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QUEST MEANS BUSINESS
Strong Rally at the End of Trading Day; Oil Prices Falling. Aired 4-5p ET
Aired December 14, 2015 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: A strong rally in the last moments of the trading day for seemingly no particular reason. The market has been literally up and
down throughout the session, but gaining over 100 points within the past 15, 20 minutes. Oh, look at that. A very strong gavel to end trading on
Monday, the 14th.
(BEGIN VIDEO CLIP)
QUEST: It is sell-off of ludicrous proportions. Oil prices are flailing and producers aren't budging. We're going to talk about oil in this program.
Six days, three finance ministers. The latest one tells us how South Africa's economy will bounce back.
And $5 to fly. The FAA slaps a charge on drones in America.
(END VIDEO CLIP)
QUEST: I'm Richard Quest. We have an hour together, and, of course, I mean business.
QUEST: Good evening. Tonight, the price of oil is flirting with levels that it's not seen in more than a decade. And as the warring signs in the
great oil battle dig in for even lower prices, just how low will they go?
(BEGIN VIDEO CLIP)
QUEST: Now, it was an in volatile day in trading, Brent rebounded after it hitting levels not seen since April 2004 and we have to really take today's
levels and today's movements with a pinch of salt, because although Brent, as you can see there, is up nearly 1% and Gross Texas up 2%, the commerce
bank analysts says the sell-off is reaching ludicrous proportions and today's movements pretty much are an aberration.
(END VIDEO CLIP)
QUEST: So joining me at the super screens, and you'll see what I mean.
(BEGIN VIDEO CLIP)
QUEST: Now, this time, two years ago, and oil stood at $110 a barrel. And production continued when it was at these very high levels in terms of
price. $110 a barrel. But by the start of 2015, Brent had collapsed its price to $50 down, more than 50%
Most OPEC members can barely can survive at this level, not because it costs so much to get it out of the ground, but their economies are so
spendthrift that they need greater moneys to balance the budget. Bearing in mind, Saudi gets it out of the ground at a couple dollars a barrel. The
production glut has continued and the fear amongst the producers is that oil could be heading to $30 or even lower.
The U.S. may now be planning to scrap an export ban. Iran could start exporting as soon as January and you start to see exactly why things are so
difficult at the moment.
T. Boone Pickens will give us the U.S. view. He's the chairman of BP Capital Management he's with us live from Dallas in Texas.
(END VIDEO CLIP)
QUEST: Mr. Boone Pickens, how wonderful to see you, sir, and I know your predictions of $70, and I've seen the reasons why this year, you blame OPEC
for the fact that this price is still so low?
T. BOONE PICKENS, CHAIRMAN OF BP CAPITAL MANAGEMENT: Well, it's -- I missed. I said a year ago, in November, that we'd be back at $70 by the end
of the year. OK, what happened to me?
One, the Saudis -- I didn't believe they would cut. They said they weren't going to cut and I believe them when they tell me they're going to do
something, but they upped the production, and got up to 10.6 million barrels a day. And the other places, Iraqis, produced more than I thought
And further to my problem was the United States production stayed up higher than I thought it would. Now, what's happened since then, the Saudis have
gone from 10.6 down to 10.1. The Iraqis have their production coming down, and the United States has gone from 9.6 to 9.1. And that's it. You say,
okay. Well, it didn't happen soon enough, is what happened.
QUEST: Right. But let me jump in here. Do you see, from the U.S. point of view, if prices stay around this, $35 to $40, maybe even testing $30, how
much production falls out from the United States, from the non-traditional, the frackers?
PICKENS: Well, Richard, you've gone from 1,609 rigs operating from year ago, to today, now you're talking about oil. You're down to a 525 rigs. So
you've cut out 1,000 rigs. You lost 21 last week. They're still coming down from here.
The production in another six months, U.S. production, will have gone from a high of 9.6 to six months from now it will be probably somewhere around
8.67 or 8.7. So you'll be down a million barrels and the Saudis come down, the Iraqis come down.
I think they've had enough. They're not willing to cut severely to get where they have to be to take care of their budget. But we're going - we
will get there. I'm going to be off by six to nine months, we'll be back, within six to nine months, I think we will be back up to $70 a barrel.
Will we go lower from here? You could go lower. You have refinery shutdowns coming in the first quarter of this year in the United States. And we'll
see, but -- but the economies around the world have, they've been fabulous, for the world economy, to be --
QUEST: So let me jump in on that. Net, net economically, it's a benefit. But I need your view, sir. When you look at Qatar and you look at Saudi and
you look at the OPEC countries, do you think they are now seriously regretting that which they've started?
PICKENS: Well, now you're asking me to speculate on somebody I've never met, as to whether they think they made a good deal or bad deal.
Well, it's costing the Saudis $500 million a day. It's also, remember, Russia produces 10 million barrels a day. It's costing them $500 million a
day. What did the Saudis set out to do, all they said they were going to do was hold production at 10.1. They went ahead and moved it up to 10.6, and
all, but I -- listen, they run their business like they want to. I'm not going to sit around and complain or criticize.
But they're getting tired of it, I can tell you that. $500 million a day, anybody would. So we'll see where we go from here, but I believe oil is --
you may - you may see it $30. But we're getting down close to the bottom.
QUEST: T. Boone Pickens, thank you for joining us from Texas. You're in good health and it's always good to see you, sir. Thank you.
PICKENS: Thank you, Richard.
QUEST: Now Russia's Finance Minister, you just heard Mr. Pickens talking about that, Russia's Finance Minister says $30 could be the future and as
T. Boone Pickens said, that's entirely possible.
I asked our emerging markets editor John Defterios who joined me on the line from Abu Dhabi. Will it will be cuts or taxes for countries feeling a
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: We're starting to see proposals here in the Middle East, particularly in the Gulf States on the
Arabian Peninsula to raise VAT taxes over the next two, three years. That is a start.
We're starting to see subsidies cut, we see the Russians tightening their belts but the dynamics are changing almost on a daily basis, Richard.
Here's an interesting number. We could see shale production drop between a million and a million and a half barrels a day in 2016, by the end of next
year. Iran suggested today the Deputy Oil Minister, Amir Zamani Nia, a powerful man there, that Iran's going to come out of the blocks racing in
There's a very important IAEA meeting taking place tomorrow, and we could see the sanctions lifted on Iran by January 7th. The plan by Iran, 500,000
a day immediately, another million barrels a day by the end of 2016, wiping out losses for the shale producers. Which means Richard that the glut
So the only thing they can do, is cut spending going forward. Perhaps raise taxes, but let's make no doubt about it, Saudi Arabia, Russia, Iran, Iraq,
all fighting for market share. The shell producers will suffer, and the publicly traded companies like shell, cutting jobs, going forward. We've
seen a lack of investment this year. Cut by a quarter trillion dollars. We see similar numbers for next year for the publicly traded oil giants as
QUEST: All right, but here's the point John. Even if -- even if American shale, the upper end, goes out of production or doesn't add to production,
with all that extra supply coming in to the market, there is no natural flaw, if you like, merely because the American shale has gone?
DEFTERIOS: Indeed. And, in fact, we see the lower cost producers are ready to fill that void. Specifically Iraq, pushing against 4.5 million
barrels a day next year. Iran wanting to get up to match Iraq. Saudi Arabia, full throttle going forward, and also Russia.
DEFTERIOS: So the major producers are pushing ahead with their production, and they seem prepared, Richard. This is the first time I've seen this in a
long time, to fight for market share continuously while the price is going from $40 down to $30 a barrel. It's quite extraordinary, and we have
dissension in the ranks still within OPEC.
QUEST: Are these major producers acting like lemmings heading over the cliff?
DEFTERIOS: It looks that way, Richard, because, indeed, they've been surprised by the deceleration in prices. Don't forget, $115 a barrel in
June 2014 into a new territory here. We're almost knocking against an 11- year low, and not one single signal yet that anyone is willing to cut. We've talked about cooperation between OPEC and non-OPEC oil producers.
This is a fight with the state oil companies. They're bleeding money right now. Many had to dip into coffers and they're suggesting they're preparing
for a year of $30 to $40 in 2016 and it could get much worse.
QUEST: John Defterios: Let me paraphrase Oscar Wild. To lose one finance minister is misfortunate. To lose two finance ministers, might be regarded
as carelessness, and that's what happened in South Africa.
(BEGIN VIDEO CLIP)
QUEST: We'll talk about the third finance minister after the break. "Quest Means Business."
(END VIDEO CLIP)
QUEST: Tonight, South Africa's third Finance Minister in a week tells us the recent upheaval in leadership is actually not incompetence but a sign
of his country's transparent democracy.
(BEGIN VIDEO CLIP)
QUEST: The opposition says the government is playing Russian roulette with the economy. South Africa's markets and the currency you'll be aware
plummeted after president Jacob Zuma sacked Nhlanhla Nene and then started a long process of replacing him.
So just let's remind ourselves how this has all played out. Nene was fired on Wednesday. Now, the ANC, the ruling ANC says it's because Nene is the
nominee to head the African Regional Center of the Bricks Bank. And he wasn't kicked out, he was merely getting ready for his new position.
QUEST: The speculation is he was sacked for speaking out against government overspending. And that sparked an outcry.
Well he was replaced by this gentlemen, David Van Rooyen on Thursday. Relatively unknown. Never held national government office, a loyal in
Tazuma in parliament. The only problem was, he lasted less than 48 hours, because by the end of the weekend, he was gone to be replaced by an old,
Pravin Gordhan returns as the finance minister. He's been on the program many times when minister between 2009 and 2014. Whichever way you look at
it, the return of Pravin Gordhan is a major u-turn by the government.
Elanie spoke to Mr. Gordhan and asked him why the chaos sent the markets tumbling?
PRAVIN GORDHAN, SOUTH AFRICAN FINANCE MINISTER: Well I think the markets were surprised by the announcement of Minister Nene's departure and the
announcement of the new minister. And as President Zuma's statement last night indicates, he had many representations since then about a different
set of views on who should occupy this position and he was both humble and gracious in taking account of these representations and decided that I need
to come and do this job again.
So it's a great privilege and honor to serve South Africa in this capacity.
ELENI GIOKOS, CNN INTERNATIONAL CORRESPONDENT: But some have called this an irresponsible move by President Jacob Zuma to not only change the finance
minister at this time, but also to backtrack on his decision?
GORDHAN: The good thing about South Africa, is that (inaudible) to be open, we are transparent, we admit mistakes as we make that. I don't think many
countries in the world do that, whether in the western world or anywhere else.
So you know that we've had a set of difficulties, the leadership of the country took (inaudible) of that and the reaction through some of that, and
said, we're going to have to pursue another course and did so in a decisive way. So the markets are already reeled back. 75%, 50% on the currency side,
equity side, demonstrating that the President's decision was a correct decision, and now we must move on. And do the hard work that's necessary to
grow our economy in an (inaudible) way and continue along the sort of fiscal consolidation part, manage our debt well and manage our expenditure
in line with what we can actually afford.
GIOKOS: Minister, there's it concern that one of the reasons that Nhlanhla Nene was removed as finance minister was because of overspending, and, of
course, a lot of speculation regarding the nuclear deal and also a bailout for South African Airways. What are you going to implement to ensure that
over spending doesn't occur?
GORDHAN: Firstly, the country hasn't been spending money it doesn't have. Secondly, we've got an excellent record of micromanagement in South Africa
and this goes back to 1994, Mr. Manuel, myself, Mr. Nene and myself again. And, thirdly we are quite clear. As I said in the press statement earlier
on, that we are going to pursue a prudent fiscal (inaudible) and can only spend money we have or think we're going to get, and we will have to manage
all of our expenditures accordingly. We will have to reprioritize as necessary, and we have to look for additional revenue sources. And we also
admit that we need to focus a lot more on raising our inclusive growth levels in the coming years, and importantly, I think a new bridge that we
have crossed is make creating an effective partnership (inaudible) within the private sector and ourselves, and we'll see many more good results
coming out of that.
(END VIDEO CLIP)
QUEST: Eleni Giokos joins me now live from Johannesburg. Eleni, we can allow the minister, perhaps his political fig leaf of exclusive
transparency and democracy, since he's the new man in the job but I'm guessing the South African Press is just being brutal at this about turn
for sacking a Finance Minister, 48 hours after appointing him.
GIOKOS: Yes. And it's not just the media, Richard, it's also the economist, the analysts, the investor community, just saying that this just
shows, you know, a government that is not responsible, putting bond holders at risk where you've got the ten-year bond yield rising.
(BEGIN VIDEO CLIP)
GIOKOS: Where you've got the local currency comer under immense pressure, but we also heard something interesting on Friday night and something we
thought on and pondered over over the weekend. Was that Nhlanhla Nene's removal was because of the urgency to send a nomination for him to run the
regional Bricks Bank here in South Africa, saying that Shanghai needed his name as soon as possible.
So that's why we saw a flurry of criticism, also ensuing over the weekend that exacerbated the entire situation saying, well, in South Africa, not a
lot more important than bricks?
(END VIDEO CLIP)
QUEST: Hang on. A very valid point. Why didn't Zuma just put Gordhan, a man of enormous respect, I mean from his previous jobs in government, and as
finance minister, if he needed to replace Nene quickly, why not just put Gordhan back in the job?
GIOKOS: This is the interesting question a lot of the chief economists of various companies that I've spoken with.
(BEGIN VIDEO CLIP)
GIOKOS: Saying that Pravin Gordhan also was also quite vocal about overspending and this was one of the issues that kind of came to the forth
at the end of his tenure. So then Nene came into the you know finance ministry he basically took the same stance of fiscal prudence. And this is
way David van Rooyen was an interesting pick .
Because we've discussed this over the last few days, that perhaps he would toe the party line and adhere to any kind of policy or projects that would
come from the top.
(END VIDEO CLIP)
GIOKOS: So this is what investors are saying, that Pravin Gordhan should have been the option if it was a matter of urgency.
QUEST: OK, now, in a word - in a word, President Zuma, seriously damaged by this? Partially damaged by this? Not damaged at all?
GIOKOS: Well, I would say that, and from what I've been hearing, is that damage has been done, and everyone is going to be watching very closely the
national budgets in February. And the ratings agencies, Richard, are not convinced. Economists are not convinced. Pravin Gordhan perhaps has a lot
of power now in his hands, that he will be able to make due on a lot of the things that President Jacob Zuma actually was trying to pull back on.
QUEST: Eleni, good to see you, thank you. Keep watching the story and come back when there's more to report to us, I appreciate it. Joining us from
Johannesburg. "Quest Means Business" with you this evening. You've already heard from one of the world's top oil man. You've heard from the South
African Finance Minister, the number third in as many weeks.
When we come back, you're going to hear from the President of the World Bank, because he's going to tell us why COP21 is such a good deal. It's
"Quest Means Business." good evening.
(END VIDEO CLIP)
QUEST: The deal is done. Now it's time for the countries to step up. The World Bank President tells CNN his organization is ready to offer support
to countries to put the landmark climate change agreement into action.
CNN's Isa Soares asked President Jim Yong Kim for his reaction to the combination of the COP 21 climate talks.
(BEGIN VIDEO CLIP)
JIM YONG KIM, PRESIDENT, WORLD BANK: I went into this meeting not even having the 1.5 degree target in my mind. We didn't think that was even
close to being on the table. The fact we've got this now, this is very powerful. 190-plus countries agreed to this. All of my governors from oil
producing states and non-oil producing states agreed to this. And so now we've got to move. The minute this happened we had a phone call with my
staff from all over the world and we had to rethink. We now feel that we've got to get much more aggressive on how we tackle climate change.
ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: I mean, I was actually doing this show when the agreement was reached, and I remember Ban Ki-Moon saying
look, the signs are there, nature is showing us that we must act. But now that the applause and praise is over, like you said, we must move. The hard
work must begin. What happens now, President? How do you make sure that the countries implement these pledges?
KIM: Well that's really the job of organizations like ours. And so we've pledged that by 2020 we'll be providing as much as $29 billion a year for
climate. So now we're going to start working with all of the countries. Their national plans are very, very aggressive and ambitious. And so now
it's the job of donor countries, it's the job of banks like ours. It's also the job of the private sector, because there's going to be many investment
opportunities for the private sector. A lot of what we're talking about is new infrastructure investment. So what we're going to do is to use our
capital in the most creative way to lower the risk of investing in these countries, and then provide business opportunities, investment
opportunities, for people who want to get in on the $90 trillion of infrastructure that are going to have to be built in a completely different
way, in a climate-smart way between now and 2030.
So you know the work starts for us today. We're already in deep conversation with countries to find a path forward.
(END VIDEO CLIP)
QUEST: The President of the World Bank. It's the moment we've been waiting for now upon us. A decade in the making. After a long, long time of
waiting, now it's the Fed that's awaiting. "Quest Means Business," after the break.
[16:31:04] QUEST: Hello, Richard Quest. There's more "Quest Means Business" in a moment when Hollywood prepares for one of its biggest
Some film about Stars, something or other. There might be a `War' in the word somewhere.
And the FAA wants you to sign up and register your drone. There will be a fee involved as well.
Before all of that, this is CNN and on this network the news always comes first.
An Egyptian investigator said they have found no evidence of terrorism in the October crash of a Russian passenger jet.
Russian and the European officials have both said that an explosion was the likely reason behind the crash which killed all 224 onboard.
ISIS has taken responsibility for bringing down the Metrojet with a homemade bomb. Egypt's civil aviation ministry says in their words they
see no sign of illegitimate interference or an act of terrorism.
President Obama says ISIS is being harder than ever in his words by his coalition of states.
He was speaking at the security briefing at the Pentagon where Mr. Obama said the terror group has lost 40 percent of the territory it once held in
Russia says it was forced to file warning shots at a Turkish fishing boat to avoid a collision on Sunday.
Confrontation in the Aegean Sea comes at a time when tensions between the two countries are already high following Turkey's shooting down of a
Russian fighter jet. So far Turkey hasn't commented on the incident.
A bus crash in Northern Argentina has killed at least 41 border police officers. The bus drove off a bridge around 2:00 in the morning local
The rescue teams are trying to use a crane to pull the bus out of the river and retrieve the bodies. Authorities believe the bus blew a tire which
sent it careening off the road.
Ten years since the last "Star Wars." I sense a great disturbance in the markets because after a ten-year absence, "Star Wars" will return to the
cinema this week and far, far away in Washington another mighty power is stirring.
This time it is the Fed awakens. Because if we've waited ten years for "Star Wars," we've had to wait nine for the Fed to move in interest rates.
After three episodes of quantitative easing, Janet Yellen must now use her most powerful weapon to restore balance in the economy.
Janet Yellen will be getting out the lightsaber of (SOUND EFFECT) and this Wednesday's likely to see the first rate hike in a long, long time.
The unprecedented era of low rates has given the Fed major economic victories. For instance, the way the economy is growing.
But do not be fooled in these dangerous times! The dark economic forces may yet strike back.
The Fed for instance faces an increasingly powerful dollar throughout the firmament of the globe.
It is the dollar that is mighty and rules.
And then the labor force - those storm troopers are facing weak wage growth and proving that these forces and foes are hardest to vanquish.
At the heart of it all there is of course low inflation rates, persistently low inflation. As soon as the Fed raises rates, attention will inevitably
turn to the sequels.
[16:35:08] Some are warning that those increases will eventually damage the fragile recovery and put vulnerable parts of the market under threat.
CHARACTER FROM "STAR WARS": It's a trap!
QUEST: It may be a trap in these times of economic upheaval. Mohamed El- Erian is our Yoda, the chief economic advisor at Allianz SE. He told me he senses a series of fragile interest rate rises.
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISOR, ALLIANZ: They will raise rates and they will package it in a very doveish statement that says that this is
going to be a very gradual cycle this time around.
They will not hike at every rate, there will be stop/go and they will finish at a lower rate than history.
So, yes they will hike despite the financial market volatility, but they will do so in a very doveish manner.
QUEST: From what I can see, there are two very distinct schools of thought. Some would say, well never mind inflation, just now's not the
time to be tinkering around when things are still looking very fragile.
The other side says you should have started a long time ago. What you're waiting for? Get on with it. Which side are you in?
EL-ERIAN: So I'm on the second - in the second camp. And let me explain why. For a very long time, we've been relying on central bank as the only
game in town when it comes to policymaking.
And they've done exceptional things. Now we are looking at the collateral damage and the unintended consequences of this, including encouraging
investors to take too much risk.
So when the economy is signaling it's OK to hike a little bit, the Fed to take that opportunity and start normalizing policy.
It should do that in a very measured and gradual fashion, but remember there's a risk associated with going forward but there's also a risk
associated with not going forward, and that is that we end up with even greater financial instability down the road.
QUEST: If you take future - this meaning of the word gradual - where do you think that puts the Fed funds rate at the end of 2016?
EL-ERIAN: I suspect that we get one hike this week and three to four hikes next year. So we're going to be at about 1 percent, 1 1/4 percent.
And we will get there in a stop/go fashion. So the market's going to be reassured at every stage that this is not your normal cycle where you're
hiked 25 basis points every single meeting.
This is going to be the loosest tightening in the modern history of the Federal Reserve.
QUEST: It's not the first time we've had major central banks at opposite sides of the monetary cycle, but I think we can agree it's amongst the
first occasions where you've had two giant central banks core to the global economy and such diametrically opposed.
The ECB where the economy is de facto almost as large as the United States. And you've got the U.S., but they're going in exactly the opposite
Is that a worry for you?
EL-ERIAN: It is notable and it is something that I spend a lot of time thinking about. And there are risks. I call it not just a divergence
which we've had historically.
This is a great divergence. The major concern is that no other aspects of policies is adjusting. Nothing else is adjusting - neither fiscal policy
nor structural reform.
What - so - the private markets have to reconcile this great divergence which means greater volatility, not only in foreign exchange, but in almost
every segment of the market.
QUEST: Mohamed El-Erian joining us there. And don't forget on Wednesday we will have a special edition of "Quest Means Business" which will be at
19:00 London, 20:00 European time. That's when the Fed decision will be announced.
So "Quest Means Business" is some two hours earlier. We'll remind you of that tomorrow, fret ye not, as we wait for the Fed decision.
To Wall Street (RINGS BELL). The Fed's looming decision combined with volatile oil prices. The Dow Jones, it was - I mean, just look at that.
Absolutely all over the place.
And then it ends near the top of the day up 103 points. The triple-digit gain at the end of what was a very volatile session.
And to Europe - the volatility in oil prices took their toll on the European markets. Remember Europe had seen almost the worst of the day,
that's why you have the Xetra Dax down nearly 2 percent.
Shares of the oil producers fell 3 percent and above. The FTSE is finishing - interestingly the FTSE is finishing at a three-year low which
is all the more remarkable when you think of how much - many - gains we were talking about just a few months - a year or two ago.
[16:40:06] In a moment, the real force finally awakens.
FEMALE VOICE: There are stories about what happened.
MALE VOICE: Strong.
QUEST: "Star Wars 7" gets its world premiere in Los Angeles tonight. Director J.J. Abrams speaks to CNN about the Force at the box office.
MALE VOICE: The dark side.
QUEST: Tonight "Star Wars" fans are out in force with the Force fully with them in Los Angeles for the world premiere of "Star Wars -- the Force
Now, this is the aerial footage of where the film stars will be later on. As you just said Hollywood.
The movie will release in U.S. cinemas on Thursday night then to the Friday session and then it will then follow on into Europe the following day.
A huge amount of expectation over how the director J.J. Abrams will carry on the "Star Wars" franchise. CNN's Isha Sesay sat down with him ahead of
ISHA SESAY, CNN ANCHOR AND CORRESPONDENT: Are you worried about the numbers - the box office numbers? Is it something you're concerned with?
All the projections are this is going to blow box office takes - you know, -- totals out of the water.
Is that something you care about?
J.J. ABRAMS, DIRECTOR: The success for me is just going to be if people go and like the film and if kids go and see themselves in the movie and people
feel better when they leave the theater than when they got there.
And the numbers are the numbers.
QUEST: The numbers are the numbers , and they could be very big numbers.
"The Force Awakens" is expected to take in as much as $220 million over the opening weekend. Brent Lang's the senior film and media reporter for
"Variety" and joins me now.
Good to see you, sir, thank you.
BRENT LANG, SENIOR FILM AND MEDIA REPORTER, "VARIETY": Thanks for having me.
QUEST: So you were just telling me -- $208 million is "Jurassic World."
LANG: Yes, that's the record.
QUEST: That's the record.
QUEST: And what's your gut feeling from what you think. Because it's already taken over $50 million in pre-sales, so you're already, you know,
25 percent of the way there.
LANG: Yes, you're in a really good position. Right now Disney is trying to manage expectations, and that's a pretty high-class problem to have.
It very well could eclipse that "Jurassic World" number. The question is how big can a movie get in December? There's never been a film in December
that's even cracked $100 million.
[16:45:04] The biggest opening is "The Hobbit" with about $84 million. "Star Wars" will blow past that. It will do at least $170 million.
And it very well could do $208 million, $250 million. It's hard to see where the cap is.
QUEST: OK, but what's the significance besides the bragging rights of a movie that does a very big opening weekend because basically taking
"Jurassic World" - well, taking the number one movie of all time globally, that's just 10 percent of what it will take overall (ph).
LANG: Well, it is about bragging rights at some level. If you're Disney, you've spent $4 billion to get the rights to this property.
You're depending on this film to not just be a hit but to be a massive global phenomenon with few equals because you need to have this movie kick
off a new trilogy and a whole bunch of spinoffs, prequels and what have you.
QUEST: We mustn't forget the international aspects, in terms of the global -
QUEST: -- amount of money that this movie makes. Now, when "Star Wars" first came out, international was important but not vital.
Now the (CROSS TALK) --
LANG: When it first - it was a small fraction, yes.
QUEST: Budget today (inaudible).
QUEST: Now it could be between 40 to 70 percent of a film's global revenues.
LANG: And for a film like this - for a film like "The Force Awakens" - it almost certainly will be about 70 percent of its total receipts.
This is a film that's going to go wide globally. It's in virtually every market except for China which it opens on January 9th, so it's going to be
a massive number. Record-breaking on all types of levels.
QUEST: I'm going to hold you to this - give me a number for opening night.
LANG: For -
QUEST: For opening weekend (inaudible).
LANG: For opening weekend, I would say $200 million - 200 million.
QUEST: Two hundred million. We won't hold it against you for more than six months.
QUEST: Good to see you.
LANG: Thanks for having me.
QUEST: Thank you very much indeed. Why just sit and watch the Jedi Knights when you can become one?
An exercise class in New York is offering lessons in the Force while getting a pretty good workout.
CNN's Claire Sebastian clearly needed to find out if the Force was with her with her Lightsaber went to investigate the true "Star War" fans.
SEBASTIAN: The first rule of Jedi School - know how to handle your weapon.
MALE: Why do you think I have my strike at an angle like this?
SEBASTIAN: Every Thursday at this Lightsaber Fitness Class in Manhattan, "Star Wars" fans get to sweat it out in character, practicing moves just
like the Lightsaber battles from the movies.
They're perhaps not quite at that level yet.
Today's instructor Daniel Reiser, a special education teacher, has been doing this for eight years.
DANIEL REISER, INSTRUCTOR, NEW YORK JEDI: Where's the fun of just simply watching something?
I mean, you look at, say, a football fan. They're going to go in the backyard and throw that football around. It's the same kind of thing.
Instead of footballs, we have lightsabers. It's a way of becoming part of something that we truly love.
SEBASTIAN: By day the Jedis-in-training could be anything from a legal assistant to a kitchen designer. By night, they are united by one thing.
RUSS BRIGGEMAN, CLASS PARTICIPANT: It's a visceral gut feeling. It just feels satisfying to pick up one of these, and all of a sudden, you are a
Jedi knight, you are a Sith Lord.
SEBASTIAN: Star Wars has inspired a type of fandom that goes way beyond a love of watching the movies. Fans like these have to experience it.
And to really understand why, so do I. Luckily I've been practicing my enjoke (ph).
You know I have already a bad feeling about this?
MALE ACTOR FROM "STAR WARS": Very bad feeling about this.
REISER: I always have a bad feeling about this.
REISER: That still doesn't stop me.
SEBASTIAN: Whatever your skill level, this group has one core philosophy.
REISER: Once a Jedi, always a Jedi!
SEBASTIAN: So I think I finally see the light of what it takes to be a true "Star Wars" fan. But really there's only one thing left to say.
CLASS PARTICIPANTS: May the force be with you!
SEBASTIAN: Claire Sebastian, CNN in a galaxy somewhere in Manhattan.
QUEST: One crashed on the White House lawn, hundreds have flown close to manned aircraft. Now the U.S. authorities are cracking down on drones.
Before that, you can enjoy "Make, Create, Innovate."
[16:52:08] QUEST: Drones are flying off the store shelves, particularly at this holiday season and now the rules have to catch up.
U.S. regulators are going to require owners to register their drones as of next week. The U.S. authority, the FAA, hopes that it will make it easier
to track down drone owners.
Rene Marsh is in Washington to talk about this. Renee, who has to - what drones have to be registered?
RENE MARSH, CNN AVIATION AND REGULATION CORRESPONDENT: So, anyone who's flying a drone that's half a pound to 55 pounds, that's the range, they
will need to register this drone before they fly it with the federal government.
And the sort of information they're going to have to give up - their name, their physical address as well as an e-mail address.
The cost will be $5. But here's the thing - if they do it in the next 30 days, starting in February they will be able to have that $5 fee waived.
The thing here essentially, Richard, is they have a problem with rogue drones. Drones flying where they're not supposed to be - -near airliners,
near stadiums, near airports.
So they want to be able to track these drones back to the owners and they think this is one step to do that.
QUEST: But you're saying that these - the drones - that have to be registered are even the very small drones that people are buying in Walmart
and stores - the sort of thing we've with great danger we've flown around the studio on several occasions.
MARSH: (LAUGHTER). You did, not me.
QUEST: Well, (LAUGHTER). I think I slipped on into trouble. But they have to be - they have to be registered. How realistic is it to expect
millions of people to be registering their drones that they've just been given for Christmas?
MARSH: Well you're right with that millions number because that's exactly how many they estimate will be sold this holiday season.
Look, at this point, it's the honor system. They are counting on people to get the information, we're putting it out in the media, the FAA is going to
be tweeting out information.
They're launching a campaign to educate people. But the bottom line is, this truly is the honor system. It will be up to these people who are
purchasing these drones to know the rules and register it.
If they don't, essentially there could be some penalties, there could be civil penalties, there could be criminal penalties.
But before the FAA goes that far, they're saying, look, we just want people to know the rules first. This is not about penalizing people, this is
about educating people - at least initially.
But, you know, the question really is how can they truly enforce this? And I don't think that they truly can enforce it, Richard.
It's really going to come down to the individuals, you know, knowing that this is the rule and going by the honor system and actually going out there
and registering that drone.
QUEST: Rene, thank you. In six months please come back and tell us - well three months - come back and tell us how many have been registered, and you
and I still have to have a drone session together.
MARSH: I'm in, I'm in. That's a challenge -
QUEST: That's a challenge.
MARSH: -- and I accept.
[16:55:08] QUEST: Rene Marsh joining us from Washington. But I assure you both drones will be registered.
We will have a "Profitable Moment" after the break (RINGS BELL).
QUEST: Tonight's "Profitable Moment." It is extraordinarily difficult to know what to make of South Africa's finance minister fiasco.
First of all you have a Minister Nene who is respected and admired and who may actually oppose many of the government's overspending policies and he
Then you have a complete non-entity that nobody's ever heard of that never held national government office appointed.
The markets fall out of bed, everybody wonders what on earth President Jacob Zuma was thinking, and that finance minister is gone within three
days to bringing back Pravin Gordhan who is an enormously respected minister who ran the South African economy from 2009 to 2014.
All of which bets the question - what is going on in Africa's most developed if not largest economy at the moment? And the truth is we don't
But the fact that a portent G20 BRIC finance minister can be replaced once, then again in such circumstances is extremely troubling.
And dressing it up as being the transparency of democracy is nothing more than the fig leaf of political expediency that it clearly and obviously is.
Oh no, the markets gave their judgment on what's been going on and that's what changed. And that's "Quest Means Business" for tonight.
I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's profitable.
We'll do it again tomorrow.