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QUEST MEANS BUSINESS
U.S. GDP Figures Miss Expectations; Slowing Growth for Eurozone Economies; Clinton: I'll Invest in Jobs Growth; Clinton: Economy Isn't Working for Everyone; New Controversy Over Trans-Pacific-Partnership; Erdogan: I Deserve Thank You for Coup Response; Simsek: Turkey has Faced a Nightmare; SABMiller Board Backs AB InBev's Higher Offer; Bank Stress Test Results Released; Monte dei Paschi Fares Worst in Stress Test; Rhodes: Eurozone Faces Mounting Crisis; Fire Breaks Out at Olympic Village; Solar Impulse Completes Around-the-World Flight
Aired July 29, 2016 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] RICHARD QUEST, CNN ANCHOR: Closing bell ringing on Wall Street. The middle of the summer and only a small move in the Dow Jones
Industrials. I'm feeling this could be -- here we go -- I think we call that a firm gavel to bring trading to a close. It's Friday. It's July the
29th. Tonight, a Yankee doodle disappointment. U.S. growth falls far short of expectations. We'll be examining what's gone wrong.
Hillary Clinton says the economy isn't working the way it should. And now she's on the campaign trail.
And Europe's banks are put to stress test. The results are about to be released. I'm Richard Quest, tonight coming to you from CNN London, where
of course I mean business.
Good evening. There's new worrying signs of weakness in the global economy, as growth slows down in the United States and among its major
trading partners, especially the European Union. We've had numbers that show a very disappointing set of data in the U.S. and the foretelling of
something worse perhaps in Europe. Let me show you exactly what the number are. Join me at the super screens and you'll see what I'm talking about.
The U.S. GDP number came in for the second quarter. It came in at 1.2 percent. Remember, the United States says its numbers seasonally adjusted
on an annual basis. So 1.2 percent was the number in the U.S. year-on- year. It's the weakest second quarter in some three years. It's way below what the market consensus had been looking for. The market had been
looking for 2.6 print on the number. So at 1.2, that's an absolute destroyer of confidence.
And consumer spending was healthy. Business cut investments. Also, there was a downgrade on the first quarter to .0008 percent. So that's the
United States. And bearing in mind it's the two largest blocs of the economy in the world, the United States and the European Union. The
Eurozone, their growth on a nominal basis on the quarter of about .0003 percent. It's about 1.2. If you want to compare apples to apples, you're
talking about roughly 1.3 and 1.2. It was cut in half compared to previous quarters.
One of key drivers of this weak Eurozone and EU number was the French economy, where growth had stalled to zero. It had been pretty high in the
previous quarter at .007 percent.
So you've got a really very worrying situation of this slowdown of growth both in France, the Eurozone, and of the United States. Within the hour
we're going to get the stress test results, which I'll bring to you later in the program. The chief economist at Chase Bank is Anthony Chang who
joins me now from New York. First of all, we'll get to Europe in a minute, Anthony. Why was the U.S. number not only poor in Q2 but dramatically
revised down in Q1?
ANTHONY CHAN, CHIEF ECONOMIST, CHASE BANK: Richard, we know that they did multiyear revisions. The first charter over the last five or so years has
consistently been weak. So that's not a really big surprise. The big question is why was growth so slow in the second quarter. That of course
you can attribute a good chunk of that to inventory change. Inventory subtracted 1.2 percent economic growth. The residential component was a
lot weaker. But that was payback for the first calendar quarter.
When we look at the trade situation, it was actually a small positive contributor but not as positive as people thought. Remember, when
inventories are weak, that means in future calendar quarters, companies are going to restock and therefore increase production. And so the third
quarter is probably going to be a lot stronger. It's going to have a 2 percent handle at the very least.
[16:05:00] QUEST: That assumes -- I mean, that's all fair and good, but I'm always suspicious, Anthony, when I hear inventories being used or one
of the reasons for a bad number, because as you know, inventories is robbing Peter to pay Paul. You lose it in one, you gain it in the other.
It's not necessarily an indication of a strengthening underlying economy.
CHAN: Not exactly a sign of strength. But you've got to keep in mind, Richard, that consumer spending was 4.2 percent. There is no question that
when consumer spending is growing that rapid, that inventories are not going to be rebuilt, because they were basically depleted. When you have
that kind of consumer spending, there is no other way to go with inventories rather than higher in the next quarter. It's not like consumer
spending was very weak. It was actually very, very strong.
QUEST: On the Eurozone numbers, and again, we've got to be careful, because we've got to compare apples to apples. If we look at the way --
it's about a 1.2, 1.3 percent on an annual basis for the quarter. That was much less than expected, again, and previous numbers were sharply down.
CHAN: Yes, it was about half the pace. You pointed out in your earlier comments correctly, spot on, that much of it was due to France. France
basically had no growth. Consumer spending was nowhere to be found. Why is that? The football game certainly added a sharp amount to consumer
spending in France in the first quarter. And by the way, they don't even have June data. When June data starts coming in, you'll see the
possibility of more revisions. And we know that these numbers in itself, if you really want to focus on weakness, they don't even include Germany.
They don't include the Netherlands. They almost assume about a 1.75 percent growth rate in those two areas. Anything short of that, these
numbers however week you think they may be, will be even a little bit weaker. But again, the big question is what can we expect in the third
quarter? The purchasing manager survey aren't consistent with an acceleration of growth. By the way, in the first half of the year for
Europe, we're still looking at about 1.7 percent growth, which is not bad on a seasonally adjusted annual rate.
QUEST: You say that, but if you compare what the U.S. -- because we have the final number for the U.S. last year, which was well over 2 percent.
Let's pull the strands together, Anthony. Are we looking at a trans- Atlantic economy that is struggling in the U.S. and in the Eurozone or the EU?
CHAN: There is no question in the case of the U.S., economic growth this year will be much weaker than last year. There is no question that the
impacts of Brexit will slow down United Kingdom growth and have a negative spillover into Europe. The big question is what's going to happen later
on. We know from the purchasing manager survey and consumer confidence in the Eurozone, that the second half is likely to be quite respectable.
I think you'll see some sort of a resilience in both economies. But there's no doubt that in the case of the U.S., growth will be slower, and
no doubt in my mind that we'll see a little bit of an acceleration of growth in the third quarter in the Eurozone.
QUEST: You're tying your colors to the mast very elegantly, Mr. Chan. We have it on tape, ready to play back to you at various points during the
course of the year. Have a lovely weekend, sir.
CHAN: Thank you, you do the same.
QUEST: Weak data in the United States may hurt Hillary Clinton's hopes of becoming the next president. Hillary Clinton began a bus tour across
Pennsylvania. She accepted the Democratic nomination last night and has now vowed to build a stronger economy. The campaigns immediately targeting
the key swing states after the speech, which focused on how to create jobs.
(BEGIN VIDEO CLIP)
HILLARY CLINTON, U.S. DEMOCRATIC PRESIDENTIAL NOMINEE: In my first hundred days, we will work with both parties to pass the biggest investment in new,
good-paying jobs since World War II. Jobs in manufacturing, clean energy, technology, and innovation, small business, and infrastructure. If we
invest in infrastructure now, we'll not only create jobs today, but lay the foundation for the jobs of the future.
(END VIDEO CLIP)
QUEST: Now, everybody is analyzing the various plans. Moody's says that Mrs. Clinton's plans would create -- they've actually put a number on it,
more than 10 million jobs. However, Moody's does say that slower economic growth could hurt the election chances. That's the slower growth that
we've just been seeing of course in the GDP numbers. Hillary Clinton admits that this number and the U.S. economy isn't doing enough for
(BEGIN VIDEO CLIP)
[16:10:00] CLINTON: I've heard from many who feel like the economy sure isn't working for them. Some of you are frustrated. Even furious. And
you know what? You're right. It's not yet working the way it should. Americans are willing to work and work hard. But right now, an awful lot
of people feel there is less and less respect for the work they do and less respect for them, period. Democrats, we are the party of working people.
But we haven't done a good enough job showing we get what you're going through. And we're going to do something to help.
(END VIDEO CLIP)
QUEST: Michael Nutter is the CNN Political Contributor and former Mayor of Philadelphia, Mr. Mayor, good to see you, sir. Everything seemed to have
gone extremely well at the convention. I'm sure great sighs of relief all round. But really, it does come now to the economy, because both sides are
claiming, on the same economic data, that they will be the best to grow the economy further. How does Hillary Clinton run on her own ticket on the
economy, but obviously has to acknowledge what president Obama has done?
MICHAEL NUTTER, CNN POLITICAL CONTRIBUTOR: Well, sure. But Richard, I would just point out, the economics are the same for both candidates. And
at least, as you pointed out in the piece that you just played, Hillary Clinton actually has a plan to create jobs and economic vitality in
America. She has a plan to deal with public safety issues and criminal justice reform. Plans to deal with how we provide even better health care.
And those plans have details that you can actually read. So Donald Trump can, you know, speak in seven-word sentences, which may not actually have a
noun and a verb in them together, but we have no details as to what he would do or how he would do it. He has no governmental experience
whatsoever, and thinks that somehow running the government is like running one of his companies, and that's just not the case.
QUEST: Isn't one of the big problems, though, that the studies and the surveys show he is more trusted on economic issue issues? The allure of a
successful businessman is giving him greater points in the polls than Hillary Clinton. She wins on foreign policy. He wins on the economy.
NUTTER: I think the challenge here is, he has -- the one thing, I have to give him this, the one thing he does well and is an expert in is self-
promotion. So he has created this fiction and this fantasy that he is this, you know, self-made, which he's not, great businessperson, we're not
sure, that he's a billionaire, we don't know. And so he's got a celebrity thing going on and has created this fiction that he is this incredible
businessperson, self-promoted. And he's the only one who knows what his real economics are. That's what he's been selling to the American people.
So Hillary Clinton can't compete on that. But she actually has government experience, she is a sane person, she knows how to get stuff done and make
things happen. And that will be part of the challenge in this campaign. But that's what campaigns are for, the public gets to know you better.
QUEST: On that point, finally, sir, it is a weekend, leave us on an uplifting note, although I'm not sure the next question will allow you to
do that. Just how nasty do you think this election is going to be? I mean, you know, we've had some pretty bad ones, and they've been pretty
abusive in the past. But this one could take us into new territory.
NUTTER: This is your uplifting question for the weekend? Richard, unfortunately I think we will probably see -- at least from one side --
possibly the nastiest, most vicious and lowdown campaign that we've seen in modern times. On the other hand, Hillary Clinton is an adult. She's not
going to lay down in the gutter with Donald Trump. She's already said that she's not going to engage in that kind of vitriol and nastiness.
Senator Kaine said, you know, most of us pretty much cut the name calling in any serious way by about the fifth grade or so. He just has temper
tantrums, or now twitter tantrums, all over the place with virtually no self-control. So it will be pretty nasty unfortunately, but we'll get
through it over the course of the next hundred days. My hope is, of course, that Hillary Clinton, the adult, wins this race and goes on to
become president of the United States of America.
[16:15:00] QUEST: Mr. Mayor, thank you, sir. You've lifted us. And we look forward to having you on again. Thank you very much.
NUTTER: Thank you.
QUEST: On the final night of the Democratic national convention, signs waved. Look at them. There they were. What did they stand for? No TPP,
the Trans-Pacific Partnership, it is the trade agreement between 12 nations across the Asia-Pacific region. It's one of president Obama's cornerstone
policies. It's been signed, but it now needs to be approved by the U.S. Senate. And then it has to be passed and it has to be enacted, which of
course has to be handed an exchange. It looks like whichever candidate wins the White House November, they have little intention of continuing
(BEGIN VIDEO CLIP)
CLINTON: If you believe that we should say no to unfair trade deals, that we should stand up to China, that we should support our steel workers and
auto workers and home-grown manufacturers, then join us.
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: I pledge to never sign any trade agreement that hurts our workers or that diminishes our
freedom and our independence. We will never, ever sign bad trade deals. America first. Again, America first.
(END VIDEO CLIP)
QUEST: Carla Hills was the U.S. Trade Representative under George W. Bush. Ambassador Hills joins me now from Washington. Ambassador, you have
negotiated more trade deals and know the pitfalls within them. Give me an honest assessment in your judgment, is TPP as far as the U.S. is concerned
over, it can't be done?
CARLA HILLS, FORMER U.S. TRADE REPRESENTATIVE: I hope not. It means a lot to our economy. It's a step forward. I know that many people feel that it
didn't accomplish everything they wanted. But it accomplishes a lot. It cuts down 18,000 tariffs that makes our economy more competitive. It opens
up services. It protects intellectual property. It provides digital protection. I could go on and on. And so I think that if we were to
educate the American people about the benefits, it would be able to pass. But we do have a huge mountain to climb, no question about it.
QUEST: So as I understand it, on the technical front, the only way -- because it has been signed, so it has to be approved by the Senate. And
then all it requires is ratification by exchanging it. That means President Obama has to do this in the lame duck Congress before the
HILLS: It would be helpful. Were it to be offered the day after the election and it would be passed by Congress the day before the next
president was inaugurated. He wants that for his legacy. It would make a difference to our economy and provide export opportunities for our
companies and greatly open the door for our small and medium-sized businesses, which actually constitute a majority of our exporters, not an
amount, but in numbers up to 90 percent. This agreement really is something that we should take on. I know it's unpopular. But it's
unpopular because we haven't explained the benefits to the American public.
QUEST: Bearing in mind, if we just look at the Supreme Court nominee, obviously the argument being that the new president should have the right
to appoint, nominate and appoint that person, arguably, Ambassador, since both candidates are against TPP, would it not be improper -- albeit legally
technically correct -- would it not be inappropriate for Congress to judge TPP when a new president would be against it, whoever is elected?
HILLS: My own view is we've been negotiating this since 2008, eight years. And I believe that President Obama will serve as president for his full
second term. He is the president. He takes the responsibility. And this is part of his legacy. And the Congress should do their job and deal with
the issues that come before it and not look down the road. We've had enough kicking the can down the road.
On TPP, though, I mean, the argument -- I hear what you say, Ambassador, that a better argument or at least an argument has to be made. But people
aren't listening. Electorates, whether in the U.K. or in Europe or the United States, are saying they don't believe the arguments that these giant
trade deals are beneficial for all.
[16:20:09] HILLS: The fact is they are listening. But what they're hearing is all the arguments against trade. Nobody's talking about the
fact that there is a clear correlation between trade and productivity and productivity enhances workers' incomes. Nobody talks about the fact that
we ought to use the benefits that trade brings to our GDP and spend more on training our workers. We could offer training programs that that would
make a difference.
Our tax program could be beneficial for those who go out and find a job, and get trained. We're not doing that. We should explain and have a plan
that works for workers and for our nation as a whole.
QUEST: Ambassador, good to have you, ma'am, on the program tonight. Thank you, as always. Thank you.
HILLS: Nice to join you.
QUEST: U.S. markets closed today virtually flat. The Dow lost 24 points, up 3 percent for the month of July. The S&P and the Nasdaq did better this
Friday, they were marginally higher.
As we continue, in the wake of the failed coup attempt in Turkey, the country's deputy prime minister says his country is facing a major test of
credibility under the rule of law.
QUEST: The Turkish president says he deserves a thank you from the United States for the crackdown against those who tried to overthrow his
government. The United States has criticized President Erdogan's response to the coup attempt, which has seen thousands of people either detained or
arrested or indeed just simply sacked from their jobs. I asked Turkey's Deputy Prime Minister about reports that newspaper and airline employees
have been sacked. Mehmet Simsec told me his country is going through a rough test and it must uphold its Democratic principles.
MEHMET SIMSEK, TURKISH DEPUTY PRIME MINISTER: Yes, we have had a nightmare, a major coup attempt, a very violate one. We are responding to
it. But we are going to uphold rule of law and adhere to democratic principles, even when dealing with these criminals. I think Turkey is
going through a major test, and the test is, you know, whether or not Turkey will be able to handle this within the rule of law and in a fashion
that would actually be consistent with post-coup-attempt new environment.
The new environment is where entire Turkey, regardless of your ethnic or political background, there is less political tension. There is more
cohesion, everybody is united against the coup.
[16:25:00] Now, regarding news reports of press, members of press, keep in mind that this network, this Galen movement, had conglomerates, a bank,
lots of media interest, lots of media outlaw's outlets. So yes, government is going after these movements because these movements we believe are
behind this coup attempt. And therefore, this is not done within the context of press freedom. This is done because there is a vast network
that has been involved in a criminal activity, whether they have media interest, whether they have financial interest is a separate issue.
QUEST: The number of governments that are expressing concern, even after hearing what you've said, and perhaps you've put your finger on it, this is
Turkey's test as to how you handle this coup within the structure of rule of law. But many are saying that Turkey is either failing or risks failing
SIMSEK: Well, of course it's premature to judge us. People forget that there was a vicious, violent coup attempt. Now, first, let's make it
clear. That coup was aimed at destroying Turkish democracy, destroying rule of law, de-seating a legislate government. This coup was aimed at
taking Turkey back a few decades. Now, clearly that coup attempt has failed. What we need to make sure is that this never happens again. And
those who perpetrated coup, that they should face justice.
Now, so far I think any country would uphold these standards. Now, our friends, our allies, first, we want them to be sincere in their
condemnation of the coup attempt, and then see how we handle it. I think it's very premature, even the suspensions that have been reported as
sacking. Military, there is a big involvement. They used F-16s, helicopters, they attacked people, they attacked the parliament. People
ignore this. Imagine, imagine, within U.S. army, rogue elements attacking White House, attacking Congress, attacking, you know, FBI. How would you
QUEST: It's Friday. What better time to talk about beer at the end of the week? The board of SABMiller approved revised offer to merge with its
competitor AB InBev. Alison Kosik is in New York with more on the deal. This deal has been around -- if it was a pint of beer, it would be well and
truly flat, it's been going for so long. But there was a Brexit component that required them to revisit it. Remind me the details.
ALISON KOSIK, CNN MONEY CORRESPONDENT: Exactly. You know, this has been going on for the better part of a year. And you talked about the Brexit.
Naturally, InBev had to wind up sweetening its bid for SABMiller just because of this slump in the pound. So AB InBev had to up its cash offer.
Let me walk you back a bit. You know, when you think about what's happening the beer industry, big beer is getting bigger, and it's kind of
the mantra, if you can't beat them, buy them, and that's what AB InBev is doing. The self-proclaimed king of beers is buying its chief rival,
SABMiller. About a month ago, actually, this deal wound up being approved in principle. But there were a lot of loose ends that had to be tied up.
Among them SABMiller's board had to approve it, the department of justice had to give its OK. Regulators in China had to do the same.
Now that all that seems to be together, it looks like this deal is moving ahead. But if you look at what's happening in the industry, you look at Ab
InBev, what it's been doing over the past few years, it's been gobbling up smaller microbrewers. It's in fact it acquired at least eight craft
breweries since 2011, because that's where the growth is, that's where the money is at. You look at Bud and Bud Light, those sales have really
stagnated. What you're seeing Ab InBev doing is trying to get that millennial interest going.
You look at the Brewer's Association says that craft brew sales, would you believe it, now claim 21 percent of the entire U.S. beer market. And if
we're keeping track, Richard, once this deal is completed, which is expected to happen by the end of the year, it will be one of the top five
acquisitions of all time, for $105 billion for this deal, Richard.
QUEST: Alison Kosik in New York at the end of the week. Many thanks, Alison.
Now those banking stress test results have been released. It's bad news for the world's oldest bank. I'll have the details. A very complicated
set of the story on these bank stress tests if you can imagine. We'll break it down for you when we return in a moment.
[16:30:00] (COMMERCIAL BREAK)
QUEST: It is Friday. Hello, I'm Richard Quest. Of course there's more QUEST MEANS BUSINESS in just a moment, when the results of those European
stress tests on the banks, the results are in, and now we've got to worry about the next big slowdown and who needs to do what with capital.
And around the world in 500 days. I'll speak to the pilot of the solar impulse plane. For all of that you're watching CNN. On this network it
will be the news that always comes first.
Hillary Clinton is on the campaign trail after accepting the Democratic Party's nomination for president. Mrs. Clinton becomes the first woman in
U.S. history to be a major party nominee. Speaking at a rally in Philadelphia, she acknowledged the historic nature of her campaign and the
(BEGIN VIDEO CLIP)
CLINTON: I have to tell you, it was also kind of overwhelming. I take deeply and with great humility the responsibility that this campaign
imposes on us. There is no doubt in my mind that every election in our democracy is important in its own way. But I can't think of an election
that is more important certainly in my lifetime. And it's not so much that I'm on the ticket. It is because of the stark choice that is posed to
America in this election.
(END VIDEO CLIP)
QUEST: A maternity hospital in northwestern Syria has been bombed according to Save the Children. The charity says there are casualties,
it's not yet clear how many. Hundreds of people are treated at the hospital in Idlib every month.
Pope Francis made his first visit to the Nazi concentration camps at Auschwitz and Birkenau. He also met briefly with several holocaust
survivors. The Pope is in Poland for World Youth Day.
Russian weightlifters will not compete at the Rio Olympic Games. The International Weightlifting Federation has banned them. Russia has been
accused of state-sponsored doping. Individual sports federations are making their final call on whether athletes can compete.
[16:35:00] So in the last half hour, we've just got the results of the Europe's banking stress tests. The world's oldest bank is also the one
that's in the worst shape financially. Some banks in Spain and in Ireland are also faring poorly. Overall, though, the test results were positive.
They covered 51 banks, which if you take overall, is around 70 percent of the EU's banking asset base.
They're measuring the ability to withstand severe financial pressure under the worst scenario. That's the idea of a bank test. So for instance, how
would they fare if the EU -- look at the pressure that they are being put into. Squeezing the asset base if they're in a recession. Slow growth
would return in 2018, was the scenario. Long term interest rates would rise combined with lower asset prices. It raises the risks of loans of
more nonperforming loans.
For the first time, this stress test squeezing once again, measuring how banks would cope with large fines and settlements for miscreant and
misconduct behavior. Throughout it all, the banks have to maintain the adequate cash cushion and of course their capital tier ratio limits. This
time it was a no pass or fail.
Joining me to help decipher the results, Bill Rhodes, the chief executive of William Rhodes Global Advisors and the author of "Banker to the World",
who says the stress tests exposed the underlying crisis in the Eurozone. Bill, good to see you, sir. As you look at these test results, not
surprisingly, those in Italy, particularly the oldest bank in the world, that particularly failed.
BILL RHODES, CEO, WILLIAM R. RHODES GLOBAL ADVISORS: I'm not surprised, I was just in Siena a few weeks ago and everyone knew it was coming. And the
government has a problem, because they can't get an official bailout because of the resolution rules. So what's happened in the last few hours,
as you probably know, Richard, is that a group of banks led by JPMorgan and Medio Banca, say they'll raise 5 billion in new capital. The third go-
round for Monte dei Paschi over the last couple of years in the sense of a bailout, and sell off 10 billion of bad loans, nonperforming loans. Now,
this isn't going to happen at once. People are talking about it maybe being by the end of this year, at the beginning of next year. It won't be
easy because it's the third go-round.
QUEST: This is just one bank in Italy. There are a variety of other Spanish and Italian banks. It raises the bigger issue, Bill. Eight years
after the recession, when U.S. banks recapped, U.K. banks recapped, Germany did. Why are so many EU banks or Eurozone banks still in a
RHODES: As you and I have talked before, Richard, here in the United States we started with tough stress testing, raising capital, writing off
bad loans, selling off bad assets in 2009. In the Eurozone area, they never got around to it until 2012, 2013, so they're way behind. And it
exposes some of these problems. Monte dei Paschi is the worst. But as Banco Popular who's had a number of problems in Spain. And others,
Raiffeisen, in Austria. And the surprise here was Bank of Ireland, in Ireland.
QUEST: We're seeing on the screen the European banking association chairman says it's not a clean bill of health. In the same week, we also
have of course Deutsche Bank and the IMF has called Deutsche Bank the riskiest bank in the world. Do you believe, Bill, that there is a
smoldering crisis still in Europe's banking system?
RHODES: Put it this way, Richard. As I've been saying to you for several years, the Europeans have to move more rapidly in cleaning up the problems
they have. And one of the things that concerns me is, as you know, in 2012, Mario Draghi announced that there would be a banking union
implemented in 2013. It took a long time just to get the first part of it, because there are three parts. Resolution is one. Regulation is the only
one that's been fully implemented. Resolution is what we're talking about, which is cleaning up the banks. It was supposed to be implemented two
years ago, and it's still not going to be fully implemented until 2018. And the third leg of this stool, which is very, very important, which we
have in the United States with the FDIC, is deposit insurance. And unless you have full implementation of resolution along with regulation and you
have the beginnings of and the full implementation of deposit insurance, this problem will continue.
[16:40:01] QUEST: Bill Rhodes, good to see you, sir.
RHODES: Always good to see you, Richard, I'm following you in London.
QUEST: Absolutely, and I'll be back in New York in a week or so. We'll have to have you on the set and we'll go head to head, face-to-face. Thank
RHODES: Good to see you.
QUEST: Now as QUEST MEANS BUSINESS continues. We'll hear more from Turkey's deputy prime minister. You heard him talk about the security
situation and the test of the rule of law. How is the economy going to fare post the attempted coup? After the break.
QUEST: Welcome back to QUEST MEANS BUSINESS. Turkey's president says countries who worry over the fate of coup plotters instead of Turkey's
democracy cannot be friend, according to reports from Reuters. The coup attempt has worried investors about the security in the country. Turkey's
deputy prime minister says the country is a worthy investment for destinations for investment. Mehmet Simsek told me the government is ready
to address investors' concerns.
SIMSEK: Clearly we take them seriously. We'll continue to improve. We'll continue to introduce reforms. We'll continue to improve investment
climate. And it's not words, it's action. I think Turkey will prove that it is a worthy investment destination. We have a sizable domestic market
that has not disappeared. We are the second most populous country in Europe, that has not disappeared. We still have a strong government.
Domestic political tensions have eased. I think probability of another coup attempt ever has clearly diminished substantially. We are taking
steps, we are introducing reforms that such a coup attempt never, ever happens again. While we understand the concerns, we'll address those
concerns. We'll rebuild credibility. We'll regain confidence.
QUEST: I see your comments that whether growth this year is 4 percent or 4.5 percent or somewhere around there doesn't really matter. But as I
understand what you're saying, you do not expect any medium term effect on the economy as a result of this coup attempt. Is my understanding of your
SIMSEK: That's correct. I mean, we had penciled in 4.5 percent for this year as far as real growth is concerned. There is some downside risk to
that. But I think in the medium term, the picture hasn't changed. Why? Because domestic political cohesion has improved. We will continue to
reform. And European Union is recovering, that should help. Again, regionally, geopolitics-wise, we don't expect the situation to further
[16:45:02] And therefore we do see, actually, a fair bit of support for medium, long term growth, even in the short term we see very limited
QUEST: The deputy prime minister of Turkey talking to me earlier this week. And just go to CNNmoney.com/quest, where you can see our newsletter
today, it arrives in your mailbox, your e-mail box, just after the close of New York trading. Where there is no trading anywhere in the world, and
then of course, it's ready for you before Asia begins.
It took far longer than expected. It took more than 16 months. There were times when it looked like the solar impulse plane would not finish its
journey across the world. The pilots who took it across the finish line are joining me and telling me their success hasn't fully sunk in yet. The
solar impulse pilots after the break.
QUEST: There's been a small fire in the basement of the team building in Olympic Village. CNN's Shasta Darlington joins from us Rio de Janeiro.
Nobody hurt. I believe some athletes, the Australian athletes I think had to be evacuated from the buildings. Do we know any more?
SHASTA DARLINGTON, CNN CORRESPONDENT: Well, that's right, Richard, it was the Australian team. According to their own tweets, they said they were
evacuated due to the small fire. But they're actually already back in the building. Nobody hurt. It's just awfully bad luck considering it is the
Australian team. They seem to have had so much trouble in the Olympic Village from day one. They only started moving in on Wednesday, because as
you know, they refused to when they found all of the blocked toilets, the leaky pipes, and those exposed wires. This just seems to be more bad news
for the Australian team and of course for the organizers, Richard.
QUEST: So Shasta, you've been covering this, you know this better than anybody. One simple question. How bad or good is the situation?
DARLINGTON: Richard, that is never a simple question. Listen, as we've said before, the venues are ready. These games are going to go on. If you
buy your tickets, come on down, there's going to be a good show. There are still a lot of problems and hurdles to get over. The transportation, the
metro line that's going to take you to all of those wonderful spanking new venues won't even be open until Monday. That's just four days before
kickoff. I can't guarantee you that it's going to work until they open the doors.
The Zika virus, there we go, that one does seem to be overblown at this point. While it is a very serious problem for Brazil and it's going to
come back to haunt them when the summer rolls around, August is in the middle of the winter. I'm standing outside, and I'm pretty chilly, and
I've only seen about one mosquito in the last week. So it does seem that that's overblown.
[16:50:07] You start looking at all the problems, crime, there was a serious problem with crime, but now we've got all of these soldiers and
police on the street, so that's looking good. On the downside, the justice minister announced today the company they've hired to man the x-rays at the
venues was incompetent. So they're going to have to bring in elite police. There's a little bit of good news and a little bit of bad news. But if
this is at all like the world cup, it is going to happen, Richard.
QUEST: And of course let's not forget, in London there was a scandal over the number of security officers just a week or two before the London
Olympics began. So let's not cast the first brick of criticism. But Shasta, again, let's have an uplifting note, it is a Friday. Let's try and
find an uplifting note to finish on. Is the party mood, is there a feeling that people have finally said, you know, something, whether we like it or
not, the Olympics are coming and we might as well enjoy them?
DARLINGTON: We're beginning to get there, Richard. I wouldn't say we're all the way there. You know, over on Copacabana Beach, they've set up some
Olympic rings. You can see long line of locals hoping to get a selfie with these rings. On the other hand, people are still frustrated with all of
the problems in Brazil. I think you won't get that I just real Brazilian enthusiasm until the games begin, Richard. And then I think you will see
QUEST: Shasta Darlington who is in Rio, have a good weekend.
Flying 26,000 miles, it took 500 days. This was the moment Solar Impulse 2 completed its round the world trip. An epic flight. It was powered
entirely by the sun's rays. It set records. The first trans-Atlantic flight and the longest solo flight not to use a single drop of fuel. It
went, as you can see, right from Abu Dhabi across through Asia, Hawaii, San Francisco. That leg, by the way, from Japan to Hawaii, was the longest,
suffering various setbacks. The recorded flight of from Nagoya to Hawaii caused the batteries to overheat, and that caused a nine-month delay. The
promise is travel free of fossil fuels. By comparison, my own round the world trip is estimated to have are it released more than 10,000 pounds of
CO2 emissions into the atmosphere. The pilots joined me and told me their feet may be firmly on the ground, their minds are definitely still in the
ANDRE BORSCHBERG, SOLAR IMPULSE 2 PILOT: We don't realize it yet, you know, maybe we are on the ground but our mind is still in the air. It will
take some time. Emotion is coming slowly inside. But I don't realize that yet.
BERTRAND PICCARD, SOLAR IMPULSE 2 PILOT: But it's a lot of relief, because the project has been very long, and much more difficult than we thought.
So there is relief, of course there is a lot of happiness and also for the team, it's 150 people who are celebrating together.
QUEST: Once you've proven the technology worked, the plane, the Solar Impulse flew, and it was possible, did your worries become more logistical?
How were you going to physically do this?
PICCARD: Logistic, of course, overflight permissions, meteorology. The costs to have an airplane that flies day and night with no fuel, a big wing
span, and a small weight. It's very sensitive to turbulence. So it's difficult to fly it. And of course flying several days and nights, it's
also a human challenge. When I tell you when I was flying the last leg from Egypt to Abu Dhabi, it was a lot of pressure because I knew that
failing this flight would be the failure of the entire 13-year project. It was a lot of turbulence, very high temperature. It was a difficult flight
and I knew everybody was counting on me.
QUEST: Andre, how does this technology, this achievement, which by your own admissions is experimental, developmental, how does it help us in the
future of aviation or indeed in the future of energy?
BORSCHBERG: For the future of aviation, think about an airplane which is electric and where the source of energy is solar. Electric airplanes have
tremendous potential because of efficiency. NASA, Airbus just launched recently a new project. It shows that big industry, big corporations, big
institutions believe in this future and for us it's great deal.
QUEST: Bertrand, favorite moment of the journey.
[16:55:02] PICCARD: Every moment between each takeoff and each landing. Flying that plane is fantastic. It's like science fiction. The sun is
running four electrical motors with no sound and no pollution. And you realize that it's not in the future, it's today.
QUEST: Andre, longest amount of sleep that you managed to get flying?
BORSCHBERG: The longest is 20 minutes, because this is maximum we allow us each time. But we can do it different times during the night. But 20
minutes is sufficient to recover. 20 minutes is not too long so you don't get too deep in the sleep, so it's a good average. But I tell you, we need
other methods. Bertrand is doing self-hypnosis during the day, during the night. I mean, it's a conscious way to recover energy. I practice a lot
of yoga and meditation which were very helpful as well.
QUEST: Bertrand, he moment when you realized, yes, we've done it.
PICCARD: It was the moment when I flew over the airport of Abu Dhabi, I crossed the line that Andre had crossed in March 2015 when he took off to
start the flight around the world. And when I crossed that line, I knew we had succeeded, and I still have an hour and a half before landing, when I
could enjoy. I was still in the adventure, there was no pressure anymore. We had done it. And that was the moment I wanted to last forever. It was
so beautiful. And I could talk to the team with the headphone and thank them for what they had done.
QUEST: Magnificent. We'll have a Profitable Moment after the break.
QUEST: Tonight's Profitable Moment. Throughout the program I have been trying to find uplifting moments upon which to leave you as you head off
into the weekend. I can think of nothing more uplifting than the Solar Impulse. Around the world, powered by nothing more than the sun's own
energy. I went on an around the world trip myself, London, Bangkok, Sidney, Brisbane, San Francisco, New York, but just think of the future
when we can do it all powered by the power of the sun. Now that's something to think about. Because that's QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London, whatever you're up to in the hours ahead, I hope it's profitable.