million children are victimized by trafficking and that is a call to action in and
of itself - that millions of children and men and women are being victimized around the world.
One of the main ways that we're asking people to get involved right now is we are supporting a legislative action on a federal level around the
Runaway and Homeless Youth Act and -
PASNAK-LAPCHICK: -- it's focused on trafficking and ensuring that there are protections for runaway and homeless youth because we've seen that
they're particularly vulnerable to trafficking and that a lot of children who have run away from home or have become homeless are approached by
traffickers on the streets and are lured into this industry.
HARLOW: So what would that do? What would the key change be?
PASNAK-LAPCHICK: So it would create family reunification systems for children who are identified as trafficking victims to be reunited with
their families if that's appropriate.
[16:50:05] It would also create training programs for people who work with runaway and homeless youth to be able to actually identify them as having
been trafficked and then give them the appropriate services.
HARLOW: Where is it the worst? I mentioned North Dakota as a place where it's been widely reported that this happening. Where else?
PASNAK-LAPCHICK: So in major cities are always a hub, but as I mentioned earlier in New York, California, Texas and Florida have particularly high
rates for a variety of reasons. They all have major cities, a lot of them have porous borders so we see a lot of trafficking instances coming from
HARLOW: Where can people go if they want to know more about what you're doing?
PASNAK-LAPCHICK: We have a website - unicefusa.org/endtrafficking.
PASNAK-LAPCHICK: You can find the advocacy alert to write to your representatives about the Runaway and Homeless Youth Act and also download
some more of our resources and find out other ways to get involved.
HARLOW: All right, Emily, thank you very much.
PASNAK-LAPCHICK: Thank you so much.
HARLOW: Appreciate it. We'll be right back.
HARLOW: Jimmy Wales, best known as the creator of Wikipedia. His fundraising campaigns have helped the online encyclopedia stay completely
free from advertising. And as you know, it is run as a non-profit.
Now he is taking his ad-free approach to social media. TPO is a social network which sees money goes towards charity. It is meant to help people
rather than to fund advertisers.
The site will be supported by the People's Operator - that a cell phone network which lets users automatically donate 10 percent of their cell
phone bill to charity at no extra cost to them.
He joins me now in studio to talk about it. Congratulations on this.
JIMMY WALES, THE PEOPLE'S OPERATOR: Thank you.
HARLOW: Look, you are being aggressive -
WALES: Oh, am I?
HARLOW: And you are taking - you are because you say it's better than Twitter.
WALES: (LAUGHTER). Well that's not hard.
HARLOW: And you're -
WALES: Now I'm being aggressive.
HARLOW: -- you're jumping into an industry that many would say you've got this entrenched competitor. So let's just walk through how it's going to
WALES: Sure, yes. So for the mobile phone service which we just launched -
WALES: -- in the U.S. yesterday, 10 percent of your bill goes to the cause of your choice, 25 percent of that company's profits go to charity. We
have really good prices in the market. So how do we afford that? Well, no Super Bowl commercials, no TV ads, no -- you know -- all the things they
send you - flyers in the mail and all that.
HARLOW: (CROSS TALK) - go head-to-head with the Verizon or an AT&T.
WALES: Yes, exactly.
HARLOW: Which I don't think people are married to their service providers.
WALES: No, I don't think so.
HARLOW: But I kind of think they might be married to their social network like a Twitter.
WALES: Yes, for sure.
HARLOW: Is that a harder proposition?
WALES: Well the idea here is that in order to raise money for a cause, you'll want to sign up your friends, sign up your family - that's part of
the deal - and this is the tool to help them do it. So obviously we actually interlink with Twitter, Facebook. We're part of the general
ecosystem of social networking.
So we think that's a good thing, yes. Time for something new.
HARLOW: So it's not fully - it's not fully separated in terms of people can still use Twitter and Facebook and use this tied to the phone service -
WALES: Yes, sure. Yes, yes.
HARLOW: -- ultimately give away money.
WALES: Yes, so for example you can use Facebook Connect to join us and if you do that, then that makes it easier for us to help you find your friends
and things like that. So, yes, exactly.
HARLOW: You say we spend money on causes you care about rather than advertising. You've penned sort of this open letter to people saying,
`Read these three things -
HARLOW: -- do these things, click OK.' It's very simple, easy to follow model.
HARLOW: First thing I thought of is millennials, my generation -
HARLOW: -- cares a lot about where their products come from, --
WALES: Exactly, yes.
[16:55:02] HARLOW: -- what the company they work for stands for. You know the study that showed 73 percent of millennials felt socially connected to
the causes which they were donating.
HARLOW: You're totally tapping into the millennial base here, right?
WALES: Yes, exactly. And also for the causes, what works for them here is a lot of times they have a good presence on social media, they'll say, `Oh,
we've got 500,000 followers on Facebook or Twitter but we're not really resonating any money there because it's not connected to a donation
platform or any kind of fundraising system.'
Here we say let's bring all that together. Let's - people can connect with the causes, they can invite their friends to come in, you know. If you're
having a birthday party you can invite everybody and say, `In lieu of gifts - I don't really need gifts - here's my charity I want you to donate to and
here's my page where you can do that.'
HARLOW: But many people may not know, but one of the most fascinating things I think about you is that you made the choice not to become a
HARLOW: You made the choice to make Wikipedia a non-profit. You could have easily made it on a Facebook-type model. What have you learned from
that that you're applying here?
WALES: I mean, there are a huge number of people out there who really feel passionate and want to do good in the world and they just need the tools to
be able to do that.
That's what I view my whole career as being about - it's thinking about what is it people are trying to accomplish and how do I help them do that?
So, you know, I think - I'm a pathological optimist I always say. I think people are good - not all of them but most of them. They want to do good
and we'll try and help them do that.
HARLOW: We'll be watching. Fascinating - tpo.com. Thank you very much.
WALES: Thank you.
HARLOW: Jimmy Wales, congratulations to you.
WALES: Thank you.
HARLOW: Coming up next, more "Quest Means Business." Quick break - we'll be right back.
HARLOW: Right now we'll want to recap the new developments in a story we have been following this hour. New York City's mayor dropping a
controversial plan to cap Uber's growth in the city. The car service has been enraged and engaged in a bitter PR war with the City and the mayor.
As part of this deal, Uber has agreed to study worker protection and mass transit issues. We will keep you posted on how it all plays out.
[17:00:00] That is "Quest Means Business" for today. I'm Poppy Harlow. Thanks so much for being with us. I'll see you back here tomorrow.