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QUEST MEANS BUSINESS
CNN Obtains Proof of Life of Some Chibok Girls; Taiwan Nationals Deported to China From Kenya; Verizon CEO: Sanders "Contemptible"; Trump: Republican Party Doesn't Want Me to Win; Ringo Starr Cancels North Carolina Show; North Carolina Governor Adjusts Transgender Law; Business Backlash Over Transgender Law; Louisiana Bans Gender Identity Discrimination; IMF: Financial Stability Risks Rising; Air Arabia to Fly Direct From Amman to Riyadh; Possible Masterpiece Discovered in France; Street Ballet "Jookin" Makes a Social Media Star. Aired 4-5p ET
Aired April 13, 2016 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN ANCHOR: Closing bell on Wall Street is ringing. Hey, look out, old sir, oh, 4-5, good Lord, normally you get 3, you get 5 today,
5 robust gavels ringing trade into close on Wednesday. It's April the 13th. Too big to fail, and not ready for it, regulators order five banks
to redo their homework.
Verizon and Facebook send harsh messages to the presidential campaigns. And stepping into success, Lil Buck explains how jookin on the internet
made him a star, and shows me some moves the like of which you'd never expect me to see, not at my age. I'm Richard Quest, we have an hour
together, and I mean business.
Good evening. Tonight I'm at the CNN center, and the words of the banks, not credible. That's what the U.S. federal officials have said to bank
plans from five major banks, detailing how they would enter bankruptcy.
The point of the so-called living will is to protect the American economy if the banks were to fail. Well the banks that have failed the test on
failure include J.P. Morgan Chase, Bank of America, Wells Fargo, Bank of New York Mellon, State Street.
They must all make changes by October or face sanctions. So these are the failed (ph), Morgan, Bank of America, Wells, Bank of New York, and State.
The deficient banks are Goldman Sachs and Morgan Stanley. And the only one that was approved, and even then there were problems with their approval,
was Citi. Now J.P. Morgan shares on Wednesday rose after the bank beat expectations, but they dropped after the living will news, so that's the
way the shares have traded over the course of the session.
Let's bring in Rana Foroohar, CNN's global economic analyst who joins me live from New York. Rana, the core question, how on earth do these banks
manage to fail something like the living wills, which was such an important part of Dodd-Frank and the post great recession?
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well you know, there was always a lot of debate about whether or not anybody was going to be able to
pass these living will exams, there's always been the thought that look, whatever people say is going to happen in advance of a crisis, when a
crisis comes, if there were another Lehman Brothers moment, would the government really step in and bail these banks out?
Now I think what's happening is that the Fed and the FIDC are really starting to put the heat on these banks in a bigger way. They're saying
look, we may have to up capital requirements, we may have to decrease leverage.
I actually just had an exclusive interview recently with Janet Yellen, and she made it very clear that the Fed is going to take their role as a
regulator more and more seriously. So I think the banks are going to continue to be under pressure.
QUEST: OK, but what are they failing on? Because as I remember, you know, when this all came about, the living will was a crucial part of what was
seen to be I think the ground phrase the macro prudential security of the system.
FOROOHAR: Say that three times backwards, Richard.
QUEST: Yes, absolutely, try and spell it on a bad day. But the macro prudential required these living wills, so to see the -- I mean look, these
banks employ large numbers of people at high wages to make sure they don't fail, so they must have known they were going to fail.
FOROOHAR: You know, and this gets to the point of do we have a too big to fail problem, or do we have a too complex to manage problem? And I would
actually argue that it's the latter. I think that banks of all sizes can be systemically important. If you look back into late '90s, long-term
capital management, the big hedge fund at - when Russia almost collapsed, almost brought down the financial system with it, there are any number of
institutions that may not be too big, but they're systemically important.
In the case of these banks, they're both. They're huge, and they're systemically important, but they're also very complex. If you think back
to J.P. Morgan, J.P. Morgan is probably the best in terms of risk management, but they had their London Whale trading scandal just a couple
of years ago, and people at the very top didn't know what was going on. I think these institutions are still figuring out how to play this new game,
and I think that we're going to see more of these failures before we see success.
QUEST: Is it even reasonable to suggest that you -- you raise a good point with J.P. Morgan Chase, or with Citi, which are huge and have many
disparate functions. It is almost impossible to imagine a scenario where a Citi or a Morgan is not too big to fail.
FOROOHAR: True enough. And think about the millions, the billions of transactions in some cases that these institutions are going through day by
day. It's really sort of impossible to think that every one of those dots could be -- could be made, every one of those T's could be crossed.
This is a very complicated situation, and in some cases, I think that we're maybe seeing how much of this living will scenario is political, that we
want to believe that we can test these banks and come up with some number that will show that they're going to be OK and we're never going to have
another financial crisis, and how much of it is really doable, you know, and what are the metrics we should be looking at.
There's still a lot of argument, a lot of people would like to see a higher capital requirement. Some people would like to see more transparency over
well what does it mean when somebody says they're holding high quality capital? Is that cash? Is that bonds? What are the grades of those
bonds, you know? And particularly in a market where there's more and more opacity, shadow banking is bigger than ever before, these are still big,
QUEST: Rana, thank you for joining us.
FOROOHAR: Thank you.
QUEST: ... bringing in your perspective. J.P. Morgan, the results of Morgan helped boost Wall Street the Dow (ph), heard (ph) that from mid-
week's session, it went up at the open, and it never looked back, 187 points in the second day of strong gains on the street, and it was the
financials that led the way, because although Morgan is the first to report, we're going to get in this reporting season, what are we, we're the
Q1 reporting season, we're expecting the other banks to report similarly.
Panama's attorney general says the authorities are searching Mossack Fonseca for evidence of possible crimes. Mossack Fonseca, that's the law
company in Panama, helped create shell companies and offshore accounts, you'll be familiar, for those potentially avoiding taxes. The attorney
general told reporters and investigators why they raided the firm's headquarters in Panama City.
(BEGIN VIDEO CLIP)
KENIA PORCELL, PANAMA ATTORNEY GENERAL: (translated) The raids being done at this time are for information, documents, and evidence collection, that
could point, like recent publications, have informed of a possible crime.
(END VIDEO CLIP)
QUEST: Nic Robertson's with me from London. Nic, when I heard about the raid this morning, my first thought was hang on, they're now raiding law
firms. Law firms normally, because of the confidentiality and the privilege rules, are almost sacrosanct. So that shows a new level of
NIC ROBERTSON, CNN CORRESPONDENT: There is clearly, and also some delay in planning this. They clearly want to get it at least a little bit right
because they've known for over a week about this situation, it's been led by the criminal division, it's got the digital forensics team, the justice
investigative bureau, the national police are all involved too, a multi- agency operation here.
But I think perhaps some of the key language is in, we've been told that this is a visual inspection, that they're looking for things. It doesn't
say that they're taking away computers, that they're physically removing things from the premises, although they've been in there now over 16 hours
I think at the last count, maybe even a little bit more, you know.
But one of the things that we've heard from the authorities in Panama is they really want to get an idea of what are the economic implications going
to be here? So there's the legalities of what this company may and may not have done. They say that they haven't broken any laws, government wants to
get a view on that, but they also clearly want to see what are the implications going to be more broadly for Panama out of this.
QUEST: And that's the core point, because if you look at the way in which on this program, I think last week we had the vice president of Panama,
when she basically -- there's a seriousness because of the way they've built their economy around so much of offshore banking now, Nic.
ROBERTSON: And the attention that this is going to draw, are they going to be calling for greater transparency? Shouldn't they be at the head of that
line of knowing what's going to be revealed if there is greater transparency? So yes, it gets to -- it's going to get to the core of
what's important to Panama, that they have built this up over the past several decades.
They're not going to want to lose it, they are going to want to be seen as a trustworthy place to do business for the right reasons. They want to get
ahead of the curve. However 11 million documents and e-mails gone already, it's kind of hard to do that.
QUEST: Nic, one final thought, the British prime minister's been in trouble, the Icelandic prime minister's gone, we've seen numerous other
politicians and leaders and all getting into trouble on this. From your understanding, does this get worse or have we seen the worst of it?
ROBERTSON: You know, you've removed, or the Icelandic prime minister's been removed, and there are allegations made against President Putin, whose
spokesman has batted them away. You know, perhaps those two issues have been majorly dealt with there.
David Cameron today again in the House of Commons, prime minister's question time, he had a fair drubbing (ph) on Monday when he was asked a
lot of questions about the Panama papers and, you know, his own family's involvement in the offshore accounts.
But he didn't really get hammered on it today, in fact he was sort of on political top form. He's put forward his tax returns the last couple of
years. The leader of the opposition, Jeremy Corbyn, said he'd put forward his, and Cameron came back with a really politically savvy retort, saying
yes, typical for Labor, they were late, they were inaccurate, the numbers didn't add up, you know, so he seems to have sort of weathered the storm.
Some of the - his problems that he admits, have been his own making the way that he's dealt with this.
Is it all over? Far from. I mean as we've seen with all big leagues of massive scale and potential scope, that they continuous people go through
them continue to provide nuggets of information, and people then take it and run it down and check it, and yes, other people will find them selves
in embarrassing positions.
QUEST: All right, our diplomatic editor, Nic Robertson, who will be plowing through the papers, and keeping us informed. Thank you, sir. Now
as we continue across mains (ph) business tonight, we'll be joined by the Albanian prime minister, controversially for a foreign leader Is happy to
comment on at least the political leader in another country. He says Donald Trump is a threat to both his country and America, after the break.
QUEST: Donald Trump says he's being set up to lose the nomination by his own party. Let's all join Anderson Cooper at the CNN town hall. Mr.
Trump says the delegate rules are rigged. Republican rival Ted Cruz swept to victory in Colorado this weekend without any direct voting from the
public. Trump says he's familiar with the Republican rule book.
(BEGIN VIDEO CLIP)
DONALD TRUMP, REPUBLICAN PRESIDENTIAL CANDIDATE: I know the rules very well, but I know that it's stacked against me, and by the establishment, I
fully understand it. We had people out there, and they weren't heard. And then in fact today, when it was announced -- the numbers were announced,
they put out something on Twitter saying oh, we stopped Trump, essentially we stopped Trump, we -- that was put out by the party in Colorado. The
point is, it was stacked against us.
(END VIDEO CLIP)
QUEST: Political man is with us, good to see you, sir.
JONATHAN MANN, CNN ANCHOR: And you, sir.
QUEST: So I think we all can agree perhaps up to a point that the establishment is not enthusiastically running to Donald Trump to have the
nomination, but are they rigging against him?
MANN: The short answer is maybe just a little bit. Colorado's an interesting example, the rules are incredibly complicated, and Colorado's
Republicans in August decided to make them even more complicated, in part because they thought it would stop an insurgent campaign, maybe one like
Donald Trump's. The rules were more complicated. And what they forced campaigns and candidates to do is pay a lot of attention to Colorado.
Donald Trump let his gaze shift away, Ted Cruz paid attention, Ted Cruz won.
QUEST: Right, but the way I read the New York Times this morning, both in its new coverage and its editorials, is that Donald Trump has nobody to
blame but himself because he didn't get into the minutiae of delegate wrangling.
QUEST: So he's just gone from mass media campaign followed by, you know, you hope to pick up delegates, but it's this wrangling of the delegates
MANN: It's not understanding the way things work. And for a man who prides himself on being a man of the world, capable of doing business all
over the world, capable of negotiating trade deals in their minutiae, to misunderstand the rules of a state like Colorado, he has no one else to
blame, except for this.
From the very outset this has been a one-man campaign, very -- trying to break all the rules. Well, when you break all the rules, and you're trying
to do it all yourself, chances are you're going to make some mistakes along the way.
QUEST: Is it -- I'm going to make myself and yourself a hostage to fortune here, is it inevitable that it will be a brokered convention, or a
contested convention now for the Republicans?
MANN: Almost certainly, yes. It is inevitable. Brokered convention means something different, it means there are brokers, it means there are
powerful figures who can guide the outcome. I don't think there are such figures anymore in the Republican party.
So it will be something even more chaotic, which is a kind of anarchy where the convention and the 2,500 delegates will themselves try to set rules
they can all agree on, and then abide by those rules, and then choose a nominee according to those rules.
QUEST: This is a nightmare for the Republican elders.
MANN: It is absolutely a nightmare. Traditionally, going to the Republican national convention, either one of the conventions, but
especially the Republicans, was like going to a meeting of the Soviety parliament. You knew what everyone was going to do months in advance. The
outcome was predetermined. And now instead of the Soviet parliament, it's the Battle of Stalingrad. That's what they're looking at on live
QUEST: And what do you believe is the outcome here?
MANN: I have no idea. No one has any idea. Because there are a lot of different ways it could go. Trump could -- if Trump comes very close to
having enough delegates, he may succeed in getting just enough more to get the nomination. It may take a round or two, but it may happen. But if it
starts going otherwise, he could lose the nomination and he could set out on his own. He's already saying that the party is rigged against him, that
the leadership of the party's trying to provide (inaudible).
QUEST: I mean just one on that point, I'm choosing my words carefully here, Jonathan. You have -- I have a certain sympathy with his view, when
he says I've got more delegates, I've got millions more voters. If by some quirk of the rules I don't get it, that's unfair.
MANN: Well, you could have that sympathy, and you might think the most votes should be the deciding factor, but the truth is, that's not what the
rule book says. The Constitution of the United States is a very complicated thing, the electoral system here doesn't make any sense, but
it's broadly accepted as the way this country will govern itself.
And it's broadly accepted among Republicans, this is the way the party governs itself. And if he says well, this broad agreement doesn't apply to
me, well maybe it doesn't, but it seems exceptionalism of a very, very self-interested kind.
QUEST: Very diplomatically telling the advert (ph), beautifully diplomatically ...
MANN: I'm originally from Canada, and rules matter in places like Canada. And that's -- we're very compliant, we follow the rules.
QUEST: Now as we talk about Donald Trump and the potential for him becoming the nominee, world leaders are commenting on the White House race
in unprecedented fashion. In the United Kingdom, David Cameron said that Mr. Trump's U.S. Muslim ban, he used the words, divisive, stupid and
Mexico's president, not surprisingly, Enrique Pena Nieto, says that Trump's rhetoric is strident, that's how Hitler got in. Yet the presidential
hopeful has some admirers. Vladimir Putin, the president of Russia, has called him an outstanding and talented personality, and the former leader
of France's National Front, Jean-Marie Le Pen said if I were an American I would vote Donald Trump.
It must be said I think, that Mr. Trump still did disavow those comments by LePen. Albians'prime minister says a successful presidential bid by the
Republican hopeful would hurt U.S. relations with his country. I asked Edi Rama why he said that, and what exactly he means.
(BEGIN VIDEO CLIP)
EDI RAMA, VICE PRESIDENT OF ALBANIA: America, it's a shining city on the hill, and purposes that we are listening from Donald Trump are really
frightening and are really undermining what America is in our eyes.
QUEST: You'll be aware of course, that diplomatic niceties usually mean foreign leaders don't comment on elections in other countries. And but you
obviously decided that this issue was greater than that, if you like, that protocol.
RAMA: I didn't comment on elections, I simply did something that I then realized was not the only and was not the first to say. Other leaders in
Europe have expressed same concerns, because America and United States is far greater and far more important than for itself and in itself. It is in
our eyes world leader that we follow as a very, very inspiring example, and this inspiring example is built on values and principles that America
fought for and made America great.
QUEST: If it becomes clear that -- and it's by -- you will follow these events very closely, that Trump does become the nominee, then it becomes a
lot more tricky, doesn't it, for everyone concerned, who has these fears?
RAMA: God forbid, I think would harm a lot America, and would harm a lot the democratic world, because he, at the end, will have to do, at least
some of the things he is saying he will do, and then of course it will be very, very harmful.
And I very much hope in the meantime he'll be able to learn more about the world, to learn more about Muslims, to learn more about how there are very
proud communities and people independent from their religion, independent from their ethnicity, that live with the values America represents and
protect these values, even with -- through sacrificing their kids in wars together with America.
(END VIDEO CLIP)
QUEST: Well thank you, Prime Minister. There's very little the candidates on either side have in common in this U.S. election season, except for one
thing, the buttons that they are wearing, the buttons or badges as they're known, they've been part of the American campaign process for more than a
century, and this may be their best year yet, not only for size and scale, but witticisms onboard too. CNN's Clare Sebastian met the New York
premiere button seller to discover why.
(BEGIN VIDEO CLIP)
MORT BERKOWITZ, POLITICAL BUTTON MAKER: This is certainly our best seller this year. We shall overcomb.
CLARE SEBASTIAN, CNN ANCHOR: When it comes to button sales, Donald Trump is, well, a winner.
TRUMP: We will have so much winning if I get elected.
BERKOWITZ: Incredible, it's going to be the best season ever for sales of buttons. Eight years ago, Obama took everybody by storm, but nobody bought
a single Republican button. This time, I'm selling Bernie and Hillary, but overshadowing that is Donald Trump pro and Donald Trump con, and how can we
have Donald Trump without having a $1 million bill?
SEBASTIAN: In Don we trust.
BERKOWITZ: Of course in Don we trust.
SEBASTIAN: Mort Berkowitz has been making political buttons for 40 years. His cluttered office near New York's Times Square is a document of that
history. These are some of the oldest ones we could find, this is the Dukakis-Bentsen ticket from 1988, there's also this, the inauguration of
Ronald Reagan, that was 1981. We've even got Jimmy Carter for president, in 1976. A staple of American democracy, this low-tech business has
rallied even as campaigning turns increasingly digital.
BERKOWITZ: You can't wear a tweet on your lapel. I mean everybody who goes to a Trump rally wears 1 to 10 Trump buttons on their chest. He was
talking about 1,000 points of light, and I said one dim bulb.
SEBASTIAN: One dim bulb. How do you think of these?
BERKOWITZ: Don't ask me.
SEBASTIAN: Buttons, says Berkowitz, are more than just a good picture and a clever slogan. You need something people can identify with.
BERKOWITZ: Bill Clinton for First Lady, yes. If you don't like Bill, it says something else. Either way, it sells a lot.
SEBASTIAN: Can button sales help Dick (inaudible)? That's (inaudible) CNN and Money (ph), New York.
(END VIDEO CLIP)
QUEST: Wonderful. Now be sure to catch the CNN town hall tonight, Ted Cruz and his family will be sitting down with Anderson Cooper, it's at 9
o'clock in New York time, 2 AM London, 3 AM central Europe, and of course if that's all a little late maybe for your bedtime viewing, CNN will
rebroadcast it at 12 AM Thursday in London.
And on Thursday we're going to be hosting the Democratic presidential debate as Hillary Clinton and Bernie Sanders face off live from New York,
that is live at 9 PM Eastern, which of course again, is 2 AM London. You'll only see it of course on CNN.
Donald Trump's team is firind back at Mark Zuckerberg. This was Donald Trump's spokeswoman. The chief execs in Silicon Valley should focus on
innovation and jobs in their businesses, and let the politicians make their policies. It follows Facebook's chief exec's veiled criticism of Trump's
(BEGIN VIDEO CLIP)
MARK ZUCKERBERG, FACEBOOK CEO: . voices calling for building walls and distancing people they label as others, for blocking free expression, for
slowing immigration, reducing trade, and in some cases around the world, even cutting access to the internet. It takes courage to choose hope over
(END VIDEO CLIP)
QUEST: CNN's Samuel Burke is following that story for us. Look, Samuel, the comments are - I mean on both sides, CEO's in this election year have
fought back when normally they might have just let it ride. This is another example of that with Zuckerberg.
SAMUEL BURKE, CNN CORRESPONDENT: Absolutely, and I think for the tech CEO's, it's a bit more personal, and also a bit more directly about
business for them because of the issue with immigrants. Every time I go to Silicon Valley, Richard, I'm really taken aback at just how many people
there, how many engineers on the campuses, whether it's Apple or Facebook, are not from the United States. They have so many engineers from India,
from China, and I think for them, it's very personal because they know these families, and they need these employees to meet their bottom line.
QUEST: OK, but that said, the danger of course is unless the CEO is on firm ground, they can alienate as much as appeal, and you know, I mean a
good example of getting it right perhaps was Jeffrey Immelt last week, we've had the Verizon CEO absolutely lambast Bernie Sanders in the -- in
the last few days -- in the last 24 hours for his comments about Verizon's tax policies. Mark Zuckerberg does not seem to be in that league.
BURKE: Yes, he's taken it a step further. When I've been traveling lately, a lot of times when these CEO's talk to me about how they feel
about Trump, even the ones who are forceful, afterward they say oh, but I might have to work with this guy, and it feels like Mark Zuckerberg is so
confident in his position that even if Trump is elected, he's willing to say these comments, maybe because it's the gigantic market valuation of
But I am always surprised even by the people who are willing to speak their mind. They know in the back of their minds they really think the Trump
presidency is a real possibility and they might have to work with him at the end of the day.
QUEST: Well no, absolutely it's a real possibility, of course it is at the moment, but back to this point, does Zuckerberg have credibility to make
these sort of comments? Immelt does, Lowell does, because they're running major companies, I suppose Zuckerberg is running a major company, but he's
not exactly known for his off-business agenda.
BURKE: It's interesting that you mention that, because as I was watching Mark Zuckeberg the past couple of days at the F8 conference, which is where
he's been speaking, the Facebook developers conference, I've noticed a different tone in him a little bit.
Let's say he's grown up a little bit over the past few years, not just in the way he talks about politics, but also the way that he talks about tax.
So I think this is something that he's doing little by little, and he's venturing more into the world of philanthropic ventures, so I think we're
seeing a change in Mark Zuckerberg with these comments.
QUEST: Samuel, thank you. As we continue our business conversation tonight, the backlash over the controversial laws growing ever stronger,
it's in North Carolina, now South Carolina's also got some problems, and prominent singer has added his voice to the chorus. We'll talk about it
after the break.
[16:30:00] (COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest. There's more QUEST MEANS BUSINESS in just a moment.
And the business backlash over controversial religious freedom laws grows ever louder. And if you want to see me show some moves, Little Buck is
here to tell us how he shot to fame and he will talk about "jookin."
Before that this is CNN, and on this network the news always comes first.
NEWTON: CNN has obtained a video that shows some of the Chibok Girls might still be alive. They were kidnapped by the militant group Boko Haram in
Nigeria two years ago. A Nigerian senator from the region where Boko Haram operates says the video is credible. Will have more on the world exclusive
report from Nigeria at the top of the hour.
45 Taiwanese citizens have been forcibly deported from Kenya to mainland China. The deportations occurred after some of the individuals were
acquitted in a phone and Internet fraud scheme. The instance highlights the growing resentment between Taiwan and China. No word yet on whether
any of the citizens will face new charges in China.
Verizon's chief executive is the latest CEO to tear into Bernie Sanders. In a LinkedIn post, Lowell McAdam has said, "Sanders views are
contemptible." He says, "The Democratic presidential candidate is oversimplifying economic matters for political concern and gain." Sanders
has taken aim at corporate America for moving jobs overseas to make more money. He joined a group of Verizon strikers in New York earlier today.
Donald Trump says Republican leaders are regained the delegate system to ensure he loses the party presidential nomination. Mr. Trump made the
claim on Tuesday night and a CNN town hall. The Republican national committee chairman said the delegate rules were made more than a year ago
and any presidential campaign should have known them beforehand.
Ringo Starr says he has canceled his June show that he was going to perform in North Carolina to protest against the transgender bathroom law. In
North Carolina and across the southern United States, the backlash to controversial transgender and religious freedom laws is growing. The fight
for civil rights and for business.
Let me remind you where we started. The North Carolina governor, Pat McCrory has adjusted protection for state employees against discrimination
over gender identity. But he hasn't of course, the legislature hasn't repealed the law as it issue.
More voices are bulking against the so-called bathroom law. Deutsche Bank, Germany's biggest has stopped his North Carolina expansion plans. PayPal
canceled plans to expand in North Carolina. And yet in spite the outcry several U.S. states are looking to do something similar. For instance,
let's go to South Carolina where senators have been holding a hearing. And then there's Tennessee where there is a transgender bill that's delayed.
That could cost the state more than $1 billion in federal money. Polo Sandoval is here with me at the CNN center. What is driving latest raft of
laws, bearing in mind Indiana, where it was --
[16:35:00] One of the first.
NEWTON: -- one of the first, which went nowhere because of the outcry. And Georgia, where it was repealed.
POLO SANDOVAL, CNN CORRESPONDENT: That was vetoed in Georgia.
NEWTON: Repealed. Beg your pardon. Repealed.
SANDOVAL: and now you'll be seen here, Richard, is this sweep. It's not necessarily just a fight for four equal rights among the LGBT members. But
now it's become a virtual battle for business. You have several big names, you have the artist that you just mention that are bowing out of
performances. So that's leading to some real concerns for some states.
NEWTON: Yes, but why are these states doing it? We know the arguments for and against. When they know the backlash and they've seen states like
Indiana, and Georgia go the opposite way and back off and back off of it at the last hurdle. Why do they so per tenaciously continue?
SANDOVAL: it seems to be that million dollar question. I spoke to a constitutional law attorney last week, Richard, that's says this is
basically has been the floodgates that have opened after last summer's key decision by the Supreme Court, essentially legalizing gay marriage. So as
a result you've seen several of these states, many of them with a very heavy conservative base, legislate and eventually even pass some of these
very heavy laws as well.
NEWTON: How much pain has to be inflicted economically on the states, seems to be the question. Because let's take North Carolina. It's going
to be very difficult for them to get themselves out of this hole that they've got themselves into, for no other reason than the law has been
SANDOVAL: Well, you have several businesses that are speaking out, because there is that real concern that it could turn away business. North
Carolina, brought a very key issue here. For example, we do understand that there was a massive expansion that was scaled back on behalf of the
online payment system PayPal, saying we're basically not going to move forward with a plan to expand and possibly even create at least 300 jobs
there in the state.
So as a result, as you mentioned it a while ago, the governor there in that state issued a key executive action yesterday, Pat McCrory, saying he is
revising the law so there so this controversial legislation would essentially at the same time give LGBT workers the right to sue based on
religious discrimination. But people are still arguing that it keeps that restroom provision intact. That is a problem..
NEWTON: OK, fine. So where does this end up? I ask you the question again. How -- you have got PayPal, as you mentioned, you have got these
stars -- I suspect the stars aren't going to make much difference one way or the other. It's only when economic pain is inflicted. What's the next
move for all these states?
SANDOVAL: I'll give you Louisiana, for example. I can read you the Executive Order that was just signed today by the governor there. But the
skinny of it here is essentially it bans discrimination in state government based on sexual orientation. And at the same time, this governor that's
only been in office for only a couple of months, also is repealing in Executive Order that was issued by his republican predecessor. I do want
to read you a portion of a statement released by the governor here as soon as he signed this earlier today. Essentially summing up why doing this.
Trying to get ahead of the financial curve here saying, "We respect our fellow citizens for their beliefs, but we do not discriminate based on our
disagreements. I believe in giving every Louisianan the opportunity to be successful and to thrive in our state. Our goal is to promote the
opportunities we have right there in Louisiana."
NEWTON: Louisiana is a southern state. Why does Louisiana go one way and Mississippi go the other?.
SANDOVAL: You have a Democratic governor here that's clearly someone who wants to essentially lend a voice to the LGBT community and has seen the
damage that has been done in neighboring states. So this is his way of trying to get ahead of the curve, trying to remind the public that in his
words, all are welcome, including the business community as well.
NEWTON: Thank you. Thank you.
A new warning from the International Monetary Fund, the risk to financial stability has risen over the past six months. Three main factors, there
are market turmoil, there is falling commodity prices, and there's concerns about China's economy. It's bank loans to Chinese that are risk. The IMF
wants banks to clean up their balance sheets. The director of the IMF's Monetary and Capital Markets is Jose Vinals, he joins me from Washington.
Always good to see you, sir. Now were not talking here about slow growth or crises or the next big recession. We are talking about risk and worry.
And if you put it in that context, what's your biggest worry?
JOSE VINALS, DIRECTOR, MONETARY AND CAPITAL MARKETS, IMF: Well, my biggest worry is that if these risks remain on the loose, they may take us to a
rather unpleasant place, which is one where the world economy would be faced with the situation of economic and financial stagnation. Meaning a
very, very low growth for a long time. And this is something that we must avoid. We have estimated that this would be equivalent to losing one full
year of global growth if that were to happen.
NEWTON: The problem is, we've known about this issue of low growth from whatever area it comes from, for the last several years. But nobody seems
to have a key to unlock it, to actually get growth going again. So what is the solution as you see it to get a more balanced growth?
[16:40:00] VINALS: Both more balance and more solid growth and stronger financial stability require having the keys to open several doors. So far
the only door that remains fully open is the monetary policy door. While the fiscal policy door and the structural reforms door in particular remain
locked. We need to open these doors and we need to add these policies to monetary policy and we need to go to a more balanced monetary policy in the
NEWTON: I don't wish to be cynical in this respect, but for the last three or four years, I've been hearing people like yourself saying -- and I've
heard central bankers, and we heard them say it at the forum last week, that monetary policy can't do it all, fiscal policy. But the fiscal policy
makers aren't listening. Or if they are listening they are not doing anything about it.
VINALS: Well, there are some who are doing something about it. You know, Canada is doing something about it. There are policy makers which have
taken action to implement structural reforms. When the structural reforms have been implemented things have been going better. For example, of
Ireland, think for example, of Spain. But it is true that many others are not listening. But we need to be consistent in providing what we think is
the right advice and then showing what the consequences of inaction are, and he consequences of inaction is the real possibility that this may take
us into an economic and financial stagnation scenario that would be very detrimental for the world.
NEWTON: Finally, Brexit. I mean, you know, this is one thing we'll know in two or three months which way that's going to go. Obviously, you share
the IMF's view, the fun's view that it could be extremely destabilizing. But nobody really knows just how destabilizing if the U.K. does vote to
leave the European Union.
VINALS: Yes, there is a lot of uncertainty associated with that. With the process that would ensue for a couple of years of negotiating what the new
status of Britain would be. But what we know is that uncertainty is not good for the economy. And finally, depending on what the final arrangement
is, it would be the case that many -- perhaps many of the financial companies customs are operating in the European Union through London, would
have to go somewhere else because they would no longer be able to use the European financial passport.
NEWTON: Look forward to seeing you in Washington at the IMF as we continue the meetings. I'll be there tomorrow, sir. It will be an interesting
couple of days. Thank you for joining us.
VINALS: Thank you very much.
The chief executive of Air Arabia says his airline has brought aviation to people who couldn't afford it before. I'm going to continue my journey
around the world on low-cost carriers. I'll be in the UAE.
NEWTON: The chief executive of Air Arabia says his airline has brought aviation to people who could never afford it before. I'm going to continue
my journey around the world on low-cost carriers. I'll be in the UAE, Abu al Abyad.
NEWTON: The global aviation industry is being reshaped by the rise of the low cost carriers.
[16:45:00] In the middle east, Air Arabia has brought low cost options to a region where many had never experienced air travel before. The airline is
rapidly expanding. Just look at the routes, Sharjah is its main hub, and out it goes. Up to Europe. Down into and of course, into the
subcontinent. And it has recently announced direct flights between Jordan and Riyadh and Saudi Arabia. Air Arabia has five hubs throughout the
region of the Middle East and North Africa and is based in Sharjah in the UAE. Many of those other hubs of course, are just subsidiaries of the main
airline. On my trip around the world which you are seeing here. I stopped in Sharjah where I met the Air Arabia, Chief Exec, Adel Abdullah Ali. and
I asked him to define the Air Arabia philosophy.
ADEL ABDULLAH ALI, AIR ARABIA CEO: I think getting people from a place to place at the lowest possible cost. And it's all started when nobody was
doing it in this part of the world. When the whole region was for legacy, high cost, and very few people were traveling, and from a point to a point,
the normal human being used to travel by bus in a very hot weather. So I said, this is a math thing. Buses were our biggest competitors when we
started. And now buses don't do a lot of those trips because we've taken over.
NEWTON: How difficult is it to set up these other bases in other countries when there isn't an E.U.-style single market?
ABDULLAH ALI: I must admit it's difficult but it's doable. A lot of countries don't totally understand what we try to do. Once they do, they
love it because they see it as not only creating opportunities for people to work, income for airports, but also to bring in tourism, which everybody
NEWTON: But do you need these other bases to grow the airline? In the sense of once you are here does not much more -- I suppose there is more
traffic here you could get, but you need to be moving into these other countries and expanding the air coverage.
ABDULLAH ALI: We've got a unique brand name that works for us, and we're using it. Air Arabia covers the Arab world, from Morocco to Mascot, 350
million people. Not a lot of them travel at the moment. We see it as an opportunity. And these bases I think will just serve us to grow the
business to the size of fly in the air in times to come.
NEWTON: If you have to have four airline operating certificates, and you have to operate in these different environments, you are at grave risk of
destroying your low-cost model.
ABDULLAH ALI: Well, I've been to the most difficult places, and I've kept to the model. And each of these airlines are now making profits and
gaining popularity among the customers. The model is so simple, if you want to stick to the basic model, so long as up an airplane and you have
crew to fly it, then it works.
NEWTON: Abdullah Ali of Air Arabia, it is Arabia or Arabia. Apparently it's all to do with where you are and where you live. You can see me take
flight on the first part of the round the world trip "BUSINESS TRAVELER." It's this Thursday. It's at 10:30 central European time, 9:30 in London.
Now there are some interesting moves. This is "jookin." It's spelled "jookin." It's pronounced "jookin." And it's not the sort of thing we do
very often on QUEST MEANS BUSINESS. But you'll see me do some very strange moves after break.
[16:50:00] (COMMERCIAL BREAK)
NEWTON: Move up to the attic and you may find an old toy, some bills, and you might find the odd multimillion dollar painting. That's possibly one
of the world's greatest art finds. It all came about because the homeowner wanted to fix a leaky roof. I jest you not. CNN's Jim Bittermann is in
JIM BITTERMANN, CNN, SENIOR EUROPEAN CORRESPONDENT (voice-over) : it's probably every homeowner's dream, to be rummaging around in the attic and
fine a priceless work of art. That's essentially what a still unidentified couple claims happened at their house near the French city of Toulouse.
Their discovery, what seem believe to be a lost work Italian Renaissance master Caravaggio. It depicts a graphic scene in which biblical heroine
Judith B had's in a Syrian general. And is similar in subject matter in style to a Caravaggio are ready gain any Roman palazzo. The art expert
hired by the homeowners is convinced the painting is genuine.
ERIC TURQUIN, ART EXPERT: Of course we know that that the composition is Caravaggio. We know there that there was a great picture in its time which
was of this subject. Which was seen by outer painters. And third, the execution, the masterfully execution. And so, you know, a painter has
ticks. This is correct? You know, a painter is like us, he has ticks and you have all the ticks of a Caravaggio in this. Not all of them. But many
of them. Enough to be sure this is the hand, this is the writing of this great artist.
BITTERMANN (voice-over): Some experts are not so ready to say the master piece is real. But the French government is playing it cautious by
declaring the painting a national treasure and slapping an export ban on the canvas for the next 30 months while it's examined further. If it is a
genuine Caravaggio some in the art world say it would be worth upwards $130 million, which makes for some strong arguments about its authenticity.
BITTERMANN (on camera): While the painting could turn out to be real, there is as of yet still no public accounting of exactly how it found its
way to France nor why it remained undiscovered for a period that its owners say went on 150 years. Still, few question the quality of the workmanship
involved. Just the identity of who did the work. Jim Bittermann, CNN, Paris.
NEWTON: A Caravaggio -- well, Caravaggio lived in the Baroque period when ballet was only just becoming popular. Now from Caravaggio to a new form
of dance. Street ballet, it's known a "jookin." And is exploding in our digital age. The popularity of jookin has allowed Charles Lil Buck Riley,
Lil Buck to his friends, to become an internet star. His dancing is smooth as silk. His videos rack up millions of views on line and it has led to
him having lucrative commercial deals. Lil Buck joined me in the New York studio. And I wanted to know, jookin, what's it all about?
LIL BUCK, DANCER: I first discovered it myself just living in Memphis, Tennessee. I think I was like 14 years old. Yeah, I was 14 years old.
The thing about living in Memphis is that you see it everywhere. It is a native style to Memphis. So you could stop at a red light where you are
driving and see some kids "jookin" on the corner outside.
So it was born from Memphis music. Memphis music has distinctive sounds of like these snares and always have those in it, and the bass, which made you
bounce a certain way. You know. And then as you start moving, you never lose this bounce. And that's what "jookin" really is, that bounce.
NEWTON: Did you have to convince people that Memphis jookin was legitimate, a real form of dance, when they already accepted break dance --
LIL BUCK: Oh, of course.
NEWTON: -- and all the other ones. And they thought this kid --
LIL BUCK: Of course I had to. I kicked in the door and forced my way in there. Because when I started auditioning I just -- you know, people
didn't know what it was, but they knew it was something different about the way I was moving. Nobody was gliding like me.
NEWTON: Now you are here in New York at Lincoln Center?
LIL BUCK: Yes.
NEWTON: What happens inside you when you go on the stage and you think this is Lincoln Center, I'm doing Memphis "jookin" at Lincoln center?
LIL BUCK: I just really get in this, you know, zone where it's like OK I'm here. You know, I'm here. I fought so hard to get here. You know,
everybody in Memphis is counting on me to represent this style.
[16:55:00] NEWTON: The way you came together with Yo-Yo Ma and everybody else. It's all through YouTube, it's all through Facebook, you are in many
ways a street dancer who is now professionally trained who has got a career. But you are a creature of social media.
LIL BUCK: Yes. YouTube has had so much to do with, you know, me, you know, being recognized in other places, you know, that I wouldn't normally
be able to get to. My first YouTube video, you know, was when I was living in Memphis, still in school. People from New York, people from all over
the world got to see this. And then we kept throwing videos up on YouTube and different people from all over started you know, seeing my moves. So -
NEWTON: What's the next move, longer term, for Lil Buck? What's your next move?
LIL BUCK: You know, my job is not done getting Memphis "jookin" out to the world to the point where I haven't really started teaching yet.
NEWTON: Is this a mission?
LIL BUCK: It is a mission for me.
NEWTON: All right.
LIL BUCK: You have got to remember one thing, man, it's all about the bounce.
NEWTON: What do you mean it's all about the bounce?
LIL BUCK: Once you hear the music you want to keep that bounce. It's about feeling the music before you go out there and do your thing.
NEWTON: Something tells me I don't think I've quite got the bounce. A Profitable Moment after the break.
NEWTON: Tonight's Profitable Moment. And tomorrow and Friday, QUEST MEANS BUSINESS comes from the IMF and World Bank. The spring meetings, where no
doubt the tulips and daffodils will be out and that might be the only cheerful thing that's on the horizon. The reality is, going into these
spring meetings, growth has been revised downwards by the IMF. We've got warnings about what Brexit will mean. You've on this program Jose Vinals,
talk about risks that are out there.
And the danger in all of this is that there's no great crisis. There's no single calamity. There's no disaster waiting to befall us. And that could
mean a reason and a rule for inaction, not actually doing anything. But the truth of the matter is, if they do not grasp the current economic
situation and deal with the sclerotic slow growth, the unbalanced growth in the world, then they're consigning the majority of us to slow growth for
the foreseeable future. Slow growth isn't sexy. It doesn't get people making policy changes. But that's the reality of what's going to be
happening at this week's IMF and World Bank. Can they do it when there's no sign of crisis?
[17:00:00] And That's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in the CNN center. Whatever you're up to in the hours ahead, I hope it's
profitable. I'll be in Washington tomorrow.